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23 Feb 2022

The English courts' approach to foreign law: Cassini v Emerald Pasture and Byers v Saudi National Bank

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Most disputes before the English courts are based on English law. Increasingly, however, courts are resolving disputes governed by foreign law. The Commercial Court Guide, for example, has recently been updated to deal with the 'significant proportion' of trials featuring expert evidence of foreign law. While judges are used to reaching conclusions about which party's expert is correct, the extent to which special considerations apply when the expert opinion relates to the law itself is complex. In this article we consider the two recent decisions from the Court of Appeal in Cassini SAS v Emerald Pasture Designated Activity Company & Ors1 and Byers v The Saudi National Bank (SNB) [2022] EWCA Civ 43 about the process the courts must follow when addressing competing expert opinions on foreign law.

The approach to findings of foreign law

Foreign law is treated as a question of fact, to be determined by the trial judge on the basis of the evidence put forward by the parties. In Dexia v Prato2, the court confirmed that the task faced by the judge is to determine what the highest available court in the foreign jurisdiction would have decided3. So far, so factual. However, In Parkasho v Singh4, doubt was cast on the extent to which foreign law is just a question of fact. Instead, the court described it as "a question of fact of a peculiar kind". This peculiarity was analysed in Macmillan v Bishopsgate5, where the court identified two different kinds of foreign law:

  1. Foreign law involving principles and concepts "unfamiliar to an English lawyer". In this case, the extent to which the judge can draw on their own legal knowledge and training in reaching the decision on foreign law is limited. The judge is effectively confined to analysing the expert evidence.
     
  2. Foreign law involving concepts which are similar to English law. Here, the judge is entitled "and indeed bound" to bring their legal knowledge and training to bear. Instead of just assessing the weight of the expert evidence given, the judge provides their own legal input.

In Byers v SNB (the background to which is set out in our article here), the Court of Appeal dismissed the appellants' arguments that concepts found in Saudi Arabian legislation, an Islamic system of law "far removed" from English law, fell into the second category. Not only was it an unfamiliar system of law but the question had to be determined against a background of the capital markets culture and practice in Saudi Arabia, with which the English courts had no "inherent familiarity". It would have been wrong in principle, and impossible in practice, for either the trial judge or the Court of Appeal to have attempted to interpret the provisions themselves as a matter of construction.

In Cassini v Emerald, where the concept derived from the French Legal Code, there was seemingly no attempt by either party (or the judge at first instance or on appeal) to suggest that this was a case in which an English judge could provide their own legal input.

Whose evidence is presented more expertly?

In Cassini v Emerald, the court was asked to consider the impact of a French Sauvegarde procedure (a form of restructuring) on the obligation to provide information under a loan agreement subject to English law and jurisdiction. French law applied to the question of interpretation of the Sauvegarde because it was a main proceeding under the Recast European Insolvency Regulation. At first instance, HHJ Kramer determined that the information obligations continued despite the Sauvegarde, dismissing Cassini's argument that the Sauvegarde rendered them unenforceable. The Court of Appeal upheld that decision.

The principal grounds of appeal were as follows:

  1. that the conclusion reached by the judge produced an 'illogical result' contrary to the purpose of the Sauvegarde regime;
     
  2. that the judge placed too much reliance on the French cases he had considered; and 
     
  3. that the judge was unduly influenced to reject Cassini's expert analysis by a number of unjustified criticisms of his evidence.

On the first point, the Court of Appeal found there was no 'illogicality' in deciding that the information obligations continued. It was not illogical for a counterparty which had fully performed its side of a contractual bargain to be able to enforce non-monetary obligations for which it had paid in full. The Court of Appeal also dismissed the criticisms of the way in which the trial judge evaluated the evidence on foreign law. In his judgment, HHJ Kramer helpfully articulated his approach to the assessment of the expert evidence, with which the Court of Appeal agreed:

  • Generally, foreign law is proved by expert evidence. Legal texts and foreign case law can only be placed before the court as part of the expert evidence. Experts can be legal practitioners or academic lawyers specialising in the law of that country.
  • Where the evidence of each party's expert witness conflicts, the court must look at the evidence to reach a decision "using its own intelligence", as on other questions of evidence.
  • While the reputation of an expert is relevant, it is only one factor to be taken into account. The greater renown of one expert over another is not determinative as to who is correct.

While HHJ Kramer did make criticisms of the French law expert instructed on behalf of Cassini, the Court of Appeal found that these were on peripheral matters and did not affect his analysis of the key points. Further, it held that he was right to prefer the evidence of Emerald's expert, and he had not improperly 'descended into the fray'  in his analysis of the evidence. For practical purposes, the trial judge's task was to decide which of the two experts was likely to be correct. In circumstances where the experts were presenting very different theories to predict how a French court would decide a 'novel' point of French law, the Court of Appeal held a judge might 'naturally and legitimately engage more actively with the expert legal witnesses and counsel in the course of cross-examination'.

Further, the Court of Appeal held that HHJ Kramer had not approached the French cases as if they were common law authorities or sought to place too much weight on them, given the absence of the doctrine of precedent in French law. Both parties had put the French case law in evidence and it had been appropriate to evaluate it.

To what extent can questions of foreign law be reviewed on appeal?

In Cassini v Emerald, both parties apparently accepted that although foreign law findings are treated as findings of fact, they are 'not subject to the same restrictions on scrutiny by an appellate court'. While the Court of Appeal did not disagree with the first instance judge, it held it was entitled to 'consider the expert evidence afresh and form its own view of the cogency of the rival contentions in determining whether the trial judge came to the correct conclusion.'

By contrast, in Byers v SNB, the Court of Appeal found that the circumstances in which it could interfere with a finding on foreign law from a lower court were effectively confined to the type of foreign law question where the legal concepts are so similar that the judge provides their own legal input. The Court of Appeal in Byers v SNB held: 'this Court should be slow to interfere with the Judge's findings of fact on Saudi Arabian law and should only do so in accordance with the principles applicable generally to findings of fact made by a trial judge who has based his findings on evidence from witnesses.' Further, that '[a]ppellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so.'

There is no reference in the later (by a few weeks) Cassini judgment to the decision in Byers. It therefore remains to be seen which interpretation of an appellate court's ability to review findings of foreign law is to be preferred.

Practical points

These cases highlight the importance of selecting the right expert on foreign law. Even if an expert's credentials and reputation are impressive, it is the evidence they give and the way they present it which is likely to be determinative. This is likely to be even more important where the system of law concerned is "far removed" from English law, because the courts will be less likely to interpret the relevant provisions themselves, and so will rely more heavily on the expert evidence. While the extent to which an appellate court can review findings on foreign law remains to be seen, the role of the trial judge in evaluating the expert evidence is plainly key.

 


1 [2022] EWCA Civ 102

2 Dexia Crediop S.p.A v Comune di Prato [2017] EWCA Civ 428

3 Note, however, in Deutsche Bank v Comune di Busto Arsizio [2021] EWHC 2706 (Comm), the court expressed the view that it is open to it to depart from a decision of the highest courts of the country whose law applies.

4 [1968] P 233, 250

5 Macmillan Inc v Bishopsgate Investment Trust (No 4) [1999] CLC 417

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