Download Peer International Corporation v. Termidor Music Publishers Ltd

Peer International Corporation v. Termidor Music Publishers Ltd
[2004] Ch 212
(English Court of Appeal)
Background
In the period from the 1930’s to the 1950’s a number of composers in Cuba assigned,
for minimal consideration, the United Kingdom copyright in their musical work to the
plaintiff, Peer International Corpn, a United States owned music publisher. At the
date of the assignments, the assignments were effective under both English law (the
lex situs) and Cuban law (the proper law of the assignments) to transfer the United
Kingdom copyright in the musical works from the Cuban composers to the plaintiff.
(It was not in contention that for an agreement to constitute an effective assignment of
United Kingdom copyright the agreement must be effective as an assignment under
English law, the lex situs, and must not be invalid by its proper law.)
In 1960, after the Cuban revolution, the Cuban government enacted Cuban Law 860.
The purpose of this law was to protect the intellectual property rights of Cuban
nationals from unfair exploitation by foreign companies. The effect of Cuban Law
860, at least from the perspective of Cuban law, was to divest, without compensation,
the plaintiff of its United Kingdom copyright in the musical works which had been
assigned to it by the Cuban composers.
Disposition
The plaintiff was entitled to a declaration that it remained the owner of the United
Kingdom copyright in the relevant musical works. Cuban Law 860 was ineffective in
English private international law to divest the plaintiff of title to property situated in
England.
Although, arguably, the assignments were manifestly inequitable and oppressive so
far as concerned the rights of the Cuban composers, considerations of forum public
policy could not displace the lex situs rule and give validity to a Cuban confiscatory
law purporting to have extraterritorial effect.
MANCE LJ:
62. In private international law, the established connecting factor in relation to governmental
acts affecting rights in movable or intangible property is the situs or location of the property … .
Where the court is concerned with a foreign governmental act in relation to an asset within the foreign
jurisdiction, public policy may constitute the reason for refusing it enforcement or recognition in this
jurisdiction in rare and exceptional circumstances, such as in Kuwait Airways Corpn v. Iraqi Airways
Co (Nos 4 and 5) [2002] 2 AC 883. The legal position regarding the rights to or in such property is
then whatever would be the position, apart from the law refused recognition. Public policy operates in
this context as a control upon some other recognised system of law which otherwise continues to
govern in accordance with the normal rules of conflicts of laws.
63. The present case is not, however, concerned with an act by a foreign government in
relation to an asset within its jurisdiction. The copyright with which we are concerned is in this
country, not in Cuba. We are asked to give positive effect to a foreign government’s act in relation to
property in England; and to elevate public policy to the level of an appropriate connecting factor, using
it to displace the ordinary law of copyright applicable in the English situs. This would, as Devlin J said
in the Bank voor Handel case [1953] 1 QB 248, 263-264, involve:
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“using public policy, not in accordance with precedent, as a restriction upon acts which are thought
to be harmful to the community, but in a novel way as a positive force to give an act validity which
it would otherwise lack.”
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Notes
In the decision of the English Court of Appeal in Peer International Corporation v . Termidor Music
Publishers Ltd (above), the court approved the decision of Devlin J in Bank voor Handel en
Scheepvaart NV v. Slatford [1953] 1 QB 248 and, on the issue of the positive role of forum public
policy as an exception to the lex situs rule, held that the decision of Atkinson J in Lorentzen v. Lydden
& Co Ltd [1942] 2 KB 202 was wrong.
Peer International is authority for two propositions:
1.
A foreign expropriatory or confiscatory law will not be recognised as having effect on title to
property situated in the forum.
2.
Although forum public policy may lead to the rejection of a foreign expropriatory or
confiscatory law effective under the lex situs (e.g. Kuwait Airways Corpn v. Iraqi Airways Co (Nos 4
and 5) [2002] 2 AC 883), forum public policy may not be relied on as the basis for the recognition of a
foreign expropriatory or confiscatory law which purports to have extraterritorial effect. In this context,
Aldous LJ (with whom Mance and Latham LJJ agreed) stated that Lorentzen was wrongly decided.
However, Mance LJ observed that the subject matter of Lorentzen (emergency wartime decree of
Norwegian government requisitioning Norwegian ships in British ports) “was very different from the
present”.
The particular circumstances in Lorentzen are described as follows in G C Cheshire and P M North,
Cheshire’s Private International Law, 8th edn, 1970, page 139:
In that case, the Norwegian Government, on the eve of their escape to England in 1940, issued a decree
whose effect, inter alia, was to requisition, in return for compensation, all Norwegian ships lying in
harbours of the United Kingdom. Since England and Norway were engaged together in a desperate war
against Germany for their very existence, the learned judge [Atkinson J] took the view that the
enforcement of the decree was demanded by public policy.
In Lorentzen, Atkinson J discussed Princess Paley Olga v. Weisz [1929] 1 KB 718 where the English
Court of Appeal recognised the validity and effectiveness of Soviet government decrees with respect to
title to tangible movable property situated in the USSR. Atkinson J observed (at 210) that the case was
not authority for “an affirmative statement that in no circumstances will our courts give extra-territorial
effect to decrees of a foreign state”. In reaching the conclusion that the 1940 Norwegian decree should
be recognised as having extra-territorial effect with regard to Norwegian registered ships, Atkinson J
said (at pages 215-216):
It seems to me that the English courts are entitled to take into consideration the following matters: that
this is not a confiscatory decree, … that England and Norway are engaged together in a desperate war for
their existence, and that public policy demands that effect should be given to this decree.
Atkinson J added (at page 216) that recognition of the Norwegian decree was “in accordance with the
comity of nations”.
In Bank voor Handel en Scheepvaart NV v. Slatford [1953] 1 QB 248, Devlin J had the advantage of
knowing the outcome of the “desperate war for their existence” referred to by Atkinson J in Lorentzen.
The plaintiff in the Bank voor Handel case was a Dutch bank which, before the outbreak of war in
1939, had placed a quantity of gold bars in a safe deposit in London. After the invasion of the
Netherlands by German forces in 1940 the Royal Netherlands government, with the approval of the
United Kingdom government, exercised its sovereign powers from London. Devlin J, in refusing to
follow Lorentzen, declined to recognise the effectiveness of a May 1940 decree of the Royal
Netherlands government which purported to transfer the gold bars to the Dutch state so as to prevent
the property from being used in a manner incompatible with the interests of the Netherlands. In
essence, the Dutch decree was ineffective because it purported to affect title to property outside the
Netherlands.
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RA/PIL08/Peer Int v. Termidor Music