Criminal Proceedings in Civil Disputes Abroad - Part 7 Chapter 12 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
Assume a situation in which an American company is involved in a contract dispute with an overseas company. Representatives of the American company are in the foreign country, dealing with the fallout from the dispute. What is the worst problemthey might face? Perhaps one that most civil litigators would not imagine possible.
The fact is that representatives of North American and European companies have encountered criminal charges, arrest and even incarceration in foreign countries at the instigation of nationals of those countries with whom the companies have commercial disputes. Not just a disturbing anomaly, the danger of retaliatory criminal proceedings is a factor that unfortunately cannot be ignored by those engaging in efforts to resolve international commercial disputes.
By way of background, criminal proceedings in most civil law countries can be instituted by persons other than government prosecutors. Ordinary citizens may file complaints (“denuncias” in Latin America) in which they are able to present, for pursuit by government authorities, elaborate presentations of fact and law, often accompanied by exhibits. These cases, brought against individuals rather than corporations, can result not only in criminal penalties but also awards of civil damages to the complaining party. Because criminal cases are often heard more speedily than civil cases, aggrieved parties are often tempted to label as criminal violations those facts and circumstances that may be, at bottom, contractual disputes. Furthermore, penal code provisions are sometimes so loosely drafted that they admit interpretations that enable conduct in commercial disputes to be characterized as criminal.
The interim measures that may be taken in criminal cases against persons charged with crimes are often powerful and intimidating. Although some cases are commenced with the serving of a notice calling for the accused to respond, in many instances the first awareness that the accused has of the existence of a complaint against her is when she is arrested and placed in custody. Bail is available but not always granted when the charges are serious. Even when bail is granted, orders may be issued prohibiting the accused persons from leaving the country. (Such an order is known as an “arraigo” in Latin America).