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.
Extraterritorial jurisdiction of federal statutes has become an increasingly important issue in international litigation. Although territoriality and nationality have traditionally been the principal bases of jurisdiction to prescribe, broader criteria embracing principles of reasonableness and fairness have developed to accommodate overlapping or conflicting state interests and affected private interests. A Supreme Court case, EEOC v. Arabian American Oil Co. (hereinafter “Aramco”): provides guidance for determining whether a given statute should apply extraterritorially or not. In its heavy reliance on a presumption of non-extraterritoriality, however, the court’s rule differs from both the approaches taken by the courts in other cases and from the approach of the Restatement of Foreign Relations Law (Third) (hereinafter “Restatement”).
This chapter discusses the decision of the Supreme Court in the Aramco case and compares its approach to the issue of extraterritoriality with the approaches taken by legal scholars and the courts. A comparison is made between the Aramco court’s position and that of the Restatement and the positions taken by courts in finding extraterritorial jurisdiction under the federal securities, antitrust and bankruptcy laws.