60

Senator Durack said it had been agreed that the

Federal Court Registry offices in each State would be  designated Registries of the Security Appeals Tribunal. As a  result the District Registrars of the Federal Court in all  States would be Deputy Registrars of the Tribunal.

In the Northern Territory, the Deputy Registrar of  the Tribunal will be Mr R. Bevis, Administrative Officer of  the Attorney-General's Department, Darwin. His office in  Darwin has been designated as the local Registry.

Canberra

6 June 1980  30/80

* * # * *

FURTHER INTERVENTION BY GOVERNMENT IN  WESTINGHOUSE ANTITRUST PROCEEDINGS

The Attorney-General, Senator Peter Durack, Q.C.,  announced today that the Government had filed a further  amicus curiae brief in connection with the uranium antitrust  case for treble damages in the United States brought by the  Westinghouse Electric Corporation.

The filing of this brief followed the sending of a  letter by United States Associate Attorney-General, Mr J.H.

Shenefield, to Judge Prentice H. Marshall, who is hearing  the case in the District Court of Illinois.

Mr Shenefield told Judge Marshall that five  foreign countries, including Australia, "have all expressed

serious concern at what they see as the exercise of the

61

United States jurisdiction over activities of foreign

persons outside the territory of the United States  challenging their authority to establish national policies  for corporate activities in their country".

"The views and representations' advanced by the  foreign governments are entitled to appropriate defence and  weight in resolving legal questions that turn,  at least in  part,  on considerations of international comity".  Mr

Shenefield said.

Senator Durack said he was releasing the brief  filed by the Australian Government with the Court and the  text of Mr Shenefield1  s letter. He was also releasing a  statement he made to Commonwealth Law Ministers at Barbados

in which he had proposed that judgements for multiple  damages should not be recognised or enforced in other  countries on the ground that they should be regarded as  penal in character.

The brief informs the District Court of the  Australian Government's views on issues which have been

raised by certain (non-Australian) defendants to the  Westinghouse suit.

One issue is whether the Court lacks jurisdiction  to deal with the suit,  or alternatively should refrain from  exercising jurisdicition. In this connection the brief:

.  points out that the exportation or uranium from Australia, has been subject to control by  the Government since 1961 as part of the  Government's overall policy and program for

supervising important natural resources;

.  emphasizes the importance that countries around the world attach to the national

control of nuclear materials;

62

draws attention to the depressing effect on

the price of uranium which resulted from the  continuation in 1971 of the 1964 United  States embargo upon the enrichment in the

United States of foreign uranium, coupled  with a policy of the United States Government  that approved the release of 50,000 tons of

uranium from a United States stockpile;

contends that the arrangements challenged in  the Westinghouse suit were a necessary  response to the embargo, were fostered and

approved on an international basis by the  Governments concerned and that the arrangeÂ­ ments excluded the United States market;

recalls the concern expressed by the

Australian Government with the embargo;

points out that Associate Attorney-General  Shenefield in January of this year acknowÂ­ ledged that the arrangements had their  genesis in a major anti-competitive action of

the United States Government;

states that it is evident that the United  States Government,  by imposing the embargo,   took the view that U.S. general antitrust

interests in a free market in uranium should,  in this instance, be subordinated to the need  to protect U.S. producers from froeign  competition;

asserts that by imposing the embargo the  United States Government necessarily removed

the international market for uranium from the  free flow of market forces which its antiÂ­ trust laws were otherwise designed to secure;

63

.  contends that the extent to which the United  States asserts extra-territorial jurisdiction  in respect of its antitrust laws is not

consistent with recognised principles of  international law;

.  expresses the Australian Government's

strongly held view that in cases of this

.  nature the United States Court should, in the

Â·  interests of international comity,  in accordÂ­ ance with two recent United States decisions,  in accordance with section 40 of the RestateÂ­ ment (second) of Foreign Relations law of the  United States, and in accordance with a

letter of Associate Attorney-General Shenefi-  eld, take into account the sovereignty and  interests of foreign nations;

.  submits that the initiation and continuation

of this massive and unjustified litigation  have thrown much of the world's uranium industry into turmoil and are jeopardising  its future.

Another issue to which the Australian brief is directed is whether the Court should impose sanctions against some defendants for failure to produce documents  whose production is prohibited by foreign law, including the

Foreign Proceedings (Prohibition of Certain Evidence) Act  1976 of Australia.

The brief contends that United States Courts, the  United States Government and scholars all agree that international comity -requires that the Court now conduct a  balancing of the various interests in the case, including

the interests of the foreign Governments,  before determining

whether to impose any of the requested sanctions.

64

Senator Durack said he was pleased that Associate  Attorney-General Shenefield had by his letter provided the  Court with a formal indication of the attitude of the United  States Government on issues raised by the proceedings. The

letter had:  .

.  acknowledged that the views and representÂ­ ations advanced by the foreign Governments  concerned in the proceedings were entitled to  appropriate deference and weight;

.  acknowledged the appropriateness of a foreign  Government communicating its views to a

United States Court by way of an amicus

curiae brief; and

.  urged the Court that it would be inappropÂ­ riate, in the absence of bad faith, to

inflict punishment against a defendant for  inability to comply with a discovery order  because of a contrary foreign criminal law.

Senator Durack said he was disappointed that the  letter did not go as far as the Australian Government had

hoped, but it was a first step in the right direction.

The Attorney-General said that on his way to the  recent meeting of Commonwealth Law Ministers at Barbados he

had discussions '  in Washington with the United States  Attorney-General,  Mr Benjamin R. Civiletti,  with a view to  reaching an agreement between Australia and the United  States on extra-territorial enforcement of antitrust law.

In those discussions he had stressed to Mr

Civiletti the importance of the United States Government  intervening in civil suits where questions of comity were

65

involved and of indicating its position on those questions.   Further discussions between officials are expected to take

place shortly.

Canberra

8 June 1980  31/80

*  *  *  *  *

66

IN THE

UNITED STATES DISTRICT COURT  FOR THE NORTHERN DISTRICT OF ILLINOIS  EASTERN DIVISION

IN RE URANIUM ANTITRUST LITIGATION

IN RE TENNESSEE VALLEY AUTHORITY  URANIUM ANTITRUST LITIGATION

WESTINGHOUSE ELECTRIC CORPORATION,

Plaintiff,

V.

RIO ALGOM LIMITED, et al.,

Defendants.

MDL 342

Master File  No. 342 A '

No. 76 C 3830

AMICUS CURIAE BRIEF OF THE GOVERNMENT OF AUSTRALIA  ON SUBJECT MATTER JURISDICTION AND ON THE IMPOSITION  OF SANCTIONS AGAINST DEFENDANTS FOR FAILURE TO PRODUCE  DOCUMENTS WHOSE PRODUCTION IS PROHIBITED BY FOREIGN LAW

Mark R. Joelson  Joseph P. Griffin

Arent, Fox, Kintner, Plotkin & Kahn  1815 H Street, NW  Washington, D.C. 20006  (202) 857-6043

Attorneys for the  Government of Australia

67

IN THE

UNITED STATES DISTRICT COURT  FOR THE NORTHERN DISTRICT OF ILLINOIS  ’  EASTERN DIVISION

IN RE URANIUM ANTITRUST LITIGATION )  MDL 342  -------------- -------------------  )

IN RE TENNESSEE VALLEY AUTHORITY )  Master File URANIUM ANTITRUST LITIGATION )  No. 342 A

)

WESTINGHOUSE ELECTRIC CORPORATION, ) )  Plaintiff, )

)

v. )

)

RIO ALGOM LIMITED,  et al., )

)

Defendants.  )

No. 76 C 3830

AMICUS CURIAE BRIEF OF THE GOVERNMENT OF AUSTRALIA  ON SUBJECT MATTER JURISDICTION AND ON THE IMPOSITION n OF SANCTIONS AGAINST DEFENDANTS FOR FAILURE TO PRODUCE  DOCUMENTS WHOSE PRODUCTION IS PROHIBITED BY FOREIGN LAW

The Government of Australia submits this brief as

amicus curiae to present its views to the Court on two issues

now pending before this Court.

The first issue is whether the Court should grant the

motions for summary judgments filed by Gulf Oil Corporation,

Gulf Minerals Canada, Limited (GMCL),  Denison Mines, Limited,  and

Denison Mines (U.S.), Inc. Those motions contend that this Court

lacks subject matter jurisdiction or, alternatively,  that this

Court should refrain from exercising subject matter jurisdiction

in the above-captioned cases. The Government of Australia

68

supports these motions and urges the Court to grant them and to

grant the request by Gulf and GMCL that the motions for summary

judgment be ruled upon before or in connection with the Court's

determination of whether to impose sanctions for failure to

produce documents whose production is prohibited by foreign law.

The second issue addressed in this brief is whether the

Court should grant the motions made by Westinghouse Electric

Corporation and Tennessee Valley Authority for the imposition of

various sanctions against certain defendants for failure to

produce documents whose production is prohibited by foreign law,

including Australian law. The Government of Australia urges

the Court to deny these motions for the imposition of sanctions.

None of the parties involved in the above-referenced

jurisdictional and sanctions motions are Australian nationals.

However, sanctions are sought against two companies, Getty Oil

Company and Noranda Mines, Ltd., because of their compliance

with Australian law. ,

I. THE INTEREST OF THE AUSTRALIAN GOVERNMENT

The Government of Australia has a significant interest

in the above-referenced motions. As is set forth in detail below,

the Australian Government has been deeply involved in the control

and regulation of the uranium industry in Australia for.many years

and has a continuing interest in the viability of that important

aspect of the Australian economy. Moreover, the Australian

Parliament has taken several actions in the form of legislation

69

and the Australian Government has taken action in the form of

Orders issued by the Attorney-General that are directly involved

in the sanctions motions now before the Court. Finally,  the

Australian Government has strongly held views concerning the

proper scope under international law of assertions of jurisdiction

by American courts in cases arising under the American antitrust

laws that involve activities in foreign countries and that may

have a detrimental effect on foreign economies.

The parties have fully briefed the legal and factual

issues as they see them. This brief will not burden this Court

by reiterating those points but will focus on the concerns and

viewpoint of the Australian Government as an affected sovereign

nation. ,  .  Ã¢ÂÂ   .

.  II. PERTINENT BACKGROUND

The background of this matter, so far as Australia

has been involved in it, is highly pertinent to the Australian'

Government's position here.  At the outset, in order to underÂ­

stand the significance to the Australian national interest in

this case, it is necessary to recognize the importance to

Australia of mineral developments and mineral exports.  Australia

is a trading nation and a major raw materials exporter. Australia's

export income from minerals and mineral products of 5.2 billion

dollars in 1978/79 represented 37 per cent of the total national

export income that year. As of June 30, 1979, the reasonably .

assured uranium resources of Australia recoverable at less than

70

580 per kilogram represented approximately 18 per cent of the

Western World's estimated resources in that category. FollowÂ­

ing a major review and decisions by the Government in 1977, .

significant new uranium development projects commenced in 1979.

In short, the health of its uranium industry and the availability

of reliable export markets for that industry have been,  and conÂ­

tinue to be, of great concern to the Australian Government.

The exportation of uranium from Australia has been

subject to control by the Government since 1961 as part of the

Government's overall policy and program for supervising important

natural resources. This control has been exercised through the

Customs (Prohibited Exports) Regulations made under the Customs

Act 1901. Since April 10, 1967, the control has formed an .

integral.part of a policy which was announced on that date by

the then Minister for National Development.

'  During the period under consideration in these proÂ­

ceedings, the exportation from Australia of uranium was prohibited  y except with prior Government approval. On February 13, 1971, the then Minister for National

Development made a statement to the Australian Parliament in

which he described the system of export control that was being

1/ The prohibition was provided for by Regulation 11 of the  Customs (Prohibited Exports) Regulations and Item 22 of the 9th  Schedule to those Regulations.

71

administered. That statement pointed out that:

Uranium is not only a valuable mineral  and the probable future source of much of the  world's future industrial power, but it is also  a material of strategic importance.  The GovernÂ­ ment has decided, in common with the Governments

of practically all other uranium exporting  countries, to maintain a system of export control.  [Hansard, 1971 at 257] Ã¢ÂÂ

The clear importance that countries around the world attach to

the national control of the nuclear industry, including moveÂ­

ments of nuclear materials, is evident from international

treaties such as: the Treaty on the Non-Proliferation of Nuclear 2/ Weapons, to which Australia and the United States,  inter alia,

are parties;  the treaty establishing the International Atomic  <3 / Energy Agency under the auspices of the United Nations which,

inter alia,  has an internationally accepted responsibility for .

safeguards on nuclear materials;  and United States domestic  1/

legislation including the Atomic Energy Act, the Private Cwner-V  .

ship of Soecial Nuclear Materials Act and the Nuclear Non-  ‘ 6/

Proliferation Act.

In 1972 there was a gross over-supply of uranium. The

policy of the United States Government, announced on October 13,

2/ 21 U.S.T. 483, T.I.A.S. No. 6839, 729 U.N.T.S. 161 (July 1, 1968)

3/ See Statute of the International Atomic Energy Agency, Oct. 26, 1956, 3 U.S.T. 1093, T.I.A.S. Mo. 3873, 276 U.N.T.S. 3.

4/ 42 U.S.C. Â§ 2011 et seq.

5/ Pub. L. No. 88-489, 78 Stat. 602 (1964) (codified in scattered  sections of 42 U.S.C.).

6/ Pub. L. No. 95-242, 92 Stat. 120 (1978) (codified in scattered  sections of 22, 42 U.S.C.).

72

1971, continued an embargo that had been imposed upon the

enrichment in the United States of foreign uranium for domestic

use. That embargo was imposed in 1964 pursuant to section 16 .

of the Private Ownership of Special Nuclear Materials Act which,

inter alia,  amended Section 161 of Atomic Energy Act of 1954 to

include a provision that the U.S.  Atomic Energy Commission "to

the extent necessary to assure the maintenance of a viable

domestic uranium industry, shall not offer such services for

source or special nuclear materials of foreign origin intended

for use in a utilization facility within or under the jurisÂ­

diction of the United States." 42 U.S.C. Â§ 2201(v)(B) (1976).

Also on October 13, 1971, the United States Government

announced its policy to approve the release of 50,000 tons of

U308 from the United States stockpile onto domestic markets

which further depressed the price obtainable. The decision of

the United States Government to continue the embargo effectively

denied the United States market, 70 per cent of the then world

market, to foreign uranium producers and forced the burden of

adjustment of supply and demand to be carried by non-United

States uranium producing countries.

In December 1971, the Australian Government deposited

an aide memoire with the United States Government drawing attention

to the Australian Government's concerns about the announcements

of October 13, 1971. In part that aide mempire stated:

73

The Australian Government is most concerned  that in their latest statement, the U.S.A.E.C. has  proposed the retention of the import embargo until  "the latter part of the present decade." The  retention of the embargo past the mid 19 70's and  especially the fact that at this stage there is  still no definite date set for its relaxation,  could have a dampening effect on the development of  Australia's uranium resources, particularly as this

industry is characterized by long term supply  contracts.'

The Australian Government is also concerned  that the Commission's proposal for the disposal of  fifty thousand tons of surplus uranium concentrates  on domestic and foreign markets contains no explicit

provisions designed to avoid disruption in markets  outside the United States. Consistent with established  practice, we would expect the United States adminisÂ­ tration to consult with interested Governments on

stockpile releases where these releases could have a  disruptive effect on the normal commercial trade of  foreign suppliers.

The Australian Government would welcome  the early announcement of a definite date for  the relaxation of the import embargo on foreign  uranium to assist the normalization of world

trade in this commodity. 7/

The United States Government did not alter its

announced policies and, in these circumstances,  it was the policy

of the Australian Government that its uranium producers should

engage in discussions with uranium producers of other countries,

outside the United States, with respect to the stabilization

of prices in the world market which, as a result of the United

States Government decision, excluded the United States market.

Following inter-governmental discussions in Paris in February 1972,

7/ Aide Memoire to the U.S. Department of State from the  Embassy of Australia 1-3 (Dec. 13, 1971).

74

in which the Australian Government participated, to study the

supply and demand position for uranium, Australian producers

engaged in discussions and on June 27, 1972, the then Minister

for National Development specifically endorsed in writing the

principles relating to the export of .uranium from Australia that

had been developed by the uranium industry at a meeting in

Johannesburg.

In his statement of February 18, 1971, the then

Minister also said:

As with previous policy, all contracts  for the export of uranium will be subjected  .  to the approval of the Minister for National  Development. This will ensure that the price

negotiated for the sale of uranium is satisÂ­ factory. Appropriate safeguards, to ensure  that the materials exported are used for peaceful  purposes only, will be mandatory. .

Subsequent to that statement no export contracts

relating to negotiated sales with United States buyers were

submitted to the Government for approval, and no shipments of

uranium to United States customers received export permission

until 1977. The marketing arrangements in question formed part

of a fundamentally important Australian Government policy for

the control of production and export of Australian uranium.

III. THE UNITED STATES COURTS SHOULD, IN THE INTERESTS  OF INTERNATIONAL COMITY, DECLINE TO TAKE OR  EXERCISE JURISDICTION IN THIS CASE_______________

The complaints at issue are directed at marketing

arrangements which were made by uranium producers, including

75

Australian producers.  Four of the defendants against whom judgÂ­

ments in default: have been entered are Australian companies.

However, in the context of the present summary judgment motions

before the Court, the Australian Government's argument here is 3/

not directed toward the situation of those companies. '

The Australian Government continues to maintain that the

extent to which the United States asserts extraterritorial jurisÂ­

diction in respect to its antitrust laws is not consistent with

recognized principles of international law and it submits this

amicus curiae brief without prejudice to that position.

The Australian Government's purpose in appearing in

support of the movants is two-fold, as follows: first, the

Australian Government wishes to express, as a .general matter, its

strongly held view that in cases of this nature the United States

courts should, in the interest of international comity, apply the

standards enunciated in Timberlane Lumber Co.  v. Bank of America,

N.T. & S.A.,  549 F.2d 597 (9th Cir. 1976), and Mannington Mills,  '

Inc. v. Congoleun Corp., 595 F.2a 1287 (3d Cir. 1979), which take

into account the sovereignty and: interests of foreign nations in

passing upon the jurisdictional questions. Second, as has already

been indicated, the Australian Government has had a specific

interest in the uranium marketing arrangements which are the

8/ Because the situation of those companies is not presently before  the Court, this brief by the Australian Government does not purÂ­ port to deal with any of the issues peculiarly applicable to them  or to any of the other foreign defendants against whom defaults  were entered.

76

subject of these lawsuits and has an ongoing concern in the wellÂ­

being of the international uranium industry, which is being

jeopardized by these suits.

From submittals made in this proceeding by the GovernÂ­ ' 9/

ments of Canada, France, and South Africa, as well as from the

instant brief and other statements made on behalf of the GovernÂ­

ment of Australia, it is evident that the challenged arrangements

were fostered and approved on an international basis by the

governments concerned, although excluding the United States market,

as a necessary response to an embargo imposed by the United States

Government prohibiting the importation into the United States of

foreign uranium for domestic use.

Aside from considerations of national sovereignty,

there are serious economic concerns which impel Australia to

urge the.  Court not to ta.-.e or exercise jurisdiction here. As was

explained earlier, Australia has considerable reserves of uranium

and is potentially a vary large supplier of that product to the

world market. The initiation and continuation of this massive—

and, it is submitted vnjustified— -litigation have thrown much of

the world's uranium industry into turmoil and are jeopardizing

its future.

As the interdependency of world trade has grown, it

has become more and more important that nations take heed of

9/ These submittals are indexed and reproduced in the Appendix to  STotion of Gulf Oil Corporation and Gulf Minerals Canada Limited  for Summary Judgments [hereinafter G. Main App.]. See, e .g ., G.  Main App. at 19, 41, 46-47, 90-91, 175, 181, 260, 264.

77

each other's interests when chey consider action affecting matters

of mutual concern. This is a statement of the principle of

international comity,  a principle in which the Australian GovernÂ­

ment deeply believes and which is well established in international

law. International comity as an aspect of international law.is

part of the law of the United States and "must be ascertained and

administered by the [American] courts of justice .  .  .  ." Hilton

v. Guyot, 159 U.S. 113, 163 (1895). The doctrine of international

comity is well established in U.S. courts and has been cited by

officers of the Executive Branch of Government as a basis for

the exercise of prosecutorial discretion not to bring lawsuits

in antitrust cases. See, e.q., U.S. DEPARTMENT OF JUSTICE,  ANTIÂ­

TRUST DIVISION, ANTITRUST GUIDE FOR INTERNATIONAL OPERATIONS 6-7

(1977). In Timberlane Lumber Co. v. Bank of America,  N .T .  & S .  A .  ,

549 F. 2d 597, 613 (9th Cir. 1976), the Court of Appeals for the

Ninth Circuit drew attention to the need to weigh the competing

interests of the United States and of foreign nations and pointed

out that this is especially required in private suits in which

there is no opportunity for the Executive Branch to weigh the

foreign relations impact before the filing of the suit. Similarly,

in Mannington Mills, Inc, v. Congoleum Corp., 595 F.2d 1287, 1296

(3d Cir. 1979), the Court of Appeals for the Third Circuit stated

that " [w]hen foreign nations are involved, however, it is unwise

to ignore the fact that foreign policy, reciprocity, comity, and

limitations of judicial power are considerations that should

have a bearing on the decision to exercise or decline jurisdiction."

78

This approach is also endorsed in Section 40 of the RESTATEMENT

(SECOND) OF FOREIGN RELATIONS LAW OF THE UNITED STATES (1965).

While, in its decision earlier this year involving the instant

case, the Seventh Circuit indicated that, in the context of a -default judgment, Mannington Mills (and Timberlane)  did not

necessarily reflect the law in this Circuit, it stated that "the

considerations recommended in that case certainly provide an

adequate framework for .  .  .  determination (of whether juris-W

diction should be exercised].  . .  ."

'  This viewpoint is also accepted by the Executive Branch

of the United States Government and was most recently stated in the

Letter from Associate Attorney General John H. Shenefield to

the Court (May 6, 1980) in connection with this proceeding.  That

letter referred to the expressed concerns of the various affected

foreign governments and emphasized that "(t]he views and repreÂ­

sentations advanced by these foreign governments are entitled to

appropriate deference and weight in resolving legal questions

that^turn, at least in part, on considerations of international

comity."

The Australian Government has consistently maintained

that its sovereignty would be unjustifiably encroached upon by

the operation of U.S. antitrust laws in this case unless, at

least, the Timberlane case is given full effect in accordance

with the principles of international comity.

10/ In Re Uranium Antitrust Litigation, 1980-1 Trade Cases (CCH)  I I  63,183, at 77,897 (7th Cir. 1980).

79

The Australian Government believes that, if the Court

gives the principle of comity the weight to which it is entitled

in this case, it will conclude that it should not exercise

jurisdiction here- As indicatedÂ· above, the activities which are

challenged in this lawsuit were evidently undertaken pursuant to

the expressed policies of governments friendly to the United

States in the exercise of their sovereign powers.  With respect

to the situation of the moving defendants,  Canada has expressly

declared that it initiated and participated in the international

uranium marketing arrangements and made the participation therein

of all Canadian uranium producers a matter of firm Government

policy. Memorandum of Government of Canada as Amicus Curiae on

Motions to Impose Sanctions for Failure to Produce Documents Whose

Production is Prohibited by Canadian Law at 14-16, May 8, 1980.

It is relevant that the challenged arrangements were

not directed against the U.S. market and that the responsible

U.S. authorities- concluded,  after an exhaustive grand jury inquiry,

that "The evidence did not support the conclusion that the broad

uranium cartel had any significant and foreseeable effect on

United States commerce, as required by law." Letter from then

Assistant Attorney General John H. Shenefield to Senator Howard

M. Metzenbaum, G. Main App.,  at 1042, 1047 (Mar. 31, 1979).

The challenged arrangements were a necessary response

to an embargo imposed by the United States Government closing

off the U.S. market to foreign producers of uranium.

80

The Australian Government draws attention to the

embargo as being of particular relevance in the application of '

the Timberlane principles. Those principles require some

assessment of the significance to the United States of its

general antitrust concerns in the maintenance of a competitive

international market in the sale of uranium.

It is evident that the United States Government, by

imposing the embargo,  took the view that U.S. general antitrust

interests in a free market in uranium should, in this instance,

be subordinated to the need to protect U.S. producers from foreign

competition.

Accordingly, the United States Government satisfied

its interests by the imposition of the embargo. In doing so, it

necessarily removed the international market for uranium from the

free flow of market forces which its antitrust laws were otherÂ­

wise designed to secure.

Other governments with vital interests in the mainÂ­

tenance of their exports, noting the anticompetitive impact upon

the market of United States Government action, took the actions

referred to earlier in this brief by way of response.

The restrictive and anticompetitive nature of the

embargo was considered by the Executive and Legislative Branches

of the United States Government in 1964, as was the possibility

of an adverse effect on U.S. international trade relations.

81

Hearings on Private Ownership of Special Nuclear Materials -

196 4 - Before the S' up comm.  on Legislation of the Joint Committee

on Atomic Energy,  38 th Cong., 2d Sess. at 336 ,  407-16 (1964).

The United States Government recently has confirmed that its

conduct in this regard was anticompetitive.  During his January

1980 confirmation hearings for the position of Associate

Attorney General, John Shenefield stated:

First, it is an undoubted fact, as your  statement clearly points out, that the cartel  had its genesis;in a major anticompetitive  action by our own Government in walling off a  major portion of the world's market to businessÂ­ men who had theretofore sold into our market.

[Confirmation Hearings on John H. Shenefield, Nominee, Associate Attorney General: Hearings Before the Senate Comm, on the Judici-ary,  96th  Cong.,  1st & 2d Sess.  73 (1979-1980).]

IV. THE COURT SHOULD NOT IMPOSE SANCTIONS ON DEFENDANTS  BECAUSE OF THEIR COMPLIANCE WITH FOREIGN LAW

A. Actions Taken by the Australian Government  Relating to Discovery Orders Made by  Foreign Courts_______ ____________________

In November 1976, the Australian Government introduced

a bill in Parliament dealing with discovery orders issued by

foreign courts. In his Second Reading Speech to the Australian

House of Representatives, the then Attorney-General of Australia,

Mr. Ellicott, stated that the purpose of the bill was

"to enable the Government to make orders in  situations in which they appear to be needed  to ensure that documents in [Australia] are not  able to be produced to courts or tribunals in  other countries." 11/

11/ Second Reading Speech of then Attorney-General R. J. Ellicott,  102 H Parliamentary Debates,  House of Representatives 2907 (Nov. 18, 1976) .

82

He then stated that the immediate need for the legislation was

caused by the various proceedings in the United States relating

to arrangements alleged to have been made for the marketing of

uranium in 1972, including: this case, the Westinghouse/Utilities

litigation before Judge Merhige and the then-oending grand jury  .  12/ *

investigation. The principal justification for the proposed

legislation was described by the then Attorney-General as

follows:

Claims are being made that the United  States antitrust laws have an operation outside  the United States to an extent which is beyond  what is generally conceded in international law

and beyond what other countries are presently  prepared to concede in relation to the pending  proceedings.

* *  *  4

In connection with the present dispute  concerning uranium, Canada has recently made  a regulation indicating that it rejects the  jurisdiction being asserted by the United States  authorities as an unjustified invasion of its  sovereignty. This is substantially the purpose  of the Bill that I am now presenting. 13/

In response to the request by the Australian Government,

the Australian Parliament enacted, in November 1976, the Foreign 14/

Proceedings (Prohibition of Certain Evidence) Act 1976 [hereinÂ­

after referred to as the Australian Statute] which was amended in 15/

certain technical respects in December 1976.

12/ Id. at 2907-8.

13/ Id.

14/ .Austl. Act No. 121 of 1976 (1976). .

15/ Foreign Proceedings (Prohibition of Certain Evidence) AmendÂ­ ment Act 1976, Austl. Act No. 202 of 1976 (1976).

83

The Australian Statute,  as amended, provides in pertÂ­

inent part that the Attornev—General ma” issue an order prohibiting 16/

compliance with discovery requests issued by foreign courts.

16/ 4.Cl) The Attorney-General shall exercise his powers under this Act so as to impose restrictions only where he is satisfied  that—

(a) a foreign tribunal is exercising or proposing or likely  to exercise 'jurisdiction or powers of a kind or in a  manner not consistent with international law or comity ,  in proceedings having a relevance to matters to which the

laws or executive powers of the Commonwealth relate,  being the only proceedings of a foreign tribunal in.  relation to which the restrictions are to have effect; or

(b) the imposition of the restrictions is desirable for  the purpose of protecting the national interest in  relation to matters to which the laws or executive  powers of the Commonwealth relate.

*  *  *  Â·  .

5.(1) The Attorney-General may, by order in writing, prohibit,  except with his consent in writing or as otherwise permitted by  the order—

(a) the production in, or for the purposes of, a foreign  tribunal of documents that, at the time of the making  of the order or at any time while the order remains  in force, are in Australia;

(b) the doing of any act in Australia, in relation to  documents that, at the time of the making of the order or  at any time while the order remains in force,  are in  Australia, with the intention that the act will result,  or where there is reason to believe that the act will, or

is likely to result, in the documents, or evidence of the  contents of the documents,  being produced or given in, or  for the purposes of, a foreign tribunal;

(c) the giving by a person, at a time when he is an Australian  citizen or is a resident of Australia, of evidence  before a foreign tribunal in relation to, or to the  contents of, documents that, at the time of the making of the order or at any time while the order is in force,

are in Australia; or '

(d) the production of documents before a tribunal in Australia or the giving of evidence, whether in relation to the conÂ­  tents of documents or otherwise, before a tribunal in  Australia, for the purposes of proceedings in a foreign

tribunal. .

[Austl. Act No. 121 of 1976, Â§Â§ 4 & 5(1), as amended by Austl. Act  No. 202 of 1976, Â§ 4 (1976).

84

In December 1976, pursuant to the Australian Statute

as amended, the then Attorney-General of Australia issued such

an Order prohibiting, except with his consent, compliance with

certain types of discovery orders issued by this Court in this .  Â·

litigation because he was: .

satisfied that the imposition of the restrictions  specified hereunder is desirable for the purpose  of protecting the national interest in relation  to matters to which the laws or executive powers  of the Commonwealth relate. 17/

'  The production of each document covered by this Order

constitutes a separate violation of the Australian Statute. The

penalty for each violation by an individual is a fine of $5,000

or imprisonment for six months. A company that violates this W

Order is subject to a fine of $10,000 for each violation.

As the parties have detailed in their papers, since

the issuance of the above-referenced Order by the then Attorney-

General, several parties have made one or more requests that the

Attorney-General grant his consent to compliance with discovery

requests generated by this litigation.

In response to the;  invitation issued by this Court in

Joint Pretrial Order No. 5, the then Australian Ambassador to

the United States,  Alan Renouf,  sent a letter dated May 25, 1979,

to this Court. That letter invited this Court's attention to

the Second Reading Speech of the then Attorney-General for a

statement of the purpose of the Australian Statute. Attached

17/ Order by R. J. Ellicott, Attorney-General, AUSTRALIAN GOVERN  MENT GAZETTE No. S239 (Dec. 24, 1976).

IB/ Austl.  Act No. 121 of 1976, Â§ 7 (1) (1976) .  ,

85

to that letter were copies of the Australian Statute, the amendÂ­

ment to the statute, the Second Reading Speech of the then

Attorney-General, the Orders issued pursuant to the Australian

Statute, and copies of correspondence from two Attorneys-General

denying requests for consent made by Westinghouse, Mr. Paul

Riddell and Getty Oil Company. Letter of Alan Renouf to the

Court, G. Main App. 109 (May 25, 1979).

As is detailed in the papers submitted by the parties,

since the time of Ambassador Renouf's letter to this Court, the

Australian Attorney General has considered a number of appliÂ­

cations for consent. Most of those applications were denied in

toto but on three applications consents were given for the

release of some of the documents for which the application was

made. Where consent was given, it was on the grounds that such

production would not be detrimental to the Australian national

interest. .  .  . Ã¢ÂÂ¢  I  ,

Recently this Court granted Getty Oil Company's ApÂ­

plication for Letters Rogatory addressed to the Supreme Court

of New South Wales, Australia. If a summons is issued by that

Court as the first step in obtaining responses to this Court's

Letters Rogatory, it is the intention of the Australian GovernÂ­

ment to intervene in the New South Wales proceedings and to seek

a denial of the Letters Rogatory on the ground that responding

to them would, be a violation of the Order issued by the then

Attorney-General pursuant to the Australian Statute.

86

3. The Proper Legal Standard for Imposing  Requested Sanctions___________________

All of the parties and this Court agree that the conÂ­

trolling American legal precedent on the imposition of sanctions

in the circumstances now before the Court is Societe Internationale

v. Rogers, 357 U.S. 197 (1958) (hereinafter Societe). Moreover,

by letter dated May 6, 1980, the Associate Attorney General of

the United States informed this Court of the position of the

United States Government that:

it would be inappropriate, in the absence of  bad faith, to inflict punishment against a  defendant in [this] case for inability to  comply with a discovery order of the court  because of a contrary foreign criminal law;

the consequences of the absence of complete  discovery should be assessed by reference to  the multiple factors identified in Societe _ .  Internationale v. Rogers . . . .

This Court analyzed ektensively the U.S. Supreme Court's

decision in Societe as it pertained to the decision whether to

issue production orders in its Memorandum Decision of November 7,

1979, In re Uranium Antitrust Litigation,  480 F. Supp. 1138

(N.D. 111. 1979). In that Memorandum Decision, this Court declined

to balance the interests of the United States, the relevant

foreign countries and the parties as part of its analysis of

whether production orders should be issued. Id. at 1148. HowÂ­

ever, this Court did reserve further consideration of communiÂ­

cations from foreign governments until the sanctions phase of

this case. Id. at 1149.

Ã¢ÂÂ¢  Westinghouse now contends that the Australian Statute

and similar laws enacted by Canada and South Africa "are. entitled

87

to no weight in this forum, since they were promulgated for the

express purpose of thwarting proceedings here and in other United

States Courts." Westinghouse Memorandum in Support of Motion

for Sanctions Against Defendants Which Have Not Complied With

the Court's Order for Production of "Foreign Documents" 37 (Mar.

3. 1980)[hereinafter Westinghouse Memorandum].

In support of this contention, Westinghouse seeks to

distinguish the Swiss law in Societe from the foreign laws at

issue in this case on the ground that: "the laws which imposed

a duty of confidentiality on Swiss banks were of general and

longstanding application .  .  Â· .  Id. at 33. According to

Westinghouse, because the Australian Statute and the other releÂ­

vant foreign laws are of recent vintage and are aimed, at least

in part, specifically at this case, they should not be accorded

the same degree of international comity that the U.S. Supreme

Court directed the District Court to accord to the Swiss law in

the sanctions portion of >  the Societe opinion. Id. at 33-34.

This contention is erroneous for two reasons. First,

in Societe the U.S. Court of Appeals for the District of Columbia

Circuit held that

Except for the action of the Swiss Federal  Attorney, explicitly designed to prevent . Ã¢ÂÂ¢  their production in this case, the documents  could have been produced. [Societe Internationale

v. Brownell, 225 F.2d 532, 539 (D.C. Cir. 1955)  (footnote omitted).

Thus, contrary to Westinghouse's assertion, the U.S.  Supreme

Court was reviewing a situation in which a foreign government

took new action directly aimed at the specific litigation under

review.

-  88

Second, even assuming arguendo that Westinghouse is .

correct in its assertion concerning the Swiss law in Societe,

it makes no sense to argue that the U.S.  Supreme Court has ruled

that in reaching its decision whether to impose sanctions,  a

trial court should weigh the impact of the existence of an old,

foreign statute of general applicability, but should not weigh

the impact of a new, directly applicable foreign statute. Nor

is it logical to contend that the specific response of a foreign

government should be weighed if it is administrative but should

not be weighed if it is legislative.

U.S. courts, the U.S, Government and scholars all

agree that international comity requires that this Court now

conduct a balancing of the various interests in this case, inÂ­

cluding the interests of the foreign governments, before

determining whether to impose any of the requested sanctions.

The most closely related case to the one at bar is

In re Westinghouse Electric Corp. Uranium Contracts Litigation,

563 F .2d 992 (10th Cir. 1977) which involved some of the parties

in the instant case and the Canadian statutes involved in this

case. There the United States Court of Appeals for the Tenth

Circuit held that "Societe calls.for a 1balancing approach'  on

a case-by-case basis," id. at 997, and that the district court

had abused its discretion in part because

Canada has a legitimate interest in the  disclosure of these documents and the  district court erred in failing to  consider such interest. [Id. at 999]

That court also noted that Section 40 of the RESTATEMENT (SECOND)

89

OF FOREIGN RELATIONS LAW OF THE UNITED STATES (1965) is a

proper source of guidance as to the factors to be considered in

the balancing of interests. 563 F .2d at 997.

As this Court is aware, Section 40 has been "very  20/ influential" and has been utilized by several courts when they

have been confronted with the issues that now confront this Court.

See,  e.q., United States v. First National City Bank, 396 F .2d

897, 902 (2d Cir. 1968). Â·  '

Moreover, the United States Department of Justice

has stated that

19/ Section 40 provides:

Limitations on Exercise of Enforcement Jurisdiction

Where two states have jurisdiction to prescribe and  enforce rules of law and the rules they may prescribe  require inconsistent conduct upon the part of aÂ· person,  each state is required by international law to consider,

in good faith, moderating the exercise of its enforceÂ­ ment jurisdiction, in the light of such factors as

(a) vital national interests of each of the states,

(b) the extent and the nature of the hardship that  inconsistent enforcement actions would impose upon the  person,

(c) the extent to which the required conduct is to  take place in the territory of the other state,

(d) the nationality of the person, and

(e) the extent to which enforcement by action of  either state can reasonably be expected to achieve ,  compliance with the rule prescribed by that state.

RESTATEMENT (SECOND) OF FOREIGN RELATIONS LAW OF THE UNITED STATES  Â§ 40 (1965) .

20/ Note, Foreign Nondisclosure Laws and Domestic Discovery Orders  in Antitrust Litigation, 88 YALE L.J. 612, 619 (1979).

90

[W]e have increasingly accepted our  responsibility as a member of the family  of nations to modify investigative practices  more appropriate to domestic situations when  we contemplate reaching across the water or  over our northern border for documents or

testimony.

* * *

What all of this means is that we have  .  stepped back from the confrontation mode of  the past. In the future, we see voluntary  cooperation as our first resort in obtaining

information and evidence located abroad. The  new emphasis is a frank recognition of the  past limited utility of compulsory process in  these cases.  .

Remarks of Deputy Assistant Attorney General Donald L. Flexner,

1978 Fordham Corporate Law Institute (Nov. 15, 1978).

In its Memorandum Decision, this Court stated its

belief that "a balancing test is inherently unworkable in this Â·

case." 480 F. Supp. at 1148. It is submitted that, although it

is difficult to balance competing sovereign interests, such a

balancing is required by the relevant precedents.  When confronted

with a similar situation, Chief Judge Kaufman of the Second

Circuit stated

the obvious, albeit troublesome, requirement  for us is to balance the national interests  of the United States and Germany and to give Â·   appropriate weight to the hardship, if any, Citibank will suffer.

(United States v. First National City Bank, 396  F.2d 897, 902 (2d Cir. 1963).]

In this matter, difficulties in balancing competing

sovereign interests are minimized by reason of statements made

by responsible U.S. antitrust authorities.

91

Westinghouse asserts that the foreign governments

involved in this case "have placed this Court in a position where

it must choose between enforcing the law of the United States or

yielding to foreign law." Westinghouse Memorandum at 69. That

assertion is incorrect. Under the American law discussed earlier

in this brief, this Court has a duty to enforce U.S. law in a

manner that takes proper account of the international ramifications

of such enforcement. Past developments in this and other litiÂ­

gation involving the international uranium industry have demonÂ­

strated that much more is involved in this case than is involved

in the enforcement of the U.S. antitrust laws in a purely

domestic context. It is those differences between a purely

domestic case and this case that should be examined and weighed

by this Court when it considers imposing sanctions upon parties

who are subject to such sanctions because they refuse to violate

the laws of foreign sovereigns.  It is submitted that a proper

examination and weighing under the guidance of existing precedents

and Section 40 of the RESTATEMENT (SECOND) OF FOREIGN

RELATIONS LAW OF THE UNITED STATES (1965) will result in the

denial of the motions for sanctions.

Ã¢ÂÂ   V. CONCLUSION -

For the foregoing reasons,  the Australian Government

urges that the motions for summary judgment filed by Gulf Oil

Corporation, Gulf Minerals Canada, Limited, Denison Mines,

92

If the Court considers that there are any difficulties

in weighing sovereign interests,  as required by the relevant

precedents,  the Court could seek further information from the

United States Government or from foreign governments.

It is precisely because foreign governments have acted .

in this case both by domestic legislation and through submissions

directly to this Court that this Court should weigh their interests

in reaching its decision. Commentators have.drawn attention to

the significance for the international relations of the United

States of the situation which would result if, despite the unÂ­

precedented level of interest and participation by friendly

foreign governments, their interests were ignored. As one AmerÂ­

ican commentator has stated:

As a general rule, a domestic court should  be extremely reluctant to impose sanctions in an  international antitrust case,  since the discovery  rules and substantive laws of the United States  are at odds with those of its major trading  partners. In the last analysis, the barriers  placed on discovery abroad reflect a continuing

international hostility to an American theory of  jurisdiction that mandates the application of  our antitrust law to transactions that seriously  affect foreign national economies. .  .  .

* * *

When forced to choose between imposing sanctions  for noncompliance and recognizing a foreign nonÂ­ disclosure law in litigation that is international  in scope, American judges must bear in mind that

their decisions will inevitably be measured against  prevailing standards in the community of nations.

Note, Foreign Nondisclosure Laws and Domestic Discovery Orders

in Antitrust Litigation, 88 YALE L.J. 612, 627-23 (1979)(footnotes

omitted).]

93

Limited and Denison Mines (U.3.}, Inc., be granted and that

the motions for the imposition'of sanctions for-failure to

produce documents whose production is prohibited by foreign

law filed by Westinghouse and the Tennessee Valley Authority

be denied. .

Respectfully submitted,

J o s e b J *  P . u i r i f f i

AKENT, FOX, KINTNER, PLOTKIN &  1815 H Street, NW Washington, D. C. 20006  .  (202) 857-6043

-  Attorneys for the

Dated: May 29, 1980 Government of Australia

KAHN

94 -

Text of Letter from Assistant Attorney-General  Shenefield to .Judge Prentice H. Marshall in  Relation to Uranium Industry Antitrust Litigation

This letter constitutes a formal statement of  interest by the United States in the above-captioned litigation.  The case implicates foreign policy concerns of both the United  States and foreign governments. Australia, Canada, France,

South Africa, and the United Kingdom have all expressed serious  concern at what they see as the exercise of the United States  jurisdiction over activities of foreign persons outside the  territory of the United States challenging their authority to

establish national policies for corporate activity in their  countries. The recent adoption of administrative and  legislative measures by some foreign governments in response  to the initiation of this lawsuit testifies to the intensity  and authenticity of their respective interests. The views  and representations advanced by these foreign governments are  entitled to appropriate deference and weight in resolving  legal questions that turn, at least in part, on considerations  of international comity. See. e.g., Societe International  v. Rogers, 357 U.S. 197 (1958)*, Timberlane Lumber Co. v. Bank of America, 549 F.2D 597 (9th Cir, 1976)., Mannington  Mills, Inc. v. Congoleum Corp., 595 F.2D 1287 (3rd Cir. 1979).,

section 40 of the restatement (second) of the Foreign  Relations Law of the United States.

Foreign Governments may perceive particular Federal  Litigation which they are not parties as threatening to their  sovereign interests. At one time, it was customary for  foreign governments to communicate such concerns through  diplomatic notes, delivered to the Federal Courts by the  Department of State, In 1978, however, the Clerk of the  United States Supreme Court notified the Solicitor General

that a foreign government that desired to present its views  to the Federal Courts on a pending case should do so by way  of a brief amicus curiae. Accordingly, since that time, both  the Department of State and the Department of Justice have  consistently encouraged interested foreign governments to

submit their positions directly to the courts as amici. It  would be improper, therefore, to discount the importance of  international comity in a particular case simply because  foreign governments have expressed their views to the court  without the intercession of the Department of State.

Finally, the United States urges that it would be  inappropriate,  in the absence of bad faith, to inflict  punishment against a defendant in the above-captioned case  for inability to comply with a discovery order of the court  because of a contrary foreign criminal law.,  the consequences

of the absence of complete discovery should be assessed by  reference to the multiple factors identified in Societe  International v. Rogers, Supra.

95

COMMONWEALTH LAW MINISTERS MEETING. BARBADOS

o 2 May 1980

Recognition and enforcement of .judgements and orders and

the service of process within the Commonwealth -

multiple damages .judgements

1. This paper raises an important issue for consideration

by Ministers in relation to the rules of law in Commonwealth

countries (whether at common law or under legislation) as to

the recognition and enforcement of certain foreign judgements

in civil proceedings. .

in private proceedings should be treated as penal or civil for

the purpose of recognition and enforcement. A judgement for

multiple damages is a judgement arrived at by doubling, trebling

or otherwise multiplying a sum assessed as compensation for the

loss or damage sustained by the person in whose favour the

judgement is given (See section 5(3) of the United Kingdom

Protection of Trading Interests Act).

3. The significance of the issue arises chiefly in the

field of United States Antitrust Laws. Under those laws

criminal proceedings in the strict sense may be taken by the

United States Government in respect of their violation. In

addition, however, private proceedings may be instituted for

the recovery of treble damages in respect of any injury to

business or property sustained as a result of anything

forbidden in the antitrust laws (section 4 of the Clayton Act).

2 . That issue is whether judgements for multiple damages

-I

96

4. The overall purpose of the provision conferring the

right to treble damages upon private plaintiffs is to enable

United States antitrust laws to be enforced more effectively.

Plaintiffs exercising that right are referred to in the United

States literature on the subject of antitrust enforcement as

"private Attorneys-General" (see Antitrust Law Developments 1975

p. 254). The right conferred is thus penal in purpose and effect.

5. The problem concerning the international recognition

of such judgements cannot be disassociated from the extremely

wide extraterritorial jurisdiction assumed by United States

courts in antitrust proceedings. As stated in the "Antitrust

Guide for International Operation" issued by the United States

Department of Justice on 26 January 1977 "Where foreign

transactions have a substantial and foreseeable effect on U.S.

commerce, they are subject to U.S. law regardless of where

they take place." (page 6). This doctrine of jurisdiction -

the "effects doctrine" - has been objected to by other countries

as being contrary to the rules of international law.

6. The position is that companies incorporated and

carrying on business in the international market outside the

United States may find themselves the subject of treble damages

suits in that country. Judgements may be given in those suits

notwithstanding that the conduct of the defendants is

extraterritorial and that the companies concerned have been

carrying out the legitimate trade policies of their governments.

7. The Australian Government has recently been

concerned with proceedings of that character brought by

97

Westinghouse Electric Corporation in Illinois against 29

United States and foreign uranium producers in respect of

uranium markerting arrangements entered into outside the

United States. Four of the defendants are Australian companies.

8. As a result of such proceedings:

. Australian defendants are facing a potential

judgement of hundreds of millions of dollars;

. Such a judgement against the companies concerned

would have a considerable impact upon Australia's

national interest;

. The alleged uranium marketing arrangement by

non-United States producers was consequential upon

an embargo imposed by the United States Government

prohibiting the importation of uranium into the

.  United States for enrichment for domestic use

there so as to protect U.S. producers. The

United States at that time constituted 70%

of the world's market. .  i

Details of the Westinghouse proceedings are attached.

9. Faced with this situation theÂ· Australian Parliament

enacted the Foreign Antitrust Judgements (Restriction of

Enforcement) Act 1979 in March of last year.  The Act provides

that where the Attorney-General is satisfied that a foreign

court has exercised jurisdiction or powers in a manner '

inconsistent with international law of comity or where he

is satisfied that it is desirable in the national interest that

judgement should not be enforced in Australia he may by order

in writing declare that that judgement should not be recognised

or enforced in Australia or that it should be enforced to the

98

extent only in such amount as indicated in the order. On

6 June 1979 the Attorney-General made an order that the

judgement entered in the Westinghouse suit should not be

recognized or enforceable in Australia.

10. The experience of Australia in the Westinghouse

suit is mentioned in order to indicate the difficulties with

which exporting countries within the Commonwealth may be faced

when confronted with a request for recognition or enforcement

of a treble damages antitrust judgement in a foreign court

against their exporters. .

11. So far as Australia is concerned the Foreign

Antitrust Judgement (Restriction of Enforcement) Act would

preclude enforcement of the Westinghouse judgement in Australia

but the companies concerned have assets in other countries

including those within the Commonwealth. Accordingly the need

could arise in other Commonwealth countries to determine whether

a judgement in the Westinghouse suit is to be treated as penal

or civil for enforcement purposes.

12. In the United Kingdom, the Protection of Trading

Interests Act has recently been enacted. Under that

legislation no recovery is allowed in respect of a foreign

judgement for multiple damages. (Section 5(2)(a)). In

certain circumstances a United Kingdom defendant to a foreign

multiple damages judgement may recover back the amount awarded

against him not attributable to compensation (Section 6(2)).

In introducing that legislation on 15 November 1979 the

Secretary of State for Trade (Mr Nott) said:

99

"We regard this civil sanction - I refer here

to triple damages - as being penal rather than

compensatory, and consequently consider that in

international dealings at least these proceedings

should be subject to the legislation that we would

regard as appropriate to criminal proceedings.

In fact, they are subject to no such limitations.

The plaintiff is given what appears to us to be

an unfair advantage." (Hansard p. 1536)

The general legal position Â·

13. The common law conflict of laws rule is that

enforceability is denied to a foreign "penal" judgement.

That principle is reflected in the United Kingdom Judgements

(Reciprocal Enforcement) Act 1933 which provides for

registration of foreign judgements and the various statutes

applying in Commonwealth countries based upon that Act.

14. The question is whether multiple damages judgements

are to be regarded as penal. In Huntington v. Attrill (1893)

A.C. 150 the Privy Council approved the following statement x

by the Supreme Court of the United States in Winsconsin v. k .

The Pelican Insurance Company (1888) 127 U.S. 265:

"The rule that the courts of no country executes the

penal laws of another applies not only to sentences

for crimes and misdemeanours but to all suits in favour

of the State for the recovery of pecuniary penalties

for any violation of statutes for the protection of

its revenue or other municipal laws, and to all

judgements for such penalties."

100

The Privy Council considered that that would apply whether .

the proceedings were instituted by the State or by an official

authorized by the State, or by a common informer, who it saw as

acting in the interest of the whole community.

15. .  A multiple damages suit would not in terms fall

within this description of penal judgements. It is perhaps

arguable that a multiple damages suit would be construed as

bearing more similarity to the situation of a common informer

because of its enforcement element.

16. Nevertheless the position is at least doubtful and

under a strict application of Huntington v. Attrill a multiple

damages judgement would not be regarded as penal. In S.A.

Consortium General Textiles v. Sun & Sand Agencies Ltd. (1978)

2 A.E.R. 339 at 354-5 Lord Denning commented that a "penalty"

under the United Kingdom Foreign Judgements (Reciprocal

Enforcement) Act 1933 referred to "a sum payable to the State

(sic) by' say of punishment and not a sum payable by way of

exemplary damages". '

17. In the United States some authorities tend to support

the view that two thirds of a judgement for treble damages under

the antitrust laws would be held to constitute a penalty - see

Kline v. Caldwell, Banker & Co. 508 F. 2d. 226 (9th Cir. 1974),

Lyons v. Westinghouse Electric Corp. 222 F. 2d. 184 (2nd Cir. 1955)

and Rogers v. Douglas Tobacco Board of Trade Inc. (1957) Trade

CAS. 68, 706 (5th Cir. 1957).

18. In the draft Bill for a Foreign Judgements (Reciprocal

Enforcement) Bill in respect of money judgements prepared by

Professors McLean and Patchett Section 3(3)(b) provides that

the Act does not apply to -

101

"any judgement to the extent to which it provides

for the payment of a sum of money by way of

exemplary or punitive or multiple damages".

Conclusion .

19. In the Australian view it would be preferable if there

were a clear exclusion from the proposed Bill of Professors .

McLean and Patchett of judgements for multiple damages or any

portion of such judgements. The most common case in which

multiple damages judgements are given is under United States

antitrust laws which, as mentioned, may be applied

extraterritorially in conflict with national economic policies

of other countries. If a plaintiff chooses to exercise the

right to multiple damages and in effect act as a "private

Attorney-General" he should not, under the guise of civil

proceedings, be entitled to reciprocal enforcement of the judgement

obtained. -  If he wishes to have that advantage he should be

obliged to limit his action to a claim for loss actually

sustained.

102

ATTACHMENT

The Westinghouse Proceedings

1. The genesis of the Westinghouse uranium litigation

lies in a 1964 decision of the United States to prohibit

the enrichment of foreign uranium for use in U.S. domestic

reactors.  This had the effect of closing, the United States

market to foreign uranium producers. This embargo, the

continuation of which was announced by the United States

Government on 13 October 1971, forced the burden of adjustment

of supply and demand to be carried by non-United States uranium

producing countries.

2. 'Also in October 1971 the United States Government

announced its policy to approve the release of 50,000 tons of

U^Og from the United States stock pile onto domestic markets

which further depressed the price obtainable. By 1972,

there was a gross over-supply of uranium in terms of demand

and prices had dropped to as low as $4.50 per pound.

3. The exportation of uranium from Australia has been

subject to control, through the Customs Act 1901, by the

Australian Government since 1961. From 10 April 1967 the

control has formed an integral part of a wider uranium market

policy. In the light of the U.S. embargo, that policy was

that its uranium producers should engage in discussions with

uranium producers of other countries, outside the United States,

to achieve the stabilization of prices in the world market

which, as a result of the United States Government decisions,

excluded the United States market.

103

4. In the late 1960's and early 1970's the Westinghouse

Electric Corporation (Westinghouse) entered contractual

arrangements for the supply of nuclear power plants. As an

inducement for these contracts they included provision of fuel

supply at low prices. By 1974 Westinghouse had a commitment

for the supply of 60 million lbs of U^Oq  at low price's.

Westinghouse, however, had not entered purchase or supply

arrangements for the uranium supply commitments it had entered into

and thus had sold "short" this very large quantity of U^Oq .

Following a steep rise in uranium prices in 1974, Westinghouse

notified its customers in 1975 that it was unable to fulfill the

uranium contracts under the "commercially impracticable" clause

of the U.S. Uniform Commercial Code. Subsequently, proceedings

were instituted against Westinghouse by 16 U.S. and 3 Swedish

electric, power utilities for breach of supply contracts. United

States Courts have however ruled that Westinghouse had not

sustained its burden of proving that it was excused from performing

its contractual obligations by commercial impracticability of

force majeure. As a consequence Westinghouse has now settled 13

of these suits out of court.  It is estimated that the total cost

of settlement of the 19 suits will reach well over one billion

dollars.

5. In July 1976, a Grand Jury was empanelled by the U.S.

Government to examine whether a case existed for criminal

prosecution of parties alleged to have been involved in the

uranium marketing cartel. The Grand Jury did not return any

indictments. However, the Antitrust Division of the Department

of Justice, after a full study of the matter, filed only a

misdemeanour charge against one United States company. Indeed,

on 24 January 1980, in the course of discussing the alleged

104

cartel and the Justice Department investigation, U.S. Assistant

Attorney-General Shenefield said "It is an undoubted fact ...

that the cartel had its genesis in a major anti-competitive

action by our own Government in walling off a major portion of

the world's market to businessmen who had therefore sold into

our market" and "I think it is also fair to point out that the

governments of certainly Canada and South Africa and Australia

see uranium as being one of their major national resources

and took steps following our own government's anticompetitive

acts to try and save an important national industry".

6. On 15 October 1976, Westinghouse commenced antitrust

civil proceedings, claiming treble damages, in the U.S. District

Court for the Northern District of Illinois against 29 defendants

20 from the United States and 9 foreign defendants. In -that

action Westinghouse sought treble damages under the Sherman

Antitrust Act of 1890, in relation to alleged uranium marketing

arrangements which had been entered into by the defendants

in 1972 outside the United States and which were alleged to

have damaged Westinghouse.

7. .  Four Australian companies were among the nine

non-United States defendant corporations which declined to enter

any appearance. As the Australian Government understands it,

the defendants have been advised that there are serious

jurisdictional objections to the proceedings against them

and that by appearing, they might be regarded, under the law of

countries where they have assets against which enforcement

might be sought, as having voluntarily submitted to the

jurisdiction and thereby waiving those objections for the purpose

of any enforcement proceedings. In particular, it appeared

105

that upon the basis of judicial authority in the United

Kingdom, even an appearance merely to contest jurisdiction

could produce the same result as an unrestricted appearance

for the purposes of enforcement proceedings in those

Commonwealth countries where United Kingdom legal precedents

are regarded as relevant. Faced with claims involving hundreds

of millions of dollars (an amount referred to in relation to

defaulting defendants by Judge Prentice Marshall hearing the case)

they were advised notwithstanding the strength of their case

on the merits, not to appear. '

8. On 3 January 1979, Westinghouse was granted a

default judgement against the 9 non-appearing defendants, for

an amount to be determined, on the grounds of their

non-appearance in the proceedings. Assessment of damages

against the non-appearing defendants was originally set down

for 10 December 1979 but was stayed pending appeal by the

contesting defendants to the United States Court of Appeals

on the grounds that such assessment would prejudice their fair

trial on the merits. Â·

9. On 15 February 1980 the Court of Appeals ruled that

the question of damages should await the resolution of the

issue of liability as to all parties. (The trial on the merits

is currently scheduled to commence in September 1981).

