1993

USSS

Hartford Fire Insurance Co v California US Supreme Court 133 S Ct 2891

The case arouse out of an insurance crisis in the US, the plaintiffs alleged that London insurance companies, acting in the UK, have collaborated in refusing to grant reinsurance to certain US business except on terms agreed among themselves, this was said to violated the Sherman Act. The UK defendants argued that their actions were legal in the place their occurred and further that they have acted in compliance with the UK law of regulation of the insurance market. The USSC by 5/4 held that the US court did have jurisdiction [Related: 1996 D’Amato (sanctions, denial of export/import licences, upon foreign business investing in Iran or Libya); Helms Burton (right of US nationals to recover compensation from persons trafficking in property in which the American plaintiff has an ‘interest’ and which was confiscated by Castro)] [The effects doctrine is basically American, invented to Anti-Trust situations]

The English defendants did not deny that their actions had effects in the US- indeed, direct and substantial effects, their argue, however that their conduct was legal in the state where it took place, and that they have operated in full compliance with the regime of regulation as prescribe by the British parliament and that under principles of IL But British law did not require the agreements that were the basis of the challenges under the Sherman Act If one looks at effect, then application of the Sherman Act would not be extraterritorial. A true conflict would exist only if compliance with US law would constitute violation of the other state’s law.