Study On The Applicability Of The Principle Of Foreign Sovereign Compulsion

Along with the rapid development of international economic and trade, various economic and trade activities are no longer confined within a country, and the link between these countries further deepen the integration of the world trade freedom. However, the ensuing trade frictions have increased. Due to the financial crisis, the global economy began to slump. In this context, developed countries especially the U.S. urgently looking for a more subtle and effective means of protection to safeguard trade interests of their country, so antitrust litigation becomes one of the primary means to implement its trade protectionism in developed countries.In recent years, Chinese enterprises continuous encountered by several antitrust lawsuits in the United States, of which is Vitamin C case, the case costs long time and has greatest impact. In these antitrust cases, Chinese enterprises responded the same strategy, they were based on foreign sovereign compulsion to defend, but had been rejected by U.S. court, failed to claim immunity from jurisdiction. Foreign sovereign compulsion is a principle which evolved from the United States case law, it means that when a government forced their companies to do some commercial activities, companies should to comply with the law, the commercial activities becomes the sovereign act. According to the relevant provisions of the United States<Sherman Act>, this commercial activity is exempt from liability; U.S. court has no jurisdiction.In this paper, by analyzing the nature of coordinating the export price of vitamin based on foreign sovereign compulsion defense. Then by analyzing the problems that enterprises faced when they based on the principle to defense in the vitamin C Litigation case, then focusing on analyzing the applicability of this principle in Vitamin C case. Then combined with the case, this chapter puts forward specific recommendations from government, industry associations and corporate levels. I hope through this study to explore the Chinese export enterprises for similar cases in the future to how to effectively apply the principle of foreign sovereign compulsion to defense in similar cases, and earnestly safeguard the interests of China’s export enterprises.This thesis is divided into four parts. In the first part, firstly cut from the Vitamin C antitrust lawsuit to bring forward research questions of this thesis. This section introduces the Chinese enterprises vitamin C antitrust case, including the background of the case occurred, the process and the latest progress of the case hearing; secondly, combined with vitamin C case, analyzed the principles of American law Litigation exempt companies based in the respondent that the theory of international comity, national and foreign sovereign compulsion behaviorism; Finally, by analyzing the reason of vitamin C case may occur and then brief commenting on this case, focusing on the case to extract information about the applicable principles of foreign sovereign compulsion, which cut into the focus of this study, and analyze the significance of this study.The second part discusses the applicability of the principle of foreign sovereign compulsion. Based on the relevant provisions of international operations Antitrust Enforcement Guidelines> about the principle of foreign sovereign compulsion, analyzes the applicable basis and conditions of the principle of foreign sovereign compulsion. This section also analyzes the problem of China’s enterprises when they apply the principle of foreign sovereign compulsion to defense in Vitamin C case. Due to fuzzy mandatory of regulatory documents and interpretative declarations issued by the competent authority of the government as well as the positioning of industry associations is unknown, leading companies cannot effectively responding to the U.S. court that corporate behavior is a fixed-price basis of the mandatory provisions of the Ministry of Commerce or By industry associations mandatory to failed to apply the principle of foreign sovereign compulsion to exempt from responsibility.Followed by the second part, the third part explores the specific applicability of the principle of foreign sovereign compulsion in vitamin C case. Depart from the content of the latest U.S. court verdict; this section analyzes the basis of Chinese vitamin companies citing the principle of foreign sovereign compulsion defense and the response of U.S. court. For the qualitative behavior of the export price coordination, Chinese companies’defense that they are based on foreign sovereign compulsion to do, But the United States Court finds that the act is in itself illegal, so the qualitative behavior is the key factors for the applicable of the foreign sovereign compulsion. Finally, analysis the applicable of the principle of foreign sovereign compulsion in the case of magnetite antitrust case, detailed analysis of the applicability of the principle of foreign sovereign compulsion in the case of vitamin C.Finally, mainly combined with analyzing of vitamin C case, this part puts forward specific recommendations when our enterprises encounter antitrust litigation. Antitrust litigation as a new means of trade protection, more and more countries and regions apply antitrust laws to the extraterritorial use, vitamin C and other antitrust cases also means that Sino-US trade friction has begun to reach antitrust areas, which need our government, industry associations and companies complement each other, establish a reasonable risk warning mechanism and response mechanisms. Meanwhile, based on the study of the principles of foreign sovereign compulsion applicability to explore strategy for solving our imperfect antitrust laws and solving the problem of no comprehensive solution to deal with such issues, in order to more clearly and effetely to apply the principle to defense in similar antitrust lawsuit, and to apply reasonably for exempting foreign extraterritorial jurisdiction, hope to earnestly safeguard the interests of enterprises in China.