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Lloyd's Maritime and Commercial Law Quarterly

EXTRATERRITORIAL JURISDICTION OF U.S. ANTITRUST LAWS: THE NEW APPROACH

M. Sornarajah

LL.B. (Ceylon), LL.M. (Yale), LL.M., Ph.D. (London). Senior Lecturer in Law, University of Tasmania, Australia.

In a shrinking and interdependent international market place, the efforts of nations to reduce adverse effects arising from conduct by foreign States and corporations on their domestic markets by extending their national regulatory legislation extra-territorially would be an increasing phenomenon. The European Court of Justice has given extraterritorial effect to the provisions on restrictive trade practices in the Treaty of Rome (e.g. The Dyestuffs Case (1972) C.M.L.R. 557). But the most extensive claims to extraterritorial jurisdiction yet have been made by the courts of the United States. The current Westinghouse litigation in the U.S. is based upon the notion that the U.S. Sherman Act, which forbids monopolisation and agreements In restraint of trade, has application to a conspiracy effected abroad by foreign corporations. The Westinghouse Corporation has brought an antitrust suit against these foreign corporations on the ground that it was forced to break contracts for the supply of uranium at a fixed price assessed according to prevailing market conditions and incur contractual damages as a result of the increase in prices effected by the conspiracy between the foreign producers of uranium. Since treble damages are awarded against defendants who have violated the Sherman Act, the consequences for the foreign corporations involved in the suit are enormous. The home States of the foreign corporations are naturally concerned about the outcome of the litigation. The vast sums that could be awarded against these corporations could cripple the uranium industries in many countries. The home States of the foreign corporations involved in the litigation have protested against the extraterritorial application of the Sherman Act and some have intervened in the Westinghouse litigation through amicus curiae briefs arguing against the use of the Sherman Act to regulate conduct of foreign corporations. The Westinghouse litigation is a present effort to apply the Sherman Act extraterritorially.
There have been several efforts in the past to exercise extraterritorial jurisdictions. Letters rogatories issued by U.S. courts to foreign courts requesting the production of documents to prove the existence of conspiracies have been rebuffed (e.g. for U.K., Rio Tinto Corporation v. Westinghouse Corporation [1978] A.C. 547). Legislatures have intervened to prevent documents situated in their countries being made available to foreign plaintiffs in antitrust suits (e.g. for U.K., Protection of Trading Interests Act 1980; for Australia, Foreign Proceedings (Prohibition of Certain Evidence) Act

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