A Comparative Analysis of FDL Under Private International Law

Abstract

FDL claims are filed by tort victims residing in host countries against parent companies residing in home countries. Therefore, FDL claims have, per se, an international nature, as they concern more than one legal jurisdiction and thus bear a foreign element. For this reason, it is important to assess the private international law aspects of the matter to determine the competent jurisdiction and applicable law in these specific disputes. The desired outcome of a successful FDL claim would be to address the liability of the parent company before the courts of the home country, which would apply the home country’s laws. In fact, the identification of the applicable law and jurisdiction is important in FDL cases, as they affect legal and practical feasibility. The courts of developed countries are generally acknowledged as being able to provide legal certainty, with more reliable legal infrastructure, better accommodation for class actions and legal aid, which are all beneficial to FDL claimants. The applicable law is important to determine whether there is a tort law in place for claims against MNCs and the conditions for liability, while the jurisdiction is important to check if the relevant courts have previously handled a transnational tort claim and what the procedural requirements of that country would be. As the subject matter of FDL claims is the alleged responsibility of the parent company for damages arising due to its transnational subsidiary’s operations, it would be important to determine the place where the tortious act took place and the place where the damage occurred in order to assess the questions on applicable law and jurisdiction. This approach requires a substantive legal analysis before deciding on the private law aspects of the claim, which constitutes the reason why this chapter comes after the substantive legal analysis of FDL. The analysis presented in this chapter will be made in light of the two scenarios: (1) a foreign parent company being sued for damages arising from the operations of its Turkish subsidiary, and (2) a Turkish parent company being sued for damages arising from the operations of its foreign subsidiary. To this end, this analysis will firstly be focused on the question of jurisdiction, to determine which country’s courts would have jurisdiction to hear the FDL claim in a potential scenario, and secondly, the question of which applicable law would apply in those cases will be assessed. The main point of focus will be Turkish law, with comparative analysis under the EU Acquis and the US law, thereby introducing certain suggestions for reform under Turkish private international law with a hope to better address FDL claims.