Factual and Procedural Background
The Plaintiff group of companies, collectively referred to as Peer, sought declarations affirming ownership or exclusive license of United Kingdom copyright in certain musical works composed by Cuban nationals. Peer’s claim was based on written assignments from the composers and, in some cases, their heirs. The Defendants, Termidor Music Publishers Ltd and Termidor Musikverlag GmBH & Co KG, part of a German publishing group, claimed exclusive licensing rights under a licence from Editora Musical de Cuba (EMC), a Cuban entity asserting ownership of the copyrights in dispute. EMC was added as a Part 20 defendant and alone appealed the judge’s order.
The dispute centered on the ownership of UK copyright in Cuban musical works, with Peer's rights deriving from agreements dated between the 1930s and 1950s, and related "Confirmation of rights" documents from circa 1989-1990. EMC’s title depended on Cuban Law 860 enacted in 1960.
Park J ordered a trial of three preliminary issues concerning the validity of the assignments, the effect of Cuban Law 860 on those assignments, and the validity of the "Confirmation of rights" documents. The judge answered all questions in favor of Peer. Expert evidence on Cuban law was presented, and the trial was without prejudice to further factual arguments.
Legal Issues Presented
- Whether the assignments of copyright relied upon by the Plaintiff were initially valid under the relevant applicable law.
- The effect of Cuban Law 860 on the above assignments and whether this provision should be given effect in English law.
- Whether the "Confirmation of rights" documents obtained by the Plaintiff are valid assignments or exclusive licenses of the 1911 Act reversionary copyright under the relevant applicable law.
Arguments of the Parties
Defendant's Arguments
- Law 860 was enacted to protect Cuban composers from exploitation by foreign companies like Peer and was consistent with English and international public policy.
- The assignments to Peer were inequitable and oppressive, potentially void or unenforceable under English public policy.
- Law 860 was not confiscatory but regulated contractual relations to redress imbalance in the music industry.
- English courts should recognize and give effect to Law 860 despite its extraterritorial impact, relying on exceptions to the lex situs rule based on public policy and comity, as exemplified in Kuwait Airways Corp v Iraqi Airways Co.
Plaintiff's Arguments
- The initial assignments complied with English law requirements and were valid under Cuban and New York law as applicable.
- Law 860 was ineffective to divest Peer of UK copyright as it conflicted with the lex situs rule, which limits recognition of foreign laws affecting property situated in England.
- Public policy does not provide a basis to displace the ordinary law of copyright applicable in the English situs.
- Law 860 was confiscatory, taking copyright without compensation, and thus not enforceable under English law.
- There is no satisfactory principle allowing public policy to override the territorial rule governing property rights.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| A. Schroeder Music Publishing Co. Ltd v Macaulay [1974] 1 WLR 1308 |
Public policy considerations in contract enforceability. |
Referenced by Defendant to argue assignments were inequitable and oppressive. |
| Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19; [2002] 2 AC 883 |
Exception to recognition of foreign law on grounds of public policy and justice. |
Defendant relied on it to support recognition of Law 860; Court distinguished it as an exceptional wartime case. |
| Lorentzen v Lydden [1942] KB 202 |
Recognition of foreign governmental decrees affecting property. |
Cited by Defendant; Court rejected its reasoning as contrary to established principles and public policy. |
| The El Condado [1939] 63 L1.L Rep 330 |
Foreign penal laws are strictly local and do not affect property outside their territory. |
Used by Court to support principle that foreign law cannot affect property situated in England. |
| Frankfurther v W.L. Exner Ltd [1947] 1 Ch 629 |
Refusal to enforce foreign confiscatory decrees affecting property in England. |
Supported the Court's view that confiscatory foreign laws are not recognized. |
| Novello & Co. Ltd v Hinrichsen Editions Ltd [1951] 1 Ch 595 |
Similar to Frankfurther; refusal to enforce confiscatory foreign laws. |
Supported Court's reasoning on non-recognition of confiscatory foreign laws. |
| Bank Voor Handel En Scheepvaart NV v Slatford [1953] 1 QB 248 |
Lex situs governs transfer of movable property; foreign confiscatory decrees ineffective in England. |
Key authority affirming that foreign laws cannot affect property situated in England; heavily relied upon by the Court. |
| Oppenheimer v Cattermole [1976] AC 249 |
English law will not enforce foreign laws confiscating property on grounds of human rights violations. |
Reinforced principle that English courts reject enforcement of foreign confiscatory or discriminatory laws. |
| Williams and Humbert Ltd v W&H Trade Marks (Jersey) Ltd [1986] 1 AC 368 |
Territorial limitation on compulsory acquisition of property. |
Supported the territorial principle that foreign laws cannot affect property situated in England. |
| Société Eram Shipping Co. Ltd v Compagnie Internationale de Navigation [2003] All ER 465 |
Respect for national sovereignty and limits on enforcement of foreign laws affecting property abroad. |
Supported the principle of territorial sovereignty and non-interference in foreign property rights. |
| Monkland v Jack Barclay Ltd |
Public policy must be applied with extreme reserve in contract invalidation. |
Used to reject the argument that public policy should override territorial property law. |
Court's Reasoning and Analysis
The court began by affirming that the initial assignments to Peer were valid under English law and the proper law of the contracts (Cuban or New York law), supported by expert evidence. The court found no Cuban law invalidating the assignments as to English copyright.
Regarding Cuban Law 860, the court analyzed its provisions and legislative intent, recognizing it as confiscatory because it divested Peer of copyright without compensation. The court rejected the Defendant’s argument that Law 860 should be given extraterritorial effect in English law based on public policy or comity.
The court applied the lex situs rule, which holds that property rights are governed by the law of the place where the property is situated. English copyright is situated in England, and foreign legislation cannot alter rights in property located in England. The court reviewed extensive precedent, including Bank voor Handel en Scheepvaart NV v Slatford and Lorentzen v Lydden, concluding that foreign laws affecting property outside their territory are generally ineffective.
The court rejected the Defendant’s reliance on exceptions to the lex situs rule, such as the Kuwait Airways case, noting those exceptions are rare, fact-specific, and not applicable here. It emphasized that public policy cannot be used to displace established property law principles, as this would create uncertainty and undermine legal stability.
On the third issue, the court considered the "Confirmation of rights" documents and their Addenda. It found the Confirmations alone did not transfer reversionary copyrights held by heirs, but when read with the Addenda, the documents clearly evidenced an intention to assign such rights to Peer. As these were in writing and signed, they constituted valid assignments under the 1911 Act.
Holding and Implications
The court DISMISSED the appeal by the Defendant EMC and upheld the preliminary judgments in favor of Peer.
The decision confirms that English courts will not recognize foreign legislation, such as Cuban Law 860, that purports to divest property rights in the United Kingdom without compensation, adhering to the lex situs principle. It reinforces the territorial nature of property law and limits the application of public policy exceptions to recognition of foreign laws. The court also clarified the validity of the assignments and licenses relied upon by Peer under English copyright law.
No new precedent was established beyond the application of existing principles regarding foreign legislation, property rights, and public policy.