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URUGUAY--Alvaro Tarabal and Anabela Aldaz

ABA JURISDICTION PROJECT REQUEST FOR COMMENTS

 

ANSWERS TO THE REQUESTED QUESTIONS

Guyer & Regules

URUGUAY

Q.1. What is the jurisdictional relevance of the presence on a state's territory of the Internet network infrastructure, such as a server?

To the extent that courts are comfortable with traditional notions of territorial power as the basis of either or both adjudicatory and prescriptive jurisdiction, there is a great temptation to establish jurisdiction over the owner of the Internet infrastructure within the state's borders. However, when such jurisdiction is asserted based on the content of information transmitted through the network, the legal responsibility of the server for such content is not clear. If liability is created because adjudicatory jurisdiction is thought to be apparent, it is arguable that "the tail is wagging the dog." Historically, changes in substantive law have propelled changes in jurisdictional understanding. For example, when privity of contract was required in order for a consumer to sue a manufacturer, the manufacture party was ordinarily not liable to consumers. Thus, no jurisdictional construct was necessary to enable a consumer to sue them conveniently, i.e. at the consumer's home. After the privity requirement was abandoned, the parts manufacturer's liability was theoretical rather than real until the law developed the notion of a "stream of commerce" which permitted the manufacturer to be sued in the forum in which the final product was sold and caused damage to a consumer. Ease of jurisdictional assertion, on the other hand, would seem as a matter of policy to be a questionable reason to expand liability.

  1. To answer this question, we think it is convenient to present a summary of the current situation of Internet servers in Uruguay.

In the last years, Internet has become a fundamental tool not only internationally, but also here in Uruguay, at a national level. Uruguayan people have reached such a familiarity with the worldwide web that is not common in other countries of South America. This fact is due to the facility offered by ANTEL (National Administration of Telecommunications – Uruguayan state owned telecommunication company) through its service called "Adinet".

Adinet is a net server that enables the use of electronic mail and access to the Internet network. This service allows such access in two ways:

One is for the use of the general public. The Internet user connects to the web dialing a telephone number by an adequate modem, and is allowed to navigate the web paying the cost of a local call plus the computation of certain pulses, being the cost of the call different according to the day-hour.

The other service offered by Adinet is the one for educational institutes to all levels, and for companies that apply for such service. This one is different from the other, since the Internet connection service is granted free of charge, through the so-called "direct lines". The direct lines are coaxial cables that keep the user permanently connected to Internet, and thus the user can save the time of connection and the inconveniences at peak time. This system allows the connection to a PC or to the whole network of a University, having the sole disadvantage that the as more users are connected at the same time, the band width is divided and therefore it works slower than usual.

In addition, we must mention that ANTEL has promoted the participation of the private sector in rendering Internet access service, and in this way, the possibility of choice for users is wider, and to this respect, there are many ISP in Uruguay. There are many private Internet server companies in Uruguay and anyone who has the adequate hardware and software can select freely the company to access the web.

As for the relevance from the jurisdictional point of view of Internet infrastructure in Uruguay concerning the Internet Services Provider, there is no legal, doctrinal nor judicial provisions in this respect. Therefore, our comments are based on the scarce legal framework available on this topic.

As a general rule, we can point out that in order to determine the competent jurisdiction to solve a conflict, in absence of an express treaty or international regulation, we must resort to the general principles included in the appendix of our Civil Code, which provides as general rule, that the parties are not permitted, exercising the principle of autonomy of the will, to choose the competent court or the applicable law to certain matter.

As a principle, and analyzing the applicable jurisdiction to a server, considered as the entity (ISP) that renders the service and considering that the same is situated in Uruguay the applicable jurisdiction for the company that renders Internet services would be that of Uruguay.

In general, we point out that in principle, ISP would not be responsible for the content of the information transmitted through it. Even if ISP may, and generally do, reserve the right to control the information transmitted or the communications carried out based on this support.

 

 

Q.2. What is the jurisdictional relevance of maintaining a web site?

A web site may be accessed from anywhere in the world and, at least in light of today's technology, there is little that its author can effectively do to prevent it from being seen anywhere. Does that mean that the author has "contacted" any state in which the site could be or is accessed? Does it matter whether the web site author has "pushed" her message to a targeted audience or whether the reader must "pull" the site to his own computer? Does it matter if the author appears to have focused on a particular geographic region by her use of content or language on the web site?

A. In the same way as it was analyzed in the first question, the existence of web sites that may be accessed from Uruguay to anywhere in the world, and viceversa, is not regulated nor is there doctrine or legislation in this respect, so that general principles of law are applicable.

In our view, as long as it is the State (the government) that encourages the development of electronic communication, and as long as a web site can be accessed with no limitation, with no need to use key words or special codes for their access, it must be understood that the authors of such pages assumes the possible access of an undetermined number of users (both in number and in place from where the connection is made) .

This does not mean that the author of a web site contacts expressly the users of certain State by placing his homepage, if he does not expressly contact or capture the users; the users of certain countries would be the ones who voluntarily contact certain homepage and consequently those users can transact or establish relationships of legal nature that are analyzed and developed in the following answers.

In the case the author of a site would focus his/her page on certain geographic sectors or groups of population, the nature of the activities, goods or services offered through said page should be analyzed on a case by case basis, in order to evaluate if he/she could be considered as doing business in Uruguay.

If, additionally, the author of a site carries out activities in order to contact certain groups of people in Uruguay, then the probability that he/she is considered as doing business in Uruguay increases and the specific regulation of each offer should be analyzed.

Q.3. If a web site author cannot prevent access to its site from any country, what is the jurisdictional effect of a geographic disclaimer on the site?

Can the author's attempt to screen certain viewers from actively participating in the site affect the jurisdictional consequences of the site?

A. In this case, we believe that the disclaim of an author is valid in legal terms, as far as he clearly warns about the consequences of accessing the site without the corresponding authorization. Furthermore, in the same way, anyone not authorized or anyone who accesses the site ignoring the warning of the author shall be liable for the responsibility it may incur and for the consequences of not observing such warnings.

On the other hand, if the author of a site prevents access to certain people or groups, in principle this would have no consequences from a jurisdictional point of view, but we would have to consider specific examples in order to determine the causes of said limitation and whether the same may be relevant from a jurisdictional point of view.

 

Q.4. If parties to a transaction agree at the outset that the law of a given state will apply to any future disputes or that any future dispute will be litigated in the courts of a chosen state, is that agreement enforceable?

Does it matter if one of the parties is a consumer? Does it matter that Internet technology makes it possible to inform the consumer in whatever degree of detail is appropriate of the substance of the law thus chosen and to permit her to compare that law to other laws chosen by other potential contracting partners?

A. Under the Uruguayan law system, the parties to an agreement are not allowed to choose the applicable law or the competent jurisdiction. In this sense, Article 2403 of the Uruguayan Civil Code prescribes as follows:

"The competent legal and judicial rules set forth under this Title, shall not be modified by any of the parties. They shall only act within the scope permitted by the applicable law."

Consequently, if the parties of a legal relationship chose the law or jurisdiction applicable to a certain matter, in violation of the precedent rule, if a controversy occurs, and no treaty exists, the conflict of law rules of our country shall be applied in order to determine the applicable legislation and jurisdiction to the specific case.

Q.5. Is it possible to identify a state in which transactions occur?

For example, if an individual gambles online from Minnesota with a web site located in Nevada, does the transaction occur in Minnesota, in Nevada, in both or in neither? If a doctor in Maine diagnoses a patient in Illinois based on medical records sent to her electronically, is she practicing medicine in Maine, in Illinois, or in both?

If identifying the state in which a transaction occurs is problematic, the location of parties involved in the transaction becomes even more critical than it currently is. How can one party determine the location of another? May a party reasonably rely on information about location provided by another party? Is the relevant location where the party is at the moment he utilizes the Internet, where he is domiciled, or somewhere else?

 

  1. We assume that the electronic document is acceptable in transactions as a valid means of manifestation of the will. Now we have to analyze the moment when the agreement is perfected under this electronic means, when the parties are located in geographically different countries, and what jurisdiction shall govern such transaction.
  2. Many hypotheses can be set forth, and many doctrines can be cited, for example, the one that refers to the contract being perfected at the moment of acceptance, even before said acceptance has departed from the area of the acceptor of the transaction, that is, before the notification to the proposer (voluntaryst theory). We prefer to apply in this case, the solution provided by the lawmaker in Article 1265 of the Uruguayan Civil Code in relation to contracts at a distance.

This rule solves the problem saying that the contract is performed once the proposer is notified of the acceptance.

Since the reception by the proposer has to be determined at a certain moment, this will be the moment when the answer is placed at disposition in the informatic system of the proposer of the transaction.

From the jurisdictional point of view, and since our law system does not allow (unless expressly set forth) the parties to choose one legislation or select the applicable jurisdiction to a contract, the different hypotheses must be analyzed case by case.

In this respect, Article 2403 of the Uruguayan Civil Code provides that: "The rules of legal and judicial competence established under this Title shall not be modified by the will of the parties. They shall only act within the scope permitted by the applicable law."

Therefore, the international laws in force are applicable, and in those cases when there is no express treaty, we must follow the provision set forth in Article 2399 of the Uruguayan Civil Code which remits to Articles 34 and 38 of the Montevideo’s Treaty of Civil Rights of 1940, which establishes that the domicile of both parties is relevant in some circumstances, while in other cases, the jurisdiction is determined by the location of things or by the place where the service is rendered.

The competent jurisdiction shall be that of the State whose law shall be applicable to the legal relation in question.

Taking into account the foregoing, it can be said that an Uruguayan judge would refuse to execute a foreign judgment if that jurisdiction is not competent in accordance with the above mentioned rules.

Q.6. Are analogies to prior technology, such as print media, telephone, television, radio or satellite transmissions, possible and useful?

We consider that precedents and the advance of communication media in Uruguay will no doubt serve as reference to discuss over technical, legal and jurisdictional matters in relation to electronic commerce.

 

Q.7. If a plaintiff obtains a judgment in one country against a defendant with no assets there, where and how can that judgment be enforced?

In one sense, this question has been around as long as lawsuits against non-present defendants have been permitted. But again, technology increases the potential that an answer will be necessary and may itself provide creative remedies.

A. For the purpose of enforcing a foreign judgment in Uruguay (based on the supposition that it is where the assets are located) the "Exequatur" procedure has to be followed.

The courts of Uruguay will not re-examine or re-litigate the merits of the actions provided that such judgment or award is ratified by the Uruguayan Supreme Court. Such ratification will occur: (i) if there exists a treaty with the country where such judgment was issued, pursuant to the provisions of such treaty, and (ii) in the absence of such treaty, if such judgment (1) complies with all formalities required for the enforceability thereof under the laws of the country where the same was issued, (2) together with related documents, have been translated into Spanish and satisfies the authentication requirements of the Uruguayan law, (3) was issued by a competent court (see next paragraph) after valid service of process, and was validly made in the country where the judgment was rendered, upon the parties to the action, (4) was issued after it was given an opportunity to the defendant to present its defense, (5) is not subject to appeal and (6) is not against Uruguayan public order (orden público).

The enforcement of the foregoing judgment was issued under the laws of a country other than that which would result from the application of the relevant Uruguayan conflict-of-law rules, or if it is based on a law that is not applicable in accordance to such rules.

 

Q.8. Does the Internet change the basis upon which commerce should be taxed?

After determining how the world of electronic commerce would look if jurisdictional rules - personal and prescriptive - do not change, the Project will consider whether substantive policy implications make the use of those rules problematic and, if so, what solutions are normatively preferable.

 

A. We believe that Internet does not change the basis of taxation over commerce, be it commerce where import or export of commodities and/or interchange of services take place, or transference of technology, etc. This comment is made considering the operations from the national jurisdiction viewpoint. However, we believe that this is an issue that will require great effort in order to harmonize the taxation and fiscal procedure over transactions performed via Internet. It will be necessary to establish coherent tax regulations upon international transactions, and not to create new taxes (e.g. to create tax on BITS), nor tax operations arbitrarily, nor create mechanisms that duplicate taxes on certain activities.

 

29/11/99

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