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With lawfare on the rise, courts are becoming a venue for politics

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With lawfare on the rise, courts are becoming a venue for politics

The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.

Usually with no leg to stand on, the objective of these claims is to disrupt and clog the system and cause chaos, Pieter Cleppe writes.

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Long gone are the days when politics was confined to parliaments. Apart from the growingly politicised and polarised media, the courtroom is increasingly becoming a political venue, with third-party litigation funding being particularly concerning.

Both in Europe and the US, there has been increased scrutiny of third-party litigation funding. 

This is a phenomenon where claimants in court cases no longer fund their own cases. Instead, they are bankrolled by investment firms, who basically see it as an attractive, if insecure, investment.

Bloomberg Law recently disclosed how Russian billionaires close to President Vladimir Putin have been secretly pouring money into US courts through third-party litigation funding in a bid to contest the sanctions they have been subject to. 

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The gist is that by investing millions without even showing their face in court, some malevolent actors have found lawfare a useful tool to laugh in the face of law and justice and syphon their money across the border while doing it.

Chinese claims are now targeting intellectual property in the US

In another example, a company based in China has been clandestinely funding intellectual property lawsuits against Samsung, using a Florida tech company as a front, to claim that the South Korean giant used its intellectual property in its popular audio products. 

The essence of the problem here is that the funders “often manipulate civil litigation for their own purposes”, according to a letter to the heads of a US congressional committee in October by major pharma companies Bayer and Johnson & Johnson. 

In the letter, they complain that the litigation finance industry “goes to great lengths to operate in complete secrecy,” demanding more transparency. 

The fear here, backed by the US Chamber of Commerce, is that litigation financing could allow Washington’s adversaries to obtain confidential information about sensitive technologies. 

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In any case, US House Speaker Mike Johnson and Senator John Kennedy, have already taken legal action, having submitted a legislative proposal that would regulate foreign entities’ ability to fund litigation. 

Business groups like the US Chamber of Commerce support this, as they believe the shortage of available information about who is financing cases opens the door for foreign adversaries to undermine US national security.

An EU directive is in the works

Also in Europe, legal action is on the way. Last summer, the European Parliament recommended to the European Commission to propose a Directive on the regulation of third-party funding in the EU, aptly named “Responsible funding of litigation”, with the goal of regulating third-party funders’ financing proceedings in the EU.

If adopted, it would create a minimum standard for third-party funders in the EU and establish a supervisory authority granting permits to funders and monitoring their activities. 

It would also hold funders jointly liable with the funded disputing party to pay the cost of the proceedings that may be awarded, impose an obligation on funders to adequate financial resources to fulfil their liabilities under the funding arrangement, impose a fiduciary duty of care the funder owes toward the funded disputing party, establish specific disclosure and transparency obligations to inform competent judicial or administrative organs of the existence of a funding arrangement and limit the financial stake of funders to 40% of the amount of compensation awarded, save for exceptional circumstances.

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The directive was spurred on by a number of questionable claims that have seen a spike in recent years. Usually with no leg to stand on, the objective of these claims is to disrupt and clog the system and cause chaos, with profits nothing more than a side quest.

Yet, sometimes, a case like this can end up hurting an entire country’s GDP, too.

The Sultanate of Sulu case continues to raise eyebrows

A prominent example in Europe of litigation funding is a case brought by a Spanish private arbitrator, Gonzalo Stampa, who demanded Malaysia to pay a $14.9 billion (€13.7bn) arbitral award to a group of individuals claiming to be heirs of the last sultan of Sulu, a territory now belonging to Malaysia. Kuala Lumpur rejected the claim, arguing the case represented a challenge to its sovereignty.

The legal claims of the sultan’s heirs had been financed by a global litigation and arbitration finance firm, the London-based Therium. 

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Even if there was no link to Spain, the claimants still brought the case there to the judicial authorities eager to find any judicial forum to get their way. As a result, Stampa, who specializes in international mediation, was appointed by the Civil and Penal Chamber of Spain’s Supreme Court (TSJM) as the arbitrator of the case.

Following legal challenges by the Malaysian government on the grounds that the required procedure had not been followed, Spain’s Supreme Court ruled in June 2021 to remove Stampa from the case, thereby granting the Malaysian government’s request for dismissal. 

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While Stampa was ordered to end the arbitration several times, the arbitrator ignored those orders and even changed the arbitration venue from Madrid to Paris on disputable legal grounds. 

There, he issued his final ruling, granting the massive award, making it the second highest ever rendered, and amounting to 1% of Malaysia’s GDP. It’s peculiar that such important cases tend to involve multiple arbitrators, rather than just one, with the entire proceedings including payment to Stampa apparently funded by Therium.

Later, an appeal in France overturned the decision, and remarkably, Stampa was found guilty of contempt of court for failing to comply with an earlier court ruling ordering him to drop the complex legal battle.

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It’s time to stop and think what to do next

Imposing to disclose who’s funding a court case may deter outside investors and mean “less access to legal finance”, but that hasn’t stopped legal action being initiated both in Europe and the US related to the practice of third-party litigation funding. 

Looking at the whole range of extra bureaucracy the European Parliament has in mind, perhaps it is important to take a pause. 

Allowing judges to decide on a case-by-case basis to what extent claimants need to be transparent, particularly in a contentious case where national security could be at risk, might just be a better way forward.

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Pieter Cleppe is the editor-in-chief of BrusselsReport.eu and a former attorney-at-law.

At Euronews, we believe all views matter. Contact us at view@euronews.com to send pitches or submissions and be part of the conversation.

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Trump's national security team comes to convince Congress to back Iran war

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Trump's national security team comes to convince Congress to back Iran war
President Donald Trump’s top national security advisers were to spend much of the day on Tuesday making the case to members of Congress ​for the U.S.-Israel war on Iran, as Democrats and some of his fellow Republicans clamored for more information.
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Iran’s senior clerics ‘exposed’ after building strike in Qom, succession choice looms

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Iran’s senior clerics ‘exposed’ after building strike in Qom, succession choice looms

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Senior Iranian clerics would have been left “exposed” after an Israeli airstrike hit a meeting place where they were supposed to be convening Tuesday — days after a strike leveled the Tehran compound of Supreme Leader Ayatollah Ali Khamenei, a defense analyst has claimed.

The clerics, members of the Assembly of Experts, had reportedly planned to meet at the location in Qom to deliberate succession plans for Khamenei, who was killed in the strikes, according to The Times of Israel.

“This second strike would be another embarrassment to what has been left of the regime,” Kobi Michael, a senior researcher at the Institute for National Security Studies and the Misgav Institute, told Fox News Digital.

“It indicates intelligence dominance and superiority because any movement is detected, meaning they would feel exposed,” Michael added.

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Iranian Supreme Leader Ayatollah Ali Khamenei was killed in an Israeli airstrike Saturday. (Getty Images)

“As of now, the leadership would feel insecure and hunted, with all of their plans collapsing one after another.”

“They would feel totally isolated and understand that the biggest risk might come from home — from a potential uprising next,” he added.

Israel Defense Forces spokesman Brig. Gen. Effie Defrin confirmed that the Israeli Air Force struck the building where senior clerics had planned to assemble, The Times of Israel reported.

KHAMENEI’S DEATH OPENS UNCERTAIN CHAPTER FOR IRAN’S ENTRENCHED THEOCRACY

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A general view of Tehran with smoke visible in the distance after explosions were reported in the city, Monday, in Iran. (Contributor/Getty Images)

It remains unclear how many of the 88 members were present at the time of the strike, according to an Israeli defense source cited by the outlet. The second strike on Iran’s leadership comes amid a broader military campaign.

As previously reported by Fox News Digital, U.S. forces have struck more than 1,700 targets across Iran in the first 72 hours of Operation Epic Fury, according to a U.S. Central Command fact sheet.

The campaign is aimed at dismantling Iran’s security apparatus and neutralizing what officials describe as imminent threats.

According to U.S. Central Command, targets have included command-and-control centers, the Islamic Revolutionary Guard Corps Joint Headquarters, the IRGC Aerospace Forces headquarters, integrated air defense systems and ballistic missile sites.

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FIREBRAND ANTI-AMERICAN CLERIC ALIREZA ARAFI SEEN AS CONTENDER TO REPLACE IRAN’S KHAMENEI

The USS Thomas Hudner fires a Tomahawk land attack missile in support of Operation Epic Fury, Sunday, while at sea. (U.S. Navy/via Getty Images)

“We need strategic patience and determination, and in several weeks most of the job will be accomplished,” Michael added. “Even if the regime does not collapse, Iran will not be like we used to know.

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“I assume that the U.S. and Israel will establish a very robust monitoring mechanism that will enable them to react whenever the regime tries to reconstitute its military capacities again.”

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Hungarian veto proves EU needs less unanimity, says new Dutch PM

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Hungarian veto proves EU needs less unanimity, says new Dutch PM

Hungary’s last-minute veto on the €90 billion loan to Ukraine highlights the need for the European Union to move away from unanimity, Rob Jetten, the new prime minister of the Netherlands, said on his first trip to Brussels since taking office.

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“The new Dutch goverment is in favour of less and less decision-making by unanimity on the European level,” Jetten told a group of media, including Euronews, on Tuesday.

“This is a clear example of why that is important because we cannot explain to our constituents that Europe is sometimes way too level in reacting to great issues that affect us all,” he added.

Jetten called on his Hungarian counterpart, Viktor Orbán, to abide by the delicate deal that the 27 EU leaders reached in December after fraught negotiations. The compromise saw Hungary, Slovakia and the Czech Republic promising the necessary unanimity to amend the EU budget rules in exchange for being exempted from the joint borrowing.

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Officials and diplomats in Brussels believe that by vetoing a critical piece of the loan at the last stage of the legislative process, Orbán has breached the principle of sincere cooperation that binds the bloc’s decision-making.

“If you reach political agreement on the Council level, we expect every member state to uphold that agreement. And if not, it’s a big task for the European Commission take action,” Jetten said.

In the new coalition programme, the Netherlands calls for the “simplification” of the Article 7 procedure that can deprive member states of voting rights when they commit grave violations of the rule of law. Hungary has been under Article 7 for years, but there has never been sufficient political momentum to move to the harder enforcement phase.

“It is absolutely necessary that we support Ukraine in the months to come to make sure they can continue their fight against Russian aggression,” Jetten went on.

“With less and less American support for the Ukrainians in terms of money and weapons, it is up to the Europeans to deliver.”

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Orbán’s veto centres on the interruption of Russian oil supplies through the Druzhba pipeline, which Kyiv says was attacked by Russian drones on 27 January and has remained non-operational since then.

But Orbán says Ukrainian President Volodymyr Zelenskyy has deliberately shut down the pipeline for “political reasons” to influence the results of the upcoming Hungarian elections. Orbán trails in opinion polls by double digits.

Caught between the two rival camps, the European Commission has asked Zelenskyy to repair Druzhba and Orbán to lift his veto. Meanwhile, Hungary and Slovakia have proposed a fact-finding mission to inspect the damaged section of the pipeline.

“We expect the European Commission to solve this issue,” Jetten said. “If it’s helpful to have any fact-finding missions on the pipeline to fix this issue, I’m open to it. But everything begins with: a political agreement at the Council level is a political agreement.”

‘Too early’ for a date on Ukraine’s accession

Among the first debates facing Jetten as premier is the future of enlargement, a topic on which the Netherlands has expressed well-known reservations in the past.

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Zelenskyy is advocating for a specific date for Ukraine’s accession to be enshrined in a prospective peace deal, something that could offset the pain of territorial concessions. Last week, he openly suggested 2027 as an aspirational benchmark.

The Commission says it cannot commit to a clear-cut date but is working on legal avenues to revamp the notoriously complex process and ensure the Ukrainian people have greater certainty in their path to membership.

Asked about the potential reform, Jetten said enlargement should be reconsidered from a “geopolitical perspective” but urged the bloc to be “careful” with next steps, warning that the essence of the European project risks being undermined.

“We are very open-minded to look into broader support for these (candidate) countries, but moving too fast is not the way to move forward,” the premier said.

“I think, at the moment, it’s not possible to set a date for enlargement with Ukraine, but it is possible to talk with them, and I will do that with President Zelenskyy, (about) how Europeans can support Ukraine in the important reforms that they have undertaken. But at this moment, it is too early to set the date.”

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Jetten also touched upon the US-Iranian strikes on Iran, which have pushed the Middle East into uncharted territory. Wholesale gas prices have soared in reaction to the war, prompting fears that Europe might soon face a prohibitive bill to refill its underground reserves, which are running low after the heating season.

“Obviously, the Iran war can have a big impact on strategic reserves, not only in Europe but also in Asia. So we have to prepare ourselves for any case that this war will continue for many more weeks and impact the strategic reserves in the Netherlands and abroad,” he said, noting extra measures would be taken “if necessary”.

“I think the broader concern is what this war and everything that’s going on in the Strait of Hormuz is going to affect in terms of pricing.”

‘The Netherlands is back’

Jetten’s D66 party has formed a minority goverment with the liberal VVD and the conservative CDA, all of which support European integration. His tenure puts an end to the fractious four-party coalition headed by the right-wing, Eurosceptic Party for Freedom (VVD) of Geert Wilders, which was marked by constant disagreements.

Among the priorities, his executive has pledged to ramp up defence spending, simplify regulation, promote new technologies and expand renewable energy.

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“As a founding (member) and the fifth (largest) economy within the EU, the Netherlands is back at the table to work closely together with everyone here in Brussels and our allies within the EU,” Jetten said.

“We see a lot of opportunities to strengthen the European economy and competitiveness, and also to make sure that we do our job with a lot of tax-based money to invest in the European defence and the European defence industry.”

Jetten and the other 26 leaders are heading for a no-holds-barred fight on the next Multiannual Financial Framework (MFF), the bloc’s seven-year budget. Brussels has proposed a €2-trillion template that some capitals consider politically unpalatable.

Where to cut spending will be a major fracture line. Germany, the Nordics and the Baltics want a greater focus on strategic priorities, while Spain, Italy and Eastern Europe want to preserve the prominence of agriculture and cohesion funds.

The Dutch premier made it clear that the next budget should focus on the big transitions shaping the continent’s future: defence, technology and climate.

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“A modern MFF doesn’t mean an exploded MFF in terms of numbers,” he said.

“The Netherlands will look into the numbers very closely, and we will have a lot of debate on this topic in the months to come.”

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