PARIS, Dec 9: The International Chamber of Commerce has appealed to the US government and the Congress to prevent misuse of an 18th century law that is allowing foreign companies to be sued in US courts for alleged events in third countries.

The ICC world leadership, headed by the organization’s American chairman, Richard D. McCormick, objected in a statement to “an unacceptable extra-territorial extension of jurisdiction”.

The statement, issued on behalf of ICC’s thousands of member companies and business associations throughout the world, called on other governments to raise the issue with Washington. It asked them to guard against any tendency themselves to use new or existing laws to exert extra-territorial jurisdiction.

The ICC said that over the past 10 years, growing numbers of US companies had been sued in US federal courts under the Alien Tort Claims Act of 1789, for alleged violations outside the United States of human rights, labour rights and environmental standards.

Originally intended to ensure that legal action could be taken against violators of the ‘Law of Nations’ — which in those days covered piracy and ‘violation of the status of protected persons’ (largely diplomats) — the statute is now being used against companies by anti-business group, the ICC said. It added that in the last few years, non-US companies have begun to be targeted.

“As a result, the threat now applies equally to any non-US company that has some link to the United States, such as a US subsidiary, or even a listing of its shares on a US stock exchange.”

The statement said a large number of non-US multinational companies are being sued under the statute in an action against more than 1,000 companies, alleging complicity in, or ‘vicarious liability’ for apartheid in South Africa.

The practice of suing companies in the US, whether domestic or foreign, for alleged events occurring in third countries is an unacceptable extra-territorial extension of US jurisdiction,” the ICC declared.

“The practice of suing companies in the US, whether domestic or foreign for alleged events occurring in third countries is an unacceptable extra-territorial extension of US jurisdiction,” ICC declared.

Other countries, and especially developing countries, would be justified in fearing that such an interpretation of the law would make US companies increasingly reluctant to invest abroad. If foreign companies investing in the United States were to be exposed to the 1789 act, this could reduce investment in the US.

The ICC statement was signed by Mr McCormic, former chairman and CEO, US WEST, Inc; ICC vice chairman Jean-Rene Fourtou; chairman and CEO, Vivendi Universal; and Adnan Kassar, ICC past chairman and CEO Fransabank.