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Ius Comparatum – Global Studies in Comparative Law
Optional Choice of
Court Agreements
in Private
International Law
Ius Comparatum – Global Studies
in Comparative Law
Volume 37
Series Editors
Katharina Boele-Woelki, Bucerius Law School, Hamburg, Germany
Diego P. Fernández Arroyo, Institut d’Études Politiques de Paris (Sciences Po),
Paris, France
Founding Editors
Jürgen Basedow, Max Planck Institute for Comparative and International Private
Law, Hamburg, Germany
George A. Bermann, Columbia University, New York, USA
This Springer imprint is published by the registered company Springer Nature Switzerland AG.
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Foreword
In the era of globalization, the frequent movement of people, goods, services, and
capitals across borders challenges the conventional legal framework. The sover-
eignty of nation-states is gradually eroded by alienating its decision-making power
to other bodies, entities, or non-state actors. The divide between “private” and
“public” is blurring, giving priority to private ordering. This paradigm shift accords
with the tendency in private international law to accentuate and extend the role of
party autonomy. This is not only the case with the freedom of choice of law but also
the freedom of selecting the forum.
Today, it is generally established that choice of court agreements ought to be
respected, subject to limited exceptions. It is a remarkable development, considering
that granting the validity and effects of choice of court agreements is a relatively
recent development in quite a few countries, particularly in the USA (1972), in the
Netherlands (1985), in China (1991), and in Italy (1995). This is because it required
overcoming the idea of sovereignty that individuals could not confer or oust the
adjudicatory jurisdiction of a court that inheres in the power of the sovereign state. It
reflects a shift of the concept of international jurisdiction from “concerns of inter-
national law and interstate power” to “concerns of fairness to individual defendants,”
with an emphasis on the interests of private parties.1 Designating the forum for future
litigation entails notable advantages of ensuring legal certainty and predictability of
the parties, allowing an effective risk calculation.
The discussions among academics and practitioners have so far concentrated on
the treatment of exclusive choice of court agreements. It is presumably attributable to
the growing use of exclusive forum selection clauses in practice, as well as the new
legal framework established by the 2005 Hague Choice of Court Convention and the
2012 Recast of the EU Brussels I Regulation adjusting to it. These tendencies of
academic and practical interests in exclusive choice of court agreements are under-
standable, given that the exclusivity of the available courts considerably affects the
1
Mills, A (2018) Party Autonomy in Private International Law, Cambridge, pp. 34 ff.
v
vi Foreword
transactions and calls for further research in view of various features and types of
optional choice of court agreements.
By tackling all these crucial issues in a comparative perspective, the underlying
book will highly inspire and contribute to enhance discussions among academics and
practitioners, which may further influence the development of case law and
law-making in different countries. Viewing its broad scope of comparative research
and the highest caliber of its thorough study, the underlying collection is a fantastic
achievement.
The practical relevance of optional choice of court agreements will presumably
continue to rise. The Judgments Project of the Hague Conference on Private
International Law was completed and adopted as a new convention on the recogni-
tion and enforcement of foreign judgments at the 22nd Diplomatic Session in June
2019. Under the Draft Convention of May 2018, Article 5 (1) (m) provides an
indirect jurisdiction ground based on a choice of court agreement “other than an
exclusive choice of court agreement”. If this provision is included in the future
convention, it will give rise to various questions on how to delineate its scope from
the exclusive choice of court agreements falling under the 2005 Choice of Court
Convention, how to deal with asymmetric choice of court agreements, and how to
solve international parallel proceedings. This will particularly be important, now that
the 2005 Choice of Court Convention has entered into force in all EU Member States
including Denmark and the U.K., Montenegro, Singapore and Mexico, has been
signed by the U.S., China and Ukraine, and is envisaged to be joined by Australia.
To find accurate information and effective answer to various questions surround-
ing optional choice of court agreements, academics and practitioners from various
countries and international business communities will primarily refer to this book,
which yields an invaluable insight in different legal systems, clear analyses and
convincing results. This collection will provide a new perspective on the treatment of
optional choice of court agreements and certainly serve as an important and useful
guide for academics, attorneys and judges, and hopefully also for lawmakers in the
future. I sincerely congratulate the contributors on the completion of this wonderful
book, which is an enrichment for the series of Ius Comparatum founded by the
International Academy of Comparative Law.
This collection comprises 19 national reports addressing the issue of the legal effects
of optional choice of court agreements, by which we mean choice of court agree-
ments that are other than purely exclusive. Whereas exclusive choice of court
agreements have attracted a great deal of attention in private international law,
optional choice of court agreements have been neglected by lawmakers and com-
mentators alike, although optional choice of court agreements are quite often found
in both commercial and non-commercial contracts. This collection therefore makes a
significant contribution to the literature on choice of court agreements.
This project was undertaken under the auspices of the International Academy of
Comparative Law, and I thank Professor Diego P. Fernández Arroyo and Professor
Katharina Boele-Woelki for the invitation to me to act as General Reporter for this
topic, and for the invitation to include this volume in the important Ius Comparatum
series. Eleven national reporters presented their draft reports at the Congress of the
International Academy of Comparative Law which was held in Fukuoka, Japan, in
July 2018. Professor Yuko Nishitani graciously chaired that session of the Congress,
and also agreed to write the Foreword to this volume, and I thank her for her
generosity and collegiality.
I also thank Anja Trautmann and Anitha Chellamuthu at Springer for their
editorial and production help with this volume. But above all I would like to record
my profound thanks to the national reporters who participated in this project. They
have been without exception not only brilliant in their written work but also truly
delightful to work with, and I have learned a great deal from each one of them. I
thank them, in particular, for their helpful comments on an earlier draft of the
General Report.
ix
Contents
xi
xii Contents
Mary Keyes
1 Introduction
One of the most radical recent changes in private international law internationally is
the development of the law in relation to the effect of choice of court agreements.
Until recently, jurisdictional litigation was less common than litigation on the issue
of choice of law, and the issue of jurisdiction attracted significantly less attention
than choice of law in the commentary. At the same time, it was evidently rare for the
parties to include forum selection provisions in their contracts, although early cases
reveal examples.1 The substantial increase in the volume of cross-border transactions
has led to far more disputes about jurisdiction. At the same time, express dispute
resolution terms have become common in cross-border agreements, involving
non-commercial as well as commercial parties. Both of these factors have led to a
sudden development in the law about the effect of choice of court agreements, to the
point that the volume of recent laws and commentary about choice of court agree-
ments substantially eclipses that in relation to choice of law agreements.2
In this chapter, references to the national reports are to the names of the authors of the national
reports, e.g. references to the Australian national report are to “Marshall (2019)”.
1
E.g. Gienar v Meyer (1796) 2 H Bl 603.
2
The main exceptions to this are the Regulation (EC) No 593/2008 of the European Parliament and
of the Council of 17 June 2008 on the law applicable to contractual obligations OJ L 177 (“Rome I
Regulation”), and the Hague Principles on Choice of Law in International Commercial Contracts
2015, each of which has generated scholarly commentary: see, e.g. (2017) 22 issue 2 Uniform Law
Review, a special issue devoted to the Hague Principles.
M. Keyes (*)
Griffith Law School, Griffith University, Brisbane, QLD, Australia
e-mail: m.keyes@griffith.edu.au
3
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards
1958, entered into force 7 June 1959 (“New York Convention”).
4
Convention of 30 June 2005 on Choice of Court Agreements 2005, entered into force
1 October 2015.
5
Hartley and Dogauchi (2010), p. 791, para 1; Hartley (2013), p. 19, para 1.47.
6
The Council Proposal for a Regulation of the European Parliament and of the Council on
jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
(Recast) noted that “granting priority to the chosen court to decide on its jurisdiction. . .would
largely accord with the system established in the 2005 Hague Choice of Court Agreements
Convention, thus ensuring a coherent approach within the Union and at international level were
the Union to decide to conclude the 2005 Convention in the future.” (Brussels, 14.12.2010 COM
(2010) 748 final 2010/0383/COD, pp. 5, 9). See likewise, Council Decision of 4 December 2014 on
the approval, on behalf of the European Union, of the Hague Convention of 30 June 2005 on Choice
of Court Agreements (2014/887/EU, OJ L 353/5 10.12.2014), which states in recital (5) that “[w]ith
the adoption of Regulation (EU) No 1215/2012 the Union paved the way for the approval of the
Convention, on behalf of the Union, by ensuring coherence between the rules of the Union on the
choice of court in civil and commercial matters and the rules of the Convention.”
7
Oprea (2019), Section 1.1.3.
8
In South Africa, until recently, “South African courts treated foreign arbitration agreements in the
same way as exclusive foreign choice of court agreements”: Schoeman (2019), Section 4, text to
note 62. The situation is similar in Taiwan: Chen (2019), Section 1.3.2. In Australia, arbitration
agreements and exclusive choice of court agreements are treated as “legally cognate” (Marshall
2019, text to note 45, citing Global Partners Fund Ltd v Babcock & Brown Ltd (in liquidation)
[2010] NSWCA 196, para 60).
9
This includes in Greece (Panapoulos 2019, Section 1.2); Germany (Weller 2019, Section 1.2); and
the People’s Republic of China (Tu and Huang 2019, Section 2 (text following note 35)).
10
For example, in Japan, amendments to the Code of Civil Procedure dealing with international
jurisdiction, including choice of court agreements, came into effect in April 2012; in Switzerland,
the Code of Civil Procedure was enacted in 2011. The Brussels I Recast came into effect in 2015.
General Report 5
11
Article 23 of the Brussels I Regulation “partially inspired” the Belgian Private International Law
Act in relation to the effect of choice of court agreements: Van Calster and Poesen (2019),
Section 2.1.
12
Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December
2012, OJ l 351/1 (“Brussels I Recast”).
13
The Brussels I Recast influenced the Romanian Civil Code: Oprea (2019), Section 1.1.3. On the
other hand, these instruments did not influence German law: Weller (2019), Section 1.2.
14
This influence relates to the introduction of special rules for consumer contracts and individual
employment relations. The Japanese rules in this respect are not identical to those found in the
Brussels I Recast. Chen reports that the Hague Choice of Court Convention and the EU instruments
“are highly valued and referred to by Taiwanese courts in some cases”: (2019), Section 1.3.3.
15
This is the term used in England and in some common law jurisdictions, including Australia and
Singapore.
16
Yeo (2005), pp. 307–308. At the time of writing this chapter in September 2018, there were no
books written in English devoted solely to optional choice of court agreements. There are a number
of books, in English as well as in other languages, which deal only with choice of court agreements,
but these address optional choice of court agreements in passing and focus on exclusive choice of
court agreements: e.g. Hartley (2013) and Joseph (2015).
17
Van Calster and Poesen (2019), Section 5.
18
France (Mailhé 2019, text to note 7).
6 M. Keyes
The national reports in this collection include a number of countries which are
Member States of the European Union.20 In those countries, there are several legal
sources which determine the effect of choice of court agreements. These include the
Hague Choice of Court Agreements Convention 2005, which at the time of writing
applies in Mexico, Montenegro, and Singapore as well as the European Union.
Singapore is represented in this collection.21 In those countries which are Member
States of the European Union, the Lugano II Convention22 applies; as it does also in
Denmark, Iceland, Norway and Switzerland. Switzerland is represented in this
collection.23 In the European Union Member States, the law on jurisdiction is
dominated by the Brussels I Recast, which applies to any choice of court agreement
not covered by the Hague Convention that designates the courts of a Member State.
Residual national laws apply to choice of court agreements that are not covered by
the Hague Convention, the Lugano II Convention, or the Brussels I Recast. In the
other countries represented in this collection, the relevant laws are national laws,
which are sometimes determined at the provincial level, as is the case in Canada.24
19
Cass civ, 1ère, 26 September 2012. This case and a number of subsequent decisions of the French
Cour de Cassation are discussed in detail by Mailhé (2019), Section 3.
20
At the time this collection was written, in 2018, the UK was still a member state of the European
Union, and the national report for the UK reflects this.
21
Chong (2019).
22
Convention on jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters, OJ L 339, 21.12.2007, entry into force 01/01/2010 (“Lugano II Convention”).
23
Haas and MacCabe (2019).
24
The Canadian civil law and common law are both covered in this collection: Guillemard and
Sabourin (2019) and Saumier (2019).
General Report 7
In general, the legal response to choice of court agreements has changed over time.
The national reports demonstrate that, for most legal systems, much of this devel-
opment has been recent, and much of it has brought about quite radical changes.
Attitudes to agreements about forum tend to cluster at opposite ends of the
spectrum: at one end, they are regarded as being superior to other means of allocating
jurisdiction, at least in international commercial disputes. At the other end of the
spectrum, they are derided as being unacceptable as either inconsistent with, or
undermining, public interests in the regulation of litigation. Historically, the latter
position prevailed in many legal systems. For example, in the US and in Québec,
choice of court agreements were invalid as contrary to public policy.25 But there are
some important exceptions. Mailhé notes that party autonomy was regarded by the
drafters of the French Civil Code, in 1804, as “a natural exception to the rules they
proposed in its articles 14 and 15”.26 In the German Code of Civil Procedure, which
entered into force in 1879, “choice of court agreements could be agreed upon
without any major limitations.”27 In Taiwan, the Code of Civil Procedure has
allowed the parties to designate a court to exercise jurisdiction from the time of its
promulgation in 1930.28
More recently, the former view that choice of court agreements are desirable and
should be respected has become popular. For example, Saumier writes that “[t]he
attitude toward choice of court agreements in Canadian common law provinces is
very positive”29; the other reports express similar sentiments.30 In most legal
systems, the law now enables the parties to choose the forum for the resolution of
disputes.
In a few countries, the laws reveal historical, ongoing, and some new, hesitations
about completely accepting party autonomy. Again the German national law is an
exception to the general trend; in 1974, the law relating to choice of court agreements
was fundamentally reformed, and significant limitations on the parties’ freedom
25
Buxbaum (2019), Section 2; Guillemard and Sabourin (2019), Section 1, text to notes 30–32. See
similarly, Tarman and Oba, referring to cases from the Turkish Cour de cassation, which establish
that “a refusal of jurisdiction by the Turkish courts due to a jurisdiction agreement would indicate a
mistrust of the adjudication of Turkish courts and would be contrary to public order”: (2019),
Section 3.3 (text to note 31).
26
Mailhé (2019), Section 1.
27
Weller (2019), Section 1.1, text to note 3, citing the Zivilprozessordnung, section 38.
28
Chen (2019), Section 1.2.1.
29
Saumier (2019), Section 1.
30
Buxbaum states that “[i]n the vast majority of US states, choice of court agreements, both optional
and exclusive, are viewed with approval.”: (2019), Section 3.1. See similarly Belgium (Van Calster
and Poesen 2019, Section 2.1); Romania (Oprea 2019, Section 1.1.3); and South Africa (Schoeman
2019, Section 3.3, text to notes 34 and 35).
8 M. Keyes
were imposed,31 which remain in force.32 Several US states also “maintain the
traditional hostility to choice of court agreements.”33 As explained below, the law
in many countries now recognises that choice of court agreements involving pre-
sumptively weaker parties require different regulation to those involving commercial
parties.34
The distinction between exclusive and optional choice of court agreements is very
well established in some legal systems. In others, particularly those in which the
parties’ ability to choose their forum has only recently been accepted, the distinction
is less well established. For example, in China “The concept of non-exclusive choice
of court agreement. . .was first formally presented in the 2005 [Supreme People’s
Court] Summary”.35 In the Netherlands, all choice of court agreements are “com-
monly referred to as ‘forumkeuze’ (i.e. ‘choice of forum’)”.36 In South Africa, there
is no reference in national law to optional choice of court agreements37; and “no
clear distinction is drawn between exclusive and optional choice of court agree-
ments”.38 Several reporters note that their national legislation makes no reference to
optional choice of court agreements, and that there is very little relevant case law.39
A preliminary issue is identifying the applicable law to determine whether a
choice of court is exclusive or optional. There is a diversity of views on this question.
In some countries, it is well settled that this is determined by the governing law of the
contract as a whole,40 or the governing law of the choice of court agreement, if that
31
Weller (2019), Section 1.1, text to note 9, citing the Law to Change the Code of Civil Procedure of
21 March 1974, Federal Law Gazette, BGBl 1974 I 753, which came into effect on 1 April 1974.
32
Weller (2019), Section 1.1, text to note 10.
33
Buxbaum (2019), Section 3.1.
34
See below, Sect. 8.
35
Tu and Huang (2019), Section 2 (text to note 27).
36
Rammeloo (2019), Section 1.1. Likewise, in Québec, the Civil Code does not distinguish between
exclusive and optional choice of court agreements: Guillemard and Sabourin (2019), Section 2.2.1.
37
This is the case in South Africa: Schoeman (2019), Section 3, text to note 26.
38
Schoeman (2019), Section 6.
39
E.g. France (Mailhé 2019, text to note 7).
40
This is so in South Africa (Schoeman 2019, Section 3.1). The position may be different in China
(Tu and Huang 2019, Section 3, text to note 42). In England, it is presumed that the applicable law
for the choice of court agreement is the same as the applicable law for the contract as a whole:
Merrett and Carruthers (2019), Section 2.1.1 (citing Mauritius Commercial Bank v Hestia [2013]
EWHC 1328 (Comm)). In Shandong Jufeng Network v MGame & Tianjin Fengyun Network, the
Supreme People’s Court of China “held that the choice of law agreement and the choice of court
agreement are two separate legal acts and therefore different applicable laws should be applied to
General Report 9
were different.41 However, even where that is the case, the courts sometimes simply
state that a choice of court agreement is exclusive or optional without justifying that
conclusion.42
It seems to be quite common that courts do not refer to any choice of law analysis
when determining whether a choice of court agreement is exclusive or optional.43
One problem with undertaking a choice of law analysis is that it might lead to
practical difficulties, given a lack of clarity under some national laws as to the
distinction between exclusive and optional choice of court agreements.44 Takahashi
proposes that a clear test for distinguishing exclusive from optional choice of court
agreements should be developed, and that it should be applied as an overriding
mandatory rule—that is, irrespective of the otherwise applicable law.45
The presumption in favour of exclusivity in the Hague Choice of Court Conven-
tion might be applied either by the nominated court, to determine whether the choice
of court is exclusive within the terms of the Convention, or by a non-chosen court
which has been seised and which is determining whether it is obliged to suspend or
dismiss those proceedings because of an exclusive choice of court agreement in
favour of the courts of another contracting state.46 When the nominated court is
determining the issue, the application of the presumption should not be justified on
the basis of the Hague Convention being part of the law of the exclusively chosen
court, because the issue as to whether it is the exclusively chosen court has not yet
been determined. That would mean that the chosen court could only be applying the
presumption under the Convention on the basis that the Convention is part of the law
of the forum. If the law of the forum was the governing law of the choice of court
agreement, that would not be objectionable. But if the governing law of the choice of
court agreement was the law of another country which was not a contracting state to
the Convention, any reference to the Convention would have to be justified on the
basis that the Convention was applicable as part of the law of the forum per se. As
Chong points out in the context of the Singaporean legislation which gives effect to
the Convention,47 this might be justified on the basis that the Convention establishes
regulate them.”: (2009) Min San Zhong Zi No 4; Model Case No 44, Notice of the Supreme
People’s Court on Issuing 10 Major Cases and 50 Model Cases on China’s Judicial Protection of the
Intellectual Property Rights in 2009 [2010] Fa No 172, promulgated on 14 April 2010, cited in Tu
and Huang (2019), Section 3, text to note 46.
41
Merrett and Carruthers (2019), Section 2.1.1, note 20 (citing Collins 2012, para 12-105 and
Maher and Rodger 2010, para 17-17); Chong (2019), Section 2.2.
42
This is so, for example, in South Africa: Schoeman (2019), Section 3.1.
43
This is so in common law Canada (Saumier 2019, Section 2); France (Mailhé 2019, Section 1.1);
Japan (Takahashi 2019, text to note 13); the Netherlands (Rammeloo 2019, Section 2.2).
44
Takahashi (2019), text following note 22.
45
Takahashi (2019), Section 4.
46
Hague Choice of Court Agreements Convention, Article 6.
47
Supreme Court of Judicature Act Cap 322, Rev Ed 2007, section 18F which relevantly provides
that “if there is no express provision to the contrary” in the choice of court agreement, then “an
agreement to submit to the jurisdiction of the Singapore International Commercial Court shall be
10 M. Keyes
a forum mandatory rule.48 The same reasoning might apply to the Brussels I Recast
and the Lugano II Convention, although it has been suggested that the characterisa-
tion of the agreement as optional or exclusive should be governed by the law of the
chosen court.49 Of course, this presents insuperable difficulties if the choice of court
agreement nominates the courts of more than one country.50
As just noted, another possibility is that the law of the forum should be applied to
determine whether a choice of court agreement is exclusive or optional.51 The law of
Québec is applied to this question, either because the issue is one of characterisa-
tion,52 or one of procedure.53 In the Czech Republic, forum law applies because the
“procedural character” of choice of court agreements, and because the “emphasis on
the transfer of jurisdiction continues to prevail.”54
In some countries, there are conflicting authorities as to the choice of law rule
which should be applied to determine whether a choice of court agreement is
optional or exclusive. For example, whereas a majority of Chinese courts take the
view that this is a procedural question which should be determined according to the
law of the forum,55 a minority of Chinese courts insist that the governing law of the
main contract should be applied to interpret the choice of court agreement.56
considered to have agreed – (a) to submit to the exclusive jurisdiction of the Singapore International
Commercial Court”. This provision is discussed in Chong (2019), Section 2.2.
48
Chong (2019), Section 2.2.
49
Panapoulos (2019), Section 2.2.
50
Van Calster and Poesen (2019), Section 3.3.2.
51
Greece (Panapoulos 2019, text to note 8); Germany (Weller 2019, Section 3.2.1); Romania
(Oprea 2019, Section 2.1).
52
Under the Québec Civil Code, this is determined by the law of the court seised: art 3078. See
Guillemard and Sabourin (2019), Section 2.1, text to note 74.
53
Under the Québec Civil Code, this is determined by the law of the court seised: art 3132. See
Guillemard and Sabourin (2019), Section 2.1, text to note 75.
54
Rozehnalová et al. (2019), Section 2.2 (sentence before note 49).
55
Tu and Huang (2019), Section 3, text to notes 42-42.
56
Tu and Huang (2019), Section 3, text to notes 44-45.
57
Hague Choice of Court Convention, Article 3(a). The Convention also defines “non-exclusive
choice of court agreement”, in Article 22(1).
58
Hague Choice of Court Convention, Article 3(b).
General Report 11
agreement to be exclusive was adopted in the Brussels I Recast,59 and in the Lugano
II Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters.60 This does not appear to have influenced the national law of
most of the EU Member States, for situations falling outside the scope of the Recast,
although the Romanian Civil Procedure Code provides that in the absence of
contrary stipulation, the jurisdiction agreement is exclusive.61 The same presump-
tion is found in other countries including Greece62 and Switzerland.63 In the Czech
Republic, it is generally assumed that choice of court agreements are exclusive,
although there is no explicit presumption to that effect.64 A suggestion made in
Japan in the preparation of the reforms to the Code of Civil Procedure that foreign
choice of court agreements should be deemed to be exclusive was rejected “as being
contrary to international business practice”, and the issue was left to interpretation of
individual agreements.65 Rather ironically, there is a tendency in Japan to charac-
terise choice of court agreements as being exclusive.66
Under the national law of most countries, there is no explicit presumption of
exclusivity.67 Rather, the distinction between exclusive and optional choice of court
agreements is one of interpretation of the agreement68; determining whether a choice
of court agreement is optional or exclusive is a question of the parties’ intentions.69
In some countries, the courts tend to find that agreements are exclusive.70
Attempting to identify the parties’ intentions is often very difficult, and several
reporters note that decisions are inconsistent.71
59
Brussels I Recast Regulation, Article 25(1). The Recast does not contain a definition of
non-exclusive choice of court agreements.
60
Lugano II Convention, Article 23. This Convention does not contain a definition of non-exclusive
choice of court agreements.
61
Oprea (2019), note 42, citing the Romanian Civil Procedure Code, article 1068(1).
62
Greek Code of Civil Procedure, Art 44.
63
Swiss Code on Civil Procedure, Article 17(1); Swiss Private International Law Act, Article 5(1);
Haas and MacCabe (2019), Section 5, text to note 53.
64
Rozehnalová et al. (2019), Sections 2.2.1, 2.8.
65
Takahashi (2019), Section 2.3, text to note 12.
66
Takahashi (2019), Section 2.3.
67
This includes Germany: Weller (2019), Section 1.2. The Scottish law is based on the Brussels
Convention, and therefore does not include a presumption of exclusivity: Merrett and Carruthers
(2019), Section 1.1.
68
Netherlands (Rammeloo 2019, Section 2.3); Taiwan (Chen 2019, Section 2.2.2).
69
Including China (Tu and Huang 2019, Section 3, text to note 48; although they also note that some
courts, including the Supreme People’s Court, have implicitly and explicitly adopted a presumption
of exclusivity in some cases) and Taiwan (Chen 2019, Section 2.2.2).
70
This is so in the Czech Republic (Rozehnalová et al. 2019, Section 2.1) and Japan (Takahashi
2019, Section 2.3), for example.
71
For China, see Tu and Huang (2019), Section 3, text to and following note 51.
12 M. Keyes
Choice of court agreements can take many different forms, and their effect will
depend in every case on what the agreement actually provides. Referring to the
clause in Sabah Shipyard (Pakistan) Ltd v Islamic Republic Of Pakistan,80 which the
English Court of Appeal described as non-exclusive, Briggs argued that “[i]t dena-
tures such a clause to call it non-exclusive, for it was more subtle, more complex,
72
E.g. BNP Paribas SA v Anchorage Capital Europe LLP [2013] EWHC 3073 (Comm), para
87 and 88, cited by Merrett and Carruthers (2019), Section 2.2.1, text to note 47.
73
E.g. Takahashi (2019), Section 2.3.
74
Buxbaum (2019), Section 4.
75
Chen (2019), Section 2.2.2.
76
Zheijiang High People’s Court (2013) Zhe Xia Zhong Zi No 42, cited by Tu and Huang (2019),
Section 3, note 52.
77
[2015] EWCA 401 (Civ).
78
Armacel Pty Ltd v Smurfit Stone Container Corporation [2008] FCA 592. In this case, the
Australian court held that because of the US judgment, the plaintiff “was barred by an issue
estoppel from contending that [the clause] was an exclusive jurisdiction clause”: para 66 and 90.
79
See likewise Tang et al. (2016), p. 65.
80
[2003] 2 Lloyd’s Rep 571.
General Report 13
than that.”81 Briggs has argued that the distinction between exclusive and
non-exclusive choice of court agreements is “unhelpful”, because some choice of
court agreements do not neatly fall into one or the other category.82 In particular,
while there appears to be widespread agreement about what constitutes an exclusive
choice of court agreement,83 the concept of optional choice of court agreement is
often defined by reference to what it is not (i.e. purely exclusive), and many different
types of choice of court agreement satisfy that criterion.84
The Explanatory Report to the Hague Choice of Court Convention gives some
examples of non-exclusive choice of court agreements (i.e. agreements which do not
come within the Convention definition of exclusive choice of court agreements).
These include agreements that impose “no restrictions on the courts before which
proceedings may be brought”, giving as an example a clause which nominates the
courts of one country but also states that “this shall not preclude the bringing of
proceedings in any other court that has jurisdiction under the law of the State in
which it is located.”85 This is contrasted with non-exclusive agreements “with
limitation”; the example given is “an agreement that designates a court or the courts
of two or more Contracting States to the exclusion of all others”.86 In Belgium,
“scholarship distinguishes two kinds of optional choice of court agreements”,
namely “non-exclusive” choice of court agreements (which confer non-exclusive
jurisdiction on one or more courts), and “complex” choice of court agreements
(which confer jurisdiction on multiple courts, “specifying that the parties can
commence proceedings in one of these courts to the exclusion of the courts which
would ordinarily have jurisdiction.”)87 Oprea identifies four different types of
non-exclusive choice of court agreements: simple non-exclusive choice of court
agreements, hybrid choice of court agreements, multiple choice of court agree-
ments,88 and asymmetric choice of court agreements.89
81
Briggs (2008), p. 118, para 4.21.
82
Briggs (2012), p. 118, para 4.21. See, likewise, Collins (2012), para 12–102.
83
Although it is possible that the parties can include what Merrett and Carruthers refer to as an
“exclusively non-exclusive” choice of court agreement, which nominates the courts of one country
as having exclusive jurisdiction if one party is claimant, and the courts of another country as having
exclusive jurisdiction if the other party is claimant: (2019), Section 2.2.1, text to note 38. The choice
of court agreement in Meeth v Glacetal Case 23/78 [1978] ECR 2133 was of this kind. See also
Keyes and Marshall (2015), pp. 357–358.
84
See also Oprea (2019), Section 2.6; Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd
[2008] 5 HKLRD 631, para 24.
85
Hartley and Dogauchi (2010), p. 845, para 246.
86
Hartley and Dogauchi (2010), p. 845, para 247 (emphasis original).
87
Van Calster and Poesen (2019), Section 3.1.
88
Oprea (2019), Section 1.2.
89
Oprea (2019), Section 2.6, text to notes 36–38.
14 M. Keyes
90
Hartley (2013), p. 5, para 1.08.
91
E.g. Brussels I Recast Regulation, Article 25(1); Lugano II Convention, Article 23(1); Greece
(Greek Code of Civil Procedure, Arts 42–44); Québec (Civil Code of Québec, article 3148(4));
Singapore (Astrata (Singapore) Pte Ltd v Portcullis Escrow Pte Ltd [2011] 3 SLR 386); Switzer-
land (Swiss Code on Civil Procedure, Article 17), and the UK (Merrett and Carruthers 2019,
Section 1.1).
92
Including the Czech Republic (Rozehnalová et al. 2019, Section 1.3) and Switzerland (Haas and
MacCabe 2019, Section 6.1 (citing the Swiss Code on Civil Procedure, Article 17, and the Lugano
II Convention, Article 23)).
93
This is the case in South Africa (Schoeman 2019, Section 3.5) and in some US states (Buxbaum
2019, text to note 76, referring in particular to Florida).
94
Keyes (2015), p. 225.
95
Marshall (2019), Section 2.3.1.1.
96
Brussels I Recast Regulation, Article 26(1); Lugano II Convention, Article 24(1); Greek Code of
Civil Procedure, Art 42 § 2; Japanese Code of Civil Procedure, Article 3-8; Taiwanese Code of
Civil Procedure, Article 25.
General Report 15
Most courts now take a favourable attitude to choice of court agreements which
nominate them. Nygh suggested that “For the prorogated forum the choice of the
parties presents no challenge to State authority. Concepts of territorial sovereignty
97
Piscator, HR February 1, 1985, NJ 1985, 698 (discussed by Rammeloo 2019, Sections 1.1 and
2.5).
98
1991 Chinese Civil Procedure Law, Articles 25 and 224 (promulgated and entered into force on
9 April 1991). These provisions were replaced by Article 34 of the 2012 Chinese Civil Procedure
Law (which was in turn replaced by Article 34 of the 2017 Chinese Civil Procedure Law). See Tu
and Huang (2019), Section 2, text to notes 13–16.
99
Oprea (2019), Section 1.1.3, text to notes 14–15.
100
Rammeloo (2019), Section 1.1, text to note 1.
101
Chen (2019), Section 2.1.
16 M. Keyes
and control are not offended, but rather flattered, when foreigners submit to the
jurisdiction.”102 Given the current popular view of international litigation as a
product, it is hardly surprising that most legal systems welcome the parties’ con-
tractual choice of the forum. However, this fails to recognise the effect of the
prorogation in potentially exacerbating, or creating, a problem of overlapping
jurisdictions.
In the legal systems which allow prorogation without any requirement of con-
nection, where the prorogation is the only basis on which a nominated court is
competent, the choice of court agreement has the effect of increasing the number of
competent courts in which either party could bring proceedings. If the courts of more
than one legal system would have regarded themselves as competent irrespective of
the agreement, prorogation exacerbates the problem of overlapping jurisdictions, by
making one more court competent. If there would have only been one competent
court but for the parties’ choice of court agreement (admittedly an unlikely scenario,
in a cross-border dispute), prorogation creates the problem of overlapping jurisdic-
tions. If a nominated court is otherwise competent under its other rules of jurisdic-
tional competency, the prorogation neither creates nor adds to the competency of that
court, and does not exacerbate the problem of overlapping jurisdictions, which
would arise in any case.
The second stage at which a choice of court agreement is relevant relates to its effect
in controlling the possibility or the reality of parallel proceedings. At this stage, a
choice of court agreement might be challenged in either the chosen, or non-chosen,
courts. It will not necessarily be given the same effect in the chosen and the
non-chosen courts, including because the chosen court will, as Nygh observed, be
flattered by the choice, whereas the non-chosen courts may be offended, especially if
the factual connections to the non-chosen court are strong.103 This may be true of
optional choice of court agreements as well as of exclusive choice of court
agreements.
The legal effects of choice of court agreements are regarded as a matter of
procedure and for that reason subject to forum law.104
The following sections first address the negative effects of exclusive choice of
court agreements; and then the negative effects of optional choice of court
agreements.
102
Nygh (1999), p. 15.
103
Nygh (1999), pp. 15, 19.
104
This is so in England and Scotland (Merrett and Carruthers 2019, Section 2.3); Germany (Weller
2019, Section 3.3); Japan (Takahashi 2019, Section 2.1); Singapore (Chong 2019, Section 2.2);
Taiwan (Chen 2019, Section 2.3.1); the US (Buxbaum 2019, Section 6.1).
General Report 17
Much of the law and scholarship about choice of court agreements concerns the
effect of exclusive agreements in non-chosen courts.105 In this context, choice of
court agreements are often said to have a negative, derogative, or “jurisdiction-
depriving”106 effect on a non-chosen court which is competent, under its own rules
of jurisdiction, to hear the dispute. This only necessarily follows if the choice of
court agreement is exclusive, because at least in most types of optional choice of
court agreements, the parties do not by their agreement foreclose the possibility of
litigating in courts other than those nominated in the choice of court agreement. An
exclusive choice of court agreement only has a jurisdiction-depriving effect if the
non-chosen court is obliged to enforce an exclusive choice of court agreement by
staying its proceedings.107 The Hague Choice of Court Convention,108 the Brussels I
Recast, and the national laws of some countries109 require the non-chosen courts of
the forum to stay proceedings where the parties have agreed to the exclusive
jurisdiction of a foreign court.
The Brussels I Recast exemplifies this approach to the strict enforcement of
exclusive choice of court agreements. Article 31(2) states
Without prejudice to Article 26, where a court of a Member State on which an agreement as
referred to in Article 25 confers exclusive jurisdiction is seised, any court of another
Member State shall stay the proceedings until such time as the court seised on the basis of
the agreement declares that it has no jurisdiction under the agreement. (emphasis added)
Article 31(3) further states that “Where the court designated in the agreement has
established jurisdiction in accordance with the agreement, any court of another
Member State shall decline jurisdiction in favour of that court.” The introduction
of article 31 is one of the most important recent developments in private international
law. The Lugano II Convention has not been amended to incorporate a similar
protection of exclusive choice of court agreements.
105
Saumier (2019), Section 3.1.
106
Hartley (2013), p. 5, para 1.08.
107
Under the common law, exclusive choice of court agreements are not strictly enforceable; the
courts will generally enforce them, but this is subject to the courts’ discretion, and the courts may
not enforce even an exclusive choice of court agreement if there are strong grounds, cause, or
reasons for non-enforcement: Donohue v Armco [2001] UKHL 64 (UK House of Lords); Akai Pty
Ltd v The People’s Insurance Co Ltd (1996) 188 CLR 418 (Australian High Court); ZI Pompey
Industrie v ECU-Line NV 2003 SCC 27 (Supreme Court of Canada); Amerco Timbers Pte Ltd v
Chatsworth Timber Corp Pte Ltd [1977-78] 2 SLR 112 (Singapore Court of Appeal).
108
Article 6.
109
Turkey (Tarman and Oba 2019, Section 3.3, text to note 33). Note, however, that the Turkish
courts sometimes establish their jurisdiction on the basis of the principle of good faith, if the
respondent is domiciled in Turkey. Tarman and Oba note that this “reasoning is heavily criticized in
the academic commentary”: (2019), Section 3.3.2.1, text to note 43.
18 M. Keyes
The common law approach is different in principle. The line of English cases
commencing with The Eleftheria110 have been very influential in England, and most
common law countries apply the principle from that case that exclusive choice of
court agreements, whether in favour of the forum or of a foreign court, should be
enforced unless there are strong reasons for non-enforcement.111 Clearly, this gives
the non-chosen court a discretion whether to enforce the agreement.
Relatively speaking, the effect of an exclusive choice of court agreement which is
being challenged in proceedings in the chosen court has not been the subject of much
litigation or much study. Nygh’s comment, mentioned above, in relation to a
prorogated court being flattered by being selected is also pertinent in terms of the
attitude the court will have to a litigant challenging the nominated court’s
jurisdiction.
In the Hague Choice of Court Convention,112 the Brussels I Recast, and the
national law of some countries,113 the court nominated in an exclusive choice of
court agreement cannot decline jurisdiction in favour of a foreign court. The Civil
Code of Québec goes even further, stating that the
Québec authorities have no jurisdiction where the parties have chosen by agreement to
submit the present or future disputes between themselves relating to a specific legal
relationship to a foreign authority, or to an arbitrator.114
110
[1970] P 94.
111
E.g. Australia (Marshall 2019, Section 3); Singapore (Chong 2019, Section 3). This case has also
been influential in South Africa (Schoeman 2019, Section 3.4).
112
Article 5(2).
113
This is so for example in China (Tu and Huang 2019, Section 3, text to note 60); and Japan,
except where the foreign court is deemed to have exclusive subject matter jurisdiction (Takahashi
2019, Section 1.1, text following note 2). Australia and New Zealand have enacted reciprocal
legislation regulating jurisdiction and judgments in trans-Tasman proceedings (the Trans-Tasman
Proceedings Acts 2010). Inter alia, this legislation was designed to be consistent with the Hague
Choice of Court Convention, and as a result, the courts nominated in an exclusive choice of court
agreement cannot stay those proceedings: Trans-Tasman Proceedings Act 2010 (Cth) s 20(1)(b).
See Marshall (2019), text to note 31.
114
Art 3148.
115
Donohue v Armco Inc [2001] UKHL 64, para 24.
116
Donohue v Armco Inc [2001] UKHL 64.
General Report 19
of court in favour of the forum, they would not give effect to choice of court
agreements that nominated foreign courts.117
Whereas the law of different legal systems has shown strong signs of convergence in
relation to the positive effects of both exclusive and optional choice of court
agreements, and the negative effects of exclusive choice of court agreements, there
are no such indications of convergence in relation to the negative effect of optional
choice of court agreements.
The negative effects of optional choice of court agreements are more complicated
than the negative effects of exclusive choice of court agreements, as the national
reporters attest. The Hague Choice of Court Convention does not contain any direct
principles in relation to the optional choice of court agreements, and the Brussels I
Recast Regulation does not contain any specific principles relating to the effect of
such agreements.
The Hague Choice of Court Convention does not regulate optional choice of
court agreements directly, but it affects them indirectly in two ways. The first is that
the Convention deems choice of court agreements to be exclusive. In some legal
systems, the effect of this will be that fewer choice of court agreements will be
optional, than would have otherwise been the case under national laws about the
distinction between optional and exclusive choice of court agreements.118 The
second is that contracting states can opt to recognise the judgments given by a
court of another contracting state, the jurisdiction of which court depends on the
parties’ optional choice of that court. Contracting states can make a declaration
under article 22, the effect of which would be that judgments rendered by the courts
of other contracting states which had also made a declaration under article 22 and the
jurisdiction of which derived from a non-exclusive choice of court agreement would
be recognised by the contracting state making the declaration. To date, none of the
contracting states has made such a declaration.
While the Recast enables prorogation of jurisdiction, and protects exclusive
choice of court agreements by requiring courts other than those nominated in an
exclusive choice of court agreement to stay proceedings in favour of the jurisdiction
of the nominated courts, it contains no specific provisions concerning the negative
effects of an optional choice of court agreement. It therefore gives no priority to
optional choice of court agreements, when it comes to the allocation of jurisdiction.
117
Guillemard and Sabourin, Section 1 text to note 29 and following note 30.
118
Marshall and Keyes (2017), p. 275.
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