The Hague Convention on Choice of Court Agreements comes into force on 1 October 2015. It applies between all contracting states in international cases commenced after that date where an exclusive choice of court agreement in favour of the courts of one of the contracting states was entered into after 1 October. A judgment made by that chosen court must be recognised and enforced in the other contracting states. At present, the only contracting state parties to the Convention are the member states of the European Union (excluding Denmark) and Mexico. Singapore and the US have signed the Convention, but have yet to ratify it. As between the member states of the European Union, the Convention does not affect the application of the Brussels Regulation (recast), which will continue to apply when questions of jurisdiction and recognition/enforcement arise between EU member states.
The Convention aims to enhance mutual judicial co-operation by the following three basic principles:
- The chosen court of a contracting state must hear an international case, unless the choice of court agreement is null and void under the law of that state;
- Conversely, courts in the other contracting states must suspend or dismiss proceedings to which an exclusive choice of court agreement applies, unless one of the specified narrow exceptions is engaged, for example, that giving effect to the choice of court agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of the non-chosen state;
- The courts of the contracting states must recognise and enforce the judgments made in a chosen court without any review of the merits of the judgment. Recognition and enforcement may be refused only on one of the specified grounds, for example, that the judgment is inconsistent with a judgment given in the requested state in a dispute between the same parties. The recognition and enforcement provisions also do not apply to interim measures of protection.
The Convention excludes from its scope contracts or matters that are customarily governed by national law, such as contracts of employment and insolvency, consumer or competition matters. The contracting states may further limit the scope of application of the Convention by way of declarations and the European Union has already excluded the applicability of the Convention to certain insurance contracts (see here).
The Convention only applies where there is an exclusive choice of court agreement. The Convention deems an agreement exclusive unless the parties expressly declare it to be non-exclusive. The contracting states may extend the scope of the Convention, by reciprocal declarations, to the recognition and enforcement of judgements given by courts of a contracting state designated in a non-exclusive choice of court agreement.
The Convention also only applies to “international cases”, which are defined as all cases other than those in which the parties are resident in the same contracting state and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that contracting state.
Building on the undisputable success of the 1958 New York Convention, which applies to the enforcement of arbitration agreements and foreign arbitral awards, the Convention marks a new area of international judicial cooperation between the national courts of the contracting states. Upon its entry into force, the Convention will be limited to judicial cooperation between the courts of one of the 27 EU member states (not counting Denmark) and Mexico. It remains to be seen whether the Convention shall in time replicate the success of the 1958 New York Convention in the area of cross-border litigation by attracting a significant number of accessions by other countries.
The full text of the Convention is available here.