On 2 June 2016, the Singapore Ministry of Law announced that Singapore has ratified the Hague Convention on Choice of Court Agreements. The Convention was concluded in June 2005 by the Hague Conference on Private International Law, but did not enter into force until 1 October 2015. The ratification requirements for the Convention were met by the EU’s ratification in June 2015. The Convention became binding on Mexico and all EU member states (except Denmark) from 1 October 2015 onwards and will come into effect for Singapore on 1 October 2016. Even though both Ukraine and the United States of America (US) are party to the Convention, it has not been ratified by either of them to date.
The Hague Convention on Choice of Court Agreements
The formal scope of the Convention is similar to the scope of the Brussels I recast regulation, but the Convention is only applicable to exclusive choice of court agreements, between professional parties. Like the Brussels I recast regulation, the Convention contains a regime for the recognition and enforcement of judgments. This regime is limited to judgments that are given by competent courts that have jurisdiction under the Convention.
For the Convention to be applicable, the chosen court has to be one from a contracting state. As most of the contracting states of the Convention are also member states of the EU, the exclusive appointment of a court of an EU member state would result in overlap between the two instruments. How is this dealt with? The Convention does not affect the application of the Brussels I recast regulation in ‘internal’ EU cases. If a party domiciled in the Netherlands enters into an exclusive choice of court agreement with a French company, appointing the Amsterdam District Court as the competent court, the Brussels I recast regulation applies. However, should (at least) one of the parties appointing the Amsterdam District Court be domiciledoutside the EU, but within a contracting state, the choice of court agreement is governed by the Convention. Consequently, for exclusive choice of court agreements regarding the Netherlands (and any other EU member state), the Brussels I recast regulation will remain applicable to all cases involving only parties domiciled in EU member states. In similar cases in which one or more parties are domiciled in Mexico or Singapore, the Convention will apply.
Much of the future impact of the Convention will depend on whether the US ratifies the Convention or not. Ratification by the EU (and, to a lesser extent, Singapore) certainly increases the likelihood of the US doing so, but its position remains uncertain. Should the US indeed ratify, it is likely that the appetite of other countries to join the Convention will increase and – as the Convention also provides for a regime of recognition and enforcement – it could become a serious contender for cases currently dealt with by the New York Convention on the recognition and enforcement of arbitral awards. Until then, however, the applicability of the Convention is limited to the EU (except for Denmark), Mexico and – from 1 October 2016 onwards – Singapore.
Given that the EU, and not the member states themselves, negotiated, entered into and ratified the Convention, it is unclear what the impact of the recent vote for a ‘Brexit’ will be on the applicability of the Convention to the United Kingdom. Will the United Kingdom remain a party or no longer consider itself bound by the Convention in light of the referendum to leave the EU? Time will tell.