Ratification will take effect on 1 October 2016.
On 2 June, Singapore ratified the Hague Convention on Choice of Court Agreements (the Convention). The Convention will take effect under domestic legislation through enactment of the Choice of Court Agreements Act (the Act), which is due to come into force on 1 October 2016. The ratification represents another step that the Singapore government has taken to establish Singapore as a dispute-resolution hub in Asia and comes a year and a half after the establishment of the Singapore International Commercial Court (SICC) on 5 January 2015.
The Convention’s benefits for businesses are two-fold. First, it gives certainty to businesses by requiring that contracting states to the Convention must stay or decline to hear a matter if the contract in question provides for Singapore’s courts to have exclusive jurisdiction. The converse is also true—Singapore’s courts must stay or decline to hear disputes when a contract specifically provides for another contracting state to have exclusive jurisdiction.
Second, the mutual recognition of court judgments will lower the enforcement costs of Singapore court judgments, including SICC judgments, in other contracting states.
However, importantly, the Convention does not apply in the following situations:
- When a dispute is not “international”—in other words, parties to the dispute are resident in the same contracting state, and the relationship of the parties and other elements relevant to the dispute are connected to the same state
- When the dispute does not involve “civil and commercial matters” (e.g., administrative law matters)
- For certain contracts and subject matters (e.g., consumer and employment contracts, family and succession issues, carriage of persons and goods, insolvency and competition matters, personal injury claims, etc.)
- During interim measures, such as injunctions
The Convention aims to replicate for exclusive choice of court clauses and court judgments what the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards has done for international commercial arbitration and the enforceability of its awards. To date, the Convention already has significant international reach, with 28 contracting states, including member states of the European Union (with the exception of Denmark).