In brief

  • The European Union Justice Ministers have approved a decision ratifying the Hague Convention on Choice of Court Agreements.
  • This decision is a significant step towards the ratification of the Convention by the European Union and the Convention’s entry into force.
  • The Convention has the potential to offer the same certainty as to the enforceability of foreign judgments as the New York Convention offers parties in respect of arbitral decisions.

Summary

On 10 October 2014, the European Union Justice Ministers approved a decision ratifying the Hague Convention of 30 June 2005 on Choice of Court Agreements (the Convention).

The Convention1 creates uniform rules on jurisdiction, and on recognition and enforcement of foreign judgments in civil or commercial matters. In so doing, the Convention seeks to provide greater certainty to businesses engaging in cross-border activities, and to thus create a legal environment more amenable to international trade and investment. The Convention was drafted by members of the Hague Conference on Private International Law, including the European Union, the United States, Canada, Japan, China and Russia, and has the potential to become a worldwide legal basis for the recognition and enforcement of judgments resulting from jurisdiction clauses (also known as choice of court agreements, or forum selection clauses) between parties to international commercial transactions.

In this way, the Convention may ultimately offer contracting parties the same certainty as to the enforceability of foreign judgments as the New York Convention offers parties in respect of arbitral decisions.  

However, the Convention has not yet entered into force, as before this can occur, two signatories must ratify, accept, approve or accede to the Convention. Following the conclusion of the Convention on 30 June 2005, the Convention was ratified by Mexico in September 2007, and was signed by the United States and the European Union in January and April 2009 respectively. However, neither the United States nor the European Union have ratified the Convention to date. Australia may, as part of its review of private international law rules in a project announced some time ago by the Commonwealth-Attorney General, consider ratification of the Convention.

In light of this precondition to entry into force, the approval of a decision ratifying the Convention by the European Union Justice Ministers is a significant step towards the entry into force of the Convention. In order for this to occur, the Convention must now be approved by European Union Member States, and be consented to by the European Parliament. Once this consent is given, the decision will be adopted by the European Council, and the Convention will enter into force.