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2020 | Book

Optional Choice of Court Agreements in Private International Law

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About this book

This book highlights the importance of optional choice of court agreements, and the need for future research and legal development in this area. The law relating to choice of court agreements has developed significantly in recent years, reflecting their increased use in practice. However, most recent legal developments concern exclusive choice of court agreements. In comparison, optional choice of court agreements, also called permissive forum selection clauses and non-exclusive jurisdiction clauses, have attracted little attention from lawmakers or commentators.

This collection is comprised of 19 National Reports, providing a critical analysis of the legal treatment of optional choice of court agreements, including asymmetric choice of court agreements, under national laws as well as under multilateral instruments. It also includes a General Report offering an overview of this area of the law and a synthesis of the findings of the national reporters.

The contributions to this collection show that the legal treatment of optional choice of courts differs between legal systems. In some countries, the law on the effect of optional choice of court agreements is at an early stage in its development, whereas in others the law is relatively advanced. Irrespective of this, the national reporters identify unresolved issues with the effect of optional choice of court agreements, where the law is unclear or the cases are conflicting, demonstrating that this topic warrants greater attention. This book is of interest to judges, legislators, lawyers, academics and students who are concerned with private international law and international civil procedure.

Table of Contents

Frontmatter

General Report

Frontmatter
Optional Choice of Court Agreements in Private International Law: General Report
Abstract
The law in relation to choice of court agreements has developed significantly in recent years, but most of this development has concerned exclusive choice of court agreements. Optional choice of court agreements have not been the focus of attention by lawmakers or by commentators. This chapter provides an overview of this area of the law, synthesising the national reports which comprise this collection, and drawing out the themes that emerge from those reports. It shows that the legal treatment of optional choice of courts differs substantially between legal systems, and argues that this topic warrants greater attention from scholars and lawmakers.
Mary Keyes

National Reports

Frontmatter
Australia: Inconsistencies in the Treatment of Optional Choice of Court Agreements
Abstract
Optional choice of court agreements, referred to in Australia as “non-exclusive jurisdiction agreements”, feature in Australian court decisions. A clear distinction is drawn between exclusive choice of court agreements, on the one hand, and optional agreements, on the other. The principles applicable to exclusive agreements and the policies informing them are, however, better developed than those applicable to optional agreements. This chapter argues that the legal treatment of optional agreements under Australian law is deficient in multiple ways. Chief among them is that optional agreements nominating forum courts and optional agreements nominating foreign courts are treated inconsistently: in only one published case in which a forum court was nominated in an optional agreement has an Australian court stayed its proceedings. In no published case in which a foreign court was nominated in an optional agreement has an Australian court stayed its proceedings. There is also a marked difference in how judges perceive parties’ intentions in concluding an optional agreement in intra-national as compared with international cases. In the former, an optional agreement is said to be “a strong indication” by the parties as to where litigation should occur; in the latter, it is said not to indicate any “preference” as to where litigation should occur.
Brooke Marshall
Belgium: Optional Choice of Court Agreements, Legal Uncertainty Despite a Modern Legal Framework
Abstract
While Belgian private international law rules in principle are in favour of choice of court, as a reflection of the overall encouragement of party autonomy, ambiguity remains, revolving around optional and asymmetrical choice of court agreements.
One particular complication concerns the application of the unfair market practices legislation in B2C relations that are not subject to the consumer section of the Brussels I Regulation and the Recast Regulation, such as transport contracts. Moreover, Belgian courts are likely to subject all choice of court agreements to the requirement of good faith. Lack of case-law on these issues suggests either that legal practice has not picked up on these issues—or indeed that such litigation is typically taken away from the Belgian courts by virtue of the very choice of court agreement.
Geert Van Calster, Michiel Poesen
Québec : Les Clauses D’Élection De For facultatives En droit international Privé Québécois
Abstract
The Civil Code of Québec makes no distinction between exclusive choice of court clauses and optional choice of court clauses, except in a very convoluted manner in the context of recognition of foreign decisions (section 3165 CCQ). “Optional” choice of court clauses are rare in Quebec private international case law. Accession to the Hague Convention on Choice of Court Agreements, although the Convention contains some flaws, would make it possible to iron out a number of difficulties. In particular, the law applicable to choice of court agreements deserves to be clarified.
Sylvette Guillemard, Frédérique Sabourin
Choice of Court Agreements in Common Law Canada
Abstract
This contribution canvasses the treatment of choice of court agreements in the law of the Canadian common law provinces. It outlines the statutory and common law sources relevant to the enforcement of such clauses by courts as well as some key judgments, including the 2017 Supreme Court decision in Douez v Facebook. The upshot is that Canadian courts largely enforce choice of court agreements but that the methodology used to assess the diverse types of clauses, including optional and exclusive clauses, is not always coherent or consistent. It concludes that reform would be useful to provide more direction to courts and predictability for parties.
Geneviève Saumier
People’s Republic of China (PRC): Optional Choice of Court Agreements in the Vibrant Age
Abstract
Due to the late development of Chinese laws in general and Chinese Private International Law (PIL) in particular, Chinese treatment of choice of court agreements is relatively under-developed, compared with that in some other advanced jurisdictions. Choice of court agreements were not accepted in China until 1991 when China began to establish a market-oriented economy and recognition of optional choice of court agreements was not made until 2005 when the Supreme People’s Court issued a formal Notice. So far, it is not clear which law will be applied by Chinese courts to determine the validity of a choice of court agreement and whether a choice of court agreement will be presumed as “exclusive” or “optional” where the agreement is ambiguous. With the Chinese version of forum non conveniens and Chinese attitude towards foreign parallel proceedings, the overall effects of optional choice of court agreements is quite homeward in Chinese Courts.
Guangjian Tu, Zeyu Huang
Czech Republic: The Treatment of Optional and Exclusive Choice of Court Agreements
Abstract
This chapter deals with optional choice of court agreements from the perspective of the Czech law. First, it describes the historical context and development of the legal approaches with regard to choice of court agreements. The authors present relevant legal sources regulating this particular issue in cross-border cases. Even though the Czech Republic applies primarily the European Union legislation, the authors focus on the legal regulation adopted in the Czech Private International Law Act. This chapter contribution addresses whether the Czech national legislation allows the parties to conclude optional choice of court agreements in international cases, what is the character of these clauses and whether they are expressly stated in the Czech Private International Law Act. The authors deal also with asymmetrical choice of court agreements, especially their legal effect. Finally, the authors evaluate the efficiency of the national regulation and propose necessary modifications.
Naděžda Rozehnalová, Silvie Mahdalová, Lucie Zavadilová
France: A Game of Asymmetries, Optional and Asymmetrical Choice of Court Agreements Under French Case Law
Abstract
France has a long tradition of favour towards choice of court agreements, dating back long before the Code civil. Optional choice of court clauses, though, are a marginal part of its abundant case law. But these few cases have recently brought a particularly intense debate. While French courts have sometimes upheld interpretation of clauses as being “to the sole benefit” of one party, allowing him to unilaterally renounce their effect, a stream of cases has paradoxically restricted the use of expressly asymmetrical clauses: they are now deemed inefficient by some courts if their optional part does not provide for objective elements allowing for the designation of the judge in the circumstances. This controversy, having given rise to no fewer than five cases in 3 years before the Cour de cassation, now firmly opposes two chambers of the Cour. The restrictive position seems condemned in the long run, but its aim is worth considering.
François Mailhé
Optional Choice of Court Agreements: German National Report
Abstract
This chapter analyzes the treatment of choice of court agreements in German law and was delivered at the 20th Congress of the International Academy of Comparative Law held in Fukuoka on 22–28 July 2018. While Sect. 1 describes the historical developments surrounding choice of court agreements in Germany, Sect. 2 focuses on the civil procedural rules in force, namely Sections 38 and 40 ZPO (Zivilprozessordnung). Sections 3 and 4 then deal with specific questions regarding optional and asymmetrical choice of court agreements. Finally, Sect. 5 provides a critical assessment, as well as comments on current and future reforms.
Matthias Weller
Greece: A Forum Favorable to Optional Choice of Court Agreements
Abstract
The Greek legal order of domestic origin reserves a friendly treatment to choice of court agreements, without prejudice to concerns of protection for presumptively weaker parties. The Brussels I Convention and Regulations have come to perfect this protection, leading to asymmetrical optional choice of court agreements, in favor of such parties, without impairing the validity of agreements in the presence of parties of presumptively equivalent negotiation force.
Georgios Panopoulos
Japan: Quests for Equilibrium and Certainty
Abstract
Japanese law in the area of choice of court agreements has been striving to find an optimal equilibrium between the interests of the parties to such agreements as well as to ensure certainty and predictability in its application. In a quest for an optimal equilibrium, a recent amendment to the Code of Civil Procedure has introduced special rules for consumer contracts and individual employment relations, which are applicable to all choice of court agreements pleaded before the Japanese courts. Those rules have obviated much of the need to rely on the amorphous concept of public policy, resulting in greater certainty. In a further development, a new provision is shortly to be inserted in the Civil Code which seeks to ensure an optimal equilibrium between parties to a standard form contract (whether or not it is a consumer contract). It may be invoked to challenge asymmetrical choice of court agreements when they are governed by Japanese law. The test is whether the terms are so unfavourable to one side as to contravene the principle of good faith. Since the notion of good faith is nebulous, the new provision may introduce an element of uncertainty into this area of law. It goes to show that a tension can arise between a quest for equilibrium and a quest for certainty. Another cause for uncertainty which exists in the current law and ought to be tackled is the absence of clear rules for determining whether a choice of court agreement is optional or exclusive.
Koji Takahashi
The Netherlands: Optional Choice of Court Agreements in a Globalizing World
Abstract
Choice of court agreements are well-established in the Private International Law of the Netherlands on the basis of the Hague 2005 Convention on Choice of Court Agreements, EU Regulation 44/2001, and national jurisprudence of the Netherlands Supreme Court. In respect of private interregional law of the Kingdom of the Netherlands, the Caribbean Civil Procedural Law Act applies to “Caribbean-Dutch” choice of court cases. Pursuant to article 8 subsection 2 of the Dutch Civil Procedural Law Code codifying case law of the Highest Court of the Netherlands, an exclusive choice for a foreign court excludes jurisdiction power of a Dutch court. If, however, any such choice is of a non-exclusive nature the Dutch court remains competent (article 8 subsection 2). Though serving as a starting point, article 8 does not and cannot provide for conclusive answers to each and every question (interpretation, legal effects, damages in case of breach of the agreement) emanating from choice of court related conflicts.
Stephan F. G. Rammeloo
Romania: Interpretation and Effects of Optional Jurisdiction Agreements in International Disputes
Abstract
This chapter provides an overview of some essential issues regarding the admissibility and the obligatory and jurisdictional effects of non-exclusive jurisdiction agreements in international disputes in front of the Romanian courts. It clarifies the regime which regulates such agreements, and emphasizes the difficulties, the inconveniences and the uncertainties raised by the existing applicable norms.
Elena-Alina Oprea
Singapore: A Mix of Traditional and New Rules
Abstract
The applicable rules differ depending on whether the Singapore High Court (not including the Singapore International Commercial Court), the Singapore International Commercial Court (“SICC”), or a foreign forum is named in an optional choice of court agreement. If the Singapore High Court (not including the SICC) or a foreign forum is named in the agreement, the traditional rules apply, although there are certain differences depending on whether the chosen court is local or foreign and the context of the case. The SICC regime departs from the traditional rules by relying on a presumption of exclusivity if party intentions as to the nature of the choice of court agreement are not made clear, and by abrogating the need to obtain leave to serve the writ on a defendant abroad. The test for the exercise of jurisdiction is also different and generally designed to make it harder for the SICC to refuse jurisdiction.
Adeline Chong
South Africa: Time for Reform
Abstract
South African domestic law of jurisdiction informs the assumption of jurisdiction in cross-border commercial litigation. In regard to choice of court agreements, the fragmented nature of High Court jurisdiction and the common law rules relating to submission to jurisdiction present unique challenges. Two types of choice of court agreements can be identified in South African law: foreign exclusive choice of court agreements and optional choice of court agreements in favour of South African courts. It is submitted that the South African law relating to cross-border jurisdiction is in need of reform and this should be undertaken following an international and comparative approach, in keeping with the Constitution of the Republic of South Africa, 1996.
Elsabe Schoeman
Switzerland: Choice of Court Agreements According to the Code on Civil Procedure, the Private International Law Act and the Lugano Convention
Abstract
The rules governing choice of court agreements in Switzerland are spread out over three different legal sources (two codes and one international convention), each of which has a specific scope of application. While all three legal sources hold different provisions regarding formal requirements, limits and effects of choice of court agreements, they do have one thing in common: None of them makes a distinction between optional and exclusive choice of court agreements. Nevertheless, optional choice of court agreements are permitted under Swiss law. In this chapter we analyze the legal sources, requirements, limitations and effects of optional choice of court agreements in Switzerland.
Eliane Haas, Kevin MacCabe
Taiwan: Legislation and Practice on Choice of Court Agreements in Taiwan
Abstract
The effectiveness of jurisdictional agreements was envisaged and recognized in the Taiwanese Code of Civil Procedure. Its provisions apply to both optional and exclusive choice of court agreements, despite the fact that they are basically designed for the latter. This chapter addresses the legislative development and judicial practice on such agreements. Section 1 explores the legislation on jurisdictional agreements with emphasis on their limitative requirements and adjustment to cope with modern communications technology. Section 2 focuses on judicial practice about optional choice of court agreements. The Supreme Court’s Decision # Tai-Kang 259 of 2012 plays a significant role in illustrating the methodology adopted to fill the gap of rules of international jurisdiction. The fact that Taiwanese courts prefer to characterize foreign nominated courts’ jurisdiction as optional reflects Taiwan’s judicial protectionism due to its isolation in the international arena. The forum law is applicable to the effects of the jurisdictional agreements and justifies the different treatment of optional and exclusive choice of court agreements. Section 3 deals with asymmetrical choice of court agreements. The test of their validity is whether a weaker party is unfairly impaired, rather than whether the bargaining powers are imbalanced and their standing to sue is asymmetrical. Section 4 concludes with some observations about future developments.
Rong-Chwan Chen
Turkey: Optional Choice of Court Agreements
Abstract
This chapter analyses choice of court agreements under Turkish private international law. Turkish private international law recognizes the freedom of the parties to conclude an agreement which designates Turkish courts and/or foreign courts as having jurisdiction for the resolution of their existing or future legal disputes under certain conditions. In this chapter first, agreements granting jurisdiction to foreign courts are examined, mainly through the requirements and consequences of forming such an agreement. Next, rules governing agreements granting jurisdiction to Turkish courts are explained. Following this, asymmetrical jurisdiction agreements are discussed. Subsequently, the requirements for the recognition and enforcement of a foreign judgment rendered by a court designated through a jurisdiction agreement are explained. Finally, discussions regarding co-existing jurisdiction and arbitration clauses are assessed. Notwithstanding the need to reform particular aspects of Turkish law in relation to jurisdiction agreements, it is concluded that the Turkish legal framework in this area is sufficient for both Turkish and foreign parties to securely conclude choice of court agreements.
Zeynep Derya Tarman, Meltem Ece Oba
United Kingdom: Giving Effect to Optional Choice of Court Agreements—Interpretation, Operation and Enforcement
Abstract
This chapter begins by explaining that respect for party autonomy is an important feature of the national common law rules and the European rules which together govern jurisdiction and choice of law in civil and commercial matters in the UK. The chapter considers the approach to optional jurisdiction agreements in the four main regimes which apply to determine jurisdiction: the BIR recast, the Hague Convention, the Lugano II Convention and the residual national rules. The chapter explains how the various regimes distinguish between exclusive and non-exclusive agreements. At common law, the starting point is to construe the express and implied positive and negative promises contained in the choice of court agreement. The key difference between exclusive and non-exclusive agreements is that while both contain a positive promise to submit to the jurisdiction of the chosen court, only an exclusive agreement also contains a negative promise not to sue anywhere else. When it comes to the effect of those promises, the unique feature of the English national rules (which are broadly mirrored by the Scottish national rules) is that jurisdiction is always discretionary. However, because of the respect for party autonomy, the courts will give effect to the promise to submit in a non-exclusive agreement unless there is a strong reason for not doing so. By contrast, it is only in the case of an exclusive agreement that suing in another jurisdiction amounts to a breach of contract. This means that remedies founded on breach of contract, including damages, anti-suit injunctions, and defences to the enforcement of judgments, should be available only where there is an exclusive jurisdiction agreement. The chapter also considers asymmetric agreements, which are usually optional in respect of one party, but exclusive in relation to another. Finally, the authors outline the potential impact of Brexit and possible ways forward.
Louise Merrett, Janeen Carruthers
United States: The Interpretation and Effect of Permissive Forum Selection Clauses
Abstract
A forum selection clause is a form of contractual waiver. By this device, a contract party waives its rights to raise jurisdictional or venue objections if a lawsuit is initiated against it in the chosen court. (If the forum selection is exclusive, then that party also promises not to initiate litigation anywhere other than in the chosen forum.) The use of such a clause in a particular case may therefore raise a set of questions under contract law. Is the waiver valid? Was it procured by fraud, duress, or other unconscionable means? What is its scope? And so on.
Unlike most contractual waivers, however, a forum selection clause affects not only the private rights and obligations of the parties, but something of more public concern: the jurisdiction of a court to resolve a dispute. The enforcement of such a clause therefore raises an additional set of questions under procedural law. For instance, if the parties designate a court in a forum that is otherwise unconnected to the dispute, must (or should) that court hear a case initiated there? If one of the parties initiates litigation in a non-designated forum that is connected to the dispute, must (or should) that court decline to hear the case?
Under US law, the bottom line is straightforward: almost always, in consumer as well as commercial contracts, forum selection clauses will be enforced. Navigating the array of substantive, procedural, and conflicts rules whose interplay yields that result, though, is far less straightforward. That is the task of this report. Section 2 provides a brief background on the general attitude toward forum selection clauses. Section 3 surveys current state law on their use, in consumer as well as commercial contracts. Section 4 addresses the interpretation of forum selection clauses as either permissive or exclusive. Section 5 analyzes the effect of permissive clauses in state and federal courts. Finally, Sect. 6 turns to choice of law problems, particularly as they arise in the course of litigation in federal courts.
Hannah L. Buxbaum
Metadata
Title
Optional Choice of Court Agreements in Private International Law
Editor
Mary Keyes
Copyright Year
2020
Publisher
Springer International Publishing
Electronic ISBN
978-3-030-23914-5
Print ISBN
978-3-030-23913-8
DOI
https://doi.org/10.1007/978-3-030-23914-5