Friday, 31 October 2014

E.U. Gives Boost to Choice of Court Convention

Earlier this month, European Union Justice Ministers approved ratification of the Hague Conference’s Convention of 30 June 2005 on Choice of Court Agreements.   

This convention is designed to ensure that choice of court clauses (also known as forum selection clauses) in international commercial contracts are effective.  The convention does so by requiring the court chosen by the parties not to decline jurisdiction on the basis of forum non conveniens, by requiring courts the parties did not choose to decline jurisdiction if one of the parties attempts to litigate there in contravention of its contract, by requiring courts to recognize and enforce judgments issued by courts the parties have chosen in a forum selection agreement, and by providing clarity on the rules governing international contracts with such clauses, among other things.    

The Convention is not yet in force but probably soon will be.  It has been ratified only by Mexico so far, but has been signed by the United States as well as the European Union.   The convention comes into force upon ratification by two or more states.  Therefore, after the European Parliament gives its consent, it will come into force in the European Union and Mexico.