Therese Lia A comparison of the Hague Convention, and the Recast Regulation
Therese Lia is currently undertaking the Master in Advocacy (M.Adv) course at the University of Malta, and has developed a special interest in matters concerning human rights law and EU law.
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1. Introduction
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urisdiction agreements1, meaning agreements as to which courts should decide any dispute which might arise between parties2, are one of the most important jurisdictional devices of modern times. This is because they enable persons, whether legal or natural, to plan where potential litigation will take place, thereby increasing legal certainty for the parties involved.3 Because of this, harmonised private international laws have entered into force to deal with their regulation, especially due to the legal difficulties4 which have arisen in their regard. Amongst such laws are the Hague Convention of 30 June 2005 on Choice of Court Agreements5, which entered into force on the 1st October 2015 and which enshrines the principle of party autonomy or consensual jurisdiction6; and the Recast Regulation7, which entered into force on the 10th of January 2015. Albeit these legal instruments being formally independent, in the drafting of each instrument, legislators took into account the other instrument in order to achieve coherence and in order to strengthen choice of forum agreements.8 Both the Convention and the Recast Regulation share a common aim; that is, of increasing legal certainty and predictability with respect to 1 Also referred to as forum-selection agreements or choice-of-court agreements. 2 Commission Staff Working Paper, Impact Assessment SEC (2010) 1547 final, 29. 3 ibid. 4 Such as in terms of third-party involvement. An example would include the issue as to whether Article 23 of Regulation (EC) No 44/2001 of 22 December 2000 meant that a jurisdiction clause in a contract between a manufacturer of goods and the buyer thereof could be relied on against a sub-buyer. (Case C‑543/10, Refcomp SpA v Axa Corporate Solutions Assurance SA and Others, (2010) [2013] 1 All ER (Comm) 1201). 5 Herein after referred to as the ‘Hague Convention’. 6 This means that no other court other than the chosen court should take jurisdiction. 7 Regulation 1215/2012 EU (2012) OJ L351/1. 8 This can be seen in how the European Commission in the Recast Proposal (European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM (2010) 748 final, 9, sub 3.1.3) stated that such proposals reflect the Hague Convention solutions, as well as in the fact that with the latter Convention, the Conference stated that it ‘would favour a revision that aligns the Community rules with the 2005 Choice of Court Convention’ (Hague Conference on Private International Law, Letter to the European Commission of 13 July 2009, 4). Furthermore, the Hague Conference, in which the European Community played a prominent role, would have found it even more preferable to have an ‘integrated system’ in which the Convention’s regime would have been fully copied by the EU.
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jurisdiction agreements in international commercial transactions, as well as safeguarding the efficacy of jurisdiction agreements and ensuring their respect and enforcement in chosen courts.9 However convergences arise when a comparison is drawn between the operational systems of the two systems, their respective scopes of application, as well as the assessment of a jurisdiction agreement under their provisions.10 This is natural considering the fact that the nature of the respective instruments is different, one being a European Union Regulation and the other being an international treaty. In light of this, a comparison of the two instruments is important for their interpretation. This is because, them being interdependent, they could have potentially binding effects on each other when it comes to their interpretation. Because of this, this research will aim to draw a comparison between the two legal instruments on the following points: (A) Applicability and the definition of internationality in this regard; (B) Validity of the Agreement; (C) Public Policy Control; (D) Parallel Proceedings.11
2. Applicability 2. 1 The Hague Convention There are three limitations to the applicability of the Hague Convention. Firstly, it applies only to international cases. Secondly, whilst contracting 9 Other considerations in the Regulation include avoiding irreconcilable judgements as well as promoting the free movement of judgements in the Community. (Petr Břiza, ‘Choice-OfCourt Agreements: Could The Hague Choice Of Court Agreements Convention And The Reform Of The Brussels I Regulation Be The Way Out Of The Gasser-Owusu Disillusion?’ (2009) 5 Journal of Private International Law 537-563.) 10 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 11 These are the points as drawn up by Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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states have the possibility of extending its scope to cover non-exclusive choice of court agreements (Article 22), it applies only to exclusive jurisdiction agreements, meaning jurisdiction agreements depriving other courts of jurisdiction. Thirdly, it applies only to civil or commercial matters, which means that consumer and employment contracts, as well as carriage of goods (and passengers) by sea or other means12, are excluded.13 Such specific matters are excluded for varying reasons: either because of the existence of more specific international agreements, such as in maritime law; either because of significant precedents reproduced in the Convention14; or else because no agreement could be reached during negotiations.15 In addition to this, the Hague Convention rules are also temporally limited for they apply only to jurisdiction agreements concluded on or after the Hague Convention came into force in the country of the chosen Court.16 Regarding the first limitation, in Article 1(1) of the Hague Convention it is said that the Hague Convention applies ‘in international cases’. ‘International’ is defined in two different ways in Article 1(2) and 1(3) of the Convention: the former defines it for jurisdictional purposes; the latter defines it for the purpose of recognising and enforcing foreign judgments.17 In Article 1(2), it is stated that: …a case is international unless the parties are resident in the same Contracting State and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that State. 12 This also includes maritime pollution, limitation of liability for maritime claims, general average and emergency towage and salvage. (Article 2(2)(g), Hague Choice of Court Convention). 13 Although insurance, and other areas of shipping law are not. 14 For example, the influence of the Brussels I Regulation on the tenancies of immovable property. 15 Andrea Schulz, ‘The Hague Convention of 30 June 2005 on Choice of Court Agreements’ (2006) 2(2) Journal of Private International Law 243-248 ; Paul Beaumont, ‘Hague Choice of Court Agreements Convention 2005: background, negotiations, analysis and current status’ (2009) 5(1) Journal of Private International Law 127-134 . 16 2005 Hague Convention on Choice of Court Agreements (the ‘2005 Hague Convention’). 17 Preliminary Draft Convention On Exclusive Choice Of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C. Hartley (See: <https://assets.hcch.net/upload/wop/jdgm_pd26e.pdf>)
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What this means is that the rules of the Convention on jurisdiction will apply either if one or more of the parties are not resident in the State of the court seised, or if some other element relevant to the dispute (other than the location of the chosen court) has a connection with some other State.18 This makes it clear that a case is not international merely by designating a court located in one Contracting State, if the connections of the parties and legal relationship both belong to a different Contracting State. Similarly, according to Article 19 of the Hague Convention, a Court in a Contracting State may refuse to determine disputes with an applicable exclusive choice of court agreement if the only connection between that State and the parties is the location of the chosen court. However, as per Article 1(3) Hague Convention, where recognition or enforcement of a foreign judgment is sought, this would suffice to ‘internationalise’ the case. This is opposed to the Rome I Regulation19, according to which a combination of choice of law and choice of forum clause does not suffice to internationalise an otherwise domestic case. Even though the author submits that such clause is a relevant connection to another State20, this seems to give rise to an inconsistency when it comes to party autonomy, since for jurisdictional purposes, party autonomy is not enough to render the case an international one. The residence of the parties does not need to be permanent or otherwise qualified. In the case of a legal person, as per Article 4(2)(a) – (d), this will be deemed resident where it either has its statutory seat, where it was legally incorporated or formed, where it has its central administration, or where its principal place of business functions. As soon as one of these connecting factors is fulfilled in another State, the case is international.21
18 In other words, the Hague Convention requires the parties to be resident in different (Contracting) States or requires the legal relationship to be otherwise international beyond the choice of a foreign Court. 19 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (2008) OJ L 177. 20 Paul Beaumont, ‘Hague Choice Of Court Agreements Convention 2005: Background, Negotiations, Analysis And Current Status’ (2009) 5 Journal of Private International Law. 21 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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enable parties to abuse of jurisdictional party autonomy.29 Furthermore, despite its clash with the Hague Convention, it is to be noted that a clash might be necessary here due to the fact that the Recast Regulation needs to comply with Article 81 TFEU (judicial cooperation in civil matters).30 Since under Article 25 of the Recast, as opposed to the former Brussels I Regulation, it is no longer required for one party to be domiciled in a Member State, the only requirement now is that the parties choose a court located in a Member State, be it two third-state parties in the same third State or in different third States, be it parties in different Member states or in the same Member State other than that of the chosen court. In Weller’s opinion and on the basis of the Lugano opinion31, the CJEU has made clear that a connection to any other state is enough and there does not need to be a connection to a Member State in particular. This is despite the fact that the justification of the Recast has been linked to improving the functioning of the internal market.32 This was confirmed in Owusu33, although in Coreck Maritime34, a different statement was made.35 According to the author, the correct view is that in a number of additional circumstances nonU defendants are caught within its provisions.36 29 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law. 30 Article 81 TFEU, Consolidated version of the Treaty on the Functioning of the European Union (2012), OJ C 326. 31 Opinion 1/03 Lugano (2006) ECR I-1145, para 145 et seq. This stated: ‘the international nature of the legal relationship at issue need not necessarily derive, for the purposes of the application of Article 2 of the Brussels Convention, from the involvement…of a number of Contracting States. The involvement of a Contracting State and a non-Contracting State…would also make the legal relationship at issue international in nature’. 32 Paul Torremans et. al. (eds.), Cheshire, North and Faucet: Private International Law (15th edn, OUP 2017). 33 Case C-281/02 Andrew Owusu v N. B. Jackson (2005) ECR I-1383, para 26, in which it was stated: ‘The involvement of a Contracting State and a non-Contracting State, for example because the claimant and one defendant are domiciled in the first State and the events at issue occurred in the second, would also make the legal relationship at issue international in nature’. 34 C-387/98 Coreck Maritime GmbH v Handelsveem BV and Others (2000) ECR I-9337. 35 Here the CJEU stated: ‘Article 17 of the Convention does not apply to clauses designating a court in a third country.’ C-387/98 Coreck Maritime GmbH v Handelsveem BV and Others (2000) ECR I-9337 para. 19. 36 Luigi Mari and Ilaria Pretelli, ‘Possibility And Terms For Applying The Brussels I Regulation (Recast) To Extra-Eu Disputes Excerpta Of The Study Pe 493.024 By The Swiss Institute Of Comparative Law,’ [2014] Yearbook of Private International Law.
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3. Validity 3.1 The Hague Convention Validity refers to grounds for nullity ex lege, for example the lack of formal requirements which are directly dealt with in both instruments,37 as well as grounds for avoiding the agreement and the matters of formation and existence of the agreement, in particular the parties’ consent. The Convention applies when there is a jurisdiction agreement which fulfils the basic factual requirements of consent to exist.38 Which law should answer whether the agreement leads to the application of the Convention? Article 5(1) of the Convention39 provides that the chosen court is to hear the case unless the agreement is null and void under the law of the chosen State. The chosen court must hence rely on its domestic law, including choice of law rules to assess the material validity of the parties’ agreement. However, the non-chosen court is allowed to review whether there is a ‘manifest injustice’, meaning an agreement in which consent does not fulfil even the minimum standards. Whilst Brand and Herrup40’s opinion is that the lex fori should decide whether the agreement is applicable in terms of the Convention, in the author’s submission, this would be a rather complex test and the application of the Convention would then depend on standards beyond the Convention’s control. Like Pertegas, the author favours reference to the chosen court’s law in the case of a harmonised conflict rule concerning the substantive validity of the agreement as this would be better suited to determine the validity of the agreement.41 Moreover, this will ensure that situations wherein one of the parties intentionally institutes proceedings in a legal forum less inclined to consider a jurisdiction agreement valid, are avoided. The author considers how the provisions of the UPICC 201042 could provide an alternative solution 37 Art 3(c) Hague Convention; Article 25(1) Sentence 3 Recast Regulation. 38 Preliminary Draft Convention On Exclusive Choice Of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C. Hartley. paras 94 et seq. 39 Article 5(1), Hague Convention states: ‘The court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that State’. 40 Robert Brand and Paul Herrup, Hague Convention on Choice of Court Agreements: Commentary and Documents (Cambridge University Press 2008), 40 and 79. 41 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 42 UNIDROIT Principles of International Commercial Contracts 2010.
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for, like the Convention, the UPICC 2010 is conceptualised for businessto-business relations and it is conceptualised as a global instrument. Whilst it is rarely chosen as applicable law for contracts in international business transactions, parties would most probably prefer its application to the application of a foreign national law by any non-chosen court of a Contracting State, since it provides more stability and legal certainty. It would also provide an autonomous standard for formal validity without giving residual control to a non-chosen court. Furthermore, referring all questions of substantive validity (except for formalities) to the transnational standard for the substantive validity of the UPICC 2010 instead of resorting to a choice-of-law rule would avoid the problem of a renvoi that would produce inconsistent and surprising results.
3.2 Recast Regulation The validity of the agreement was assessed differently under the Brussels I Regulation, which instead of providing for a choice-of-law rule for nullity, provided that upon the fulfilment of the formal requirements, there will be an indication of sufficient consent.43 Whilst the interaction between form and consent should have excluded any additional recourse to national law to assess consent, Member States still referred to national law and inconsistent results were still produced. Thus, the Recast Regulation tried to fix this problem by copying the choice-of-law rule for nullity and avoidance from the Hague Convention into the new Recast Regulation. The latter now deals with substantive validity without dealing with capacity, agency and binding effects on third parties which hadn’t been covered in the Convention. However, the Regulation did not make it clear if by referring to the law of the designated court including conflict of law rules44, this meant that the previous link between form and consent was extinguished. One may argue that if the legislators of the Recast 43 This was reaffirmed in the Case 24-76 Estasis Salotti di Colzani Aimo e Gianmario Colzani s.n.c. v Rüwa Polstereimaschinen GmbH (1976) ECR 1976 -01831 . This is a preliminary reference case, which stipulated in detail the formal requirements needed in order for the validity of the clauses conferring jurisdiction. 44 This is made clear in Recital 20 of the Recast Regulation which states that the question as to whether a jurisdiction agreement is null or void ‘should be decided in accordance with the law of the Member State of the court or courts designated in the agreement, including the conflict-of-laws rules of that Member State’.
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desired such a fundamental change, this would have been more explicit and without such an indication, it is assumed that the nexus still exists. If this assumption is made then the Hague Convention and the Recast Regulation would be contradictory, despite the latter’s provisions being taken from the Convention. It is suggested that the CJEU develop its own case-law as to the validity of the agreement rather than leaving this point to national law, which may vary and provide less legal certainty than before. Because of this lack of clarification, it is suggested by the author, using Weller’s research, to use the DCFR45 as the standard for the Brussels regime.
4. Public policy 4.1 The Hague Convention Article 6(c)(2) of the Hague Convention states that a court of a Contracting state (the non-chosen Court) shall dismiss proceedings, unless the jurisdiction agreement is contrary to the public policy of the state of the court seized.46 In addition to this, the derogated Court may be able to refuse recognition of the judgement by the chosen court on the basis of violation of public policy47 and on the basis of inconsistency of the foreign judgement.48 Courts often invalidate derogation established in jurisdiction agreements as soon as the danger of breach of their internationally mandatory rules arises.49 45 Draft Common Frame of Reference (DCFR) – Principles, Definitions and Model Rules of European Private Law, Prepared by the Study Group on a European Civil Code and the European Research Group on Existing EC Private Law (Acquis Group). 46 An example would be if the chosen court is expected or suspected to breach fundamental principles of antitrust law or the core principles of investor protection law of the lex fori of the derogated court. T Hartley and M Dogauchi, Preliminary Document No 25 of 23 March 2004, para 97. 47 Article 9(e)(2), Hague Convention. 48 Article 9(f), Hague Convention. 49 An example would be in Ingmar, Case C-381/98 Ingmar (2000) ECR I-9305, in which the CJEU held that a valid choice-of-law clause selecting the law of a third-State (California, US) must not result in depriving a European commercial agent from his rights under the Commercial Agents Directive. In this case, there was no additional exclusive choice-of-forum clause in favour of the Californian courts; however, the German Federal Court of Justice extended the implicit limitation of party autonomy and decided through an acte claire that the forum clause designating the court of a third State (Virginia) must be invalidated in order to ensure implementation of the Directive. This decision is consistent with older German law which has repeatedly
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In the author’s submission, it seems to be undermining the party’s effective access to justice to send the party’s case to the chosen court just to prove that the judgement violates the public policy of the lex fori of the derogated court. On the other hand, there cannot be an international mandatory rule allowing for the invalidation of the derogation of the courts of the state whose mandatory rules are in question50 and hence, public policy control of jurisdiction agreements must be a measure of last resort, applying in very restricted situations.
4.2 Recast Regulation The Recast does not provide any equivalent to Article 6(c) of the Hague Convention; because of mutual trust under the Recast Regulation, there cannot be the derogation of a Member State’s jurisdiction, even if this would amount to a public policy violation. In Trasporti Castelletti, the CJEU decided that ‘substantive rules…applicable in the chosen court must not affect the validity of the jurisdiction clause.’ However, though conflicting with Article 9 of the Rome I Regulation51, J Fetsch suggests that Member State courts pay attention to other Member States’ internationally mandatory rules since the latter would not be able to.52 The Recast Regulation seems to be shifted towards making the EU system of private international law more legally certain by excluding any interference from Member States’ national legal orders, which in the author’s submission, comes at the cost of taking care of legitimate fundamental regulatory interests of the Member States. As M. Weller suggests, the principal reliability of jurisdiction agreements and their residual control should be rebalanced – invalidated exclusive jurisdiction agreements in favour of courts in New York and in London since German investors would not be able to rely on mandatory German investor protection law in the selected foreign courts. 50 Matthias Weller, ‘Validity and Interpretation of International Choice of Court Agreements: The Case for an Extended use of Transnational Non-state Contract Law’ in Essays in Honour of Michael Bonell (International Institute for the Unification of Private Law (UNIDROIT), 2016, 393 et seq. 51 Article 9(3) Rome I Regulation allows giving effect to third State’s internationally mandatory rules only to a very limited scope; namely, to those at the place of performance of the contractual obligation in question. 52 Matthias Weller, ‘Internationally Mandatory Rules and EC-Treaty, Book Review of Johannes Fetsch, Eingriffsnormen und EG-Vertrag, Die Pflicht zur Anwendung der Eingriffsnormen anderer EG-Staaten’ (2003) Annual of German and European Law 566.
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either de lege lata through a reinterpretation of Trasporti Castelletti or de lege ferenda in the next Recast.
5. Parallel Proceedings 5.1 Hague Convention According to Article 6 of the Hague Convention, a court of a Contracting State other than that of the chosen court shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies, even if no proceedings are pending. This is unless one of the exceptions in Article 6(a)-(e) applies.53 In the case that one of the exceptions applies however, the non-chosen court is free to base its jurisdiction on autonomous grounds of jurisdiction to adjudicate its proceedings. If parallel proceedings have been instituted, the non-chosen court is to suspend its own proceedings and also possibly dismiss its own case.54 Thus, the Hague Convention thus does not give to any court the right to establish the validity of the jurisdiction agreement; rather it puts both courts on an equal footing, giving each court the competence to decide for itself on the validity and scope of the jurisdiction agreement. The non-chosen court may, however, give priority to the chosen court on its own motion, if it decides it logical to do so, or else it may continue its own proceedings, going to the merits of the case if the jurisdiction agreement is found to be null and void. The author sides with Brand and Herrup55, who believe that by granting more autonomy to Contracting State Courts, the Conventionâ&#x20AC;&#x2122;s coordination mechanism in a way accepts parallel proceedings, despite initially seeking to reduce parallel proceedings by harmonizing the standards for establishing the validity of the jurisdiction agreement. 53 These exceptions are if the agreement is null and void under the law of the State of the chosen Court; if a party lacked capacity to conclude the agreement under the law of the State of the court seized; if giving effect to the agreement would result in manifest injustice or would manifestly brief the public policy of the State of the Court seized; if for exceptional reasons beyond the partiesâ&#x20AC;&#x2122; control the agreement cannot reasonably be performed or if the chosen court has decided not to hear the case. These exceptions are modelled on the New York Convention though the exceptions of the Hague Convention may seem more complex, according to Hartley and Dogauchi. 54 Preliminary Draft Convention on Exclusive Choice of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C Hartley. 55 UNIDROIT Principles of International Commercial Contracts 2010.
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5.2 Recast Regulation The Recast Regulation has strengthened the role of jurisdiction agreements, particularly in parallel proceedings. This has happened in two ways. Firstly, Article 31(2) establishes the principle that in exclusive jurisdiction agreements, the named court does not have to stay proceedings seised under Article 29, as usually would be the case. This helped to tackle the problem of parties commencing proceedings in another Member State to purposefully delay litigation and increase litigation costs. In fact, in the Proposal for the Recast the European Commission56 declared that since the Recast Regulation obliged the court designated by the parties in a jurisdiction agreement to stay proceedings if another court has been seised first. This used to enable litigants acting in bad faith to delay dispute resolution by first seising a non-competent court, thereby undermining legal certainty and predictability. Due to the criticism the CJEU judgement Gasser57 received58, which posed difficulties for commercial transactions59, an amendment of the lis pendens rule came about. Whilst the general mechanism for coordinating parallel proceedings in Article 29 of the Recast was not changed, the general lis pendens rule is provided with an exception in order ‘to avoid abusive litigation tactics’, and this applies where both a court not designated as well as a court designated in an exclusive jurisdiction agreement have been seized of proceedings for the same cause of action.60 In such a case, the court first seised should be required to stay its proceedings as soon as the designated 56 European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM(2010) 748 final. 57 Case C-116/02, Erich Gasser GmbH v. MISAT Srl [2005] QB 1. 58 In this case the CJEU decided that Article 21 of the Brussels Convention cannot be derogated where the duration of proceedings before the Courts of the Contracting State in which the court first seised is established is excessively long. According to the CJEU, the court second seised is never better placed than the court first seised to determine whether the latter has jurisdiction as the jurisdiction would be determined by the rules of the Brussels Convention which are common in both courts (Para. 47). 59 Petr Břiza, ‘Choice-Of-Court Agreements: Could The Hague Choice Of Court Agreements Convention And The Reform Of The Brussels I Regulation Be The Way Out Of The Gasser-Owusu Disillusion?’ (2009) 5 Journal of Private International Law 537-563. As Fentiman observed this case is a product of a formal approach, ‘the one which prized (legitimately, if awkwardly), logic above consequences, theory above practice.’ Richard Fentiman, ‘Case note on Gasser’ (2005) 42 Common Market Law Review 241, 251. 60 Recital 22, Recast Regulation.
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court has been seised until the latter declares it has no jurisdiction,61 in order to ensure that the designated court has priority to decide on the dispute pending before it. 62 Secondly, through Articles 33 and 34, the Recast Regulation directly addressed the issue of parallel proceedings with third States, which has been causing problems since Owusu v. Jackson.63 Articles 33 and 34 establish a number of pre-conditions which must be satisfied before a stay of proceedings is permitted where it is ‘necessary for the proper administration of justice’ (as cross-referenced to recital 24). Whilst these Articles attempted to address uncertainty as to whether Member State courts possessed discretion as to whether to stay proceedings when, for example, proceedings were ongoing in a non-Member State, they have been criticised for being too narrow in scope. This is because these pre-conditions, which apply on the basis of domicile, or under special rules for persons domiciled in EU Member States in relation to contract and tort disputes, do not include discretion to stay where the Member State has jurisdiction under an Article 25 jurisdiction agreement, which should be the case in non-exclusive jurisdiction agreements.64 Thus, contrary to the Hague Convention, which grants full parallel powers to the courts, the priority is shifted under certain circumstances from the court first seized to the chosen court, reversing the lis pendens rule, according to Hartley.65 Whilst the author sides with Pertegas, who is in favour of priority being given to the chosen court, despite the possibility of this causing delays, the author is also of the opinion that in comparison to the Convention, the lis pendens mechanism of the Recast Regulation is deemed overly complex. This is because the prerequisites of such a priority criterion are too difficult to define. It is thus suggested that the priority is granted by a simple and formal criterion such as ‘first seised’ as in Article 29 Recast Regulation.66 Finally it is important to note in this regard that due to the Gothaer 61 Article 29(1), Recast Regulation. 62 This would increase the effectiveness of jurisdiction agreements and reduce abusive litigation in non-competent courts. European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM(2010) 748 final, 3. 63 Case C-281/02 Andrew Owusu v N. B. Jackson (2005) ECR I-1383. 64 UCP Plc v Nectrus Ltd [2018] EWHC 380 (Comm), 21 February 2018. 65 Thomas Hartley, ‘The “Italian torpedo” and choice-of-court agreements: sunk at last?’ in Patrik Lindskoug et al (eds), Essays in Honour of Michael Bogdan (Juristförlaget, 2013), 95, 100. 66 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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Versicherung judgement67, Member Statesâ&#x20AC;&#x2122; courts are bound by judgements of other Member States on jurisdiction agreements68 Whilst this does not affect the modified coordination mechanism in Articles 31(2) and (3) of the Recast, such judgement could displace the modified mechanism installed in Article 31 of the Recast Regulation as well as the general mechanism established in Article 29.
6. Conclusion It is to be concluded that the Hague Convention and the Recast Regulation are self-standing instruments in their respective norms. Whilst, due to their influence on each other, similarities are commonplace, the legal instruments also often clash69 at times. This can be observed in the similarities and divergences which were noted with respect to the points discussed, a conclusion of which is drawn hereunder.
67 In this case, proceedings were instituted at a Belgian Court, which decided that the jurisdiction agreement in place was exclusive and valid in terms of Article 23 of the Lugano Convention. Proceedings were then once again instituted in the German Courts, which was faced with the question as to whether the latter courts had to recognise the validity of the decision of the Belgian courts; whether they were bound by the findings on the jurisdiction agreement. The CJEU held that the judgment of a Member State which declined jurisdiction on the ground of the existence of a jurisdiction clause was res judicata and was thus binding on courts of other Member States. Article 32 must be interpreted to include such judgements, irrespective of how that judgment is categorised under the law of another Member State 68 C-456/11, Gothaer Allgemeine Versicherung AG and others v Samskip GmbH [2013] QB 548. 69 It is possible for them to co-exist and conflict, even though the Hague Convention is ratified by the EU. This is because Article 26(6) deals with the interface between the Convention and Brussels I. It states that the Brussels I Regulation prevails where both parties are resident in (a) European Union Member State and the other in a non-European Union State which is not party to the Hague Convention. Where one party resides in a EU state, and the other in a non-Member State but in a State party to the Convention, the Convention prevails. Explanatory Report by Thomas Hartley and Masato Dogauchi to the Convention of 30 June 2005 on Choice of Court Agreements (www.hcch.net).
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(A)
Applicability:
Both instruments are limited to disputes in civil and commercial matters with a number of specific exceptions, such as the validity of asymmetric jurisdiction clauses, which the EU rules are unclear on and which the Hague rules do not support. 70 Both of them only apply to exclusive choice of court agreements, though it is possible for contracting states to extend recognition and enforcement provisions of the Convention to non-exclusive jurisdiction agreements.71 In contrast to the Recast Regulation, the Convention does not apply to consumer contracts and contracts of employment. These are covered by the Recast but are afforded specific treatment through protective jurisdiction rules. Furthermore, the international element features in both legal instruments; however, party autonomy is given different weight in each legal instrument, resulting in different definitions of what constitutes â&#x20AC;&#x2DC;internationalâ&#x20AC;&#x2122;. (B)
Validity:
Both legal instruments require the validity of the jurisdiction agreement, for without consent it would be rendered null and void and without any binding force. In the Hague Convention, it is the chosen Court which decides as to validity. In the Recast, which copied the Hague Conventionâ&#x20AC;&#x2122;s provisions, uncertainty as to the relationship between form and consent remains.
70 Christopher M V Clarkson and Jonathan Hill, The Conflict Of Laws (4th edn, Oxford University Press 2011). 71 C-456/11, Gothaer Allgemeine Versicherung AG and others v Samskip GmbH [2013] QB 548.
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Private International Law (C)
Public Policy:
A clash occurs between the two instruments with regard to the question as to whether a non-chosen court may disregard the jurisdiction agreement on the basis that it would result in a violation of public policy. Contrary to the Recast Regulation, the Hague Convention expressly allows any court of a Contracting State derogated by the parties to continue its proceedings and disregard the jurisdiction agreement, despite the fact that giving effect to the jurisdiction agreement would be manifestly contrary to the public policy of the lex fori of the derogated court. This exception, which does not exist in the Recast, is founded on the basis of validity and lis pendens. (D)
Parallel Proceedings:
Contrary to the Hague Convention, which places the chosen and non-chosen courts on equal footing, the priority in the Recast is shifted under certain circumstances, from the court first seized to the chosen court. Finally, seeing as the EU is a signatory to the Hague Convention, EU policy-makers should ensure that coordination is ensured between the two instruments in order to ensure a coherent international legal order for litigants involved in disputes before the EU Courts.72 In this regard, Pertegas73 questions whether it is possible to place an integrated regime on the treatment of jurisdiction agreements by European courts, and in the author’s opinion whilst this might pose certain challenges from a legislative perspective74, there are several ways this could happen – through the transposition of the Convention’s operational system, and through the removal of the two legal systems’ convergences so that the two legal instruments could operate alongside each other, being just two. 72 See HCCH’s Response to the Commission’s report and green paper on the review of Regulation 44/2001 ‘concerning jurisdiction and the recognition and enforcement of judgments in civil and commercial matters’, available at http://ec.europa.eu/justice_home/news/consulting_public/news_consulting_ 0002_en.htm. 73 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 74 For example with regard to the primacy of the Regulation with respect to insurance, consumer and employment contracts.
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