The confusing state of international jurisdiction, particularly
where the internet and e-commerce are concerned, affects businesses
worldwide.
When something goes wrong with contracts between parties in
different countries, there is often confusion as to where a court
action should be brought. Should it be in the country of the
purchaser? Or that of the seller or service provider? And how can
you enforce a court ruling when each party is in a different
country?
A recent ICC survey, submitted to government representatives
negotiating the draft convention in The Hague, asked 100 leading
companies whether any significant decision had ever been determined
by uncertainty regarding the court that would resolve disputes or
the law that would apply to the contract. Forty-one percent of
respondents said 'yes'.
Clearly questions of international jurisdiction are of concern
to companies when they are making business decisions. The fear is
that until there is an international agreement to clarify matters
then businesses will be reluctant to take full advantage of the
opportunities put forward by the internet.
The proposed Convention seeks to address these issues.
In terms of the draft, signatory states would agree to follow a
set of rules regarding jurisdiction for cross-border litigation.
Every country agrees to enforce nearly all of the member country
judgments, subject to an exception for judgments that are
"manifestly incompatible with public policy," or to specific treaty
exceptions, such as one for certain antitrust claims.
Negotiations for the Convention began in 1996, but there are
signs that the long process of consultation and amendment may
finally be coming to a close. On 19th August an invitation was sent
to the member states of the Hague Conference on Private
International Law, inviting them to a Special Commission to
negotiate the draft. This will take place in early December.
Once that hurdle is crossed, a full-scale negotiation known as a
diplomatic conference is scheduled for next June to finalise
matters.
The International Chamber of Commerce (ICC) welcomed the news of
the Special Commission, and the terms of the draft Convention. ICC
Secretary General Maria Livanos Cattaui said: "The document that is
now going forward for final negotiations is on the right
lines."
Michael Hancock of Salans in Paris, the international business
lawyer who presented the survey findings to the Hague negotiators
on behalf of ICC, said:
"The draft now going forward satisfies the principal business
expectations that the Convention will increase the respect given to
agreements between businesses regarding choice of national court
and enforceability of judgments."
He added that the predictability of judgments would be
strengthened under the present draft by limiting the right of the
national courts of choice to dismiss proceedings.
