A draft of the Hague Convention on Exclusive Choice of Court
Provisions is due to be discussed in June. But the
US
Internet Service Providers Association has joined AT&T, MCI,
SBC, Verizon and others in asking the State Department to argue for
the exclusion of non-negotiable contracts from the remit of the
measure.
The draft Convention, previously known as the draft Hague
Convention on Jurisdiction and Foreign Judgments in Civil and
Commercial Matters, is designed to help business overcome
widespread uncertainty surrounding cross-border disputes.
Negotiations for the Convention began in 1992, and June's
diplomatic conference could see delegates finally approve the draft
wording. However, the scope of the Convention has been narrowed
considerably from the original proposals, and now covers only
certain business-to-business (
B2B
) contracts in which
the parties have chosen which court will have jurisdiction.
The new proposals would require signatory states to enforce
rulings from this exclusively chosen court, 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.
With the diplomatic conference approaching, the
ISP
s and telcos have written an open letter to the
US
State Department saying that, unless non-negotiated
contracts are excluded,
US
companies could find
themselves bound to follow a foreign court's ruling in connection
with contracts that they have not had a reasonable opportunity to
negotiate or assent to.
According to the letter, this means that "the liability for a
US
company would hinge entirely on the court whose
jurisdiction you 'agreed to' in a non-negotiated contract".
The authors raise the spectre of a
US
company
having its assets seized as evidence and its bank accounts frozen
because of "the overly broad remedies" of Europe's Directive on the
Enforcement of Intellectual Property Rights, remedies from which
they say an
ISP
is protected under
US
law.
In the authors' opinion, the best approach, on grounds of
"predictability, certainty and ease of enforcement," is to narrow
the scope of the Convention to only negotiable contracts.
