Academic journal article Journal of Politics and Law

The European Rules on the Choice of Forum by Individuals: An Elaboration of Law Cases

Academic journal article Journal of Politics and Law

The European Rules on the Choice of Forum by Individuals: An Elaboration of Law Cases

Article excerpt

Abstract

Transactions among individuals of different residencies are countless and occur on a daily basis worldwide. A key question is at which court the parties shall bring an action. The judicial settlement of disputes arising from a contract is a complex procedure, especially when contracts have foreign elements. The scope of this article is to elaborate on the choice of forum agreements and the legal effects that they have (according to Article 23 of Brussels I Regulation). Results show that although the autonomy of the parties in choosing the competent court is given great priority in the strict system of procedural law rules of the European Union, the autonomy of the parties brings legal effects only when it is expressed according to certain requirements that are set in the European Regulation.

Keywords: Community law, Judicial settlements, International competent forums, Brussels i regulation, Hague convention, Rome I / Rome II regulation

1. Introduction

Transactions among individuals of different residencies are countless and occur on a daily basis worldwide. In the majority of the cases these transactions are contracts between individuals and/or corporations, for example products bought through the internet or contracts between multinational companies. There are, frequently, disputes between parties to a contract as far as the application of it is concerned. The judicial settlement of disputes arising from a contract is a complex procedure, especially when contracts have foreign elements.

A key question is at which court the parties shall bring an action. For example, in the case that there is a contract of sale between the resident of country A and the resident of country B and the delivery of goods has been agreed to take place in country C but one of the parties does not honor the agreement. In which of the three forums will the other party have the right to bring an action? The rules regarding the competency of a court in these cases are set by the national civil procedural law of each country.

After bringing an action to one of the competent forums, certain problems can arise. The most important problem being denial of justice, i.e. when all forums that link to a case refuse to rule on it because under their national rules the court of another state is competent to settle the dispute. Furthermore, there is the possibility that a court does not recognize the judgment issued by the court of another state on the ground that the latter had no jurisdiction over the case. Consequently, the judgment will not be enforced in the latter state in which the winner party has an interest. This party might never fully recover the damage that he suffered from the other party's breach of contract.

The scope of this article is to elaborate on the choice of forum agreements and the legal effects that they have (according to Article 23 of Brussels I Regulation). First, the necessary requirements for the conclusion of such a jurisdiction agreement will be examined. After, the consequences of such an agreement will be described. Lastly there will be a comparison between the rules on choice of court agreements on Article 23 of the Brussels I Regulation and the rules on The International Hague Convention (2005) for the agreements on choice of court, which regulates the same matter in international level.

2. Historical Background

In the European Union (EU) these complications were first addressed by the proposal of a regional convention which would regulate the jurisdiction on settlement of disputes arising between individuals (or corporations) which reside (or have their headquarters) in different Member States within the EU. This Convention was signed by the six Member States in European Community in 27.9.1968 and entered into force in 1.2.1973. Since then every country that acceded to the European Community was also bound by the Convention of 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, also known as the Brussels Convention. …

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