The Hague Choice of Court Convention and Cross-Border Commercial Dispute Resolution in Australia and the Asia-Pacific

By Mills, Alex | Melbourne Journal of International Law, June 2017 | Go to article overview

The Hague Choice of Court Convention and Cross-Border Commercial Dispute Resolution in Australia and the Asia-Pacific


Mills, Alex, Melbourne Journal of International Law


I INTRODUCTION

This year (2017), Australia is very likely to accede to an international treaty commonly known as the Hague Convention (1)--the treaty has been laid before Parliament, the Joint Standing Committee on Treaties has recommended accession, (2) and work is already underway on the implementing legislation. (3) The Hague Convention was negotiated under the auspices of the Hague Conference on Private International Law ('Hague Conference'), the principal international organisation responsible for global efforts to harmonise rules of private international law. It has potentially very important implications for international commercial dispute resolution in Australia, in the Asia-Pacific region and indeed internationally.

The Hague Convention concerns jurisdiction agreements, also known as choice of court clauses--those clauses we have all seen in contracts which deal with the forum in which disputes must be resolved. They may be complex constructions of several paragraphs, or at their simplest may be only two words ('Jurisdiction: Victoria'), but most commonly state something like: 'Any dispute arising under this contract must be heard exclusively in the courts of Victoria'. These clauses are commonplace and they may seem banal--certainly, few of us read through such fine print in the many contracts we make on a daily basis and the location in which potential disputes may be resolved is rarely at the forefront of the minds of contracting parties. Jurisdiction agreements can, however, be extremely important, because the venue for dispute resolution is often very significant for practical or strategic reasons and for some disputes can even be outcome determinative. This is particularly because the choice of forum may affect the governing law, as different forums may apply different choice of law rules or mandatory statutes. The Hague Convention is focused particularly on exclusive jurisdiction agreements--those agreements which seek to confer jurisdiction on the nominated court to the exclusion of any other court.

This paper addresses four points. First, it examines the effects of exclusive jurisdiction agreements under current Australian law. Secondly, the key provisions of the Hague Convention are outlined and explained. Thirdly, the potential impact of the Hague Convention on Australian law is examined. Fourthly and finally, some of the key regional and international implications of the Hague Convention are analysed, in light of Singapore's accession to the Hague Convention in 2016, which potentially has particularly significant implications for dispute resolution in the Asia-Pacific region, as well as Australia's proposed accession.

II EXCLUSIVE JURISDICTION AGREEMENTS UNDER CURRENT AUSTRALIAN LAW

An analysis of the effects of exclusive jurisdiction agreements must consider their impact both on the chosen court as well as on courts which are not chosen. It must also consider their effects on questions of jurisdiction as well as more indirectly in the context of the recognition and enforcement of foreign judgments. This gives us a table of four different contexts in which exclusive jurisdiction agreements may affect Australian law, in which five distinct effects may be identified.

A Prorogation

The most obvious effect of an exclusive jurisdiction agreement is on the jurisdiction of the chosen court. Under the laws of the various Australian state and federal courts (referred to in this paper as 'Australian courts' for convenience), exclusive jurisdiction agreements provide a basis for jurisdiction even if the dispute or the parties have no other connection with Australia. (4) It is important to note, however, that if the defendant does not accept the jurisdiction of the chosen court once proceedings have been commenced, there remains a discretion for the court not to exercise its jurisdiction (at least in theory), under the doctrines of forum conveniens or forum non conveniens. …

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