Litigating Globally (Update Aug 2024)

Exception made for regional initiatives (notable among few others, the system in force in the EEA[1]), there is regrettably no universal consensus assuring mutual recognition of selected for a, and enforcement of relevant judicial decisions. Basically, each State maintains their own rules on jurisdiction and local court may, or may not consider themselves as a convenient forum, moreover, their decision may, or may not be recognized, and enforced in another countries. It depends on these latter courts’ rules governing the matter issues.

Indeed, a well-populated web of bilateral agreements does exist. However, this involves just some selected countries and above all, it does not assure any uniform treatment since each of said bilateral treaties differs from one another.

Towards a World New Framework: the HCCH Conventions (2005 & 2019)

To redress this situation, which amounts to an unpleasant puzzle for international operators, two notable conventions were forged in the recent years under the aegis of the HCCH – Hague Conference on Private International Law (an intergovernmental body created at the end of the ‘800 with the aim to work for “the progressive unification of the rules of private international law”[2]):

• the Convention of June 30^th, 2005, on Choice of Court Agreements and

• the Convention of July 2^nd, 2019, on the Recognition and Enforcement of Foreign Judgements in Civil or Commercial Matters.

Both contain rules on mutual recognition and enforcement of judicial decisions (exception made for interim measures, such attachments, freezing orders, and the like), and also of settlement agreements possibly “approved, or concluded before” a contracting country’s court.

Also, both conventions are designed to work as a closed system, i.e. they may be activated only in case all the parties in dispute have their respective seat in contracting State[3].

… their Status

Both conventions are presently in force. The 2005 Convention entered into force on Oct 1^st, 2015; the 2019 Convention, on Sept 1^st, 2023.

The number of adhering States is still limited, though – i.e. 35, and 30 respectively. However, there are serious expectations it may increase in the coming years. If this will be the case, a very useful set of tools will be offered to international operators to support planning, and conducting their business. A similar goal was sought, and (one may say basically) achieved years ago in respect of arbitration clauses, thanks to the 1958 New York Convention, presently in force in 172 States[4]. No comparing solution was worldwide available so far, in respect of recourse to national courts.

… their Scope

Both Conventions focus on typical cross-border B2B business (“… civil or commercial matters”), with some notable exceptions. The respective lists of excluded matters are similar but not at all identical:

2005 Convention Excluded Matters (art. 2)	2019 Convention Excluded Matters (arts. 1, 2 & 5)
	1.1 revenue, customs or administrative matters
2.2.a) the status and legal capacity of natural persons	2.1.a) the status and legal capacity of natural persons
2.2.b) maintenance obligations	2.1.b) maintenance obligations
2.2.c) other family law matters, including matrimonial property regimes and other rights or obligations arising out of marriage or similar relationships	2.1.c) other family law matters, including matrimonial property regimes and other rights or obligations arising out of marriage or similar relationships
2.2.d) wills and succession	2.1.d) wills and succession
2.2.e) insolvency, composition and analogous matters	2.1.e) insolvency, composition, resolution of financial institutions, and analogous matters
2.2.f) the carriage of passengers and goods	2.1.f) the carriage of passengers and goods
2.2.g) marine pollution, limitation of liability for maritime claims, general average, and emergency towage and salvage	2.1.g) transboundary marine pollution, marine pollution in areas beyond national jurisdiction, ship-source marine pollution, limitation of liability for maritime claims, and general average
2.2.h) anti-trust (competition) matters
2.2.i) liability for nuclear damage	2.1.h) liability for nuclear damage
2.2.m) the validity, nullity, or dissolution of legal persons, and the validity of decisions of their organs	2.1.i) the validity, nullity, or dissolution of legal persons or associations of natural or legal persons, and the validity of decisions of their organs
2.2.p) the validity of entries in public registers	2.1.j) the validity of entries in public registers
	2.1.k) defamation
	2.1.l) privacy
2.2.n) the validity of intellectual property rights other than copyright and related rights	2.1.m) intellectual property;
2.2.o) infringement of intellectual property rights other than copyright and related rights, except where infringement proceedings are brought for breach of a contract between the parties relating to such rights, or could have been brought for breach of that contract
	2.1.n) activities of armed forces, including the activities of their personnel in the exercise of their official duties;
	2.1.o) law enforcement activities, including the activities of law enforcement personnel in the exercise of their official duties
	2.1.p) anti-trust (competition) matters, except where the judgment is based on conduct that constitutes an anti-competitive agreement or concerted practice among actual or potential competitors to fix prices, make rigged bids, establish output restrictions or quotas, or divide markets by allocating customers, suppliers, territories or lines of commerce, and where such conduct and its effect both occurred in the State of origin
	2.1.q) sovereign debt restructuring through unilateral State measures
2.2.j) claims for personal injury brought by or on behalf of natural persons
2.2.k) tort or delict claims for damage to tangible property that do not arise from a contractual relationship
2.2.l) rights in rem in immovable property, and tenancies of immovable property
2.1.a) exclusive choice of court agreements to which a natural person acting primarily for personal, family or household purposes (a consumer) is a party	5.2.a) – 7 5.1.e) E/R excluded unless the consumer “expressly consented to the jurisdiction of the court of origin in the course of the proceedings in which the judgment was given” AND “the consent was addressed to the court, orally or in writing”
2.1.b) exclusive choice of court agreements relating to contracts of employment, including collective agreements

In addition, a contracting State may add further restrictions[5].

The 2005 Convention on Forum Clauses: more details

The 2005 Convention basically seeks to ensure that a parties’ indication in a cross-border agreement of a given court, as competent for dealing with possible relevant disputes, deserves respect. In other words, the Convention sets an obligation for the courts in any country that has adopted it, to give due recognition of that clause by rejecting, or assuming jurisdiction, as the case may be. This enhances the level of predictability in a considerable matter for commercial operators, since jurisdiction is no longer matter of domestic laws.

The 2005 Convention focuses on contractual clauses on dispute management. But it also requires (articles 8 ff.) that a decision by a court identified as competent, must be recognized and enforced in any of the contracting States. In that, it somehow overlaps the 2019 Convention.

As mentioned above, in terms of success, one might say that we are still halfway. Just 35 countries, in fact, result to have adopted the 2005 Convention so far. If one does not consider the

• EU block – where the Convention entered into force on Oct 1^st 2015[6] – the Convention binds just a handful of other no-EU States:
• Albania (since Oct 1^st, 2024),
• Mexico (Oct 1^st, 2015),
• Montenegro (Aug 1^st, 2018),
• Moldova (July 1^st, 2024),
• Singapore (Oct 1^st, 2016),
• Ukraine (Aug 1^st, 2023), and
• the UK (which in 2020 reiterated their willingness to remain bound to the Convention since the original inception in 2015, when they were part of the EU. On the occasion, the UK extended the effect of the Convention to Gibraltar as well).

Some important country signed the Convention but is still not part of it: such as PR of China (signed in 2017), Israel (2021), the United States (2009). Signature may mean that an adoption path has been started, though there is no assurance that sooner or later it will be completed.

It should be noted that the 2005 Convention covers not all jurisdiction clauses. Indeed, it covers (art. 3) just written exclusive choice-of-court agreements. There is, indeed, the possibility that non-exclusive agreement be considered: that is the case – art. 22 – where both countries involved made a declaration in this respect (as a matter of fact, no one made it, so far). Anyway, in the silence of the parties, a clause is deemed to be exclusive.

Understandably, the case-law concerning the 2005 HCCH Convention is not abundant, at the moment. However, some interesting cases have already undertaken a judicial review.

The 2020 beer case in Singapore[7]. In 2020 a dispute arose before the Singapore High Court, between a Singaporean local beer importer and their principals, concerning alleged breach of three distribution contracts. Two of said contracts provided for a clause stating, “courts of England and Wales have exclusive jurisdiction”; the other was referring instead to unspecified “local courts”. The importer filed a request for interim measures, as well. After recalling that Singapore has enforced the HCCH Convention via the Choice of Court Agreements Act of 2016, rev. 2017 (CCAA), the HC held that the English courts should be considered as competent on the merit[8]; on the contrary, jurisdiction was retained in re. injunction.

In 2019 the Court of First Instance in Piraeus (Greece)[9] clarified the interplay between the 2005 HCCH Convention and the EU Regulation 1215/12. The latter is the instrument that sets the criteria for determining jurisdiction and assure circulation of judicial decisions withing the EU. The Piraeus court so held: “If one of the parties is domiciled in the EU and the other in a third state that has ratified the Convention, the Convention will apply and not the Regulation, regardless of whether the court to which reference is made is in the EU or not; if both parties are domiciled in the EU and have chosen a court of a Member State, the Regulation will apply, regardless of the fact that Member States are bound by a Convention”. It is interesting to note that the Greek court also added that “the Hague Convention will not apply, in cases where the clause conferring jurisdiction is asymmetric, i.e. it confers exclusive jurisdiction to the detriment of one party and to the benefit of the other”.

The 2019 Convention on the Recognition and Enforcement of Foreign Judgements: more details

The 2019 Convention basically aims to facilitate the circulation of judgments among its Contracting Parties. It establishes a shared framework of minimal conditions for recognition and enforcement of foreign judgements to be followed by the courts in any contracting State. “Minimal” means that it does not prevent or limit the recognition and enforcement of judgments under national law, bilateral, regional or other international instruments (Arts 15 and 23). However, contrary to other regional instrument, namely the EU Reg. 1215/12, the 2019 Convention does not establish any rule to determine jurisdiction, and therefore select which is the competent court in each dispute.

As it is the case for the twin 2005 Convention, the process of ratification/adhesion of the 2019 Convention is still in its prime. A big burst has been undeniably attributable to the adhesion of the

• UE in 2022, which resulted in drawing in all the EU member States, Denmark excepted (entry into force (EIF): Sep 1^st, 2023).

Other ratifications then followed – entry into force in brackets:

• Ukraine (EIN Sep 1^st, 2023)
• Uruguay (EIN Oct 1^st, 2024)
• the UK (EIN July 1^st, 2025)

Among the signatory States that have not ratified yet: Costa Rica, Israel, Montenegro, North Macedonia, Russia, the USA. In the commercial circles, there is the hope that the United States, in particular, eventually ratify: this will be a major step forwards, for a country that is still a splendid isolation having either no federal law governing recognition of foreign judgements, and no bilateral in place.

 

 

(Pictures taken from a 1927 Italian Atlas)

 

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[1] EEA stands for European Economic Area, grouping the EU (see Reg. 1215/12 and 1968 Brussels Convention still applicable to Denmark) and the EFTA countries (see the 1988 Lugano Convention, revised 2007).

[2] At present, the HCCH is composed of 91 member States / REIO – Regional Economic Integration Organizations (90 plus the EU, which is a REIO). Since its foundation, the HCCH has produced tenths of convention, and model law texts, that are open for adoption also to non-member States. Some were greeted by fortune (such as the 1961 Convention Abolishing the Requirement of Legalisation for Foreign Public Documents – the so called Apostilla Convention now adopted by 126 States) others remained just an attempt (see for instance the 1978 Convention on the Law Applicable to Agency, which has been ratified by just 4 States and never entered into force).

[3] As for the 2005 Convention, for instance, the courts of any Contracting State (CS) are bound to recognize a jurisdiction clause only in case it refers to the jurisdiction of court of a CS (E.g. any EU court must recognize a clause referring to either themselves or to “the tribunals in Ciudad de Mexico”, being Mexico a CS. On the contrary, it shall not be bound to recognize a similar clause referring to “the tribunals in Santiago de Chile” not being Chile a CS). Conversely, the courts of any Contracting State (CS) are bound not to accept jurisdiction clause only in case the selected forum pertains to a CS (E.g. Any EU court must reject jurisdiction in case the agreement provides for a clause referring to “the tribunals in Ciudad de Mexico”, being Mexico a CS. On the contrary, it shall not be bound to recognize a similar clause referring to “the tribunals in Santiago de Chile” not being Chile a CS).

As for the 2019 Convention, art. 4.1 sets the basic principle that “A judgement given by a court of a Contracting State (State of origin) shall be recognized and enforced in another Contacting State (requested State)”.

[4] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).

[5] That is the case of the EU and Moldova that set heavy limits to apply the 2005 Convention to insurance contracts. And of the EU that will not apply the 2019 Convention to non-residential leases of real estate situated in the EU.

[6] Denmark is a special case: although an EU State, they are not bound by the EU initiative in the re matter. However, they ratified the Convention, eventually, and it entered into force on Sep 1^st, 2018.

[7] Judgement issued by the High Court of Singapore on Nov 16, 2021, in case no. 951/2020 and 2021/138, 6DM Ltd v AE Brands Korea Ltd at al. [2021] SGHC 257.

[8] Section 12 of the CCAA, which reproduces art. 6 of the 2005 Convention almost verbatim, so states —

(1) Despite any other written law or rule of law, if an exclusive choice of court agreement does not designate any Singapore court as a chosen court, a Singapore court must stay or dismiss any case or proceeding to which the agreement applies, unless the Singapore court determines that —

(a) the agreement is null and void under the law of the State of the chosen court;

(b) a party to the agreement lacked the capacity, under the law of Singapore, to enter into or conclude the agreement;

(c) giving effect to the agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of Singapore;

(d) the agreement cannot reasonably be performed for exceptional reasons beyond the control of the parties to the agreement; or

(e) the chosen court has decided not to hear the case or proceeding.

(2) This section does not affect the ability of a Singapore court to stay or dismiss the case proceeding on other grounds.

[9] Piraeus (EL) First Instance Court (Protodikeio), decision no. 3106/19. The case was between a Liberian ship owner (claimant) and an HK oil supplier (defendant). A third-party defendant (a company based in Monaco) later joined. There was a contractual clause providing for the exclusive jurisdiction of the English courts. Therefore, it is hard to understand why application of the 2005 Convention could have ever been considered. Not to mention the alleged asymmetry of the dispute clause…