Choice of court agreements and derogation from competition law

Abstract

Japanese courts have held that a choice of court agreement should be respected even if it would lead to derogation from domestic competition law. The exception is where there would be such a discrepancy between the outcomes before the designated foreign court and the Japanese courts that it would be intolerable to enforce the agreement from the standpoint of maintaining the public policy objectives of Japanese competition law. However, this paper puts forward an alternative approach as the more appropriate course to take, submitting that choice of court agreements should generally be respected by courts in competition law claim situations, unless they are obviously unreasonable or contrary to public policy on their face. At the jurisdictional stage, a court should not treat an agreement as invalid merely because it could potentially lead to a derogation from domestic competition law, even where such law is regarded as a body of overriding mandatory rules.