Exclusive Jurisdiction Clause Research Articles

Re Simplicity & Vogue Retailing (HK) Co Ltd [2023] HKCFI 1443 (HCCW 457/2022, 30 May 2023) (coram Linda Chan J) [case comment

AbstractThe impact of an exclusive jurisdiction clause on a winding‐up petition is settled in the English and Singaporean common law jurisdictions. In Hong Kong, the matter has recently been decided in the case of Re Guy Kwok Hung Lam (2023) 26 HKCFAR 119. Nonetheless, a similar issue has been brought up again in the cases of Re Simplicity & Vogue Retailing (HK) Co Ltd [2023] HKCFI 1443 (HCCW 457/2022, 30 May 2023) (per Linda Chan J) and Re Shandong Chenming Paper Holdings Ltd [2023] HKCFI 2731 (HCCW 175/2017, 25 October 2023) (per Harris J). The different approaches adopted in the two cases have sparked on the correct appraoch to be adopted. This article briefly introduces the different appraoches and suggest that the correct approach is to stay a winding‐up petition in favour of an arbitration proceeedings launched purusant to an arbitration agreement.

브렉시트 이후 해상책임보험의 보험자에 대한 제3자 직접청구권의 행사에 관한 고찰 : 로마Ⅱ 및 Retained EU-Law를 중심으로

Article 18 of REGULATION (EC) No. 864/2007 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 July 2007 on the law applicable to non-contractual obligation (Rome Ⅱ) stipulates that the court chooses a law that is advantageous to the victim ex officio by selectively linking direct claims to the governing law of non-contractual obligation and the governing law of insurance contract. Regarding the interpretation of the above provision, the Court of Justice of the European Union(CJEU) ruled that victims can directly claim against insurers as long as the governing law of non-contractual obligation permits, regardless of the provisions of the governing law chosen by the parties to the insurance contract. In addition, after Brexit, Rome II is Retained EU-law, and CJEU's ruling on Article 18 of Rome II is Retained EU case-law, which remains effective in the UK, respectively. Meanwhile, the Supreme Court of the UK declared the basic principle that victims cannot stand in a better position than policyholders in the Fanti and Padre Island cases, revealing the validity of the pay to be paid rule. Subsequently, the lower court rulings in the UK also did not allow the victim to exercise the right to claim directly against the insurer in other countries on the grounds that the victim also was bound by the jurisdiction agreement stipulated in the insurance contract between the insurer and the insured. However, the Fanti and Padre Island cases of the Supreme Court of the UK were not only before the enforcement of Rome II, but CJEU clearly ruled on the nature of Article 18 after the enforcement of Rome II, and its effect is still maintained in the UK. In addition, in the current situation where CJEU's ruling applying the Brussels I regulations and the above regulations is no longer effective for the UK, the exclusive jurisdiction clause(e.g., the English Court) stipulated in the insurance contract is likely to take precedence. However, if the UK joins the 2007 Lugano Convention in the future, which is substantially the same as the Brussels I Regulations, the purpose of CJEU's ruling, which was based on the Brussels I Regulations, can be considered important again. In the end, even if a lawsuit is filed in a Korean court to exercise the victim's right to claim directly against the insurer, and insurance contracts between the insurer and the insured stipulate English laws and customs as governing law, relevant interpretations should be made based on Article 18 of the Roman II(Retained EU-law) and the purpose of CJEU's ruling(Retained EU case-law), so that victims can be protected heavily by allowing selective connections to the governing laws of the country in which the damage occurs.

Exclusive jurisdiction clauses in international trust deeds

AbstractJurisdiction clauses commonly feature in high-value international contracts. Recently, these clauses are also increasingly utilised in international trust instruments. At common law, a contentious issue vis-à-vis exclusive jurisdiction clauses in trust deeds has been whether they should be upheld in the same way as their contractual equivalents. In obiter remarks in Crociani v Crociani, in 2014, the Privy Council stated that these clauses should be afforded less weight in trusts than in contracts. However, as this paper seeks to demonstrate, the reasoning underpinning the treatment of exclusive jurisdiction clauses in trust deeds in this manner is questionable. The paper's key contention is that exclusive jurisdiction clauses in trust deeds should be enforced in the same way as those in contracts. Accordingly, an exclusive jurisdiction clause in a trust instrument should be upheld, unless the claimant can establish a strong cause why the matter should be litigated elsewhere.

Trusts and jurisdiction clauses—Crociani revisited Ivanishvili, Bidzina and others v Credit Suisse Trust Ltd [2020] SGCA 62

Abstract In the recent Singapore Court of Appeal decision of Ivanishvili, Bidzina and others v Credit Suisse Trust Ltd, the court analysed the effect of a forum administration clause in the trust context, holding that while the clause in question was a jurisdiction clause, it was not an exclusive jurisdiction clause governing the dispute between the trustees and beneficiaries.

Approaches to Jurisdiction Clauses in Anglophone African Common Law Countries: Principle and Policy

When parties based in different countries enter into a contract, they may be well advised to include therein a jurisdiction clause, agreeing that the courts of a particular place will have (exclusive) jurisdiction to determine disputes arising out of that contract. This article analyses the various approaches which courts in Anglophone African common law countries adopt when asked to enforce exclusive jurisdiction clauses. By scrutinising these various approaches, this article hopes to develop further the legal policy informing courts' decisions whether to enforce exclusive jurisdiction clauses in the places under study.

ECONOMIC TORTS IN THE CONFLICT OF LAWS

IN AMT Futures Ltd. v Marzillier [2017] UKSC 13; [2017] 2 W.L.R. 853, the Supreme Court had to decide where a “harmful event” occurred in order to determine whether the English court had jurisdiction over the defendant, Marzillier, a German lawyer. AMT brought an action in England against Marzillier for inducing breaches of contracts made between AMT and their European clients. Although the client contracts contained an exclusive jurisdiction clause in favour of the English courts, Marzillier had encouraged the clients to bring actions against AMT in Germany. The claims were made under German law of delict alleging that AMT were accessory to the bad investment advice given by the clients’ brokers. The brokers were insolvent. The German claims were brought directly against AMT and AMT settled. It had lost on the jurisdiction question in Germany because the exclusive jurisdiction clause did not bind the clients. They were consumers. Additionally, the actions were in tort and therefore did not fall within the scope of the clause. AMT brought this action in England after paying over £2m in settlement and costs in Germany. AMT argued that Marzillier had deprived AMT of the benefit of the contractual exclusive jurisdiction agreement by inducing the clients to sue in Germany. Marzillier, a defendant domiciled in Germany, could only be sued in England if the harmful event occurred here. Lord Hodge J.S.C., giving a beautifully clear judgment, held that the case could not be heard in England. England was not the place where the harm occurred, despite payment out of an account in England and the alleged breach of the exclusive English jurisdiction agreement. He held that Germany was the place where the harm occurred under what is now Article 7(2) (ex Article 5(3)) of the Brussels I Regulation Recast (Regulation EC No 1215/2012).

Choice of Forum Clauses in International Contracts

The autonomy of contracting parties to select the court in which any disputes between them will take place is typically justified on the basis of the need for certainty and predictability in international commerce. The parties know in advance where litigation will take place, thereby eliminating later litigation over the proper forum and conserving valuable judicial resources for the determination of the merits. Free choice also maximizes flexibility, enabling parties to shop for a litigation venue appropriate to their particular circumstances. This article seeks to shed light on the issue by surveying the recent treatment of exclusive jurisdiction clauses by the courts in the common law provinces in Canada, and by selected courts elsewhere in the common law world.

CONFLICTS OF JURISDICTION AND PARTY AUTONOMY IN EUROPE

Party autonomy provides certainty and predictability to the parties, reduces litigation costs, promotes the prompt assertion of jurisdiction by a court, and simplifies case management between different countries. However, the existence of an exclusive jurisdiction clause cannot completely extinguish conflicts of jurisdiction. Common law countries traditionally adopt discretionary instruments, such as forum non conveniens and anti-suit injunctions to tackle conflicts of jurisdiction. Both instruments work together in common law countries to create a balance between international comity and effective case management. The application of these two instruments, however, has been questioned in the European Union (EU). This article examines conflicts of jurisdiction in the Brussels I Regulation and particularly focuses on the effect of the European approach in cases involving a jurisdiction clause. It is submitted that the current Brussels regime in dealing with conflicts of jurisdiction and choice of court agreements demonstrates three weaknesses: procedural certainty takes priority over party autonomy; mutual trust and comity override justice in individual cases; and an artificial fragmentation of the internal and international market. It is expected that situations will be improved after the proposed amendment in the Recast Proposal and the Presidency Amendment is adopted, which provides harmonised choice of law rules to decide on the material validity of a jurisdiction clause and the negative kompetenz-kompetenz rule to decide on the preliminary issue of an exclusive choice of court agreement. Although the proposals do not accept the common law instruments to tackle conflicts of jurisdiction in cases with exclusive jurisdiction clauses, it may not be necessary to insist that forum non conveniens and anti-suit injunctions be adopted where a proper approach has been established to ensure the effectiveness of an exclusive jurisdiction clause and to provide for the priority of the courts in deciding on its validity. However, the European lawmaker should pay specific attention to the improvement of the functioning of the Regulation in the international context to tackle conflicts of jurisdiction in choice of court agreements involving a third country.

EFFECTIVENESS OF EXCLUSIVE JURISDICTION CLAUSES IN THE CHINESE COURTS—A PRAGMATIC STUDY

AbstractChinese judicial practice demonstrates great diversity in enforcing exclusive jurisdiction clauses. In practice, the derogation effect of a valid foreign jurisdiction clause is frequently ignored by some Chinese courts. It may be argued that these Chinese courts fail to respect party autonomy and international comity. However, a close scrutiny shows that the effectiveness of an exclusive jurisdiction clause has close connections with the recognition and enforcement of judgments. If the judgment of the chosen court cannot be recognized and enforced in the request court by any means, the request court may take jurisdiction in breach of the jurisdiction clause in order to achieve justice. Chinese judicial practice demonstrates the inevitable influence of the narrow scope of the Chinese law in recognition and enforcement of foreign judgments. It is submitted that the Chinese courts do not zealously guard Chinese jurisdiction, or deliberately ignore party autonomy and international comity. Instead, the Chinese courts have considered the possibility of enforcement of judgments and the goal of justice. Applying theprima facieunreasonable decision test is the best the courts can do in the specific context of the Chinese law. Thestatus quocannot be improved simply by reforming Chinese jurisdiction rules in choice of court agreements. A comprehensive improvement of civil procedure law in both jurisdiction rules and recognition and enforcement of foreign judgments is needed.

The Enforcement of Jurisdiction Agreements under the Brussels I Regulation: Reconsidering the Principle of Party Autonomy

The role of jurisdiction agreements within the scope of the European Community Regulation 44/2001,2 also known as the Brussels I Regulation ('the Regulation') is discussed. The only way to solve enforcement problems is when the jurisdiction rules of the Regulation should be amended to reverse the obligation to suspend proceedings in cases where there is a court designated by an exclusive jurisdiction clause, granting to that court the exclusive right to determine the clause's validity.

Exclusive jurisdiction clauses and anti-suit injunctions

Exclusive jurisdiction clauses and anti-suit injunctions

Skype Technologies SA v Joltid Limited and others [2009] EWHC 2783 (Ch). Anti-suit injunction: Clarification of effect of English exclusive jurisdiction clause in worldwide technology licensing contract

The Court's discretion in granting an anti-suit injunction has been clarified further by the recent decision of Mr Justice Lewison in Skype Technologies SA v Joltid Limited and Others [2009] EWHC 2783 (Ch). Ruling on the Court's willingness to grant an anti-suit injunction where an exclusive jurisdiction clause had been breached, Mr Justice Lewison held that “standard considerations that arise in arguments about forum non conveniens should be given little weight in the face of an exclusive jurisdiction clause where the parties have chosen the courts of a neutral territory in the context of an agreement with world-wide application. Otherwise the exclusive jurisdiction clause would be deprived of its intended effect”. It follows that contracting parties who deliberately select the English courts as a neutral forum in an exclusive jurisdiction clause will not be allowed to “wriggle out” of their agreement, unless the party seeking to commence proceedings in an alternative forum can establish exceptional reasons, outside of ordinary forum non conveniens arguments, to justify why the exclusive jurisdiction clause should be displaced.

International Sales Transactions - A Series of Simulated Negotiation and Drafting Exercises

This short paper describes a series of simulated negotiation and drafting exercises developed as a tool to teach various aspects of international sales transactions. Students get the opportunity to represent imaginary parties to such transactions and to negotiate on their behalf in front of the class solutions to various real-world problems which they are likely to meet in their future legal or business practice. The series covers the following aspects of international sales transactions: * Drafting an initial memorandum of agreement to cover the main components of the sales transaction; * Allocation of costs and risk in connection with the long shipment: the use of the ICC INCOTERMS; * The UN Convention on International Sales of Goods (CISG): the scope of application of the CISG; its substantive provisions; should one exclude it? Should one exclude some of its provisions? * Modes of payment in international commerce; Letters of Credit; * Allocation of performance risks: drafting a Force Majeure clause; * Settlement of Disputes: choosing between courts and arbitration; drafting exclusive jurisdiction clauses, arbitration and mediation clauses, and choice of law clauses. This type of exercises is very different from those students usually are required to submit in law school, where they are expected to analyze a legal problem and essentially write a judgment - thus implicitly suggesting that all problems should be solved by means of litigation. The premise of this exercise is that in international commerce, litigation is a bad option, due to the extensive costs, significant cultural problems and high level of uncertainty involved, and should only by used as a last resort. Instead, the transaction should be planned and structured in a way that minimizes the risk of a dispute, and when problems arise they should preferably be solved by negotiation.

Creating a safe harbour from Gasser--restoring the effectiveness of exclusive jurisdiction clauses in European financial markets transactions

The problems arising from the ECJ's decision in Erich Gasser GmbH v MISAT Srl [2005] 1 QB 1 (ECJ) have been the subject of much academic discussion.1 The interpretation in that case of the lis pendens provisions in the Brussels Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (EC Regulation 44/2001) undermines the effectiveness of exclusive jurisdiction clauses by granting to first seized but ‘non-chosen’ courts the exclusive right to resolve the question of jurisdiction, and by compelling the court chosen in the exclusive jurisdiction clause to stay its proceedings in the meantime.2 This has given increased effect to the so-called ‘Italian torpedo’3—the practice of pre-emptively issuing proceedings seeking a negative declaration (ie a declaration of non-liability) in a jurisdiction known to have drawn out civil procedure. The recent case of JP Morgan Europe Ltd v PrimaCom AG 4 has heralded the arrival of the technique in the financial markets. The consequent subversion of party autonomy in this context is of critical significance because of the importance to the EU economy of the smooth functioning of the internal financial markets.

The Enforcement of Jurisdiction Agreements Within The Brussels Regime

AbstractUntil relatively recently the question of whether it is possible to get damages for breach of an exclusive jurisdiction clause was very rarely considered by the courts and had attracted little academic interest. But when considered alongside recent developments in cases covered by the Brussels regime, the subject becomes of potentially much greater practical significance. The main purpose of this article is to consider how the newly developing common law principles might apply in that context.

Exclusive Jurisdiction Clauses

Exclusive Jurisdiction Clauses Get access Trusts & Trustees, Volume 6, Issue 7, June 2000, Pages 27–28, https://doi.org/10.1093/tandt/6.7.27b Published: 01 June 2000

Breach of an Arbitration or Exclusive Jurisdiction Clause: The Legal Remedies if it Continues

THIS ARTICLE considers the remedies available to a party1 where an arbitration or exclusive jurisdiction clause has been breached by the commencement of foreign proceedings and, in particular, what the claimant can do where the usual remedies (applying for a stay of the foreign proceedings in the foreign court itself and/or an anti-suit injunction in the English courts against the counterparty continuing in the foreign proceedings) are ineffective. However, before proceeding with this analysis it is important to place the arbitration/jurisdiction clause in context and consider some preventative remedies. In international commercial transactions it has proved increasingly important that all agreements include a dispute resolution provision. Two clauses vital in any dispute resolution provision are the arbitration/jurisdiction and choice of law clauses. These clauses are interrelated: the arbitration/jurisdiction clause cannot competently be drafted until the governing law has been determined because it is that legal system which will generally govern its interpretation. Throughout this article it is assumed that English law2 has been chosen to govern the agreement and that an English arbitral seat or English courts are chosen. In many cases there will be advantages in opting for international arbitration, as opposed to national courts, to resolve an international commercial dispute. Arbitration generates an arbitral award that may be more easily enforceable against a counterparty's transnational assets than a court judgment, or a party (especially a state or sovereign) may refuse to submit to a national court's jurisdiction due to concerns about neutrality or submission to another state's jurisdiction per se . The alternative is a jurisdiction clause which may provide for exclusive or non-exclusive jurisdiction. A party with enough bargaining power will be best served by a clause that provides for exclusive jurisdiction in its home country's court or the courts (if they can be trusted) …

'The Mahkutai'

The Privy Council was faced with the following set of facts: Shipowners chartered their vessel to time charterers. The vessel was subchartered to shippers for the carriage of a cargo from Indonesia to China. The time charterers issued a bill of lading which contained a so-called Himalaya clause, i.e. a clause which purported to confer on subcontractors the benefit of 'all exceptions, limitations, provision, conditions and liberties benefitting the carrier. It also contained a clause conferring exclusive jurisdiction on the Indonesian courts. After discharge of the cargo, the cargo owners issued a writ against the vessel in Hong Kong claiming that the cargo was damaged on delivery. The shipowners sought to rely on the jurisdiction clause, as being a provision within the meaning of the Himalaya clause. In the view of the Hong Kong Court of Appeal, the shipowners were not entitled to rely on the clause because they were not parties to the bill of lading. Nor had there been a bailment on terms which included the jurisdiction clause. The shipowners appealed to the Privy council, which dismissed the appeal (Lord Goff of Chieveley giving the judgment of the Board). It traced the development of Himalaya clauses as a device to accommodate various situations arising in the context of carriage of goods by sea where there was a commercial expectation that the benefit of certain terms of the contract of carriage should be made available to parties involved in the adventure who were not parties to the contract - primarily stevedores, but in some cases also shipowners relying on terms in charterers' bills of lading to exempt them from possible liability to cargo owners and consignees. The theoretical basis for giving effect to such clauses remained problematic (although they were currently construed as bilateral contracts arrived at through the agency of the carrier). It was not apparent that a jurisdiction clause should be included within the list of clauses from which a subcontractor should be allowed to benefit. 'Such a clause can be distinguished from terms such as exceptions and limitations in that it does not benefit only one party, but embodies a mutual agreement under which both parties agree with each other as to the relevant jurisdiction for the resolution of disputes. It is therefore a clause which creates mutual rights and obligations.' While the Himalaya clause in the contract in question referred to subcontractors enjoying the benefit of a 'provision' for the benefit of the carrier, this term must be interpreted eadem generis with exceptions and limitations. The function of a Himalaya clause was 'to prevent cargo owners from avoiding the effect of contractual defences available to the carrier by suing in tort persons who perform the contractual services on the carrier's behalf. To make available to such a person the benefit of an exclusive jurisdiction clause in the bill of lading contract does not contribute to the solution of that problem.' In addition, the purpose of a jurisdiction clause is usually to confer jurisdiction on a court in the place where the carrier carries on business. It is purely fortuitous if that court is also a convenient place for a subcontractor to litigate. Both the terms of the Himalaya clause and the policy it pursued therefore indicated that it was not intended to include the jurisdiction clause. The following case note contrasts the legal reasoning employed in Belgium in similar situations (E. Dirix).

Sub‐Bailments and Consent

Of the two major strands existing in the increasingly important topic of subbailment on terms, one has become well settled, the other has been shrouded in ambiguity for close to two decades. The recent Hong Kong Privy Council decision of The Pioneer Container' reaffirms the first strand and, more importantly, delivers a definitive pronouncement on the second. Briefly stated, the facts of The Pioneer Container were as follows. The plaintiffs shipped goods on board the defendants' vessel, which goods were lost when the vessel sank after a collision. The plaintiffs commenced the present action, issuing a writ in rem against the defendants' sister ship, claiming damages for loss of the said goods. The defendants applied for a stay of proceedings on two grounds: first, that by virtue of an exclusive jurisdiction clause in the relevant bills of lading, the plaintiffs had agreed that any dispute would be governed by Chinese law and determined at Taipei in Taiwan; secondly, that taking the circumstances as a whole, Taipei was the natural and appropriate forum for the trial of the action. The Board held in favour of the defendants, holding that the exclusive jurisdiction clause was binding on the plaintiffs and that, on the facts, a stay of proceedings ought to be granted. The present comment, focusing as it does on the bailment context, will only consider the Board's reasoning on the first issue. Problems arose with regard to the first issue (viz, that centring on the effect of the exclusive jurisdiction clause) because two groups of plaintiffs did not in fact have a direct contractual relationship with the defendant shipowners; each group had initially shipped the goods concerned on board vessels owned by different companies which then (in effect) subcontracted the carriage of the goods to the defendants. This raised the question as to whether the clause could in fact bind these plaintiffs in the absence of a contractual nexus. It should be noted at this juncture that although the instant case concerned the issue as to whether or not the burden of an exclusive jurisdiction clause could be placed on a third party (here, the plaintiffs), the reasoning of the Board would undoubtedly apply equally to the effect of exception clauses in similar circumstances.2 Another (more specific) point should also be noted: in so far as each group of plaintiffs was concerned, the bills of lading issued by the initial carriers each contained a similar clause as follows: 'The Carrier shall be entitled to sub-contract on any terms the whole or any part of [the carriage].'3