Volume 42 | Number 3 Summer 2007
VII. Appraisal and Recommendation
The presumption of exclusivity established in the Hague Choice of Court Convention is of special significance in the United States. The major reason is that notwithstanding the U.S. Supreme Court’s ruling in Bremen in 1972, which validates forum selection clauses, U.S. courts have not generally held forum selection clauses to be exclusive without explicit language showing that jurisdiction is exclusively in the designated forum.116
Thus, following the ratification and implementation of the Hague Convention in the United States, there should be no uncertainty that choice of court agreements will be held exclusive by U.S. courts. As the existing uncertainty on this issue is removed and there is predictability that a decision by the chosen U.S. court will be recognized and enforced abroad, a foreign business should find no disincentive in choosing a U.S. court as a forum to resolve potential disputes in business-to-business transactions.
The importance of the Hague Convention is not limited just to the United States, for it is widely seen as a viable alternative to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, under whose provisions not only arbitration awards but arbitration clauses are recognized and enforced abroad.117 However, the Hague Convention should not be seen as competing with the New York Convention, as evidenced by the International Chamber of Commerce (ICC) and its International Court of Arbitration’s strong support for this new development.118
The Hague Convention has gained wide support. For instance, the intellectual property community considers the Convention to be an important instrument, as it will make licensing agreements easier to enforce.119 Similarly, the Convention will be equally important for the insurance industry.120 The legal profession has also enthusiastically endorsed it: professional associations, including the American Bar Association, the International Bar Association, the International Law Association, and the American Society of International Law, have all featured the Convention at their conferences.121 The ABA’s Section of International Law stated in its August 2006 report:
The Choice of Court Convention addresses a specific perceived need for facilitating global transactions and providing certainty for US parties and litigants. It can be understood as a contract drafting tool and should be part of cross-border planning starting today. The Convention is also a means of dispute resolution, providing a viable alternative to arbitration.122
It recommended that the ABA urge the U.S. government “promptly to sign, ratify and implement the Hague Convention on Choice of Court Agreements.”123 At its annual meeting the ABA resolved to make that recommendation.124 It is in the interest of the United States to ratify the Convention and implement it through federal legislation.
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Footnotes
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