Enforceability of Choice of Court Clauses in Transnational Agreements: the 2005 Hague Convention, Its Implementation in Contracting States, and the U.S. Approach

Document Type

Article

Publication Title

Chicago Journal of International Law

Abstract

Parties involved in transnational business naturally expose themselves to peculiar international risks, including the possibility of having a foreign court resolve their future disputes. To reduce uncertainty, transnational contracts often contain a so-called “choice of court” (or “choice of forum”) clause to dictate where future disputes should be resolved.

Chosen courts, however, do not always enforce such clauses. Indeed, absent a convention or a treaty, the enforcement of a choice of court clause is purely a matter of national law and, in the case of federal systems like the United States, even of sub-national domestic law. To guarantee predictability, several countries have ratified the Hague Convention of 30 June 2005 on Choice of Court Agreements (the “Convention”), which aims at ensuring that the parties’ choice will be respected. The United States, however, was not among them, and U.S. courts continue to apply a variety of tests to determine whether they will follow the parties’ selection of forum.

This Article analyzes recent judicial decisions involving the enforceability of choice of court clauses in transnational agreements under the Convention (i.e., Ermgassen & Co Limited v. Sixcap Financials Pte Limited, and Motacus Constructions Ltd v. Paolo Castelli SpA), and under the internal laws of selected jurisdictions (France, United Kingdom, Florida, New York, and California). Such analysis aims to ascertain whether the Convention was successful in guaranteeing the enforcement of choice of court clause in transnational contexts, and whether the United States should finally ratify it.

First Page

417

Last Page

440

Publication Date

Winter 2024

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