[Hague-jur-commercial-law] Miriam Nisbet (ALA) Summary of Dec 1-9, 2003 Meeting at The Hague

[Manon Ress]

Miriam Nisbet wrote:

I just returrned last week from The Hague, as a member of the U.S.
delegation - ALA requested representation in 2001 and the request was
granted this fall.  Attached is a summary of what the draft convention
concerns, background, highlights of current draft, etc. that AFFECT
members might find helpful.  It does look like the convention is moving
again, albeit in a much narrowed way.  Miriam

Miriam M. Nisbet
Legislative Counsel
American Library Association
1301 Pennsylvania Ave. NW - #403
Washington, D.C. 20004-1701
Voice:  202-628-8410, x. 202,=20
        or 800-941-8478, x. 202
Fax:     202-628-8419
e-mail:  mnisbet@alawash.org
http://www.ala.org/washoff


December 2003=20
Miriam Nisbet, ALA Legislative Counsel

Draft Hague Convention on Exclusive Choice of Court Agreements (formerly =
the draft Convention on Jurisdiction and Enforcement of Judgments in Civi=
l and Commercial Cases)

What is the draft Hague Convention?  The Hague Conference on Private Inte=
rnational Law is an intergovernmental organization, with 64 Member countr=
ies, which was established over a hundred years ago to negotiate and draf=
t multilateral treaties or Conventions in the different fields of private=
 international law.=20

One of the draft conventions (agreements) under negotiation for a decade =
has been the Hague Convention on Jurisdiction and Enforcement of Judgment=
s in Civil and Commercial Cases.  This convention would create jurisdicti=
onal rules governing international lawsuits and provide for recognition a=
nd enforcement of judgments by the courts of Member States.  Member State=
s, of which the U.S. is one, would be required to recognize and enforce j=
udgments covered by the Convention. The library community has been follow=
ing the development of this convention for several years because of the i=
mportance of jurisdictional matters, particularly those concerning contra=
cts and intellectual property rights. =20
=20
What is the background of the Convention?  Discussions on the draft Conve=
ntion (treaty) began in 1992 and several meetings have been held since th=
en to consider varying drafts.  Finally, in 2002, lead delegates from the=
 Hague Conference member countries agreed over the next year to draft a s=
caled-down convention based on less controversial "core" provisions.  In =
March 2003 a small Working Group produced a new, narrower draft treaty fo=
r consideration by the member countries. =20

In the summer of 2003 the Hague Conference on Private International Law a=
nnounced that the member countries had agreed to go forward with trying t=
o draft a convention that would apply only to cases in which business and=
 commercial parties have chosen a court (or =93forum=94) in their contrac=
t (so called =93B2B contracts=94).  The draft convention would make such =
=93choice of court=94 terms in contracts (including those governing copyr=
ighted materials, such as software) enforceable if the parties resort to =
the courts to settle a legal dispute.  The convention would also ensure t=
hat judgments rendered by the courts designated in such agreements are en=
forced by other courts.  (For example, the assets of a losing party may b=
e in a country other than the one where the judgment was rendered, making=
 it necessary for the winning party to have the judgment, awarding money =
to the winner, enforced subsequently in another court.)

Why are libraries concerned about the draft convention?   Although the dr=
aft convention has been scaled down considerably, many groups, including =
libraries and the business community, continue to be concerned about term=
s in non-negotiated contracts and licenses, which allow the licensor to d=
esignate in advance which court will hear the parties=92 disputes.  For e=
xample, library groups wrote a letter to the head of the U.S. Delegation =
to the Hague Conference in June 2003, setting out library concerns with t=
he draft convention on choice of court agreements.  [See letter of June 1=
3, 2003 in Related Files]  The library letter pointed out that terms in n=
on-negotiated contracts and licenses, which allow the licensor to designa=
te in advance which court will hear the parties=92 disputes, remain a sig=
nificant and controversial issue for many groups, including libraries and=
 the business community.  The draft convention does not change the underl=
ying substantive law of contracts of the Member Countries.  However, some=
 critics are concerned that contracts falling under the terms of the trea=
ty (including non-negotiated contracts) will be more easily enforceable. =


NOTE: Although some language in the latest draft convention (see below) i=
s helpful in addressing the concerns about non-negotiated contracts, thes=
e issues and others remain.  For further background on the controversy su=
rrounding non-negotiated =93shrink-wrap=94 or =93click-wrap=94 contracts,=
 turn to our UCITA pages. [LINK]  One proposed provision in the amendment=
s to Article 1 of the Uniform Commercial Code, that began circulating in =
state legislatures in 2002, reflect the same kind of thinking about choic=
e of forum and choice of law clauses seen in the original drafting of UCI=
TA.=20

What is the status of the Convention?   In 2001 ALA requested the Departm=
ent of State to include a library representative on the U.S. Delegation t=
o The Hague.  In 2003, the State Department invited Miriam Nisbet, ALA Le=
gislative Counsel, to participate as a Private Sector Advisor on the U.S.=
 Delegation at a special meeting in The Hague, December 1-9, 2003, to con=
tinue negotiations on the draft convention on choice of court agreements.=
  A new draft emerged from the meeting and negotiations are to continue i=
n Spring 2004, possibly to be concluded in a Diplomatic Conference to app=
rove the treaty by the end of 2004. =20

The new draft Convention on Exclusive Choice of Courts Agreements will be=
 available soon on the Hague Conference web page, http://www.hcch.net/e/w=
orkprog/jdgm.html.  Here are the highlights of the draft that are most pe=
rtinent to libraries. =20

The convention is intended to provide certainty that courts have jurisdic=
tion to hear disputes between business and commercial parties who have en=
tered into a contract (B2B contracts) and that the courts of other countr=
ies will recognize and enforce the judgments issued by those courts.=20

The convention applies to commercial contracts that specify that if there=
 is a dispute between the parties to the contract, the proceedings will b=
e heard and decided by a particular court (or the courts of one particula=
r country).  Such clauses or agreements in contracts are called =93exclus=
ive choice of court=94 agreements. =20

Commercial contracts for copyrighted materials are covered by the convent=
ion.  The convention does not apply to proceedings that mainly concern a =
dozen other specified matters including the validity of other intellectua=
l property rights.=20
An earlier draft of the convention contained an Article 3 (Formal Validit=
y) that seemed to suggest that any choice of court clause meeting the req=
uirements set out in the article would be considered a valid contract.  [=
See libraries=92 letter of June 13, 2003 in Related Files]  That article =
has been eliminated in an attempt to remove that confusion.  Whether an u=
nderlying contract is substantively valid =96 for example, whether one pa=
rty has assented to certain terms =96 is left up to the law of the court =
hearing the dispute.  The convention requires only that the choice of cou=
rt agreement be in writing (including electronic).

The general rule, with exceptions, is that the court chosen in the partie=
s=92 agreement should hear the dispute brought before it. =20

The general rule is that if the dispute is brought before another court (=
other than the one designated in the agreement), that court will decline =
to hear the case.  Again, there are exceptions, including that =93giving =
effect to the agreement would lead to a very serious injustice or would b=
e manifestly contrary to fundamental principles of public policy.=94  Thi=
s type of escape clause is important for parties who want to challenge th=
e enforcement of a choice of court clause, though the current language is=
 less than desirable.

The general rule  with some exceptions - is that once the court designate=
d in the exclusive choice of court agreement has issued a judgment, that =
judgment will be recognized or enforced by other courts of the Hague Memb=
er Countries.   =20