Agreement Jurisdiction

The law provides that a State may recognize as compulsory the jurisdiction of the Court of Justice in disputes vis-à-vis any other State which assumes the same obligation. These cases are brought before the Court of Justice by way of memorial. The nature of the disputes in respect of which such mandatory jurisdiction may be recognised is set out in Article 36(2) to (5) of the Statute, which reads as follows: Article 36(1) of the Statute provides that the jurisdiction of the Court of Justice shall include all cases brought before it by the parties. These cases are normally referred to the Court of Justice by notifying the Registry of a so-called special agreement concluded by the parties specifically for this purpose2. The subject matter of the dispute and the parties must be indicated (Statute, Art. 40 para. 1; Rules, art. 39). Arbitration is a procedure in which a dispute (by agreement between the parties) is submitted to a tribunal (usually composed of one or three arbitrators chosen by the parties) which makes a binding decision on the dispute. In choosing arbitration, the parties opt for a private form of dispute resolution rather than submitting to the jurisdiction of a national court. A jurisdiction clause therefore stipulates that the parties have agreed that the courts of a particular country will assume jurisdiction over all disputes that may arise (in other words, have the right to be heard).

Exclusive jurisdiction clauses limit disputes to the courts of a jurisdiction. An exclusive jurisdiction clause creates relative certainty: you know where to sue and be sued. They also offer greater protection, as another court is less likely to accept jurisdiction if faced with an exclusive jurisdiction clause. However, these agreements are not considered exclusive under the Hague Convention on Jurisdiction Agreements. As this may be the mechanism by which the UK maintains mutual applicability within the EU, it may not be desirable to designate two courts as having exclusive jurisdiction over EU-related transactions. Also keep in mind that there is a risk of parallel proceedings, especially if there is a counterclaim to a claim, with the claim being heard by one court and the counterclaim by another court. If a State has not recognised the jurisdiction of the Court of Justice at the time when the action is brought against it, that State may recognise that jurisdiction retroactively so that the Court can rule on the case: the Court therefore has jurisdiction from the date of adoption under the rule of the forum prorogatum. 44.3.

Applicable law and jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the Republic of China, without regard to its principles of conflict of laws rules. Any dispute, question or difference of any kind arising at any time at a later date between the parties (including the Company) or their respective representatives or any of them that the parties cannot resolve amicably between them, with respect to or in connection with this Agreement or the validity, the interpretation, meaning, function or effect thereof, or any clause contained therein; or with respect to the rights, obligations or liabilities of the Parties under this Agreement or under this Agreement, shall be definitively governed in accordance with the Arbitration Rules of the International Chamber of Commerce by one (1) arbitrator appointed in accordance with such Rules. The arbitration proceedings will take place in Israel and will be conducted in English. The decision on an arbitral award rendered by the arbitrator may be registered with any court of competent jurisdiction, or an application may be made to that court for judicial acceptance of the award and, where appropriate, for an enforcement order. A list of the most common arbitration institutions with the various model clauses is attached to this note (annexes 1 and 2). However, for the sake of simplicity, we present below (with reference to the DIFC-LCIA model agreement) an example of an arbitration agreement that should be accepted by a court as a prima facie case. This option, known as “hybrid” or “asymmetric” clauses, often appears in loan agreements because the borrower is limited to bringing an action in a particular jurisdiction, and the bank reserves the right to initiate proceedings in any court of competent jurisdiction, i.e. wherever the assets are located.

Such clauses are usually negotiated when there is an imbalance of bargaining power between the parties, as this clearly puts one party in a more favourable position than the other. Recent developments mean that contracting parties must be cautious when using these clauses, especially in European transactions.4 Sometimes parties choose to settle disputes through arbitration, in which case they include an arbitration clause in their contract (see our September 2007 e-briefing for editorial advice). In other cases, however, the parties like to rely on the courts to deal with disputes. In which case does the question arise: which courts? Otherwise, as in current law, there is a risk of costly, lengthy and unnecessary preliminary battles over whether disputes should be dealt with in the courts of country A or country B, as well as the risk that several claims will be heard in parallel in several different jurisdictions at the same time. In the Corfu Canal case (United Kingdom/Albania), the parties concluded a special agreement following the delivery of the judgment on the interim appeal. The case of the arbitral award of the King of Spain of 23 December 1906 (Honduras v. Nicaragua) was filed by application, but the parties had previously reached an agreement on the procedure to be followed when the dispute was brought before the Court. Article 36(6) of the Statute provides that, in the event of a dispute concerning the jurisdiction of the Court of Justice, the matter shall be settled by decision of the Court of Justice. Article 79 of the Rules of Procedure lays down detailed rules for the submission of preliminary applications4. A well-formulated dispute settlement clause is essential and provides certainty in terms of procedures and procedures for parties wishing to resolve a dispute. This is even more common in an international environment where the parties are based in different jurisdictions.

Following the submission of the applications by Congo v. France on 11 April 2003 and by Djibouti v. France on 9 January 2006, the defendant accepted the jurisdiction of the Court. This consent led to the inclusion of these cases on the General List from the date of receipt of consent, namely certain criminal proceedings (Republic of the Congo/France) or certain mutual legal assistance issues in criminal matters (Djibouti/France). `The parties shall submit all disputes arising out of or in connection with this Agreement to the exclusive jurisdiction of the courts of [ ]`. When drafting a jurisdiction clause, there are three options: an authoritative clause expressly states the choice of law applicable to the contract, so no prior argument is required as to which laws of the country should be used to interpret the contract. .