Australia: Singapore gives effect to Hague Convention on Choice of Court Agreements

Earlier this year, Singapore followed up on its signing of the Hague Convention on Choice of Court Agreements,1 by passing laws to ratify and give local force and effect to this convention.2

These laws came into force on 1 October 2016. As the first jurisdiction in the Asia-Pacific region to sign, ratify and give effect to the Hague Convention, Singapore continues to lead the way as a forum for international commercial dispute resolution.

The Hague Convention attempts to overcome one of the significant shortcomings of cross-border litigation – the reluctance of some national courts to respect "choice of court" clauses that parties often insert into agreements. While these clauses represent a deliberate choice to have disputes resolved in a particular forum, national courts around the world have not always enforced these clauses in a coherent or consistent manner. Further (and notwithstanding the seemingly limited title of the Hague Convention), it was also intended to create uniform rules on the recognition and enforcement of foreign judgments in civil and commercial disputes.3

Traditionally, the recognition and enforcement of foreign arbitration agreements and arbitral awards represent the two most significant benefits of arbitration over litigation, as both are recognised and enforced in the 156 states that have signed the New York Convention.4 The recognition and enforceability of choice of court clauses and court judgments are much more limited. It was intended that the Hague Convention rectify this by creating a global framework of rules on jurisdiction, recognition and enforceability,5 and thereby promote "greater legal certainty for cross-border business" and a "climate more favourable to international trade and investment."6

The Hague Convention includes "three basic rules" that put choice of court clauses into effect:7

  • Rule 1: The court of a Contracting State that is designated to hear disputes pursuant to an exclusive choice of court clause has jurisdiction over, and must hear, a case put before it.8
  • Rule 2: A court in Contracting State other than that of the chosen court of a Contracting State must decline to hear a case put before it.9
  • Rule 3: A judgment given by a chosen court of a Contracting State must be recognised and enforced in a court of another Contracting State (subject to limited grounds of refusal which largely mirror those contained within the New York Convention).10

Importantly, where a party seeks to enforce a judgment in the circumstance described in rule three, Art 9(2) provides that the court of enforcement cannot conduct a merits review of the original decision and shall be bound by the findings of fact and law on which the court based its decision.11 Its effect in respect of judgments is similar to (but not identical with) the provisions of the New York Convention relating to arbitration.12

Of course, there are other bilateral arrangements between states which are designed to achieve a similar result, for example, see the Australian Foreign Judgments Act 1991 (Cth), which provides for the enforcement of certain courts' (stipulated by regulation) judgments. However, the Hague Convention is more ambitious as it is intended to have a multilateral effect.

While the Hague Convention promised a lot when first conceived, it remained dormant from when it was opened for signature on 30 June 2005 until it came into force on 1 October 2015.13 Further, until Singapore's recent ratification, the Hague Convention only had force between Mexico and the European Union states.14 While the United States and Ukraine are signatories, neither has ratified the Hague Convention locally.15 It has therefore had limited practical effect.

Prior to the ratification of the Hague Convention, the European Union states (with the exception of the United Kingdom) and Mexico were not within the ambit of the existing reciprocal enforcement regimes in Singapore.16 This is what makes Singapore's ratification of the Hague Convention so noteworthy.

On a practical level, a judgment of the Singapore High Court or Singapore International Commercial Court (SICC), that involves an "international case" and is made pursuant to a choice of court clause, is now enforceable in the European Union and Mexico. Given the competitive attitude taken by Singapore to its status as an international destination for dispute resolution, this may encourage other countries to sign and ratify the Hague Convention.

However, it remains the case that it is unlikely that parties to international commercial agreements will choose a court in the European Union, Mexico or Singapore unless both counterparties (or at least significant assets of these parties) are in a jurisdiction which has also ratified the Hague Convention. For example, for agreements between Chinese and European parties with Singapore as the choice of court jurisdiction, the utility of using the clause would be asymmetrical. While the Chinese party is able to enforce a decision of a court in Singapore in Europe, the European party could not enforce the decision in China. Accordingly, for the moment, the Hague Convention is unlikely to constitute significant competition to international arbitration as a means of resolving international commercial disputes.

The Hague Convention probably needs to be ratified by a global superpower – China or the US – to take on real significance and potentially challenge the New York Convention. With that said, the door is open for other countries, especially those in the Asia-Pacific region such as Australia, to follow Singapore's lead and ratify the Hague Convention with a view to capture a greater slice of the international dispute resolution market. The newly minted SICC, in a relatively short time, has attracted an array of interesting and complex cross-border cases determined by high calibre "international judges" like Sir Vivian Ramsey.

From an Australian perspective, the signing and ratification of the Hague Convention would be welcome. Currently, the bilateral treaty for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters 199417 works alongside the statutory regimes18 and common law to govern whether foreign judgments can be enforced. The operation of these treaties and laws is limited and does not resolve the issues that arise with jurisdiction, recognition and enforcement in the same way as an international convention like the New York Convention does for arbitration.

Finally, while the United Kingdom currently has the status of a Contracting State (via its membership of the European Union), that may not be the case once its "Brexit" is finalised. While the matter is complex, signing and ratifying the Hague Convention (or an equivalent treaty or convention with the European states) may be a priority for the UK government to entrench London courts as recognised venues for international disputes. This will be particularly so if the SICC attracts significant business away from other commercial centres.

Footnotes

1 Convention on Choice of Court Agreements, opened for signature 30 June 2005, 44 ILM 1294 (entered into force 1 October 2015) (" Hague Convention").

2 Choice of Court Agreements Act 2016.

3 See Hague Convention (see introduction).

4 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959) (" New York Convention"); see http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html for a list of parties.

5 The Law Society of England and Wales 'Briefing Note on Hague Convention on Choice of Court Agreements' (11 February 2016).

6 Hague Convention, "Outline of the Convention" May 2013.

7 Hague Convention, "Outline of the Convention" May 2013.

8 Art 5.

9 Art 6.

10 Arts 8 and 9; New York Convention Art V.

11 Art 9(2).

12 See New York Convention Art III.

13 Hague Convention Arts 27, 31; see https://www.hcch.net/en/instruments/conventions/status-table/print/?cid=98 (at 4 October 2016).

14 Excluding Denmark.

15A current status of the signatories is available at https://www.hcch.net/en/instruments/conventions/status-table/print/?cid=98 (at 4 October 2016).

16 Reciprocal Enforcement of Commonwealth Judgments Act and Reciprocal Enforcement of Foreign Judgments Act.

17 Agreement between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters (Canberra, 23 August 1990). Entry into Force 1 September 1994.

18 Foreign Judgments Act 1991 (Cth) and the Foreign Judgments Regulations 1992 (Cth).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions