The Hague Convention of 30 June 2005 on the Choice of Court Agreements (Hague Convention) has entered into force in Switzerland on 1 January 2025. The Hague Convention regulates the effectiveness of jurisdiction agreements, the competence of agreed courts in international trade disputes, and the basics of cross-border recognition and enforcement of court judgments.
Enhancing Legal Certainty and Efficiency
The Hague Convention aims to enhance legal certainty and efficiency for companies engaged in international transactions by regulating exclusive choice of court agreements in most civil and commercial matters. It ensures that the courts specified in such agreements hold the sole authority to adjudicate disputes, preventing "forum shopping" and reducing transaction costs for businesses.
Alignment with Swiss Law
The Hague Convention is largely consistent with Swiss law, particularly the Swiss Private International Law Act (PILA). However, some minor adjustments to the PILA came into force alongside the Hague Convention on 1 January 2025. The most significant changes were made to Article 5 PILA regarding jurisdiction agreements.
Under the former PILA provision, merely agreeing on the jurisdiction of a Swiss court was not sufficient; a specific location needed to be determined. Now, if the parties agree on a jurisdictional location within Switzerland, the Swiss courts' jurisdiction will be determined according to the PILA provisions. In the absence of a specific PILA provision covering the dispute at hand, any court in Switzerland can be approached and the court which is approached first will have jurisdiction. Additionally, as of 1 January 2025, a court can no longer decline jurisdiction simply because a party lacks residence, domicile, or establishment in the canton of the agreed court, or if foreign law applies to the dispute. These amendments ensure that Swiss courts uphold the parties' choice of jurisdiction, aligning with the principles of the Hague Convention.
Interaction with the Lugano Convention
The Lugano Convention remains in effect and generally takes precedence over the Hague Convention. Nonetheless, the Hague Convention holds particular importance for cases involving countries outside the Lugano Convention, such as the UK. This is especially significant in light of the EU's refusal to accept the UK's adherence to the Lugano Convention, creating a void that the Hague Convention now at least partially addresses.
Applicability and Benefits
The Hague Convention applies to choice of court agreements made after 1 January 2025. It is expected to improve the recognition of choice of court agreements, thereby increasing the predictability of cross-border dispute resolution and reducing associated costs. This will enhance Switzerland's appeal as a hub for international dispute resolution.
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