Sometimes the parties choose to resolve 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 resolve any dispute. In this case, the question arises: which courts? Otherwise, as in the case of the current law, there is a risk of costly, lengthy and unnecessary preliminary battles over whether disputes should be heard by the courts of Country A or Country B, as well as the risk that several claims will be dealt with in parallel in several different jurisdictions at the same time. The parties are usually able to name the applicable law of their choice in the contract, which is usually confirmed by the courts of the country where the dispute is to be resolved. There are exceptions to this general rule, for example, the Unfair Contract Terms Act 1977 contains requirements that may apply to a contract, regardless of the applicable law chosen by the parties. In other jurisdictions, the primacy of mandatory laws may mean that a chosen applicable law cannot be enforced. It may be necessary to seek advice to ensure that a selected provision of applicable law functions properly in the event of a dispute. If a party comes from an EU Member State (other than Denmark) and another from Mexico or Singapore, the provisions of the Hague Convention on Jurisdiction Agreements (Hague Convention) must be taken into account, according to which exclusive jurisdiction clauses must be recognised and applied. The UK`s position is that the EU regime will no longer apply when it leaves the EU. Although both parties seem interested in replicating the existing system in one way or another, other agreements to which the United Kingdom has acceded (e.g.
the Hague Convention) may take on a new meaning. Given this uncertainty, it is all the more important to understand the consequences of the applicable law and jurisdiction and to indicate English law and jurisdiction in a contract, where applicable. A jurisdiction clause specifies where all disputes arising under the contract are to be negotiated. In the case of contracts with an international dimension, the development of a clear jurisdiction clause is very important, as it gives the parties certainty as to the location of the courts designated to hear disputes between them, the procedural regime in which they will have to navigate and the cost regime to which they will be subject. Member States have exclusive jurisdiction over certain types of disputes, irrespective of their place of residence (e.g. claims arising from immovable property, certain company law issues, etc.). If the Member States have such exclusive jurisdiction, this shall prevail over any provision to the contrary agreed by the parties in a contractual jurisdiction clause and the designated court shall decline jurisdiction if infringement claims are brought against them. It is therefore logical to indicate in a contract which laws will regulate it. Otherwise, if the terms of the contract later become relevant in a dispute between the parties, there is a risk of waste before the battle on the laws that should be used to interpret the obligations of the parties. The general principles provide that the court chosen in the jurisdiction agreement is obliged to hear the case; The courts of another signatory State must refuse to hear the case, and the judgment of the chosen court must be enforced and recognized in other signatory States. A State may agree in writing to waive its immunity from execution or injunction, and submission to jurisdiction alone is not effective. A court will enforce such a judgment if, in applying the principles of sovereign immunity, the foreign court would have had jurisdiction.
Consequently, an agreement to submit to the procedure of a foreign court would allow the enforcement of a judgment in that State of the court. 6. Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation) A court is much more likely to issue an injunction to restrict foreign proceedings if its jurisdiction is exclusive and not exclusive, since the foreign proceedings constitute a breach of contract. Section 7.6 Governing Law and Jurisdiction. The Filing Agreement, ADRs and ADS shall be construed in accordance with the laws of the State of New York applicable to contracts entered into in that State and intended to be fully performed. Notwithstanding anything to the contrary in the Filing Agreement, ADR or any current or future provision of the laws of the State of New York, the rights of holders of shares and other securities filed, as well as the obligations and obligations of the Company with respect to holders of shares and other securities filed, as such, shall be governed by the laws of England and Wales (or, , where applicable, other laws that may govern the titles filed). From now on, the contracting parties may or may not agree on an applicable law or a jurisdiction clause. In the event that the relevant clause is not agreed, the contract cannot contain a clause of the applicable law. What happens if there is no clause that expressly defines the law under which the provisions of the contract are regulated? In such situations, certain rules come into force, depending on the following jurisdictions: the jurisdiction(s) in which the parties are located, the jurisdiction(s) in which the contractual obligations must be fulfilled, etc. After a court decision, the applicable law will be determined, respecting the tone and content of the contract in addition to the above provisions. The number of determinants that play a role here makes the job difficult. The inclusion of a jurisdiction clause conferring exclusive jurisdiction on the courts of a particular jurisdiction significantly increases the chances of avoiding a stay of proceedings.
Courts are also increasingly willing to issue an injunction against a legal action to prevent a party from pursuing foreign proceedings in violation of an exclusive jurisdiction clause. Conversely, if the parties have agreed that a foreign court has exclusive jurisdiction, it is more likely that a stay of proceedings can be obtained in another jurisdiction unless a valid reason for not doing so is demonstrated. The inclusion of clear provisions on applicable law and jurisdiction in a contract as mentioned above should ultimately help ensure that all disputes are resolved in accordance with the law and in the courts chosen by the parties. A party may wish to enforce a foreign judgment in the courts of England and Wales, as the defendant or his property may have jurisdiction. In some cases, a foreign judgment only needs to be recognized, in other circumstances, such as .dem attempt to seize assets, the decision must be recognized and enforced. There are different regimes that must be taken into account depending on where the initial judgment was rendered. All parties agree that the courts of competent jurisdiction shall have exclusive jurisdiction to resolve any dispute (including claims for set-off and counterclaim) that may arise in connection with the establishment, validity, effect, interpretation or performance of this Agreement or the legal relationships established by this Agreement, or otherwise in connection with this [Agreement], and irrevocably decline the jurisdiction for that purpose of the [competent] courts. First of all, it is important to understand that there is a difference between an applicable legal clause and a jurisdiction clause and their respective meaning for the contract. The applicable law clause refers to the law of the place of jurisdiction applicable to the contract. Generally, this is represented by the words „this Agreement” and the terms of this Agreement are governed by the laws of (a particular jurisdiction such as India, England, the State of Delaware, the United States of America, etc.). That is, the law providing for the governance of contracts in these jurisdictions will determine how the terms of those contracts are to be interpreted.
For example, if the contract is to be governed by Indian law, the Indian Contracts Act, 1872 applies to it.