Hague Convention Choice of Court Agreement and the Common Law 2007

FOOTNOTES

[1] Convention on Choice of Court Agreements of June 30, 2005, 44 I.L.M. 1294, available online at

http://www.hcch.net/index_en.php?act=conventions.text&cid=98 (the Convention).

[2] An argument might be advanced that federal legislative authority under the trade and commerce power would suffice to permit the Parliament of Canada to effectively implement the Convention without the need of co-operation from the provinces, but I do not pursue that here.

[3] That view is reflected in the title of an article on the Convention by Jeffrey Talpis and Nick Krnjevic, “The Hague Convention on Choice of Court Agreements of June 30, 2005: The Elephant that Gave Birth to a Mouse” (2006), 13 Sw. J.L. & Trade Am. 1. I have expressed a similar view myself: V. Black, “The Hague Choice of Court Convention” (2006), 6 Can. Int’l Lawyer 181.

[4] Z.I. Pompey Industrie v. ECU-Line N.V, [2003] 1 S.C.R. 460; GreCon Dimter inc v. J.R. Normand inc., [2005] 2 S.C.R. 401; Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34. The last two of these cases are Québec ones, but that does not affect the general point.

[5] C. Walsh, “Choice of Forum Clauses in International Contacts” in Meredith Lectures, 1998-99 (Cowansville, Qué.: Yvon Blais, 2000), 211 at 213.

[6] There are some studies conducted by the International Chamber of Commerce that suggest that international traders would favour increased certainty with respect to the enforcement of choice-of-court clauses, but (1) they do not focus on the Convention per se and (2) they are not specific to Canada. http://www.iccwbo.org/law/jurisdiction and http://www.iccwbo.org/policy/law/iccef/index.html.

There is also a bit of empirical work done in 2003 by the American Bar Association Section on International Litigation and Practice that showed some practitioner support for the Convention. Specifically, a substantial majority of participants in that survey indicated that if something like the Convention was in place it would make them more willing to designate litigation instead of arbitration in those international contracts they were responsible for negotiating. See L.E. Teitz, “Both Sides of the Coin: A Decade of Parallel Proceedings and Enforcement of Foreign Judgments in Transnational Litigation” (2004) 10 Roger Williams U.L. Rev. 1 at 63.

Note that neither of these studies show that the Convention will achieve its goal of increasing efficiency in international trade. They only show that international traders and their legal counsel think that such a result would follow.

[7] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 10, 1958, 330 U.N.T.S. 38 (entered into force 7 June 1959). This treaty is available on the UNCITRAL website online: UNCITRAL <http://www.uncitral.org/en-index.htm> (New York Convention). It currently has 136 parties, including Canada.

[8] Ronald Brand used this phrase in two different papers on the Convention: see R. Brand, “Introductory Note to the 2005 Hague Convention on Choice of Court Agreements” (2005) 44 I.L.M. 1291; see also R. Brand, “The New Hague Convention on Choice of Court Agreements” (2005) ASIL Insight 1. He made a similar point in R. Brand, “A Global Convention on Choice of Court Agreements” (2004) 10 ILSA J. Int’l & Comp. L. 345 at 346, and the same observation is made in Louise Teitz, “The Hague Choice of Court Convention: Validating Party Autonomy and Providing an Alternative to Arbitration” (2006) 53 Am. J. Comp. L. 543 at 548.

[9] Convention, art. 1(1).

[10] This exclusion and the one relating to consumers are found in art. 2(1) of the Convention.

[11] Convention, art. 1.

[12] But see paras. 66-68 below.

[13] These exclusions and the other ones listed in this paragraph are spelled out in art. 2(2) of the Convention.

[14] Convention, art. 2(4).

[15] Ibid., art. 5(1). The matter is a little more complicated than mere voidness, in that art. 5(1) contains a choice-of-law provision. It provides that the chosen court shall have and assume jurisdiction “unless the agreement is null and void under the law of that State [i.e., the state of the chosen court, including, it would seem, its choice of law rules].”

[16] [1990] 3 S.C.R. 1077, at 1103-04.

[17] It also includes consent by attornment.

[18] And of course if the defendant is present within the jurisdiction of the court then service may be made without leave, and jurisdiction taken, as well.

[19] The focus throughout this report is on personal jurisdiction. Of course to exercise jurisdiction courts must have both personal and subject matter jurisdiction. However, the latter presents little difficulty here. The superior courts of the provinces have subject matter jurisdiction over contract claims. Areas where they might not have subject matter jurisdiction – for instance, over title disputes involving foreign land – are not covered by the Convention.

[20] Generally this power is confirmed several times over. It could be located in the general power in provincial judicature acts that confirms that the provincial superior courts posses the power that the courts of England historically had. (See for instance, Court of Queen’s Bench Act, CCSM c280, s. 32.) These sections make no express reference to the powers of courts to stay proceedings, but they would be interpreted to include that power. In addition, provincial judicature acts also frequently include a specific reference to courts’ powers to stay proceedings brought before them. (See for instance Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106 and Judicature Act, R.S.N.L. 19990, c. J-4, s. 97(1).) In two provinces (B.C. and Saskatchewan) this statutory confirmation appears in more detail the provincial version of the ULCC’s Court Jurisdiction and Proceedings Transfer Act. In addition, the power to stay proceedings on grounds of forum non conveniens others is generally found in provincial rules of court. For details see the next part.

[21] R.S.C. 1985, c. 3 (2nd Supp.), s. 3(1).

[22] Ibid., s. 3(2) and (3).

[23] Supra note 4..

[24] Z.I. Pompey Industrie v. ECU-Line N.V , ibid., para. 29.

[25] Convention, art. 6 (c).

[26] Talpis & Krnjevic, supra note 3 at 24.

[27] A.E. Kerns “The Hague Convention and Exclusive Choice of Court Agreements: An Imperfect Match” (2006) 20 Temple Int’l & Comp. L. J. 509.

[28] Supra note 16.

[29] [2003] 3 S.C.R. 416 at 453

[30] Section 8(a).

[31] Convention, art. 9(e).

[32] Beals, supra note 29 para. 71.

[33] Convention, art. 9 (d), italics added.

[34] Beals, supra note 29.

[35] Beals, ibid., para. 52, per Major J. for the majority.

[36] Ibid. para. 42.

[37] King v. Drabinsky, [2007] O.J. No. 2901.

[38] Alta. Reg. 390/1968, s. 30(f)(iv).

[39] S.B.C. 2003, c. 28.

[40] Lombard General Insurance Co. Of Canada v. Teck Cominco Ltd., 2007 BCCA 249, para. 60.

[41] R.S.B.C. 1996, c. 78, s. 40. Québec has a comparable provision, but that is outside the scope of this report.

[42] Man. Reg. 553/88, r. 17.02(f)(iii).

[43] C.C.S.M. c. C280, s. 38.

[44] R.S.N.B. 1973, c. F-19. Saskatchewan had a similar statute but repealed it in April 2006.

[45] Ibid., ss. 3(b). To expand, take a case of a New York resident with a cottage in New Brunswick who hires a New Brunswicker to do work on the cottage. The contract has an exclusive choice-of-court clause in favour of New York. The N.B. renovator accidentally burns down the cottage and the New York resident sues in N.Y. The Convention would require enforcement of that N.Y. judgment in N.B., but the Foreign Judgments Act would preclude such enforcement.

[46] The impeachment defences in the Foreign Judgments Act are phrased more broadly than those in the Convention.

[47] S.N.L. 1986, c. 42, Sch. D, s. 6.07(1)(f)(iv).

[48] Supra note 20.

[49] N.W.T. Reg. 010-96, s. 47(f)(iv).

[50] Morguard actually made reference to the C.P.R. rules of both Nova Scotia and Prince Edward Island: supra note 16 at 1104. However, since that time P.E.I. has changed its rules and adopted the Ontario model.

[51] S.N.S. 2003, (2nd Sess.), c. 2.

[52] Judicature Act, S.N.W.T. 1998, c. 34, s. 59(2).

[53] Supra note 20.

[54] S.S. 1997, c. C-41.1

[55] S.S. 2005, E-9.121 (EFJA).

[56] The Foreign Judgments Act, R.S.S., c. F-18.

[57] See Old North State Brewing Co. v. Newlands Service Inc. (1998) 58 B.C.L.R. (3d) 144 (C.A.).

[58] S.Y. 2000, c. 7.

[59] Judicature Act, R.S.Y. 2002, c. 128, s. 38.

[60] Commercial Arbitration Act, S. C. 1986, c. 22; Canada-United Kingdom Civil and Commercial Judgments Convention Act, R.S.C. 1985, c. C-30.

[61] Convention, art. 2(5).

[62] R.S.C. 1986, c. F-29.

[63] Convention art. 3(c)(ii).

[64] E.K. Volkswagen Ltd. v. Volkswagen Canada Ltd., [1973] 1 W.W.R. 466 (Sask C.A.); Khalif Commercial Bank v. Woods (1985), 29 B.L.R. 69 (Ont. H.C.); Old North State Brewing Co. v. Posen, [1999] 4 W.W.R. 466 (B.C.C.A.) at paras. 34-37. And in GreCon Dimter, the Supreme Court of Canada wrote that a choice-of-court clause “must clearly and precisely confer exclusive jurisdiction on the foreign authority.” (Supra note 4 at para. 27.) However, for a case that went the other way on this point see Northern Sales Co. v. Sask. Wheat Pool (1992), 78 Man. R. (2d) 200 (C.A.).

[65] Beals v. Saldanha, supra note 29 at 453.

[66] Beals, ibid., at para. 76.

[67] At para. 44.

[68] Supra, note 42. Québec has an analogous provision.

[69] Convention, art. 2(2)(j).

[70] Convention, art. 17.

[71] Convention, art. 22(2). There are also additional limitations that arise from the need, in this context, to deal with enforcement of competing judgments, actual and prospective.

[72] A. Asif Rashid, “The Hague Convention on Choice of Court Agreements 2005: An Overview” (2005) 45 Indian J. Int’l Law 558.

[73] Guangjian Tu, “The Hague Choice of Court Convention – A Chinese Perspective” (2007) 55 Am. J. Comp. L. 347.

[74] E. González de Castilla del Valle, “The Hague Convention on Choice of Court Agreements of June 30, 2005: A Mexican View” (2006) 13 Sw. J.L. & Trade Am. 37.

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