Current Uniform Acts

Hague Convention Choice of Court Agreement and the Common Law 2007

VI. Conclusion

[91] I have read approximately 25 recently-published law review articles describing and assessing the Convention from the point of view of a number of different national systems – including India,[72] China[73] and Mexico.[74] The overwhelming majority of these essays give the Convention good marks. That is, while they raise the expected quota of quibbles and offer some lamentations about how the Convention might have been made even better, they generally take the position that this proposed multilateral treaty is an overdue progressive step and they urge its quick and widespread implementation. Some of the authors of these papers are persons who were involved in the negotiating and drafting of the Convention, so it is not surprising that they should praise it. However, most of the commentators appear to be neutral observers.

[92] Of course, none of that amounts to an argument that Canada should adopt the Convention. I mention it here, however, for two reasons. First, it seems worthwhile pointing out that the view I offer in this report – namely, that the Convention represents a modest but useful initiative – appears to be uncontroversial and fairly orthodox. Secondly, since (as pointed out in para. 4) Canada will benefit only if its trading partners adopt the Convention, it is encouraging to note that the Convention seems to be the subject of a fair amount in international goodwill, at least among academic observers. The chances of its being adopted by a significant number of states are hard to ascertain, however, since they depend on more than just academic goodwill. To date no countries are contracting parties to the Convention. However, it is early days yet.

[93] I wrote in para. 3, that there did not seem to be anything to lose by Canada’s adopting the Convention, apart from the expenditure of the resources (i.e., drafting time, time on the legislative agenda) required to implement it. One can, I suppose, conjure up other possible losses which might result from subscribing to this proposed multilateral treaty. Its adoption might result in some contracting parties shifting from arbitration for litigation to resolve their disputes. One could speculate that the consequent drop in the number of arbitrations would mean a loss of business for arbitrators and international commercial arbitration centres, including those in Montréal and Vancouver. Related to that, an increase in litigation resulting from the shift from arbitrators to judges could put additional strain on Canada’s commercial courts. That is, it may be the case that the current lack of a choice-of-court convention prompts contracting parties to elect arbitration rather than litigation, which is a loss for them (because other things being equal they would prefer litigation) but has the advantage of effectively privatizing that dispute resolution and making it a user-pay system. The Convention would effectively allow such parties to shift more of their dispute-resolution costs onto a publicly-subsidized system -- namely, the courts. Arguably such a shift could constitute a loss arising from adoption of the Convention, though it would have to be balanced against the gain to international commercial traders of access to superior (or at least preferred) dispute resolution.

[94] Putting aside such speculation as to the Convention’s possible redistributive effect, it is hard to imagine any negative effects arising from it. As things stand today, the lack of a multilateral treaty reinforcing the effectiveness of contractual choice-of-court clauses constitutes a generally-acknowledged gap in the international commercial trading regime. The Convention seeks to fill that gap. Although it is narrow in scope – thus leaving part of the gap still unfilled – it is a commendable measure that Canada should support.

VII. Summary of Recommendations

[95] Canada should ratify the Convention. It should refrain from making declarations under arts. 19 and 20, but should make the declaration under art. 22 dealing with non-exclusive choice-of-court clauses. No declarations need to be made under art. 26 at this time. Declarations will be required under art. 28 for any provinces which do not elect to implement the Convention at this time, and under art. 21 for those provinces which will only implement the Convention if they can prevent its application to specific matters.

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