Monday, April 21, 2014

Hague Convention on Choice of Court Agreements: Role of U.S. Courts in Future Success

By Edward J. Ohanian
Ed Ohanian, a third-year student at Albany Law School, graduated summa cum laude from Marist College, with a major in mathematics and a minor in political science.
Mr. Ohanian is an associate editor of the Albany Law Review and serves as the student trustee on the Albany Law School Board of Trustees. He is a law clerk at Greenberg Traurig’s Albany office where he will join the firm as an associate after law school and the bar exam. He enjoys hiking, skiing and fishing, and has recently taken a particular interest in fly-fishing.
This paper was prepared for Professor Harrington’s Spring 2013 International Business Transactions class.

The Hague Convention on Choice of Court Agreements (“Hague Convention”), part of the Hague Conference on Private International Law, concluded on June 30, 2005. The overarching purpose of the Hague Convention is to “provide certainty and ensure[] the effectiveness of exclusive choice of court agreements between parties to commercial transactions.”

The Hague Convention was initially an endeavor that focused on achieving judicial cooperation regarding the enforcement of judgments generally But negotiations led to the more narrow purpose of ensuring judicial cooperation regarding the “recognition and enforcement of judgments in international disputes arising from commercial transactions to which exclusive choice-of-court agreements apply.”

Whether by design or compromise, the importance of judicial cooperation regarding the enforceability of choice of court agreements included in international commercial agreements cannot be understated.  If ratification of the Hague Convention becomes widespread, it could greatly increase the efficiency of international business transactions by diminishing ex ante uncertainty regarding the forum for potential litigation.

Part II of this Article proposes a hypothetical scenario that highlights the significance of uniform international enforcement of choice of court agreements with attention to the uncertainty left by Article 28 of the CISG. Part III explores core articles of the Hague Convention and addresses escape devices that have the potential to undermine the Convention’s overarching goal. Recognizing that ratification will cause state and federal preemption, Part IVa discusses the current state of U.S. federal law regarding the enforceability of choice of court agreements. Part IVb argues against domestic judicial interpretation of the Hague Convention that would allow U.S. courts to take advantage of the escape devices introduced in Part II thereby undermining the purpose of the Hague Convention and decreasing the likelihood of widespread ratification.
To read the paper, open HERE.