This instrument establishes general principles for the choice of law applicable in international trade agreements. They reaffirm the principle of party autonomy with a few exceptions. Jurisdiction and choice of location need not be the same, and parties may take advantage of Alberta`s substantive laws while submitting to the procedural laws of another jurisdiction. In most cases, however, the parties choose an applicable law and jurisdiction from a single jurisdiction. Although the words “attorn” and “submit” are often used as part of a jurisdiction clause, Canadian laws and international treaties generally refer to “submission” to a jurisdiction. In addition, the use of “attorn” comes from a real estate context and can cause confusion among international parties. When choosing a place of jurisdiction, the parties may submit to exclusive or non-exclusive jurisdiction. Exclusive jurisdiction means that an action can only be brought in the chosen forum. Non-exclusive jurisdiction provides the parties with some flexibility, as it allows more than one court to hear the action. Parties intending to have exclusive jurisdiction must make this clear in the clause.
Courts cannot apply an exclusive jurisdiction provision if a party can demonstrate a “solid reason” for an alternative forum, such as. B the convenience of the place, the applicable law agreed by the parties, the strength of the parties` jurisdictional relations and whether this justifies the rejection of the forum by public policy. In cases where the parties are located in different jurisdictions, you should consider adding a provision to this clause that designates for each party a representative for the service of the proceedings with respect to all disputes arising from the agreement. As regards both the choice of applicable law and the choice of court, it must be argued that that wording covers only contractually justified claims and not automatically an action for tort. If tort claims are to be covered, it may be advisable to include additional language to ensure they are covered. Article 6 – Agreement on the choice of applicable law and the battle of forms In Halpern -v- Halpern,6 there was no explicit choice of law, but one of the parties argued that the agreement was subject to Jewish law. The Court of Appeal rejected this argument: the law of a country was needed. If the parties want their relationship to be governed by a law other than the law of a country, they should include arrangements for arbitration. In particular, article 46 of the Arbitration Act expressly recognizes that arbitral tribunals may and shall settle disputes in accordance with the law chosen by the parties” or, if the parties so agree, in accordance with other considerations agreed upon by them or determined by the courts”. “The evidence before me showed that each of the parties openly insisted that it did not want to accept the other party`s applicable jurisdiction or law and that it could not reach an agreement on another jurisdiction or applicable law. Consequently, [the agreement in question] does not contain an applicable law clause or a jurisdiction clause.
Moreover, none of the parties wished to confer on the others an advantage with regard to the conclusion of the agreement. If their intention was to create darkness and difficulties for lawyers to debate in the coming years, they did well. “A growing number of international treaties provide for arbitration as an effective and efficient means of settling disputes between the parties. They can be used to interpret, supplement and further develop the rules of private international law. If you operate internationally, a hermetic contract is by far the best way to ensure the predictability and efficiency of your business transactions and adequately protect your interests in the event of a disagreement. In the case of a transaction without a foreign element, it is usually not necessary to specify the legal system that should govern the transaction or the courts that should have jurisdiction in the event of a dispute. However, if the transaction has international aspects, it makes sense to specify in the contract both the applicable law and the jurisdiction – that is, which law of the country governs the terms of the contract and in which country the courts of a dispute will be definitively decided. The problems that may arise in this regard are highlighted by mann J.A.`s observations in Apple Corps Ltd -v- Apple Computer Inc.2 In this case, a dispute arose out of an agreement that did not contain any applicable law or jurisdiction clause. Justice Mann noted that: There may sometimes be significant differences between the laws of different jurisdictions that could be related in any way to your agreement or the negotiations that lead to its eventual enforcement.
And the main purpose of a choice of law clause is to avoid uncertainty as to which law would settle any dispute that might arise from the relationship that arose through that agreement. But many transaction professionals and their lawyers do not pay enough attention to the language used in a choice of law clause; and such omission may result in undesirable consequences that compromise the certainty to be achieved by choosing a particular jurisdiction in the choice of law clause. Vice Chancellor Slights` recent decision focused on another aspect of the proposed “wise but thorough choice” with respect to choice of law clauses – the issue of ensuring that any claims that might arise from the relationship created or related to the agreement of the parties are subject to the same law. When a dispute arises in connection with a merger and acquisition agreement, it is not uncommon for contract and tort to be invoked in respect of that dispute – that is, In addition to claims that either party has breached the Agreement, there may also be claims for fraudulent or negligent misrepresentation, transformation, breach of the obligation of good faith, unauthorized interference and similar claims based not on the breach of the obligations imposed by the contract itself, but on obligations arising from the customary law of a particular jurisdiction and in all are related to the transactions provided for in the agreement. Rome II offers commercial parties the opportunity to achieve greater economic security by allowing them to contractually agree on a clause on the applicable law that covers both the contractual and non-contractual obligations of the parties. As far as editorial requirements are concerned, Article 14 does not prescribe any specific formalities. It merely provides that the choice of law governed by their non-contractual obligations “shall be expressed or demonstrated with sufficient certainty by the circumstances of the case”. A recent article by Professor John Coyle, published in the Washington Law Review, provides an in-depth review of the approaches of different state and federal courts to interpreting choice of law provisions. [4] The article is a treasure trove of information for practicing lawyers. However, the most important contribution of this article is its conclusion that it is not necessary to understand the different approaches of the courts to the interpretation of the standard choice of law clause if, instead of continuing to rely on a model clause, the authors of the directive have in fact formulated the choice of applicable law clause in such a way that it covers all issues that lead to the different approaches of these courts. And he even proposed a clause that seems to exclude any question of whether the chosen law applies to both procedural and substantive law, as well as to contractual and non-contractual claims.
[5] Parties engaged in interstate and international trade seek certainty about the rules governing their relations by choosing the law. If it were to be assumed that their choice is effective only with regard to the determination of contractual claims and not with regard to tort actions to terminate the contract on the basis of misrepresentation, this would create uncertainty exactly the kind that the parties sought to avoid by the choice of law provision. In this context, it should also be noted that the relationship between contract law and tort law with regard to the avoidance of contracts due to misrepresentation is extremely complex and cumbersome, even in the law of each jurisdiction. Placing the tort law of one State over the contract law of another State reinforces this complexity and makes the outcome of disputes less predictable, the kind of contingency that sound commercial law should not promote. 2. § 1 e) does not prevent the application of other applicable legal provisions to establish the formal validity of the contract. A clause on applicable law and choice of jurisdiction addresses two different issues: (1) choice of law, which aims to settle all disputes arising out of the Contract; and (2) the choice of the place of jurisdiction in which disputes are heard. These issues are often dealt with in a single provision, but can also be dealt with separately. Therefore, after Brexit, the English courts will continue to apply the rules currently contained in the Rome I and Rome II Regulations when deciding to maintain a choice of law or, in the absence of a choice of law clause, to determine the law applicable to contractual and non-contractual obligations. .