Jurisdiction and Arbitration

Agreements in International
Commercial Law

Arbitration and jurisdiction agreements are frequently used in trans-

national commercial contracts to reduce risk, gain efficacy and acquire
certainty and predictability. Because of the similarities between these two
types of procedural autonomy agreements, they are often treated in a
similar way by courts and practitioners.
This book offers a comprehensive study of the prerequisites, effective-
ness and enforcement of exclusive jurisdiction and arbitration agreements
in international dispute resolution. It examines whether jurisdiction and
arbitration clauses have identical effects in private international law and
whether they have been or should be given the same treatment by most
countries in the world. By comparing the treatment of these clauses in the
US, China, the UK and the EU, Zheng Sophia Tang demonstrates how, in
practice, exclusive jurisdiction and arbitration agreements are enforced.
The book considers whether the Hague Convention on Choice of Court
Agreements could be treated as a litigating counterpart to the New York
Convention, and whether it could work successfully to facilitate judicial
cooperation and party autonomy in international commerce.
This book breaks new ground in combining updated materials in EU,
US and UK law with unique resources on Chinese law and practice. It will
be valuable for academics and practitioners working in the field of private
international law and international arbitration.

Dr Zheng Sophia Tang (LLB, LLM, PhD, Barrister, Accredited Mediator)

is an Associate Professor in business law at the Centre for Business Law
and Practice, University of Leeds. Her research interest lies in the field of
private international law, arbitration and commercial corruption. She is
the author of Electronic Consumer Contracts in the Conflict of Laws (Hart,
2009) and she has published extensively in internationally renowned,
peer-reviewed journals.
Routledge Research in International Commercial Law

Available titles in this series include:

International Commercial and Marine Arbitration

Georgios I. Zekos

International Commercial Arbitration and the Arbitrator’s Contract

Emilia Onyema

Jurisdiction and Arbitration Agreements in International Commercial Law

Zheng Sophia Tang
Jurisdiction and Arbitration
Agreements in International
Commercial Law

Zheng Sophia Tang

First published 2014
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2014 Zheng Sophia Tang
The right of Zheng Sophia Tang to be identified as author of this
work has been asserted by her in accordance with sections 77 and 78
of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice : Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Tang, Zheng Sophia, author.
Jurisdiction and arbitration agreements in international
commercial law / Zheng Sophia Tang.
pages cm. – (Routledge research in international commercial law)
Includes bibliographical references and index.
1. Arbitration agreements, Commercial. 2. International
commercial arbitration. 3. Jurisdiction. 4. Commercial law. I. Title.
K2400.T356 2014
343.08'7–dc23
2013033349
ISBN: 978-0-415-62554-8 (hbk)
ISBN: 978-0-203-71278-8 (ebk)
Typeset in Baskerville
by Wearset Ltd, Boldon, Tyne and Wear
Contents

Table of cases vi
Table of statutes and legislative instruments xxxiii
Preface xxxvii

1 Introduction 1

2 Prerequisites: contractual requirements 18

3 Prerequisites: which forum decides? 67

4 Subject matter scope 93

5 Enforceability of dispute resolution agreements 110

6 Supporting party autonomy: lis pendens, forum non

conveniens and anti-suit injunctions 140

7 Autonomy and supporting measures in Europe 178

8 Recognition and enforcement of judgments and

awards 224

9 International convention in jurisdiction and

arbitration agreements: a comparative study 240

Bibliography 257
Index 268
Table of cases

English cases
7E Communications Ltd v Vertex Antennentechnik GmbH CA
TLR [2007] EWCA Civ 150 . . . . . . . . . . . . . . . . . . . . . . . 20, 21, 42, 53, 79
Abbott Laboratories v Qiagen Gaithersburg, Inc. [2010] WL
1539952, 4 (N.D.Ill, 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Ace Insurance SA-NV v Zurich Insurance Co & Anor [2001]
C.L.C. 526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171, 190
Advent Capital Plc v GN Ellinas Imports-Exports Ltd [2006] 1 All
ER (Comm) 81; [2005] 1 CLC 1058 . . . . . . . . . . . . . . . . . . . . . . . . 80, 186
AEL v Socofi SA [2009] EWHC 3223 (Comm). . . . . . . . . . . . . . . . . . . . . . 20
Aeroflot-Russian Airlines v Berezovsky [2012] EWHC
1610 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120, 121
AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk
Hydropower Plant JSC [2011] EWCA Civ 647, [2011] 108(25)
L.S.G. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Africa Express Line v Socofi SA [2010] ILPr 15 . . . . . . . . . . . . . . . . . . . . . 24
Aggeliki Charis Compania Maritima SA v Pagnan SpA, The
Angelic Grace [1995] 1 Lloyd’s Rep 87 . . . . . . . . . . . 3, 61, 156, 157, 197
Ahad v Uddin [2005] EWCA Civ 883 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
AIG Europe SA v QBE International Insurance [2001] All ER(D)
50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 42
Airbus v Patel [1999] 1 AC 119 . . . . . . . . . . . . . . . . . . . . . . 80, 154, 155, 196
Akai Pty Ltd v People’s Insurance Co Ltd [1998] 1 Lloyd’s Rep 90
[1996] 188 CLR 418 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 157, 196, 197
Alberta v Katanga Mining [2009] 1 BCLC 189 . . . . . . . . . . . . . . . . . . . . . 148
Albon v Naza Motor Trading SDN BHD [2007] EWHC
665 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 86–88, 121, 168
Alfred C Toepfer International GmbH v Societe Cargill France
[1998] 1 Lloyd’s Rep 379. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Alfred McAlpine Construction Ltd v RMG Electrical [1998]
A.D.R.L.J. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Allianz SpA v West Tankers [2007] UKHL 4. . . . . . . . . . . . . . . . . . . 207–208
 Table of cases vii
Al-Naimi (t/a Buildmaster Construction Services) v Islamic Press
Agency Inc. [2000] 1 Lloyd’s Rep. 522 . . . . . . . . . . . . . . . . . . . . . . 86, 120
American Design Associates v Donald Insall, [2000] WL 33250594 . . . . . 34
American International Specialty Lines Insurance Co v Abbott
Laboratories [2003] 1 Lloyd’s Rep 267. . . . . . . . . . . . . . . . . . . . . . . . . 196
Amin Rasheed Shipping Corporation v Kuwait Insurance Co.
[1984] A.C. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Anglia Oil v Owners and/or Demise Charterers of the Marine
Champion (The Marine Champion) [2002] EWHC 2407
(Admlty) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Anglo-Newfoundland Development v King [1920] 2 KB 214 . . . . . . . . . . 51
Antec International v Biosafety USA [2006] EWHC 47 (Comm) . . . . . . 150
Antonio Gramsci Shipping v Oleg Stepanovs [2011] EWHC 333
(Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 26
Apple Co v Apple Computer [1992] FSR 431. . . . . . . . . . . . . . . . . . 105, 148
Aratra Potato Co Ltd v Egyptian Navigation Co (‘The El Amria’)
[1981] Lloyd’s Rep 119, CA. . . . . . . . . . 123, 124, 147, 148, 158, 172, 190
Arkwright Mutual Insurance Co. v Bryanstan Insurance Co. Ltd
and Others [1990] 3 W.L.R. 705; [1990] 2 Lloyd’s Rep 70 . . . . . 148, 171
AstraZeneca v Albemarle International [2010] 1 CLC 715 . . . . . . . . 56, 106
Atlanska Plovidba v Consignaciones Asturianas SA (The Lapad)
[2004] 2 CLC 886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Aughton, 31 Con LR 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Axa Re v Ace Global Markets Ltd [2006] EWHC 216. . . . . . . . . . . . . . . . . 20
Azov Shipping v Baltic Shipping (No 3) [1999] CLC 1425 . . . . . . . . . . . . 84
Baghlaf Al Safer Factory Co BR for Industry Ltd v Pakistan
National Shipping Co & Anor [1998] C.L.C. 716 . . . . . . . . . . . . . . . . 126
Baker v Yorkshire Fire and Life Assurance [1892] 1 QB 144. . . . . . . . . . . 51
Baltimore & Ohio R Co v United States 261 US 592 [1923] . . . . . . . . . . . 34
Bank of New York Mellon v GV Films Ltd [2010] 1 Lloyd’s Rep.
365. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi Pazarlama AS
[2004] 2 Lloyd’s Rep 395. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Bankers & Shippers Insurance v Liverpool Marine & General
Insurance [1925] 21 Ll. L. Rep 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Barclays Bank Plc v Homan [1992] B.C.C. 757. . . . . . . . . . . . . . . . . 171, 196
Bas Capital Funding Corporation & Ors v Medfinco Ltd [2003]
EWHC 1798 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Beazley v Horizon Offshore Contractors [2005] I.L.Pr. 11 . . . . . . . 122, 151
Benarty v EG Thomson [1985] QB 325. . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Best Beat v Rossall [2006] EWHC 1494 (Ch) . . . . . . . . . . . . . . . . . . . . . . 120
Black Clawson International Ltd v Papierwerke
Waldhof-Aschaffenberg AG [1981] 2 Lloyd’s Rep. 446 . . . . . . . . . . . . . 87
Black-Clawson v Papierwerke [1975] AC 591 . . . . . . . . . . . . . . . . . . . . . . . 29
Bland v Low [1894] 1 Ch 147. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
viii Table of cases
Bols Distilleries BV(t/a Bols Royal Distilleries) v Superior Yacht
Services Ltd [2007] 1 W.L.R. 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 25
Bouygues Offshore SA v Caspian Shipping Co [1998] 2 Lloyd’s
Rep 461 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Bovis Homes Ltd v Kendrick Construction Ltd [2009] EWHC
1359 (TCC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
BP International v Energy Infrastructure Group [2003] EWHC
2924 (Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Breams Trustees v Upstream Downstream Simulation Services
[2004] EWHC 211 (Ch). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 147
Bremer Vulkan Schiffbau v South India Shipping [1981] AC 909 . . . . . . 42
British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368. . . . . 157
British Airways Board v Laker Airways Ltd [1985] A.C. 58. . . . . . . . 154, 196
Bushby v Munday [1821] 5 Madd. 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
BVI v Ferrell International Ltd [2002] 1 All ER (Comm) 627. . . . . . . . . . 29
C v D [2007] EWHC 1541 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Cable & Wireless v Muscat [2006] EWCA Civ 220, 2005 WL
556663. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Cadre v Astra Asigurari [2006] 1 Lloyd’s Rep 560 . . . . . . . . . . . . . . . . . . 194
Cambridge Gas Transportation v Official Committee of
Unsecured Creditors of Navigator Holdings [2007] 1 AC 508 . . . . . . . 98
CAN Insurance v Office Depot International [2005] EWHC 456
(Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Canada Trust Co v Stolzenberg (No. 2) [1998] ILPr 290 . . . . . . . . . . . . . 25
Capital Trust Investments v Radio Design TJ [2002] 1 All ER
(Comm) 514 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 121
Carron Iron Co. v Maclaren [1855] 5 H.L. Cas. 416 . . . . . . . . . . . . . . . . 154
Carvalho v Hull Blyth [1979] 3 All ER 280 . . . . . . . . . . . . . . . . . . . . . . . . 148
Castanho v Brown & Root (U.K.) Ltd [1981] A.C. 557 . . . . . . . . . . . . . . 154
Catalyst Investment Group Ltd v Lewinsohn [2010] 2 WLR 839. . . . . . . 186
Celltech R&D v Medlmmune [2004] EWHC 1522 (Pat) . . . . . . . . . . . . . 147
Cetelem SA v Roust Holdings Ltd [2005] 2 Lloyd’s Rep 494. . . . . . . . . . . 87
Chadha v Dow Jones [1999] ILPr 829; Askin v Absa Bank [1999]
ILPr 471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Cherney v Deripaska [2010] 2 ALL ER (Comm) 456. . . . . . . . . . . . . 80, 189
China National Foreign Trade Transportation v Evlogia Shipping
(The Mihaios Xilas) [1979] 1 WLR 1018 . . . . . . . . . . . . . . . . . . . . . . . 149
Cigna Life Insurance Co of Europe SA NV v Intercaser SA de
Seguros y Reaseguros [2002] 1 All E.R. (Comm) 235 . . . . . . . . . . . . . 121
Cinnamon European Structured Credit Master Fund v Banco
Commercial Portugues SA [2010] ILPr 11 . . . . . . . . . . . . . . . . . . . . . . . 62
Citi-march Ltd and Another v Neptune Orient Lines Ltd and
Others [1996] 1 W.L.R. 1367. . . . . . . . . . . . . . . . . . 123, 12, 148, 172, 190
Claxton Engineering v TXM Olaj-es Gazkutato Kit [2011]
ILPr 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 86–89, 122, 152, 168
 Table of cases ix
CMA v Hyundai [2008] EWHC (Comm) 2791; [2009] 1 Lloyd’s
Rep 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88, 211
Cohen v Rothfield [1919] 1 KB 410 . . . . . . . . . . . . . . . . . . . . . . . . . 154, 199
Collins (Contractors) Ltd v Baltic Quay Management [1994] Ltd
[2004] EWCA Civ 1757 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Compagnie d’Armement Maritime SA v Compagnie Tunisienne
de Navigation SA [1971] AC 572. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 27
Connelly v RTZ [1998] AC 854 . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 171, 189
Continental Bank NA v Aeakos Compania Naviera SA and Others
[1994] I.L.Pr. 413 . . . . . . . . . . . . . . . . . . . . . 11–12, 80, 157, 180, 187, 197
Co-operative Wholesale v Saunders & Taylor,[1994] 39
Con LR 77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Credit Suisse Financial Products v Société Generale d’Enterprises
[1997] CLC 168 CA . . . . . 41, 42, 53, 76, 79, 148, 158, 160, 181, 194, 196
Czech Republic v European Media Ventures SA [2008] 1 All ER
(Comm) 531 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Dallah Real Estate & Tourism Holding Co v Pakistan [2010]
UKSC 46 [2011] 1 A.C. 763 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34, 86, 88
De Dampierre v De Dampierre [1988] AC 92 . . . . . . . . . . . . . . . . . . . . . 147
Deutsche Bank AG v Asia Pacific Broadband Wireless
Communications [2008] EWCA (Civ) 1091 . . . . . . . . . . . . . . . . . . . . . . 68
Deutsche Bank v Asia Pacific Broadband Wireless [2009] ILPr 36 . . . . . . 70
Deutsche Bank v Highland Crusader Offshore Partners [2010] 1
WLR 1023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 150, 152, 171, 194, 196
Donohue v Armco [2001] UKHL 64 . . . . . . . 4, 80, 122, 148, 151, 157–160,
171, 193, 194, 196,
Dornoch v Mauritius Union Assurance [2006] 2 All ER
(Comm) 385 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 189
DSV Silo- und Verwaltungsgesellschaft mbH v Owners of the
Sennar and 13 Other Ships (The Sennar (No 2)) [1985]
1 WLR 490. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Dubai Electricity v Islamic Republic of Iran Shipping Lines (The
Iran Vojdan) [1984] 2 Lloyd’s Rep 380 . . . . . . . . . . . . . . . . . . . . . . . . . 76
Dubai Islamic Bank PJSC v PSI Energy Holding Co [2011] EWHC
1019 (Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44, 149, 194
E. & J. Gallo Winery v Andina Licores S.A., 446 F.3d 984, 991 (9th
Cir.2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Eagle Star Insurance Co Ltd v Yuval Insurance Co [1978] 1
Lloyd’s Rep. 357 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Eastern Power Ltd v Azienda Comunale Energia e Ambiente
[2001] I.L.Pr. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
EI Du Pont de Nemours v Agnew [1987] 2 Lloyd’s Rep 585 . . . . . . . . . . 147
El Nasharty v J Sainsbury Plc [2004] 1 All E.R. (Comm) 728 . . . . . . . . . 120
Eleftheria [1970] P 94 . . . . . . . . . 2, 122, 123, 124, 127, 148, 150, 157, 159,
171, 172, 190, 197
x Table of cases
Elektrim v Vivendi Holdings [2009] 2 All ER (Comm) 213. . . . . 80, 86, 87,
122, 169
Empresa Exportadora De Azucar (CUBAZUCAR) v Industria
Azucarera Nacional SA (IANSA) [1983] 2 Lloyd’s Rep 171 . . . . . . . . . 61
Equitas v Allstate Insurance [2009] 1 All ER (Comm) 1137 . . . . . . 194, 195
Evans Marshall & Co. Ltd v Bertola S.A. [1973] 1 WLR 349 . . . . . 123, 124,
158, 190
Evialis SA v SIAT [2003] 2 Lloyd’s Rep 377 . . . . . . . . . . . . . . . . . . . . . . . 187
Excalibur Ventures v Texas Keystone [2011] EWHC 1624
(Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84–88, 120, 168,
Extrudakerb (Maltby Engineering) Ltd v Whitemountain
Quarries Ltd [1996] N.I. 567. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Federal Bulker [1989] 1 Lloyd’s Rep 103 . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Fillite (Runcorn) v Aqua-Lift [1989] 26 Con LR 66 . . . . . . . . . . . . . . . . 7, 69
Fiona Trust and Holding v Privalov [2007] UKHL 40 . . . . . . 62, 69, 74, 120
Firswood Lea v Petra Bank [1996] CLC 608 . . . . . . . . . . . . . . . . . . . 133, 135
Fortress Value Recovery Fund v Blue Skye Special Opportunities
Fund [2013] EWCA Civ 367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Fulham Football Club [1987] v Richards [2011] EWCA Civ 855 . . . . . . . 94
General Star International Indemnity v Stirling Cooke Brown
Reinsurance Brokers [2003] ILPr 19 . . . . . . . . . . . . . . . . . . . . . . . 80, 196
Glaxo Group v Genentech [2008] Bus L R 888 . . . . . . . . . . . . . . . . . . . . . 80
Glencore International AG v Metro Trading International (No 1)
and Metro Trading International v Itochu Petroleum (No 1)
[2000] ILPr 358 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86, 133, 135, 196, 197
Glencore International AG v Metro Trading International Inc.
(No. 3) [2002] EWCA Civ 528; [2002] 2 All ER (Comm) 1 . . . . . 86, 196
Gomez v Gomez-Monch Vives [2008] EWHC 259 (Ch). . . . . . . . . . . . . . 193
Goshawk Dedicated Ltd v Life Receivables Ireland Ltd [2008]
I.L.Pr. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Grovit v De Nederlandsche Bank [2008] 1 All ER (Comm) 106. . . . . . . . 80
Grupo Torras SA v Al-Sabah (No 1) [1995] 1 Lloyd’s Rep 374 . . . . . . . . 187
Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v Sometal SAL
[2010] 1 All ER (Comm) 1143; [2010] Bus LR 880; [2010]
EWHC 29 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34, 38, 42
Haji-Ioannou v Frangos [1999] 2 Lloyd’s Rep 337, CA . . . . . . . . . . . . . . 190
Halifax Overseas Freighters Ltd v Rasno Export (The Pine Hill)
[1958] 2 Lloyd’s Rep 146. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Hamed El Chiaty & Co. (T/A Travco Nile Cruise Lines) v The
Thomas Cook Group [1994] ILPr 367 . . . . . . . . . . . . . . . . . . . . . 173, 190
Hamed el Chiaty v Thomas Cook [1994] 1 Lloyd’s Rep 382 . . . . . . . . . . . 80
Harbour Assurance v Kansa General International [1993]
QB 701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 69, 84
Heyman v Darwins [1942] AC 356. . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 42, 69
 Table of cases xi
Hickman v Kent or Romney Marsh Sheepbreeders’ Association
[1915] 1 Ch 881 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Hirji Mulji v Cheong Yue Steamship [1926] AC 497 . . . . . . . . . . . . . . . . . 69
HIT Entertainment v Gaffney International Licensing [2007]
EWHC 1282 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Holmes v Holmes [1989] 3 WLR 302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Horn Linie Gmbh v Panamericana Formas e Impresos SA [2006]
2 All ER (Comm) 924. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Implants International v Stratec Medical[1999] 2 All ER
(Comm) 933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Import Export Metro Ltd v Compania Sud Americana De Vapores
SA [2003] EWHC 11; [2003] 1 All ER (Cmm) 703 . . . . . . . . . . . 148, 173
In re Dynamics Corporation of America [1973] 1 WLR 63 . . . . . . . . . . . 199
Innovia Films Ltd v Frito-Lay North America [2012] EWHC
790 (Pat) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Intermet FZCO v Ansol Ltd [2007] EWHC 226 (Comm) . . . . . 87, 168, 170
Interserve Industrial Services Ltd v ZRE Katowice SA [2012]
EWHC 3205 (TCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
IPCO (Nigeria) Ltd v Nigerian National Petroleum Co [2005] 2
Lloyd’s Rep 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Irish Response Ltd v Direct Beauty Products [2011] EWHC 37
(QB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Irish Shipping v Commercial Union Assurance [1990] 2 WLR 117 . . . . . 80
Israel Discount Bank of New York v Hadjipateras [1984] 1 WLR
137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
J v P [2007] EWHC 704 (Fam). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
J.P. Morgan Securities Asia Private Limited v Malaysian Newsprint
Industries [2002] I.L.Pr 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173, 190
Jacobs & Turner Ltd v Celsius Sarl [2007] SLT 722 . . . . . . . . . . . . . . . . . 186
Jameel v Dow Jones [2005] QB 946 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Jarvis & Sons Ltd v Blue Circle Dartford Estates [2008] Bus LR
D25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Johannesburg Municipal v D Stewart 1909 SC(HL) 53 . . . . . . . . . . . . . . . 69
JP Morgan Europe Ltd v Primacom AG [2005] 1 CLC 493 . . . . . . . . . . . 186
JSC BTA Bank v Mukhtar Ablyazov [2011] EWHC 587 (Comm) . . . . 61, 63
Jureidini v National British and Irish Millers Insurance [1915] AC
499. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Kaufman v Gerson [1904] 1 KB 591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Kazakhstan v Istil Group Inc. [2007] EWHC 2729 (Comm) . . . . . . . . . . . 87
Knorr-Bremse Systems for Commercial Vehicles Ltd v Haldex
Brake Products GmbH [2008] 2 All ER (Comm) 448; [2008]
ILPr 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101, 181
Kolden Holdings Ltd v Rodette Commerce Ltd [2007] 4 All
ER 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 186
Kolmar Group v Visen Industries [2010] ILPr 23. . . . . . . . . . . . . . 25, 37, 38
xii Table of cases
Konkola Copper Mines plc v Coromin [2005] 1 C.L.C. 1021;
[2006] 2 All ER (Comm) 400 . . . . . . . . . . . . . . . . . . . . 124, 148, 192, 194
Koonmen v Bender [2007] WTLR 293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Kuwait Oil Tanker v Qabazard [2004] 1 AC 300 . . . . . . . . . . . . . . . . . . . . 80
Lafarge (Aggregates) v London Borough of Newham [2005]
EWHC 1337 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Law Debenture Trust Corp Plc v Concord Trust [2007] EWHC
2255 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Lennon v Scottish Daily Record & Sunday Mail Ltd [2004] EWHC
359 (QB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Limit v PDV Insurance [2005] 2 All ER (Comm) 347 . . . . . . . . . . . . . . . . 80
Lloyd’s Syndicate 457 v Shifco (Somali High Seas International
Fishing Co) [2009] I.L.Pr. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Lubb v Cape [2000] 1 WLR 1545. . . . . . . . . . . . . . . . . . . . . . . . . 80, 171, 189
Lyman v Greater Boston Radio, Inc., [2010] WL 2557831, 6 (E.D.
Mich. 21 June 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Mabey & Johnson v Danos [2007] EWHC 1095 (Ch) . . . . . . . . . . . . . . . 176
Mackender v Feldia AG [1967] 2 QB 590 . . . . 68, 69, 76, 124, 157, 181, 197
Mahavir Minerals Ltd v Cho Yang Shipping Co Ltd (‘The MC
Pearl’) [1997] C.L.C. 794 . . . . . . . . . . . . . . . . . . . . . . . 123, 125, 126, 158
Marine Contractors v Shell Petroleum Development [1984] 2
Lloyd’s Rep 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Markel International Co Ltd v Craft (The Norseman) [2007]
Lloyd’s Rep. I.R. 403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Masri v Consolidated Contractors International Co [2009] QB 503. . . . . 80
McHenry v Lewis [1882] 22 Ch.D 397. . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Middle Eastern Oil v National Bank of Abu Dhabi [2008] All ER
(D) 285; [2009] 1 Lloyd’s Rep 251 . . . . . . . . . . . . . . . . . . . . 173, 190, 194
Midgulf International Ltd v Groupe Chimiche Tunisien [2010] 1
CLC 113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 89, 90
Morgan Stanley v China Haisheng Juice [2009] EWHC 2409
(Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Morgan v William Harrison [1907] 2 Ch 137 . . . . . . . . . . . . . . . . . . . . . . . 51
Motor Oil Hellas (Corinth) Refiners SA v Shipping Co of India
(The Kanchenjunga) [1990] 1 Lloyd’s Rep 391 . . . . . . . . . . . . . . . . . 149
National Navigation Co v Endesa Generacion SA (The Wadi
Sudr) [2009] 1 Lloyd’s Rep 666 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
National Westminster Bank plc v Utrecht-America Finance Co
[2001] CLC 1372 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171, 173
Navigation Maritime Bulgare v Rustal Trading Ltd (The Ivan
Zagubanski) [2002] 1 Lloyd’s Rep 106 . . . . . . . . . . . . . . . . . . . . . . . . . 197
Noble Assurance Co v Gerling-Konzern General Insurance Co
[2007] 1 CLC 85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 196
Nomihold Securities v Mobile Telesystems Finance SA [2012]
EWHC 130 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
 Table of cases xiii
Nomihold Securities v Mobile Telesystems Finance SA [2011]
EWHC 2143 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Novasen S.A. v Alimenta S.A. [2011] EWHC 49 (Comm) . . . . . . . . . . . . . 68
Novus Aviation v Onur Air Tasimacilik [2009] 1 Lloyd’s Rep 576 . . . . . . 80
Ocarina Marine Ltd v Marcard Stein & Co [1994] 2 Lloyd’s Rep.
524. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Oceanconnect UK Ltd & Anor v Angara Maritime Ltd [2010] 2
CLC 448 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156, 196, 197
Oceanfix International Limited v AGIP Kazakhstan North Caspian
Operating Company [2009] WL 908173 . . . . . . . . . . . . . . . . . . . . . . . 197
Oldendorff v Libera [1996] CLC 482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Omnium de Traitement et de Valorisation SA v Hilmarton Ltd
[1999] 2 Lloyd’s Rep. 222 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Oneon Insurance v Moshe, 17 PD 646 [1963] . . . . . . . . . . . . . . . . . . . . . 148
Orams v Apostolides [2007] 1 WLR 241 . . . . . . . . . . . . . . . . . . . . . . . . . . 186
OT Africa Line v Magic Sportswear [2006] 1 All ER
(Comm) 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 151, 166, 186, 194
Overseas Union Insurance v AA Mutual International Insurance
[1988] 2 Lloyd’s Rep 63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 69, 197
Patel (Jitendra) v Patel (Dilesh) [2000] Q.B. 551. . . . . . . . . . . . . . . . . . . 121
Paul Smith Ltd v H&S International Holding Inc. [1991] 2 Lloyd’s
Rep 127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Peruvian Guano v Bockwoldt [1883] 23 Ch.D 225 . . . . . . . . . . . . . . . . . . 155
Phillips v Symes (A Bankrupt) [2008] 2 All ER 537; [2006] 1 WLR
2598. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Pine Ton Insurance v Unione Italiana Analo Saxon Reinsurance
[1987] 1 Lloyd’s Rep. 476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Pitchers Ltd v Plaza (Queensbury) Ltd [1940] 1 All E.R. 151 . . . . . . . . . 121
Polskie Ratownictwo Okretowe v Rallo Vito [2009] ILPr 55 . . . . . . . . 24, 25
Premium Nafta Products Ltd v Fili Shipping company Limited
[2007] UKHL 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Provimi Ltd v Aventis Animal Nutrition SA [2003] 2 All ER
(Comm) 683 (QBD (Comm)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Rawlinson & Hunter Trustees SA v Kaupthing Bank HF [2011]
EWHC 566 (Comm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
Re Harrods (Buenos Aires) [1991] 4 All ER 335; [1992] Ch 72 . . . . 80, 190
Reichhold Norway ASA v Goldman Sachs International [2000] 1
WLR 173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Rep 378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Rimpacific Navigation Inc. v Daehan Shipbuilding Co Ltd [2010]
2 All ER (Comm) 814. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Roche Products Ltd v Freeman Process Systems Ltd, [1996] 80
B.L.R. 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Roussel-Uclaf v GD Searle Co [1978] 1 Lloyd’s Rep 225 . . . . . . . . . . . . . 137
xiv Table of cases
Royal Bank of Canada v Cooperative Centrale
Raiffeisen-Boerenleenbank BA [2004] 2 All ER (Comm) 847 . . . 80, 155
Royal Bank of Scotland v Hicks [2011] EWHC 287 (Ch) . . . . . . . . . . . . 158
Royal Boskalis Westminster NV v Mountain [1999] QB 674 (CA) . . . . . . 58
Ryanair v Bravofly [2009] ILPr 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Sabah Shipyard (Pakistan) Ltd v Pakistan [2003] 2 Lloyd’s Rep
571; [2004] 1 CLC 149; [2003] 2 Lloyd’s Rep 571. . . . . . . . . 80, 171, 196
Samengo-Turner v J&H Marsh & McLennan (Services) Ltd [2007]
EWCA Civ 723. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80, 151, 164, 166, 196
Sea Bridge Shipping v AC Orssleff’s Eftf’s A/S (The Delos) [1999]
2 Lloyd’s Rep 685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Sea Trade Maritime v Hellenic Mutual War Risks Association
(The Athena) [2006] 2 CLC 710. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Seismic Shipping Inc. & Anor v Total E & P UK plc (The Western
Regent) [2005] 2 C.L.C. 182; [2005] 2 All ER (Comm) 515. . . . . 80, 122
Shashoua v Sharma [2009] EWHC 957 (Comm) . . . . . . . . . . . . . . . . . . . 210
Shell International Petroleum Co Ltd v Coral Oil Co Ltd (No. 2)
[1999] 2 Lloyd’s Rep. 606 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Sinochem International Oil v Mobil Sales [2000] 1 All ER
(Comm) 758 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Six Constructions v Paul Humbert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Skips AS Nordheim v Syrian Petroleum (The Varenna) [1983] 2
Lloyd’s Rep. 592 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 26
Skype v Joltid [2011] I.L.Pr. 8 . . . . . . . . . . 125, 172, 181, 190, 193, 194, 203
Societe Microstof Textiles v Societe Laine Freres [1990] ILPr 364. . . . . . 50
Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987]
AC 871. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 155, 196
Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987]
AC 871. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Society of Lloyd’s v White & Ors [2000] C.L.C. 961. . . . . . . . . . . . . . . . . 122
Society of Lloyd’s v White (No. 2) [2002] I.L.Pr. 11 . . . . . . . . . . . . 151, 194
Sohio Supply Co v Gatoil (USA) Inc. [1989] 1 Lloyd’s Rep. 588 . . . . . . 122
Soleimany v Soleimany [1998] 3 WLR 811 . . . . . . . . . . . . . . . . . . . . . . . . 226
Sotrade Denizcilik Sanayi Ve Ticaret A.S. v Amadou LO, Tiger
Denrees Senegal, Axa Assurance Senegal, Axa France
Assurance S.A. (The ‘Duden’) [2008] EWHC 2762 (Comm). . . . . . . . 26
South Carolina Insurance Co v Assurantie Maatshappij De Zeven
Provincien NV [1987] AC 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Sovarex SA v Romero Alvarez SA [2011] EWHC 1661 (Comm) . . . . . . . 154
Speed Investments Ltd v Formula One Holdings Ltd (No. 2)
[2005] 1 WLR 1936 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Spiliada Maritime v Cansulex [1987] AC 460 . . . . . . . . . . . . . . . 80, 171, 189
Standard Bank Plc v Agrinvest International [2008] 1 Lloyd’s
Rep 532 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Star Reefers Pool Inc. v JFC Group Co Ltd [2012] 1 C.L.C. 294 . . . . . . . 122
 Table of cases xv
Stellarr Shipping v Hudson Shipping Lines [2010] EWHC 2985
(Comm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Svenska Petroleum v Lithuania [2006] EWCA Civ 1529 . . . . . . . . . . . . . . 38
Taunton-Collins v Cromie [1964] 1 WLR 633 . . . . . . . . . . . . . . . . . . . . . 158
Telenor Mobile Communications v Storm 584 F.3d 396 (C.A.2
(NY) 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
The Adolf Warski [1976] 2 Ll Rep 241 (CA) . . . . . . . . . . . . . . . . . . . . . . 125
The Annefield [1971] P. 168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The Athena (No 2) [2007] 1 Lloyd’s Rep 280 . . . . . . . . . . . . . . . . . . . 38, 42
The Athenee, 11 Ll.L.Rep. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
The Emmanuel Colocotronis (No 2) [1982] 1 Lloyds Rep 286 . . . . . . . . 26
The Fehmarn [1958] 1 WLR 159. . . . . . . . . . . . . . . . . . . . . . 2, 123, 172, 190
The Hari Bhum (No 2) [2005] 1 CLC 376 . . . . . . . . . . . . . . . . . . . . . . . . 134
The Vishva Apurva [1992] 2 SLR 175 (CA) . . . . . . . . . . . . . . . . . . . . . . . 148
The Wadi Sudr [2010] 1 Lloyd’s Rep 193 . . . . . . . . . . . . . . . . . . . . . 213, 236
Through Transport Mutual Insurance Association (Eurasia) Ltd v
New India Assurance Co Ltd (The Hari Bhum) (No. 2) [2005]
2 Lloyd’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000
Trademark Licensing Co Ltd v Leofelis SA [2010] I.L.Pr. 16 . . . . . . . . . 186
Travelers Casualty & Surety Co of Canada v Sun Life Assurance
Co of Canada (UK) Ltd [2007] Lloyd’s Rep. I.R. 619 . . . . . . . . . . . . . 171
Trendtex Trading v Credit Suisse [1980] QB 628 . . . . . . . . . . . . . . . . . . . 76
TW Thomas v Portsea Steamship [1912] AC 1 . . . . . . . . . . . . . . . . . . . 20, 42
Tyburn Productions Ltd v Conan Doyle [1991] Ch 75 . . . . . . . . . . . . . . 105
UBS AG & Anor v HSH Nordbank AG [2009] 1 C.L.C. 934 . . . . . . . . . . 171
Ultisol Transport Contractors Ltd v Bouygues Offshore SA & Ors
[1998] CLC 1526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173, 190
Underwriting Members of Lloyd’s Syndicate v Sinco SA [2008]
2 CLC 187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Union of India v EB Aaby’s Rederi A/S [1975] AC 797. . . . . . . . . . . . . . . 69
Union of India v McDonnell Douglas [1993] 2 Lloyd’s Rep 48 . . . . . . . . 29
Unterweser Reederei GmbH v Zapata Off-Shore Co (The
Chaparral) [1968] 2 Lloyd’s Rep 158 . . . . . . . . . . . . . . . . . . . . . . 157, 197
UR Power v Kuok Ails [2009] 1 Lloyd’s Rep 495 . . . . . . . . . . . . . . . . . . . . 68
Vao Exportkhleb v Navigation Maritime Bulgare (No 2) [1994] 2
Lloyd’s Rep 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Vee Networks v Econet Wireless [2005] 1 All ER (Comm) 303. . . . . . . . . 69
Walter Baine Grieve v Marion Jack Tasker [1906] AC 132 . . . . . . . . . . . 199
Weissfisch v Julius [2006] 1 Lloyd’s Rep 716. . . . . . . . . . . . . . 86, 87, 89, 168
Welex AG v Rosa Maritime Ltd [2003] 2 Lloyd’s Rep 509. . . . . . 3, 4, 23, 80
West Tankers 2012 [2012] EWCA Civ 27 . . . . . . . . . . . . . . . . . . . . . 212–213
Westacre v Jugoimport-SDPR Holding [1998] CLC 409 . . . . 56, 97, 98, 226
Winnetka Trading Corp v Julius Baer International Ltd [2009]
2 All ER (Comm) 735; [2009] Bus LR 1006 . . . . . . . . . . . . . . . . . 193, 194
xvi Table of cases
XL Insurance v Owens Corning [2000] 2 Lloyd’s Rep 500; [2001]
CLC 914 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Zambia Steel & Building Supplies v James Clark & Eaton [1986] 2
Lloyd’s Rep 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

EU cases
C-190/89, Marc Rich v Societa Italiano Impianti [1991] ECR
I-3855. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205–211, 228
C-214/89, Powell Duffryn v Petereit [1992] ECR 1992 I-1745. . . . . . 54, 200
Case 201/82, Gerling v Amministrazione del Tesoro dello Stato
[1983] ECR 2503 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132, 134
Case 221/84 Berghoefer GmbH & Co KG v ASA SA [1985] E.C.R.
2699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37, 38, 55, 79
Case 23/78 Meeth v Glacetal Sarl [1978] ECR 2133 . . . . . . . . . . . . . . . . . 10
Case 24/76 Estasis Salotti di Colzani Aimo eGianmario Colzani v
RUWA Polstereimaschinen GmbH [1976] ECR 1831 . . . . 21, 23, 24, 41,
50–53, 79
Case 25/76 Galeries Segoura Sprl v Firma Rahim Bonakdarian
[1976] ECR 1851 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 23, 37, 50, 56, 79
Case 351/89 Overseas Union Insurance v New Hampshire
Insurance [1991] ECR I-3317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Case 71/83 ‘Tilly Russ’ v Nova NV [1984] ECR 2417. . . . . . . . . 23, 37, 132,
133, 135
Case 9/77 Bavaria Fluggesellschaft Schwabe & Co. KG and
Germanair Bedarfsluftfahrt GmbH & Co. KG v Eurocontrol
[1977] ECR 1517 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Case C-106/95 Mainschiffahrts-Genossenschaft eG (MSG) v Les
Gravieres Rhenanes Sarl [1997] ECR I-911 . . . . . . . . . . . . . . . . . . . 23, 39
Case C-115/88 Reichert and others v Dresdner Bank [1990]
ECR I-27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Case C-116/02 Gasser v MISAT [2003] ECR 14693 . . . 78, 81, 82, 145, 178,
180–188, 201, 215, 216, 236
Case C-126/97 Eco Swiss China Time Ltd v Benetton
International NV [1999] ECR I-3055 . . . . . . . . . . . . . . . . . . . . . . 100, 210
Case C150/77 Societe Bertrand v Paul Ott KG [1978] ECR 1431. . . . . . 200
Case C-159/02, Turner v Grovit [2004] ECR I-3565. . . . . . . . . . . . . . . . . 126
Case C-159/97 Transporti Castelletti Spedizione Internatzionali
SpA v Hugo Trumpy SpA [1999] ECR I-1597. . . . . . . . . . 23, 24, 179, 185
Case C-18/02 Danmarks Rederiforening v LO
Landsorganisationeni Sverige [2004] ECR I-1417 . . . . . . . . . . . . . . . . 181
Case C-185/07, Allianz SpA v West Tankers [2009]
ECR I-663 . . . . . . . . . . . . . . . . . . . . . . . . 154, 178, 197, 201, 204, 207, 210
Case C-256/00 Besix [2002] ECR I-1699. . . . . . . . . . . . . . . . . . . . . . . . . . 191
 Table of cases xvii
Case C-26/91 Jakob Handte & Co GmbH v Traitements
Mecano-Chimiques des Surfaces SA (TMCS) [1992] ECR
I-3967. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Case C-269/95, Benincasa v Dentalkit [1997] ECR I-3767. . . . . . 70, 71, 74,
181, 200
Case C-281/02, Owusu v Jackson [2005] ECR I-1383. . . . . . . . 178, 189–196
Case C-314/96 Djabali [1998] ECR I-1149 . . . . . . . . . . . . . . . . . . . . . . . . 191
Case C-318/00 Bacardi-Martini and Cellier des Dauphins [2003]
ECR I-905 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Case C-381/98 Ingmar GB Ltd v Eaton Leonard Technologies
Inc. [2000] ECR I-9305 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Case C-387/98 Coreck Maritime GmbH v Handelsveem BV
[2000] E.C.R. I-9337. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 132, 179
Case C-391/95, Van Uden Maritime BV v Deco-Line [1998] ECR
I-7091. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205–209
Case C-405/92 Owners of Cargo v Owners of the Maciej Ratij
(The Tarty) [1994] ECR I-5439. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Case C-412/98, Group Josi Reinsurance v Universal General
Insurance [2000] ECR I-5925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Case C-440/97 GIE Groupe Concorde and Others [1999] ECR
I-6307. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191, 200
Case C-543/10, Refcomp SpA v Axa Corporate Solutions
Assurance SA, unreported 7 February [2013] . . . . . . . . . . . . . . . . . . . 132
Case C-7/98, Krombach v Bamberski [2000] ECR I-1935 . . . . . . . . . . . . 236
Joined Cases C-480/00 to C-482/00, C-484/00, C-489/00 to
C-491/00 and C-497/00 to C-499/00 Azienda Agricola Ettore
Ribaldi and Others [2004] ECR I-0000. . . . . . . . . . . . . . . . . . . . . . . . . 191

US cases
A.P. Moller-Maersk A/S v Ocean Express Miami, 590 F. Supp. 2d
526 (S.D.N.Y., [2008]) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
AAR International v Nimeias Enterprises S.A., 250 F.3d 510,
524–525 (7th Cir.), cert. denied 534 US 995 [2001] . . . . . . . . . . . . . . 171
Abbott Laboratories v Takeda Pharmaceutical 476 F.3d 421
(C.A.7 (Ill) [2007]) . . . . . . . . . . . . . . . . . . . . . . . . . . . 72, 76, 80, 164, 196
Afram Carriers v Moeykens 145 F.3d 298 (5th Cir. [1998]) . . . . . . . . . . . 26
Afram Carriers v Moeykens 145 F.3d 298(C.A.5 (Tex) [1998]) . . . . . . . . 56
Aguas Lenders Recovery Group v Suez, S.A., 585 F.3d 696
(2nd Cir. (N.Y.) [2009]) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126, 149
Albemarle Corp. v AstraZeneca UK Ltd [2009] WL 902348,
6 (DSC 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Albert M. Higley v N/S Co [2004] WL 5550700 (N.D. Ohio, 2004) . . . . . 57
Alexander v Anthony Int’l., L.P., 341 F.3d 256, 265 (3d Cir.2003) . . . . . . 59
xviii Table of cases
Allen v Tenet Healthcare Corp., 370 F. Supp. 2d 682 (M.D. Tenn.
2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Almacenes Fernandez v Golodetz, 148 F.2d 625. . . . . . . . . . . . . . . . . . . . . 71
Amaprop v Indiabulls Financial Services, WL 1050988, 5 (S.D.N.Y.
2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
America Online v Superior Court of Alamed County, 108 Cal.
Rptr.2d 699 (Cal. App. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
American Safety Equipment v J.P. Maguire & Co., 391 F.2d 821
(2d Cir. 1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
American v El Paso Pipe and Supply, 978 F.2d 1185 (10th Cir.
1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Ameropa AG v Havi Ocean Co. LLC [2011] WL 570130 (S.D.N.Y.
16 February 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Andre et Cie SA v Marine Transocean Ltd (The Splendid Sun)
[1980] 1 Lloyd’s Rep 333. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Anna Maria [1980] 1 Lloyd’s Rep 192. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Applied Medical Distribution Corp. v Surgical Co. BV 587 F.3d
909 (C.A.9 (Cal) 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Arciniaga v General Motors Corp., 460 F.3d 231, 234 (2d Cir.
2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Arnold v Goldstar Financial Systems [2002] WL 1941546 (N.D.Ill
2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Asoma v SK Shipping 467 F.3d 817 (C.A.2 (N.Y.), 2006). . . . . . . . . . . . . 132
Preferred Capital v Associations of Urology, 453 F.3d 718 (6th Cir.
2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56, 57
Asvesta v Petroutsas, 580 F.3d 1000 (9th Cir.2009) . . . . . . . . . . . . . . . . . 162
AT&T Mobility v Vincent Concepcion et ux. 131 S. Ct. 1740
[2011] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Attachmate Co v Public Health Trust 686 F. Supp. 2d 1140 (W.D.
Wash., 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,
Avedon Engineering v Seatex 112 F. Supp. 2d 1090 (D.Colo,
2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 38
Bachchan v India Abroad Publications, 585 N.Y.S.2d 661 (Sup. Ct.
1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Banco Ambrosiano v Artoc Bank and Trust, 62 N.Y.2d 65 [1984] . . . . . 130
Banco de Seguros del Estado v Mutual Marine Office, Inc., 344
F.3d 255 (2d Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Bank Melli Iran v Pahlavi, 58 F.3d 1406 (9th Cir. 1995) . . . . . . . . . . . . . 233
Baumgart v Fairchild Aircraft [1993] 981 F.2d 824 (US 5th Circuit
of Appeals) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Bechtel v Industrial Indem [1978] 86 Cal.App. 3d 45 . . . . . . . . . . . . . . . 171
Bergquist v Sunroc Co 444 F. Supp 1236 (E.D.Pa 1991) . . . . . . . . . . . 35, 41
Binder vMedicine Shoppe [2010] WL 2854308 (E.D.Mich. 2010) . . . . . . 57
Blackpool and Fylde Aero Club v Blackpool Borough Council
[1990] 1 WLR 1195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
 Table of cases xix
Blanco v Banco Indus. de Venezuela, S.A., 997 F.2d 974 (2nd Cir.
(N.Y.) 30 April 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Bolter v Superior Court, 87 Cal.App. 4th 900, 908 [2001]. . . . . . . . . . . . . 59
Braspetro Oil v Modec (USA) 240 Fed.Appx 612 (C.A.5 (Tex)
2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Bremen v Zapata off-Shore Company 407 US 1 [1972] . . . . . . 3, 14, 21, 59,
129–131, 149, 154, 174
Bridgeway v Citibank, 201 F. 3d 134 (2d Cir. 2000) . . . . . . . . . . . . . . . . . 233
British Midland Airways Ltd (BMA) v Int’l Travel, Inc., 497 F.2d
869 (9th Cir. 1974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
Buckeye Check Cashing v Cardegna, 824 So.2d 228 (Fla.Dist.
Ct.App. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Buffet Crampon S.A.S. v Schreiber & Keilwerth [2009] WL
3675807, 2009 US Dist. (N.D.Ind. 2 November 2009). . . . . . . . . . . . . 137
Bumpus v Ward, Ohio App. 5 Dist. [2012] (Oct 09, 2012) . . . . . . . . . . . 130
Cable & Wireless, para 58; The Aramis [1989] 1 Lloyds Rep 213 . . . . . . . 35
Carnival Cruise Lines, Inc. v Shute, 499 US 585 [1991]. . . . . . 59, 107, 129,
130, 149
Certain Underwriters at Lloyd’s v Bristol-Myers Squibb Co. 51 F.
Supp. 2d 756 (E.D.Tex 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Changzhou AMEC Eastern Tools and Equipments v Eastern Tools
& Equipment Not Reported in F. Supp. 2d, (C.D.Cal., 2012) . . . . . . 227
Chastain v Robinson-Humphrey 957 F.2d 851 (C.A.11 (Ga), 1992) . . . . . 51
Cheney v IPD Analytics, 583 F. Supp. 2d 108, 122 (D.D.C., 2008) . . . . . . 63
China Minmetals Materials Import and Export v Chi Mei, 334
F.3d 274, 288, 9C.A.3 (N.J) 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . 84, 85
China Trade v MV Choong Yong, 837 F.2d 33, 35 (2d Cir. 1987). . . . . . 160
Chloe Z Fishing Co. v Odyssey Re (London) Ltd, 109 F. Supp. 2d
1236 (S.D. Cal. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 228
Coastal Steel Corp. v Tilghman Wheelabrator Ltd, 709 F.2d 190
(3d Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Conagra v William E Martin [1994] WL 270304 (N.D Ill 1994) . . . . . . . . 39
Cooper v Meridian Yachts, Ltd, 575 F.3d 1151 (11th Cir. 2009) . . . . . . . 137
Cooper v MRM Investment, 367 F.3d 493(C.A.6 (Tenn) 2004) . . . . . . . . 56
Corporacion Salvadorena de Calzado v Injection Footwear Corp.,
533 F. Supp. 290 (S.D. Fla. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Cottonwood Financial, Ltd v Estes, 339 Wis.2d 472; 810 N.W.2d
852 (Wis.Ct.App. 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Curran v Radiaguard Intern [2009] WWL 276793 (D. Puerto Rico,
2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Damigos v Flanders Companiea Naviera, 716 F. Supp. 104, 107
(S.D.N.Y. 1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Davis Intern., LLC v New Start Group Corp. 367 Fed.Appx. 334
(C.A.3 (Del.), 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
xx Table of cases
De La Mata v Am. Life. Ins. Co., 771 F. Supp. 1375, 1377–1390
(D. Del. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Dean Witter Reynold v Byrd, 470 US 213 [1985] . . . . . . . . . . . . . . . . . . . . 83
Delta Reclamation Limited v Premier Waste Management Limited
[2008] EWHC 2579 (QBD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Denicola v Cunard Line, 642 F.2d 5 (1st Cir. 1981). . . . . . . . . . . . . . . . . . 19
DiMercurio v Sphere Drake Ins. PLC, 202 F.3d 71 (1st Cir. 2000) . . . . . 228
Direction Der Disconto-Gesellschaft v United States Steel Corp.,
300 F. 741, 747 (D.N.Y. 1924) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
Diskin v JP Stevens, 836 F.2d 47 (1st Cir. (Mass) 1987) . . . . . . . . . . . . . . . 39
Dixie Aluminum v Mitsubishi International 785 F. Supp. 157
(N.D.Ga 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 41
Doctor’s Associations v Casarotto 517 US 681 [1996] . . . . . . . . . . . . . . . . 56
Doe1 v AOL LLC [2009] WL 103657 (9th Cir. Jan. 16, 2009). . . . . . 58, 130
Dorton v Collins 453 F.2d 1161 (6th Cir. 1972) . . . . . . . . . . . . . . . . . . 35, 41
Downing v Al Tameer [2002] CLC 1291 . . . . . . . . . . . . . . . . . 43, 44, 45, 120
eBay v Digital Point Solutions [2009] WL 2523733 (N.D. Cal
2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Effron v Sun Line, 67 F.3d 7 (C.A.2 (N.Y.), 1995) . . . . . . . . . . . . . . . . 19, 60
Erie Railroad v Tompkins, 304 US 64 [1938] . . . . . . . . . . . . . . . . . . . . . . 232
Evolution Online System v Koninklijke PTT Nederland, 145 F.3d
505 (2d Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 126, 149
Excomm v Ahmed [1985] 1 Lloyd’s Rep 403 . . . . . . . . . . . . . . . . . . . . . . . 42
Fazio v Lehman Brothers 340 F.3d 386 (6th Cir. (Ohio) 2003) . . . . . . . . 57
Fertilizer Co of India v IDI Management, Inc., 517 Supp. 948, 955
(S.D. Ohio, 1981), reh’g denied, 530 F. Supp 542 (S.D. Ohio
1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
First Federal Financial Service, Inc. v Derrington’s Chevron, Inc.,
230 Wis.2d 553, 602 N.W.2d 144 (Wis.Ct.App. 1999) . . . . . . . . . . . . . . 59
First Nat Bank v Pepper, 454 F.2d 626 (2nd Cir. (NY) 1972).) . . . . . . . . . 72
Freddie Records, Inc. v Ayala, Not Reported in S.W.3d [2009] WL
3135790 (Tex.App.-Corpus Christi, 2009) . . . . . . . . . . . . . . . . . . . . . . 199
Frietsch v Refco, Inc., 56 F.3d 825, (7th Cir.Ill. 1995) . . . . . . . . . . . . . . . 137
Gallo v Andina, 446 F.3d 984 . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 161–164
Gau Shan Co., Ltd v Bankers Trust Co 956 F.2d 1349 (C.A.6
(Tenn) 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Gen Elec Co v G Siempelkamp GmbH 29 F.3d 1095 (6th Cir.
1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
General Electric Co. v Siempelkamp GmbH & Co., 809 F. Supp.
1306 (S.D. Ohio 1993), aff’d, 29 F.3d 1095 (6th Cir. 1994) . . . . . . . . 137
Genesis of Kentucky, Inc. v Creation Ministries Intern. 556 F.3d
459, 471 (C.A.6 (Ky) 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Grant v Phila. Eagles, LLC, No 09–1222 [2009] WL 1845231
(E.D.Pa. June 24, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
 Table of cases xxi
Great Earth Companies v Simons 288 F.3d 878 (C.A.6 (Mich)
2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Great Earth v Simons, 288 F.3d 878 (6th Cir. 2002). . . . . . . . . . . . . . . . . . 57
Green Tree Financial Corp.-Alabama v Randolph, 531 US 79
[2000] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Greenview Hospital v Wooten [2010] WL 2835742, 5 (W.D. Ky.
2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Gulf Shipping Lines Ltd v Jadranska Slobodna Plovidba (The
Matija Gubec) [1981] 1 Lloyd’s Rep 31 . . . . . . . . . . . . . . . . . . . . . . . . . 43
Gullion v JLG Serviceplus, Inc., Civil Action No H-06–1015 [2007]
WL 294174 (S.D.Tex. Jan. 29, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Hamilton v Hoe Insurance 137 US 370 [1890] . . . . . . . . . . . . . . . . . . . . . 71
Harris v Green Tree Financial 183 F.3d 173 (C.A.3 (Pa), 1999) . . . . . . . . 55
Haynsworth v Corporation, 121 F.3d 956, 964 (C.A.5 (Tex) 1997) . . . . . 71
Hays and Co. v Merrill Lynch, Pierce, Fenner and Smith, Inc, 885
F.2d 1149 (3rd Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Helen Whiting v Trojan Textile 307 NY360 [1954] . . . . . . . . . . . . . . . . . . 36
Hellenic Linces v Louis Dreyfus, 372 F.2d 753 (2nd Cir. (NY)
1967)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Hilton v Guyot 159 US 113 [1895] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Hodes v SNC 858 F.2d 905 (3d Cir. 1988) 19
Holland Am. Line, Inc. v Wartsila N. Am., Inc., 485 F.3d 450, 456
(9th Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Hollander v K-Lines Hellenic Cruises, 670 F. Supp. 563, 566
(S.D.N.Y. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Hubei Gezhouba Sanlian Industrial & Hubei Pinghu Cruise v
Robinson Helicopter Co, Inc., 06–01798 (C.D. 2009). . . . . . . . . . . . . 234
Huffington v T.C. Group, 637 F.3d 18, (1st Cir. (Mass.) 25
February 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Ibeto Petrochemical Industries, Ltd v M/T ‘Beffen’ [2010] WL
1050988 (S.D.N.Y. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
In re Marriage of Ricard and Sahut, 975 N.E.2d 1220 (Ill.App. 1
Dist., 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
In re Neutral Posture, 135 S.W.3d 725 (Tex.App-Houston [1 Dist]
2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
In re Olympus Healthcare Group 352 BR 603 (Bkrtcy.D.Del,
2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
In re Pahlberg Petition, 131 F.2d 968 (2 Cir. 1942) . . . . . . . . . . . . . . . . . . 71
Inland Bulk Transfer v Cummins Engine 332 F.3d 1007 (6th Cir.
(Ohio) 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Insteel Wire v Dywidag WL 2253198 (M.D.N.C. 2009). . . . . . . . . . . . . . . . 37
Int’l Equity Invs., Inc. v Opportunity Equity Partners Ltd, 441 F.
Supp. 2d 552 (S.D.N.Y. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Intecall Telecommunication v Instant Impact, 376 F. Supp. 2d
155, 160 (D. Puerto Rico, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
xxii Table of cases
Interocean v National Shipping and Trading, 462 F.2d 673, 676
(2d Cir. 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Investors Guaranty Fund, Ltd v Compass Bank, 779 So.2d 185 (Ala
Sup Crt 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
J&C Dyeing v Drakon [1994] WL 584669 (S.D.N.Y. 1994) . . . . . . . . . . . . 39
Jacobson v Mailboxes, 419 Mass. 572 [1995] . . . . . . . . . . . . . . . . . . . . . . . 64
John G. and Marie Stella Kenedy Memorial Foundation v
Fernandez, 315 S.W.3d 512 (Tex., 2010) . . . . . . . . . . . . . . . . . . . . . . . 199
Johnson v Long John Silver’s Restaurants Inc., 320 F. Supp. 2d
656 (M.D. Tenn, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Jones Apparel v Petit, 75 A.D.2d 504 (NYAD 1980) . . . . . . . . . . . . . . . . . . 39
Jones v Weibrecht, 901 F.2d 17 (2nd Cir. (N.Y.) 11 April 1990) . . . . . . . 149
Just In-Material Designs v ITAD, 94 A.D.2d 103 (NYAD 1983) . . . . . . . . . 39
K2M3, LLC v Cocoon Data Holding Pty. Ltd, Not Reported in
S.W.3d, 2012 WL 2469705 (Tex.App.-Corpus Christi, 2012) . . . . . . . 130
Kamaya v American Property Consultants, 959 P.2d 1140 (Wash.
App. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Karaha Bodas Co., LLC v Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 364 F.3d 274 (5th Cir. 2004) . . . . . . . . . . . . . . . . . 227
KKM v Gloria Jean’s Gourmet Coffees Franchising 184 F.3d 42
(C.A.1 (R.I.) 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Krendel vKerznerIntern Hotels, 579 F.3d 1279 (C.A.11 (Fla)
2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Kubis & Perszyk Assocsiation v Sun Microsystems, 680 A.2d 618
(N.J. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
La Societe Nationale v Shaheen Natural Resources Co., 585 F.
Supp. 57 (S.D.N.Y. 1983), aff’d, 733 F.2d 260 (2d Cir.), cert.
denied, 469 US 883 [1984] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
LAIF X SPARL v Axtel, 390 F.3d 194 (2d Cir. 2004) . . . . . . . . . . . . . . . . 168
Lambert v Kysar, 983 F.2d 1110 (1st Cir. 1993) . . . . . . . . . . . . . . . . . . . . . 63
Laminoirs-Trefileries-Cableries de Lens v Southwire Co., 484 F.
Supp. 1063 (N.D. Ga. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Laufer v Westminster Brokers, Ltd, 532 A.2d 130 (D.C. App.
1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Leasefirst v Hartford Rexall Drugs, Inc., 168 Wis.2d 83,
483N.W.2d 585 (Wis.Ct.App. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Lee v New Seaescape 1998 WL 730873 (ND Cal. 1998) . . . . . . . . . . . . . . 149
Lexair v Edgar [1993] 65 BLR 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Lichter v US, 68 S.Ct 1294, 1302 (US. Cal. 1948). . . . . . . . . . . . . . . . . . . . 72
Lipcon v Underwriters at Lloyd’s, 148 F.3d 1285, 1299 (11th Cir.
1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Lloyd v Wright [1983] QB 1065. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Lu v Dryclean-USA of California, 11 Cal.App. 4th 1490 (Cal.App.
1 Dist. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132, 134, 136
 Table of cases xxiii
M & C Corp. v Erwin Behr GmbH & Co., KG, 87 F.3d 844 (6th
Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Manetti-Farrow, Inc. v Gucci America, Inc., 858 F.2d 509 (9th Cir.
1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Marano Enters. v Z–Teca Rests., L.P., 254 F.3d 753 (8th Cir.
2001)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
March USA v Hamby, 28 Misc.3d 1214 (Sup. Ct., N.Y. County
2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000
Marinechance Shipping, Ltd v Sebastian, 143 F.3d 216 (5th Cir.
1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Marlene v Carnac, 45 N.Y.2d 327 (NY 1978). . . . . . . . . . . . . . . . . . . . . . . . 35
Matter of Weinroff, 32 N.Y.2d 190. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
May v US HIFU, LLC., 98 A.D.3d 1004, 951 N.Y.S.2d 163
(N.Y.A.D. 2 Dept., 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
MBNA American Bank v Hill, 436 F.3d 104 (2d Cir. 2006) . . . . . . . . . . . . 99
McCullough v Shearson Lehman Brothers 1988 WL 23008
(W.D.Pa, 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Medtronic, Inc. v Endologix, Inc., 530 F. Supp. 2d 1054 (D. Minn.
2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Merrill Lynch v DeCaro, 577 F. Supp. 616 (W.D.Mo 1983) . . . . . . . . . . . . 88
Ministry of Def. and Support for the Armed Forces of the Islamic
Republic of Iran v Cubic Def. Sys., 665 F.3d 1091 (9th Cir.
2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Mitsubishi v Soler Chrysler-Plymouth, 473 US 614. . . . . 4, 7, 35, 41, 56, 59,
76, 99, 128, 162, 187
Mitsui & Co (USA) v Mira, 111 F.3d 33 (C.A.5(La) 1997). . . . . . . . . . . . . 71
Modern Buildings (Wales) v Limmeer & Trinidad [1975] 1 WLR
1281. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Morgan Trailer Mfg. Co. v Hydraroll, Ltd, 759 A.2d 926 [2000]. . . . . . . . 64
Moses H. Cone Mem’l Hospital v Mercury Construction., 460 US
1 [1983]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
Moses H. Cone Mem’l Hospital v Mercury Construction., 460 US
1 [1983]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Muschany v US, 65 S.Ct 442 [1945]) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Mut. Reserve Fund Life Ins. v Cleveland Woolen Mills, 82 F. 508
(6th Cir. 1897) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
N&D Fashions v DHJ Injus 548 F.2d 722, 726 (8th Cir. 1976). . . . . 35, 36, 41
Nagrampa v Mailcoups, 469 F.3d 1257 (C.A.9 (Cal) 2006) . . . . . . . . . 56, 57
Nagrampa v MailCoups, Inc. 469 F.3d 1257 (C.A.9 (Cal) 2006) . . . . . . . . 59
National Union Fire v Source One Staffing, 36 Misc.3d 1224(A)
(N.Y.Supp., 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
New Moon Shipping Co., Ltd v MAN B & W Diesel AG, 121 F.3d
24, (2nd Cir.(N.Y.) 18 June 1997). . . . . . . . . . . . . . . . . . . . . . . . . . 16, 149
Nobel Drilling; WM Schloser v School Bd of Fairfax County 980
F.2d 253 (C.A.4 (Va) 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37, 38
xxiv Table of cases
Nowland v Hill-Rom, 2008 WL 1909217 (D Or 2008) . . . . . . . . . . . . . . . 107
Orkal Industries v Array Connector, 2011 WL 2138486 (NY Sup
2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (The
Hannah Blumenthal) [1983] 1 AC 854 . . . . . . . . . . . . . . . . . . . . . . . . . 43
Paczy v Haendler & Natermann GmbH (No. 2) [1981] 1 Lloyd’s
Rep 302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Paramedics Electromedicina Comercial v GE Medical System
Information, 369 F.3d 645, 652 (C.A.2(NY) 2004) . . . . . . . . . . . 156, 160
Parsons & Whittemore Overseas Co. v Societe General de
L’industrie du Papier, 508 F.2d 969 (2d Cir. 1974). . . . . . . . . . . . . . . 227
Pelleport Investors v Budco Quality Theatres, 741 F.2d 273 (9th
Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Perry v Thomas 482 US 483 [1987] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Peterson v Beale 1995 WL 479425 (S.D.N.Y. 1995) . . . . . . . . . . . . . . . . . . 39
Petition of Prouvost Lefebvre 102 F. Supp 757 [1952]; Kulukundis
Shipping v Amtorg Trading 126 F.2d 987 (2 Cir. 1942) . . . . . . . . . . . . 71
Phillips v Audio Active Ltd, 494 F.3d 378 (2nd Cir. (N.Y.) 2007) . . . . 63, 149
Piper Aircraft v Reyno [1981] 454 US 235 . . . . . . . . . . . . . . . . . . . . 171, 174
Pollux Marine Agencies v Louis Dreyfus 455 F. Supp. 211
(S.D.N.Y. 1978). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Prima Paint v Flood & Conklin Mfg, 388 US 395 (US NY 1967) . . . . . . 7, 72
Quaak, 361 F.3d 11 (1st Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . 148, 156, 163
Rafael Rodriguez Barril, Inc. v Conbraco Industries, Inc., 619 F.3d
90 (1st Cir. (Puerto Rico) 8 September 2010) . . . . . . . . . . . . . . . . . . . 149
Re Kinoshita & Co., 287 F.2d 951 (2d Cir. 1961) . . . . . . . . . . . . . . . . . . . . . 7
Re Unterweser Reederei Gmbh, 428 F.2d 888, 896 (5th Cir. 1970),
aff’d, 446 F.2d 907 [1971] . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 161, 162
Red Bull Associates v Best Western Intern., Inc., 862 F.2d 963,
(2nd Cir. (N.Y.) 29 November 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Revlon v United Overseas 1994 WL 9657 (S.D.N.Y. 1994). . . . . . . . . . . . . 37
Reynolds-Naughton v Norwegian Cruise Line 386 F3d 1 (Cal
(Mass) 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Richards v Lloyd’s of London 135 F.3d 1289 (9th Cir. 1998) . . . . . . . . . . 74
Robert Lawrence v Devonshire Fabrics 271 F.2d 402 (CA2 1959) . . . . . . 71
Roberts & Schaefer v Merit Contracting 99 F.3d 248, 252–253 (7th
Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Roby v Corporation of Lloyd’s, 996 F.2d 1353 (2nd Cir. (N.Y.)
1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63, 149
Rollins v Foster 991 F. Supp 1426 (M.D.Ala. 1998) . . . . . . . . . . . . . . . 51, 55
Royal Bed and Spring Co., Inc. v Famossul Industria e Comercio
de Moveis Ltda., 906 F.2d 45 (1st Cir. (Puerto Rico) 26 June
1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
RWI Acquisition LLC v Todd, Not Reported in A.3d, 2012 WL
1955279 (Del.Ch., 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
 Table of cases xxv
S.W. Intelecom v Hotel Networks, 997 S.W.2d 322 (Tex. Ct. App.
1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Scherk v Alberto-Culver, Co, 417 US 506 . . . . . . . . . . . . . 4, 68, 72, 129, 149
Schulze v Tree Top; N& D Fashions v DHJ Injus 548 F.2d 722 (8th
Cir. 1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 39
Schutex v Allen Snyder 49 N.Y.2d 1 (NY 1979) . . . . . . . . . . . . . . . . . . 38–39
Scott v Tutor Time Child Care Systems, Inc. 33 S.W.3d. 679 (Mo,
2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Seattle Totems, 652 F.2d, 855 . . . . . . . . . . . . . . . . . . . . . . 154, 155, 161, 162
SEI Societa Esplosivi Industriali SpA v L-3 Fuzing and Ordnance
Systems, Inc., 843 F. Supp. 2d 509 (D.Del., 2012) . . . . . . . . . . . . . . . . 227
Shearson v McMahon, 482 US 220 [1987] . . . . . . . . . . . . . . . . . . . . 126, 225
Society of Lloyd’s v Byrens, 2003 US Dist. LEXIS 26719 (S.D. Cal.
29 May 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Software AG, Inc. v Consist Software Solutions, Inc., 2008 WL
563449 (S.D.N.Y. 21 February 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Somportex Ltd v Phila. Chewing Gum Corp., 453 F.2d 435, 443
(3d Cir. 1971), cert. denied, 405 US 1017 [1972] . . . . . . . . . . . . . . . . 233
Southland v eating, 465 US 1 [1984]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Spataro v Kloster Cruise 894 F.2d 44 (2d Cir. 1990) . . . . . . . . . . . . . . . . . 19
Stachurski v DirecTV 642 F. Supp. 2d 758 (ND Ohio 2009) . . . . . . . . . . . 55
Standard Steamship Owners Protection & Indemnity Association
(Bermuda) Ltd v GIE Vision Bail [2004] EWHC 2919 . . . . . . . . . . . . . 40
Stangvik v Shiley Inc. [1991] 54 Cal.3d 744 . . . . . . . . . . . . . . . . . . . . . . . 171
Stewart Sandwiches, Inc. v MSL Indus., Inc., 1990 WL 165630
(N.D.Ill. Oct. 19, 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 41
Stolt Tankers BV v Allianz Seguros, S.A WL 2436662 (S.D.N.Y.
2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Suchodolksi Assoc., Inc. v Cardell Fin. Corp, 2006 WL 3327625. . . . . . . 162
Sun World v Lizarazu Olivarria, 804 F. Supp. 1264 (E.D.Cal. 1992) . . . . 156
Swain v Auto Services, Inc., 128 S.W.3d 103, 108–109 (Mo.Ct.App.
2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Taag Linhas Aereas de Angola v Transamerica Airlines 915 F.2d
1351 (9th Cir. 1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
The ‘Kanchenjunga’ [1990] 1 Lloyd’s Rep 391 . . . . . . . . . . . . . . . . . 43, 149
The Athena [2007] 1 All ER (Comm) 183 . . . . . . . . . . . . . . . . . . . . . . . . . 42
The Golden Anne [1984] 2 Lloyd’s Rep 489 . . . . . . . . . . . . . . . . . . . . . . . 43
The Mercanaut [1980] 2 Lloyd’s Rep 183. . . . . . . . . . . . . . . . . . . . . . . . . . 43
Tracomin v Sudan Oil Seed [1983] 1 WLR 1026 . . . . . . . . . . . . . . . . . . . . 42
Transmarine Seaways Corp. v Marc Rich & Co. A. G., 480 F. Supp.
352 (S.D.N.Y. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Traube v Perelman and another [2001] All ER (D) 346; 2001 WL
1251816. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Tricome v Ebay Inc., No 09–2492, 2009 WL 3365873 (E.D.Pa.
Oct.19, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
xxvi Table of cases
Triton Container International v Di Gregorio Navegacao LTDA,
440 F.3d 1137, 1138 (9th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Troshak v Terminix 1998 WL 401693 (E.D. Pa 1998) . . . . . . . . . . . . . . . . 55
Umbro Int’l Inc. v Japan Professional Football League, 1997 WL
33378853 (D.S.C. 2 October 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
United Steelworkers of America v American Manufacturing Co,
363 US 564 [1960] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
US Asphalt Refining v Trinidad Lake Petroleum, 222 F 1006
[1915] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
US Lines, Inc. v Am. S.S. Owners Mut. Prot. (In re US Lines, Inc.),
197 F.3d 631, 641 (2d Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
US v Bethlehem Steel, 315 US 289 [1942] . . . . . . . . . . . . . . . . . . . . . . . . . 72
Valmont Indus., Inc. v Mitsui & Co. (U.S.A.), Inc., 419 F. Supp.
1238 (D.Neb.1976). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 41
Velazquez v Brank Energe 2011 WL 864857 (WDLa 2011) . . . . . . . . . . . . 55
Venard v Jackson Hole Paragliding 292 P.3d 165 (Wyo., 2013) . . . . . . . 137
Waldron v Goddess, 473 N.Y.S.2d 136 (NY 1984). . . . . . . . . . . . . . . . . . . . 39
Walker v Ryan’s Family Steak Houses, 400 F.3d 370 (C.A.6(Tenn)
2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Ware Else & Ware Enterprises v Susan Ofstein 865 So 2d 1079 (Fla
app 5 Dist 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Waterside Ocean Navigation Co. v International Navigation Ltd,
737 F.2d 150 (2d Cir. 1984). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Watkins v Hudson Coal 151 F.2d 311 (3 Cir. 1945) . . . . . . . . . . . . . . . . . . 71
Weaver v American Oil, 276 NE2d 144 (Ind. 1971)) . . . . . . . . . . . . . . . . . 72
Westbrook International v Westbrook Tech, 17 F. Supp. 2d 681
(E.D. Mich. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Whirlpool v Philips, 848 F. Supp. 474, 478 (S.D.N.Y. 1994). . . . . . . . . . . 225
Whitin Machine v US, 175 F.2d 504 (1st Cir. (Mass) 1949)) . . . . . . . . . . . 72
Withem v Deison, Not Reported in S.W.3d, 2009 WL 2045322
(Tex.App.-Beaumont, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Wong v PartyGaming Ltd 589 F.3d 821 (C.A.6 (Ohio), 2009) . . . . . . 56, 72
Woodcrest Fabrics v B&R Textile 95 A.D.2d 656 (NYAD 1 Dept
1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 39
Worldwide Network v DynCorp International, 496 F. Supp. 2d 59
(D.D.C. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Xantrex Technology v Advanced Energy Industries, Not Reported
in F. Supp. 2d, 2008 WL 2185882 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
YA Global Investments v Cliff 15 A.3d 857 (N.J.Super.A.D., 2011) . . . . . 131
Yavuz v 61 MM, 576 F.3d 1166 (10th Cir. 2009) . . . . . . . . . . . . . . . . . . . . 174
Yes To v Hur, 2011 WL 902297 (N.D.Cal., 2011) . . . . . . . . . . . 173, 174, 190
Zimmerman v Continental Airlines, 12 F.2d 55 (3rd Cir. 1983),
cert. denied, 464 US 1038, 104 S.Ct. 699, 79 L.Ed.2d 165
[1984] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
 Table of cases xxvii
Chinese cases
Baron Motorcycles Inc. v Awell Logistics Group, Inc, Ningbo
Maritime Court, [2008] Yong Hai Fa Shang Chu Zi No 277. . . . . . . . 174
Bejing Ailisheng v Japan Sunglide, No 4 Civil Tribunal of the
Supreme People’s Court [2007] No 14 . . . . . . . . . . . . . . . . . . . . . . . . 115
CECT v Korea Mobile, Shanghai Ausheng Investment, Supreme
People’s Court [2006] No 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
China Pacific Insurance v Sunglide Maritime No 4 Civil Tribunal
of the Supreme People’s Court [2008] No 50 . . . . . . . . . . . . . . . . . . . 115
China People Insurance v Zhongcheng International Transport, No
4 Civil Tribunal of the Supreme People’s Court [2004] No 39 . . . . . . . 115
China Point Finance Ltd v Zhuhai City Commercial Bank,
Guangdong Province High People’s Court, [2004] No 263 . . . . . . 27, 73
Dongfeng Garments Factory of Kaifeng City v Henan Garments
Import and Export Zhengzhou Intermediate People’s Ct., 28
September 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Dongguan ACE Medical Packaging, No 4 Civil Tribunal of the
Supreme People’s Court [2007] 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Dongpeng Trade v HK Bank of East Asia, Selected Cases of
People’s Courts (People’s Court Publisher, 1996), 143. . . . . . . . . . . . 173
Hubei Province Import and Export Co, Hubei Donghu Disk
Technology Ltd v Kangweike Technology (Chengdu), No 4
Civil Tribunal of the Supreme People’s Court [2004] No 34 . . . . . . . 114
Inner Mongolia Zhicheng Mining Ltd v South Africa Huajin
International Group Ltd, No 4 Civil Tribunal of the Supreme
People’s Court [2001] No 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Jaten Electronic v Smartech Electronic, Shanghai Municipality No
1 Intermediate People’s Court, [2009] Hu Yi Zhong Min Wu
(Shang) Chu Zi No 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Jiangmen Xinhua Paper Mill v HK Tak Lee Metals & Paper,
Guangdong High Court, [1999] No 322 . . . . . . . . . . . . . . . . . . . . . . . 143
Kwok & Yih Law Firm v Xiamen Huayang Color Printing
Company, Xiamen Municipality Intermediate People’s Court,
13 August 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119, 142–144
Lai v ABN AMRO Bank, Shanghai Municipal High People’s Court
[2010] No 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 11, 61, 64, 76, 117, 145
Liantai Photo-Voltaic, Jiangsu Province High People’s Court
[2009] No 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Liberia Liberia Power Shipping v China Chongqing Xinfu Food,
Supreme People’s Court [2006] No 26 . . . . . . . . . . . . . . . . . . . . . . . . 113
Ningxia Hebin Minzhu Electric Power v HK Qilong Industry,
Ningxia Province Yinchuan Municipal Intermediate People’s
Court, [2004] No 19, rev’d, Ningxia High People’s Court,
[2004] No 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
xxviii Table of cases
NKK (Japan) v Beijing Zhuangsheng, Beijing Municipality High
Court, [2008] Gao Min Zhong Zi No 919. . . . . . . 118, 139, 144, 234, 235
Quanshun v Jinsheng, Chongqing Municipal No 1 Intermediate
People’s Court, 23 August 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Rent Co v Zhongcheng Ningbo Import & Export, No 4 Civil
Tribunal of the Supreme People’s Court [2008] No 4 . . . . . . . . . . . . 115
Russian National Orchestra Application on the Recognition of
Judgments of English High Court, Beijing Municipal No 2
Intermediate People’s Court, [2004] No 928. . . . . . . . . . . . . . . . . . . . 143
Shandong Jufeng v Korea MGame Supreme People’s Court,
[2009] No 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 73, 76
Shanghai Youlixin International Freight Agency Co. Ltd v Xiamen
Yaozhong Asia-Pacific Trading Co, Fujian High People’s Court
[2011] No 818 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Shengmei v Hangzhou Huangshun, No 4 Civil Tribunal of the
Supreme People’s Court [2005] No 4 . . . . . . . . . . . . . . . . . . . . . . . . . 115
Shenzhen Huahan v Xionghai, No 4 Civil Tribunal of the
Supreme People’s Court [2005] No 41 . . . . . . . . . . . . . . . . . . . . . . . . 115
Sojitz v Xiao, Shanghai Municipal High People’s Court, [2004]
No 72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118, 145
Sumitomo Bank v Xinhua Real Estate, Supreme People’s Court,
[1999] Jing Zhong Zi No 194 . . . . . . . . . . . . . . . . . . . . . . . 11, 27, 73, 173
Tianjing Goubuli Dumpling, No 4 Civil Tribunal of the Supreme
People’s Court [2007] No 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Watanabe v Culture & Art Press, Shanghai Municipal
No 1 Intermediate People’s Court [2008] No 210. . . . . . . . 7, 11, 61, 64,
118, 145
Wenzhou Light Article Industry v CMA (France), Fujian Province
High People’s Court, available at www.chinalawinfo.com,
reference code: CLI.C.21767. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118, 145
Yacheng Automobile Parts v Huifeng, Jiangsu Province Wuxi
Municipal Intermediate People’s Court [2006] No 23 . . . . . . . . 118, 145
Zhangjiagang Electro v Best-Better Worldwide Ltd No 4 Civil
Tribunal of the Supreme People’s Court [2006] No 1 . . . . . . . . . . . . 115
Zhongshan Shishen v Auli, Guangdong Province High People’s
Court [2004] No 239 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 73
Zhuo v Nanjing Diansheng, Jiangsu Province Nanjing Municipal
Intermediate People’s Court [2004] No 7 . . . . . . . . . . . . . . . . . . . . . . 143

French cases
La société Banque privée Edmond de Rothschild Europe v Mme
X, Cour de Cassation, judgment of 26 September 2012 . . . . . . . . . . . . 12
In Zone Brands International v In Zone Brands Europe, Cass Civ
1e’re, 14 October 2009, nx 08–16369 . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
 Table of cases xxix
Société d’études et représentations navales et industrielles
(SOERNI) et autres vs. Société Air Sea Broker Limited (ASB),
July 8 [2009] Case no. 08–16025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
L’Entreprise Tunisienne d’Activités Pétrolières (ETAP) v Bomal
Oil, November 9, 1993, Case no. 91–15194 . . . . . . . . . . . . . . . . . . . . . . 31
In Zone Brands International v In Zone Brands Europe Cass Civ
1, 14 October [2009], n 08–16369 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Société anonyme Française Entrepose GTM pour les Travaux
Pétroliers Maritimes (ETPM) v Société anonyme Empresa
Constructoria Financiera (ECOFISA), December 4 [1990],
Case no. 88–13336 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Hecht v Buismans [1972] Rev. Arb. 67 Cour d’Appel de Paris . . . . . . . . . 32
Fiandre v La Societe Mothes (French Cour de Cassation) [2001]
ILPr 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Societe Jansen v Societe Heurtey Paris, Jan 27 1955, Rev 1955 330 . . . . . 34
Societe Impex v Societe PAZ, 18 May 1971, Cass. Civ 1re, 1971
Bull. Civ I, No 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Isover St Gobain v Dow Chemical France, October 21, 1983
[1984] Rev. Arb. 98 Cour d’Appel de Paris . . . . . . . . . . . . . . . . . . . . . . 32
Municipalité de Khoms El Mergeb v Société Dalico, December 20
[1993], Case no. 91–16828 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Banque Worms v Brachot (Cass. 1re Civ, 11 November [2002]). . . . . . . 131
Stoltzenberg, Cass, 1ere Civ, 30 June [2004], Rev crit DIP [2004]
815. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
SIEPA v Micheline Lifestyle Ltd, Cass. Civ 2nd, June 5 [2008] . . . . . . . . . . 7

German cases
BGH NJW 2001, 1731 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Oberlandesgericht Köln (12/21/2005–16 U 47/05) . . . . . . . . . . . . . . . . . 40
Phillip Alexander Securities Ltd v Bamberger & Ors [1997]
I.L.Pr. 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Re Jurisdiction in the Case of a Sale Involving the Carriage of
Goods (5 U 99/07) (Oberlandesgericht (Stuttgart)) [2010]
ILPr 29 [2010] ILPr 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 37, 38
Re the Enforcement of an English Anti-suit Injunction (Case 3 VA
11/95) (Oberlandesgericht, Dusseldorf) [1997] ILPr 320 . . . . . . . . . 167
Richard Zellner v Phillip Alexander Securities (Case 6 O 186/95)
(Landgericht, Krefeld) [1997] ILPr 716. . . . . . . . . . . . . . . . . . . . . . . . . 54

Italian cases
Alpina Compagnia v Agenzia Marittima (the ‘Ice Express’)
(Italian tribunale) [1990] ILPr 263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
xxx Table of cases
Lloyd’s Syndicate v Shifco (Italian Corte di Cassazione) [2009]
ILPr 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 42
Luz v Bertram (Italian Corte di Cassazione) [1992] ILPr 537. . . . . . . . . . 53
Societa Trasporti Castelletti Spedizioni Internationali SpA v Hugo
Trumpy SpA (Corte di Cassazione) [1998] ILPr 216 . . . . . . . . . . . . . . 37
Trasporti Castelletti v Hugo Trumpy (Corte di Cassazione) [1998]
I.L.Pr. 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

Irish cases
Clare Tavern’s v Gill [2001] 1 IR 286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
O’Connor v Masterwood [2010] ILPr 18 . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Belgium case
2 September 2011 (Judgment No 71 in commercial case No
1193/2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Russian case
Sony v RTC, Case No 1831/12, judgment dated 19 June 2012 . . . . . . . . . 12

Luxembourg case
Jurgen Weber v SA Eurocard Belgium-Luxembourg (Luxembourg
Court of Appeal) [1993] ILPr 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Brazil cases
Campanhia Paranaense de Engergia-COPEL v UEG Araucaria
Ltda, Case No 24.334/2003, 3rd State Court of Curitiba, PR . . . . . . . . 87
Martinelli v Columbia, 115 Achivo 319 [1955] . . . . . . . . . . . . . . . . . . . . . 144

Canadian cases
Anraj Fish Products Industries v Hyundai Merchant Marine Co
Ltd [2000] I.L.Pr. 717 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124, 190
Canadian Royalties Inc. v Nearctic Nickel Mines Inc. [2010]
QCCS 4600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Desputeaux v Éditions Chouette [2003] 1 S.C.R. 178 [2003] SCC
17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Service Bérubé ltée c. General Motors du Canada ltée [2011] J.Q.
2781. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
 Table of cases xxxi
Singapore cases
Aloe Vera of America v Asianic Food [2006] 3 SLR 174 . . . . . . . . . . . . . . 94
Petroprod Ltd (in official liquidation in the Cayman Islands and
in compulsory liquidation in Singapore) v Larsen Oil and Gas
Pte Ltd [2010] SGHC 186 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Re Sanpete Builders (S) Pte. Ltd, High Court, Singapore [1989]
SLR 164 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Lithuanian cases
AMIR-S v BUAB Ekoela (2T-44/2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Belaja Rus v Westintorg Corp (3K-3–562/2008). . . . . . . . . . . . . . . . . . . . . 98
BUAB Briauna v BITC Mobel AB (2–178/2009) . . . . . . . . . . . . . . . . . . . . 98
UAB Rimi Lietuva v UAB Vegida (3K-3–142) . . . . . . . . . . . . . . . . . . . . . . . 98

Swiss cases
16 October 2012 (Case reference cases: 4A_50/2012) . . . . . . . . . . . . . . . 99
Vivendi SA and others v Deutsche Telekom AG and others,
4A_428/2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Dutch cases
Rb. Amsterdam, 24 November 1906, W 8561 . . . . . . . . . . . . . . . . . . . . . . . 99
Rb. Amsterdam, 13 June 1979, NJ 1980, 254. . . . . . . . . . . . . . . . . . . . . . . . 99

Awards
6 ICC Case No 4131 [1982] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Alfred Dunhill v Tivoli Group, Giustizia civile 1996 I 2065–2070 . . . . . . . 20
Dow Chemical France v Isover (France) [1984] IV Yearbook
Commercial Arbitration 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Dow Chemical v Isover-Saint Gobain, 110(4) J.D.I. 899 [1983], IX
Y.B. Com. Arb. 131 [1984]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Duta Wajar Sdn v Pasukhas Constructions Sdn Bhd [2012] 4 CLJ
844. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hoerter (Trading as C.F. Mumm) v Hanover Caoutchouc, Gutta
Percha & Telegraph Works, 10 T.L.R 103 . . . . . . . . . . . . . . . . . . . . . . . 27
Hub Power Co Ltd (HUBCO) v Pakistan WAPDA and Federation
of Pakistan [2000] 15(7) Mealeey’s International Arbitration
Report, Section A.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
ICC Award No 1110 of 1963. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ICC Case No 4381 [1986]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ICC Case No 4604 [1984]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
xxxii Table of cases
ICC Case No 4604 [1984], reprinted in 111 J. Droit Int’l 973
[1985] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ICC Case No 5065 [1986]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ICC Case No 8423 [1994]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Isover St Gobain v Dow Chemical France (4131/ 1982) ICC I ICC
Awards 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Noble Power Investments Limited & Another v Nissei Stomach
Tokyo Co Ltd, CACV 398/2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Nordgemuse di Wihem Krogmann OHG v Gennaro Parrilli,
Giustizia civile 1996 I, 811–814 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table of statutes and legislative
instruments

International conventions
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards 1958 . . . . 3, 16, 17, 22, 28, 32, 47–47, 51, 52, 60, 66, 84,
86, 89, 90, 95, 110, 120, 128, 139, 152, 163, 170,
204, 205, 207, 212, 213, 219–222, 224–229, 240–253
European Convention on International Commercial Arbitration
1961. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16–17, 29, 204
Inter-American Convention on International Commercial
Arbitration (the ‘Panama Convention’) . . . . . . . . . . . . . . . . . . . . . . . . . 17
Treaty on the Functioning of the European Union . . . . . . . . . . . . . . . . . 227
Hague Choice of Court Convention 2005. . . . 3, 6, 8, 9, 22, 46, 54, 105,106,
139, 238, 240–246, 254–255

EU legislation
Regulation (EC) No 593/2008 of the European Parliament and of
the Council of 17 June 2008 on the law applicable to
contractual obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 23, 32, 95
Convention on jurisdiction and the recognition and enforcement
of judgments in civil and commercial matters (Brussels
Convention) . . . . . . . . . . . . . . . . 12, 34, 71, 107, 126, 133, 178, 187, 191,
198, 205, 206, 206
Regulation on Jurisdiction and the Recognition and
Enforcement of Judgments in Civil and Commercial
Matters (Recast) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 17, 19, 22, 23, 25,
42, 47, 50, 52, 58, 71, 79, 126,
127, 145, 146, 214, 215, 237, 243
Council Regulation (EC) No 1346/2000 of 29 May 2000 on
insolvency proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Regulation (EC) No 44/2001 of 22 December 2000
on jurisdiction and the recognition and
enforcement of judgments in civil and
commercial matters . . . . . . . . . . . . 3, 9, 11, 12, 14, 17, 19, 21–25, 32–42,
xxxiv Table of statutes and legislative instruments
46–47, 50, 52, 54, 57, 58, 61, 71, 75, 77–82, 89,
103, 104, 107, 109, 126, 127, 138, 139, 141,
145, 146, 164, 165, 178–223, 230, 235–237,
239, 240, 242–244
Regulation (EU) No 1215/2012 of 12 December 2012
on jurisdiction and the recognition and
enforcement of judgments in civil and
commercial matters (recast) . . . . . . 13, 14, 17, 19, 22, 23, 25, 42, 47, 50,
52, 58, 71, 79, 126, 127, 146, 214, 215, 237, 243

UK
Administration of Justice Act 1920 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Arbitration Act 1996 . . . . . . . 4, 13, 41, 46, 48, 51, 70, 72, 84, 86, 88, 89, 94,
120, 121, 152, 169, 170, 176, 205, 212, 213
Carriage of Goods by Sea Act 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Civil Procedure Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 36, 86, 89, 142
Contracts (Rights of Third Parties) Act 1999 . . . . . . . . . . . . . . . . . . . . . . 132
Foreign Judgments (Reciprocal Enforcement) Act 1933. . . . . . . . . . . . . 230
Scottish Arbitration Act 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Senior Courts Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87, 169, 170

US
Federal Arbitration Act 1925 . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 30, 72, 127

China statutes
Arbitration Law 1994 . . . . . . . . . . . . . . . . . 15, 16, 30, 73, 109, 112, 120, 228
Choice of Law on Foreign-Related Civil Relationships Act 2010. . . . . 16, 30
Civil Procedure Law 1991. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 115,
Civil Procedure Law 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 111, 116
Civil Procedure Law 2012. . . . . . . . . . 5, 15, 16, 27, 33, 46, 57, 61, 103, 109,
111, 112, 114, 115, 116, 142, 228, 233, 254
Contract Law 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 45

China Supreme People’s Court interpretation and other

documents
Answers to Economic Disputes relating to Hong Kong or Macau,
[1987] No 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Answers to Questions Arising out of Trial Practice of Commercial
and Maritime Cases with Foreign Elements 2004 . . . . . . . . . . . . . . . . 173
Arrangement on Reciprocal Recognition and Enforcement of
Judgments in Civil and Commercial Matters by the Courts of
 Table of statutes and legislative instruments xxxv
the Mainland and of the Hong Kong Special Administrative
Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119, 254
Interpretations of the Supreme People’s Court on Several Issues
Concerning Application of the Law of the People’s Republic of
China on Choice of Law for Foreign-Related Civil Relationships
(I), [2012] No 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 30, 31
Notice on Issues about the Handling of Cross-Border and Foreign
Arbitration, [1995] No 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,
Interpretation of the Supreme People’s Court Concerning some
Issues on the Application of the Arbitration Law of the
People’s Republic of China, [2006] No 7. . . . . . . . 13, 16, 30, 41, 45, 46,
64, 73, 85, 116
Opinion on Several Issues on the Application of the Civil
Procedure Law of the People’s Republic of China’
(‘1992 Opinion’), [1992] No 22 . . . . . . . . . . . . . 9, 15, 109, 142, 143, 235
Re the request for setting aside China International Economic
and Trade Arbitration Commission [2008] No 44 Award’,
[2009] No 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Re whether the People’s Courts should recognize and enforce the
Judgment given by the Japanese Court in Payment of Debts,
[1995] No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
Regulations of the Supreme People’s Court Regarding the Issue
of Fees and Investigation Periods for the Recognition and
Enforcement of Foreign Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . 225
Response about how to handle the case where a party in a
contract with an arbitration agreement fails to enter an
appearance, (2008) No 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Summary of the Second National Conference on the Adjudication
of Commercial and Maritime Cases with Foreign Elements,
[2005] No 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16, 117, 142, 173, 174

Germany
German Code of Civil Procedure of 1998 (CCP) . . . . . . . . . . . . . . . . . . . . 94

France
French Civil Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
French Civil Procedure Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

Switzerland
Swiss Statute of Private International Law. . . . . . . . . . . . . . . . . . . . . . . 31, 94
xxxvi Table of statutes and legislative instruments
Quebec
Civil Code of Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143, 144

Brazil
Introductory Law of the Civil Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Preface

Arbitration and jurisdiction agreements are frequently used in trans-

national commercial contracts. Sophisticated commercial parties adopt
them to reduce risk, gain efficacy and acquire certainty and predictability.
Both agreements have specific contractual requirements for their forma-
tion, incorporation and validity, have the prorogation effect to make the
chosen forum competent and have the derogation power to deprive any
otherwise competent fora of their jurisdiction. Both generate complex
and interesting questions on the conflict of jurisdiction and interaction
with anti-forum shopping measures, such as lis pendens, forum non conven-
iens, anti-suit injunction and anti-arbitration injunction. Because of the
similarities between the two types of frequently used dispute resolution
agreements, they are often treated in a similar way by courts and
practitioners.
This book offers a comparative study on the prerequisites, effectiveness
and enforcement of exclusive jurisdiction and arbitration agreements in
international dispute resolution in order to determine whether the clauses
have the identical effects in private international law and whether they
have been or should be given the same treatment by most countries in the
world. The book compares the treatment of jurisdiction and arbitration
clauses in the US, China, the UK and the EU to demonstrate how, in prac-
tice, exclusive jurisdiction and arbitration agreements are enforced. In
light of all this, the book considers whether the Hague Convention could
be treated as a litigating counterpart of the New York Convention and
whether it could work successfully to facilitate judicial cooperation and
party autonomy in international commerce.
I gave a four-day training course on law relating to procedural auto-
nomy in the EU-Macau Judicial Cooperation/Mutual Trust Programme in
Macau during June 2011. This lecture inspired me to do further research
on this issue and to compare detailed rules concerning validity, effective-
ness and enforcement between jurisdiction and arbitration agreements. I
would wish to express my gratitude and appreciation to Professor Paul
Beaumont for his recommendation and Macao Law Reform and Inter-
national Law Bureau for the invitation and organization.
xxxviii Preface
I wish to thank my previous colleague, Dr Christa Roodt, for her stimu-
lating discussions with me, and an anonymous reviewer for his/her pos-
itive and constructive comments. I want to thank Professor YongPing Xiao,
who provided me with opportunities to do research and to use the
resources at the Wuhan University in order to complete the writing on the
Chinese law part.
I am grateful to my parents, Yang Cao and ZhuoLiang Tang, and my
husband, Roy Rao. Their support and encouragement were important to
me in completing this work.
Z.S. Tang
Leeds, 31 July 2013
1 Introduction

1 Introduction
Strategic manipulating of procedure is a potential risk in international
commercial dispute resolution. Substantive and procedural advantages are
relatively easy to gain in international compared with domestic transac-
tions, caused by the conflict of different legal systems and substantive
laws.1 Effective dispute resolution is one of the key factors contributing to
the success of international business practice. In order to achieve certainty
and predictability, parties usually enter into dispute resolution agreements
in their international civil and commercial relationship. Dispute resolu-
tion agreements record the parties’ consent on the method, the forum
and the special procedural conditions to resolve their commercial dis-
putes. Various dispute resolution agreements exist, including choice of
court/jurisdiction agreements, arbitration agreements, mediation agree-
ments, class action waiver agreements, etc. The two most important and
frequently used dispute resolution agreements are choice of court agree-
ments and arbitration agreements, which are the focus of this book. For
the purpose of this book, disputer resolution agreements/clauses, thus,
refer only to jurisdiction and arbitration agreements.
The functioning of dispute resolution agreements is to direct the
parties to the agreed forum, either a court or an arbitral tribunal, using
the agreed method, adjudication or arbitration, to resolve their disputes.2
Where the parties enter into jurisdiction or arbitration agreements, they
expect greater certainty, procedural efficiency and lower litigation cost.
They wish their dispute to be brought in the only forum or tribunal, as
designated in their agreements, and no party can freely breach the
promise.
If a dispute resolution agreement is the same as other contract terms,
the expectation is realistic. However, dispute resolution agreements are

1 Fentiman, 2010: para 7.01.

2 A dispute resolution clause includes both choice of court agreements and arbitration
agreements. For a general introduction of dispute resolution clause, see Taylor, 1993: 785;
Lenhoff, 1960: 414; Pryles, 1976: 543.
2 Introduction
different from normal contract terms in that they aim to grant jurisdic-
tional competence to an authority, while derogating other competent
authorities from their jurisdiction. While state sovereignty is involved, the
agreement, though aiming to resolve private matters between private
parties, cannot be classified as purely ‘private’. The mixture of private
rights and public power leads to the complexity of this issue. The recogni-
tion and enforcement of dispute resolution agreements, as a result,
generate more perplexing problems than ordinary contract terms could.
The forum, which has been designated by the parties, may not be able to
accept the prorogated power because accepting such power might infringe
the sovereignty of another state3 or because exercising this power is
impractical.4 It is also possible that the subject matter concerns the inter-
ests of third parties, public policy or fundamental national interest, which
is not privately disposable.5 More difficulty may result from the derogation
effect of dispute resolution clauses, as many countries traditionally object
to the idea of having courts’ authority ousted by the private agreement.6
The attitude to dispute resolution agreements has been largely changed in
the contemporary world.7 However, the sceptical view of the ‘ouster’ effect
has never been completely removed.8 The effectiveness of dispute resolu-
tion clauses, especially jurisdiction clauses, is frequently questioned in
international legal practice. The original purpose of commercial parties
by adopting dispute resolution agreements in their contracts is not achiev-
able if state attitude towards dispute resolution clauses is unclear or
negative.
Regardless of practice in individual countries, the world clearly wit-
nesses the trend to support party autonomy. This is demonstrated by the
international effort to establish judicial cooperation or harmonized

3 Many matters subject to exclusive jurisdiction of a country fall into this category. For
example, the dispute relates to the disposal of a land located in the territory of another
country, validity of public registrar of another country, composition and dissolution of a
company registered in another country, the validity and nullity of IP rights registered or
deposited in another country.
4 For example, all relevant evidence of the dispute is located in another country, which
renders proceedings extremely difficult, expensive and inconvenient. The traditional doc-
trine of forum non conveniens may be used to refuse jurisdiction granted by a valid jurisdic-
tion clause. See Eleftheria, [1970] P 94; Restatement (Second) Conflict of Laws (1971), Ch 80.
5 See Ch 4 on arbitrability and the scope of jurisdiction agreements. Briggs, 2008: para 1.07.
6 English common law: Kahn-Freund, 1977: 843; The Fehmarn [1958] 1 WLR 159, 161; US
history: Mut. Reserve Fund Life Ins. v Cleveland Woolen Mills, 82 F. 508 (6th Cir. 1897); Crystal
and Giannoni-Crystal, 2012: 205; traditional Dutch vie: Kollewijn, 1961: 31.
7 Kahn-Freund, 1977: 843; Nygh, 1999: 15–28; Briggs, 2008.
8 This is demonstrated by the court reserving discretion to take jurisdiction where the parties
have entered into a valid exclusive jurisdiction clause choosing another court. See Elefthe-
ria, [1970] P 94; Restatement (1st) Conflict of Laws (1971), Ch 80.
 Introduction 3
9
jurisdiction rules on enforcement of procedural autonomy agreements. It
is reasonable to predict that the importance of dispute resolution agree-
ments will continue to increase in the future. Countries will further relax
national law on deciding the validity and enforceability of dispute resolu-
tion agreements, and more in-depth judicial cooperation will be estab-
lished in the international context to improve efficiency of dispute
resolution agreements and to prevent concurrent proceedings and irre-
concilable judgments.

2 Jurisdiction and arbitration agreements: comparison

A sketchy observation may lead to a conclusion that jurisdiction and arbit-
ration agreements are the same. They do share some characteristics. Both
are based on the parties’ genuine consent and need basic contractual
requirements in order to be valid,10 the effect of both stems from the prin-
ciple of contract freedom,11 both can provide procedural certainty and
reduce cost,12 both have the effect to grant jurisdiction to the chosen
court/tribunal and both (except non-exclusive jurisdiction agreements)
intend to exclude any otherwise competent non-chosen forum from taking
jurisdiction. They are frequently equalized by courts, which apply the same
principles to both jurisdiction and arbitration agreements.13 In the USA,
for example, the cornerstone case providing enforceability to jurisdiction
agreements, Bremen v Zapata off-Shore Company,14 has been frequently
quoted in cases giving effects to international arbitration agreements,
because ‘an agreement to arbitrate before a specified tribunal is, in effect,

9 In the area of arbitration, the Convention on the Recognition and Enforcement of

Foreign Arbitral Awards 1958 (New York Convention) requires a court to respect arbitra-
tion agreements, validity concluded, and to recognize and enforce arbitral awards given
in the tribunal seated in a foreign state. The UNCITRAL also publishes the Model Law
on International Commercial Arbitration and Arbitration Rules to provide further con-
sistency in procedural rules. In the area of jurisdiction, the Council Regulation (EC) No
44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (Brussels I Regulation) provides uniform juris-
diction rules in deciding validity and enforceability of choice of court agreements, and
facilitates recognition and enforcement of judgments made by the chosen court within
EU. The Hague Choice of Court Convention 2005 is the international instrument in
giving effectiveness to exclusive jurisdiction clauses among Contracting States in the
world.
10 See Art II.3 of the New York Convention; Art 3(c), 5(1), 6(a) and 9(a) of the Hague
Choice of Court Convention; Art 23 of the Brussels I Regulation.
11 Crystal and Giannoni-Crystal, 2012: 248.
12 Ibid., 248.
13 See discussion in Fawcett and Carruthers, 2008: 473–475. Aggeliki Charis Compania Mar-
itima SA v Pagnan SpA, The Angelic Grace [1995] 1 Lloyd’s Rep 87; Welex AG v Rosa Maritime
Ltd [2003] 2 Lloyd’s Rep 509.
14 407 US 1 (1972).
4 Introduction
a specialized kind of forum-selection clause’.15 In England, exclusive juris-
diction agreements and arbitration agreements have equivalent weight
when courts exercise their discretion in granting anti-suit injunctions.16
The principle of deciding whether to grant anti-suit injunctions in cases
where there is an exclusive jurisdiction clause is summarized in Donohue v
Armco,17 which is followed by a few cases in which it was decided to grant
injunctions in supporting arbitration agreements.18
The analogy raises a question: are jurisdiction and arbitration agree-
ments completely identical in nature and, thus, require the same treat-
ment? This is a misunderstanding. Jurisdiction and arbitration agreements
share similarities in the perspective of contract law. However, they have
fundamental diversity. Arbitration agreements submit disputes to arbitral
tribunals, which are private bodies, acquiring their dispute resolution
power from party autonomy. Parties could designate not only the seat of
the tribunal, but also the composition of the tribunal, the law applicable
to the arbitration agreement, the arbitration procedure and the sub-
stance/merit of the dispute.19 They can also exclude the application of the
domestic law of any countries and subject the merit of their disputes to
flexible international commercial norms, such as the lex mercatoria.20 Party
autonomy is the foundation of arbitration. The flexibility in terms of merit
and procedure exists in arbitration but not adjudication.21 Although most
countries allow the parties to choose courts to hear their disputes, the
parties cannot intervene in the procedure and conflict of laws of the court.
Party autonomy is a supplement rule in adjudication to improve certainty
and procedural efficiency. It is, however, not the foundation of inter-
national adjudication.
Another difference between jurisdiction and arbitration agreements is
that arbitration agreements provide an alternative dispute resolution
method. It is the parties’ agreement to resolve their disputes out of court,
in a private tribunal. No matter how much a state wants to preserve its
sovereignty, no country would demand the parties to resolve their disputes

15 Scherk v Alberto-Culver, Co, 417 US 506, 518. See also Mitsubishi v Soler Chrysler-Plymouth, 473
US 614, 631; Crystal and Giannoni-Crystal, 2012: 248.
16 See Fawcett and Carruthers, 2008: 474–475.
17 [2001] UKHL 64.
18 Atlanska Plovidba v Consignaciones Asturianas SA (The Lapad), [2004] 2 CLC 886, para 28:
‘An agreement to arbitrate has many similarities to an exclusive jurisdiction clause . . . This
principle [of Donohue] applies equally to arbitration agreements’. See also Noble Assurance
Co v Gerling-Konzern General Insurance Co [2007] 1 CLC 85, para 84–85; Welex AG v Rosa
Maritime Ltd [2003] EWCA Civ 938, para 47–52. The principles applying to decline juris-
diction, however, differ between cases with exclusive jurisdiction agreements and with
arbitration agreements. The former depends on discretion under forum non conveniens,
while the latter is regulated by statute, i.e. the Arbitration Act 1996, s9.
19 Gertz, 1991: 163.
20 Lando, 1985: 747; Maniruzzaman, 1999: 657; Lowenfeld, 1990: 133; Elcin, 2012.
21 Briggs, 2008: para 1.09.
 Introduction 5
exclusively in courts. Out-of-court resolution of private differences is
encouraged, or at least permitted, by most countries.22 A court, as a result,
would not have much discomfort, if the parties agree to submit their
dispute to arbitration. Submitting disputes to the court of another sover-
eign state is different. The parties do not resolve their dispute out of court,
but have made a private decision that another court is more competent,
or more appropriate.
The difference between jurisdiction and arbitration agreements deter-
mines the fact that some countries provide the same contractual require-
ments in deciding their formation and validity, while providing more
stringent restrictions to the enforcement of jurisdiction agreements.23 In
other countries, even the validity requirements differ between jurisdiction
and arbitration agreements.24 Nevertheless, the current development
shows that more countries recognize the importance of efficient dispute
resolution, the necessity to enforce freely entered agreements between the
parties and the national interest to promote international comity. The
enforcement of jurisdiction clauses has been gradually improved, first in
domestic legislation and judicial practice, then in international legal
framework. An optimistic view is that an increasing number of national
courts will gradually accept party autonomy in international adjudication
and abandon their traditional scepticism to the private choice of another
court over the local one. Jurisdiction clauses may be enforced as effectively
as arbitration clauses in international commerce in the future.

3 Terms and definitions

3.1 International
Arbitration and jurisdiction agreements may be entered into to deal with
both domestic and international disputes. Although a country usually pro-
vides the same substantive law to decide the validity of dispute resolution
agreements in both domestic and international contexts, domestic and
international dispute resolution agreements are never treated in the same
way. International dispute resolution agreements resolve disputes in a
cross-border relationship, which usually involves the interests of more than
one country. There are complicated conflict of law questions concerning

22 See Dundas, 2010: 343; Ahmed, 2012: 151; Wall, 2009: 78; Shipman, 2006: 181; Lord Phil-
lips of Worth Matravers, 2008: 406.
23 For example, in the USA, the enforcement of jurisdiction clauses is more uncertain in
state courts than arbitration agreements. See Haines, 2002: para 3 and para 19. In China,
there is explicit legislation providing requirements to enforce arbitration agreements
(Civil Procedure Law 2012, Art 271), while there is no such requirement to jurisdiction
clauses.
24 An example is China, where more restrictive requirements are provided to jurisdiction
agreements than arbitration agreements. See Chapter 2 below.
6 Introduction
the applicable law to decide the validity of such clauses, and the forum
that can determine the preliminary issues. Difference also exists as to the
enforcement of dispute resolution agreements domestically and interna-
tionally. Domestic enforcement only requires a statutory provision of the
domestic law, while effective international enforcement requires judicial
cooperation between other countries and the balance of national interest,
commercial efficiency and international comity. More perplex issues arise
in international dispute resolution agreements.
The definition of ‘international’ differs among different instruments,
depending on their specific purposes. In the UNCITRAL Model Law on
International Commercial Arbitration, an arbitration is international if the
parties have their place of business in different states at the time of con-
tracting, if the place of arbitration, the place of performance of substantial
obligations or the place most closely connected to the subject matter of
the dispute is located out of the parties’ place of business, or if the parties
have agreed that the subject matter relates to more than one country.25 In
the New York Convention, on the other hand, ‘international’ only refers
to the award, which seeks recognition and enforcement, being made in
the territory other than the territory where recognition and enforcement
is sought.26 If the parties and all elements relating to the dispute are
located in one country and the parties submit their dispute to the arbitral
tribunal seated in another country, this agreement is not ‘international’ in
the Model Law but the award is ‘international’ in the New York Conven-
tion if it seeks recognition and enforcement in the parties’ place of busi-
ness. The difference is caused by the different purpose of the instruments.
The Model Law aims to reduce disparity between national arbitration law
in enforcing arbitration agreements, while the New York Convention
attempts to facilitate the global movement of arbitral awards between dif-
ferent countries. Different definitions for different purposes are recog-
nized in the Hague Choice of Court Convention.27 Article 1 of the Hague
Convention provides that, for the purposes of jurisdiction,

a case is international unless the parties are resident in the same Con-
tracting State and the relationship of the parties and all other ele-
ments relevant to the dispute, regardless of the location of the chosen
court, are connected only with that State.28

For the purpose of recognition and enforcement, ‘a case is international

where recognition or enforcement of a foreign judgment is sought’.29

25 Art 1(3).
26 Art I.1.
27 Art 1.
28 Art 1(2).
29 Art 1(3).
 Introduction 7
This book primarily focuses on enforcing dispute resolution agree-
ments at the jurisdictional stage and defines ‘international disputes’ as dis-
putes with all relevant elements, except the chosen forum or tribunal,
located in different countries; in sections dealing with enforcement of
judgments or awards made pursuant to a dispute resolution agreement,
‘international’ refers to the situation where recognition and enforcement
are sought in a country other than the place where the judgments or
awards are made.

3.2 Commerce
This book concerns dispute resolution agreements in international com-
merce. Commerce is given a wide definition, covering all business relation-
ships, contractual or non-contractual. A non-exhaustive list of commercial
relationships is provided in the UNCITRAL Model Law in International
Commercial Arbitration, which includes:30

any trade transaction for the supply or exchange of goods or services;

distribution agreement; commercial representation or agency; factor-
ing; leasing; construction of works; consulting; engineering; licensing;
investment; financing; banking; insurance; exploitation agreement or
concession; joint venture and other forms of industrial or business
cooperation; carriage of goods or passengers by air, sea, rail or road.

Disputes arising out of these commercial activities may, or may not, be

contractual in nature. If the parties have disputes on delictual liability,
they may also submit their disputes to arbitration or to their chosen court
for adjudication. Dispute resolution agreements can be entered into
before or after disputes have arisen. If a dispute resolution agreement is
entered into before the dispute has arisen and the concerned dispute is
delictual, it is necessary to consider whether the dispute resolution clause
is broad enough to cover delictual claims arising out of the parties’ rela-
tionship.31 Furthermore, not every country permits the use of jurisdiction

30 UNCITRAL Model Law 2006, footnote 2.

31 For jurisdiction agreements, see English case: Provimi Ltd v Aventis Animal Nutrition SA
[2003] 2 All ER (Comm) 683 (QBD (Comm)); US case: Marinechance Shipping, Ltd v Sebas-
tian, 143 F.3d 216 (5th Cir. 1998); Chinese cases: Lai v ABN AMRO Bank, Shanghai Muni-
cipal High People’s Court (2010) No 49; Watanabe v Culture & Art Press, Shanghai
Municipal No 1 Intermediate People’s Court (2008) No 210; French case: SIEPA v
Micheline Lifestyle Ltd, Cass. Civ 2nd, June 5, 2008. For arbitration agreements, see English
cases: Capital Trust Investments v Radio Design TJ [2002] 1 All ER (Comm) 514; Heyman v
Darwins [1942] AC 356; Overseas Union Insurance v AA Mutual International Insurance
[1988] 2 Lloyd’s Rep 63; Fillite (Runcorn) v Aqua-Lift (1989) 26 Con LR 66; US cases: Mit-
subishi Motors Co v Soler Chrysler-Plymouth, Inc., 473 US 614 (1985); Re Kinoshita & Co., 287
F.2d 951 (2d Cir. 1961); Prima Paint v Flood & Conklin Mfg, 388 US 395, 421 (US NY
1967), at 406.
8 Introduction
or arbitration agreements in resolving delictual disputes.32 This broad defi-
nition also includes contracts with inequality of bargaining power, where
the unsophisticated party may require special protection in terms of
dispute resolution agreements.

3.3 Different types of jurisdiction agreements

Exclusive jurisdiction agreements

Unlike arbitration agreements, there is usually more than one type of jur-
isdiction agreement. The book will primarily focus on exclusive jurisdic-
tion agreements. An exclusive jurisdiction agreement is a clause with the
effect of both prorogation and derogation. It designates, for the purpose
of deciding disputes which have arisen or may arise in connection with a
particular legal relationship, the competent forum to the exclusion of any
other courts.33 An example of a typical exclusive jurisdiction clause is that:
‘Any disputes arising out of the contract shall be decided exclusively by
Chinese courts.’ An exclusive jurisdiction clause attempts to have the same
effect as an arbitration agreement with both prorogation and derogation
power.

Non-exclusive jurisdiction agreements

Non-exclusive jurisdiction agreements have the effect of prorogation but
not derogation. In other words, non-exclusive jurisdiction clauses grant
jurisdiction to the chosen court but do not prevent the parties from bring-
ing the dispute to other courts which are otherwise competent.34 For
example, a contractual clause states: ‘Besides all the competent courts, any
dispute arising out of the contract can also be brought to the court of
Hong Kong.’
The exclusivity of a jurisdiction clause is crucial to its effect in the chosen
court and to a non-chosen forum’s decision to take or decline jurisdiction.
Many jurisdiction clauses expressly state whether they are meant to be
exclusive or non-exclusive. However, it is also common practice that a juris-
diction clause is drafted in neutral terms, which does not state its exclusiv-
ity. For example, a jurisdiction clause is drafted as follows: ‘The parties
agree to submit any disputes arising out of the transaction to the High
Court of England.’ There are different means to decide the exclusivity of

32 For example, Texas courts invalidated choice of court agreements in fraud or tort actions,
S.W. Intelecom v Hotel Networks, 997 S.W.2d 322, 324 (Tex. Ct. App. 1999); Colorado Dis-
trict Court held choice of court agreements only cover contractual claims, Xantrex Techno-
logy v Advanced Energy Industries, Not Reported in F. Supp. 2d, 2008 WL 2185882, D.Colo.,
2008. See Haines, 2002: para 8.
33 See the definition in the Hague Choice of Court Convention, Art 3(a).
34 Fawcett and Carruthers, 2008: 289.
 Introduction 9
such a jurisdiction clause. In the USA and Australia, a jurisdiction clause is
presumed non-exclusive unless the parties clearly indicate otherwise;35 in
continental Europe, a jurisdiction clause is considered exclusive unless it
explicitly states it is non-exclusive;36 in other countries, there is no pre-
sumption and courts have to make a decision according to the ‘true con-
struction’ of the clause, taking account of all the circumstances.37

Choice of more than one jurisdiction

There are also untypical jurisdiction agreements. Occasionally, a jurisdic-
tion clause designates the competent courts of more than one country.
For example, a contract provides: ‘Disputes should be decided by the
court of Hong Kong or China Mainland.’ Different interpretations exist as
to the exclusivity of such a jurisdiction clause. Under the law of some
countries, such as China Mainland, a choice of court clause, either choos-
ing more than one court in one country, or choosing the courts of more
than one country, is invalid. In the Opinions on Some Issues Concerning
the Application of the Civil Procedure Law of 1992, Article 24 provides
that the parties could choose one of the related people’s courts to hear a
domestic dispute, but the choice of more than one court should
be invalid.38 The same view was repeated in subsequent judicial
interpretations.39
Common practice, however, is not so restrictive. The choice of more
than one jurisdiction is allowed in both the 2005 Hague Convention and
the Brussels I Regulation. Article 3(b) of the 2005 Hague Convention pro-
vides that ‘a choice of court agreement which designates the courts of one
Contracting State or one or more specific courts of one Contracting State shall be
deemed to be exclusive unless the parties have expressly provided other-
wise’ (emphasis added). Although the Convention does not prevent the
parties from choosing the court of more than one country, a jurisdiction
clause choosing more than one Contracting State shall be non-exclusive.40
The Brussels I Regulation says the choice of the court of ‘a Member State’
shall be enforced. However, the ECJ has ruled that the choice of two
Member States is valid and within the scope of the Regulation, and, more
importantly, it can be exclusive in that it excludes all other non-chosen

35 Haines, 2002: para 9.

36 Brussels I Regulation, Art 23. See also Hague Choice of Court Convention, Art 3.
37 Such as English common law, Hong Kong, Japan and China. See Haines, 2002: para 9.
38 Discussed and adopted at the 528th meeting of the Judicial Committee of the Supreme
People’s Court, and promulgated by Judicial Interpretation No 22 [1992] of the Supreme
People’s Court on 14 July 1992.
39 Fa Han [1995] No 157.
40 If more than one court in one Contracting State is chosen, the jurisdiction clause can still
be exclusive unless the parties provide otherwise.
10 Introduction
states’ jurisdiction.41 This interpretation is appropriate because the parties
may have chosen more than one country and allowed the claimant the
option to select between the chosen courts to bring the action, while they
want to derogate jurisdiction of all other competent courts.

Alternative choice of court agreements

The second type of unusual jurisdiction agreement permits the parties to
choose alternative courts in different occasions. For example, the clause
provides: ‘The seller agrees to bring all the actions concerning disputes or
differences arising out of the contract in the court of England; the buyer
agrees to bring any actions in the court of Hong Kong.’ In other cases, the
parties could agree that ‘any disputes should be brought to the court of
jurisdiction where the defendant has his domicile’. This choice then pro-
vides alternative jurisdiction to each party and jurisdiction depends on
which party brings the action.
Alternative choice of court clauses are different from clauses choosing
more than one court. Although the latter is invalid under Chinese law, the
former is valid and enforceable in Chinese courts. In alternative jurisdic-
tion clauses, the claimant can only bring the action in one court. Although
the other party can bring the same action in a different chosen court, it
would not cause confusion as to which court is chosen by the parties in a
single action.
The Chinese Supreme Court provided judicial guidance in 1994 that if
the parties made an agreement that any action should be brought in the
place of the claimant’s domicile, this agreement was valid. If one party A
brought the action in his domicile, while the other party B brought the
same action in B’s domicile, lis pendens rule should apply.42 This interpre-
tation was provided to determine the effect of a domestic choice of court
agreement. It is uncertain whether the interpretation applies to an inter-
national choice of court agreement.

Asymmetric jurisdiction agreements

An asymmetric choice of court agreement is similar to an alternative
choice of forum clause but it is clearly more favourable to one party than
the other.43 For example, the clause provides that: ‘The lender may bring
proceedings against the borrower in an English court, or in any other
court having jurisdiction under its law, while the borrower may bring pro-
ceedings against the lender only in an English court.’ This agreement is
mostly used by banks in cross-border loan agreements.

41 Case 23/78 Meeth v Glacetal Sarl [1978] ECR 2133; Fawcett and Carruthers, 2008: 288.
42 Jing Han [1994] No 307.
43 Hartley, 2009: 164.
 Introduction 11
As alternative choice of court clauses, asymmetric choice of court
clauses are different from clauses choosing more than one forum. Once a
part brings the action, there is only one chosen forum available. As a
common practice in the standard term contract of banks, an asymmetric
jurisdiction clause is enforceable under the law of most countries. In a few
Chinese cases, for example, the people’s courts recognize the effect of
asymmetric choice of court clauses, regardless of relevant bargaining
power between the parties. In The Sumitomo Bank v Xinhua Real Estate,44 dis-
putes arose from a loan agreement between a bank (the lender) and a
company (the borrower). The agreement included a jurisdiction clause
providing:

For the benefit of the lender, the Borrower irrevocably agrees that the
courts of Hong Kong are to have non-exclusive jurisdiction to settle
any disputes which may arise out of or in connection with this Agree-
ment and that, accordingly, any legal action or proceedings arising
out of or in connection with this Agreement (‘Proceedings’) may be
brought in those courts and the Borrower irrevocably submits to the
non-exclusive jurisdiction of those courts. Nothing in this Clause shall
limit the right of the Lender to take Proceedings against the Borrower
in any other court of competent jurisdiction nor shall the taking of
Proceedings in one or more jurisdictions preclude the Lender from
taking Proceedings in any other jurisdiction, whether concurrently or
not.

This agreement was held valid and enforceable under the applicable law.45
If this decision is said to be fair because parties shall be deemed to have
equal bargaining power and have a fair bargain, asymmetric clauses are
equally upheld in consumer contracts. In Lai v ABN AMRO Bank,46 for
example, a private investor entered into an investment agreement with a
Dutch bank. Within this agreement, there was a choice of court clause to
the effect that the investor could only sue the bank in Hong Kong to the
exclusion of any other competent jurisdiction, while the bank could sue
the investor in any competent fora. Both Shanghai Intermediate Court
and Shanghai High Court upheld the choice of court agreement and
declined jurisdiction in favour of Hong Kong courts.
In Europe, an asymmetric clause may be enforceable under the
domestic law of Member States, and the Brussels I Regulation does not
contain any rules that make an asymmetric clause invalid. In Continental

44 Supreme Court, (1999) Jing Zhong Zi No 194.

45 The court, however, used the governing law of the contract to interpret the jurisdiction
clause, which was inconsistent with most courts’ practice in China, where lex fori was
applied.
46 Shanghai Municipality High Court, (2010) No 49.
12 Introduction
Bank v Aeakos,47 for example, the American bank and some borrowers
entered into a loan agreement which provided that the borrowers could
sue the bank exclusively in England while the bank could sue the borrow-
ers in other competent jurisdictions. This agreement was upheld by the
English courts under the Brussels Convention and domestic English law.
The effect of an asymmetric jurisdiction clause, however, will be different
in European Member States. A Member State may use a domestic law pur-
suant to its choice of law rules to invalidate such an agreement. For
example, an asymmetric jurisdiction clause falling under Article 23 of the
Brussels I Regulation was struck down by the French Supreme Court,48
which applied French substantive law that invalidates a contract where one
party has entire control over the event.49 Similar decisions have also been
reached by Bulgarian50 and Russian courts.51

3.4 Arbitration agreements

Arbitration agreement is defined in the UNCITRAL Model Law as ‘an
agreement by the parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them in respect of a defined
legal relationship, whether contractual or not’.52 There may be two types
of arbitration agreements, mandatory and non-mandatory. Non-mandatory
arbitration agreements may allow the claimant the choice either to bring
the dispute to the designated arbitral tribunal or to bring the dispute to
the court. Arbitration agreements may also be classified into binding and
non-binding agreements. The non-binding arbitration agreement means
that the arbitral award may not bind the parties and the unsatisfied party
has the option to bring the dispute to the court. Between them, there are
also partial binding agreements, under which the arbitral award only binds
one party but not the other.53
Non-mandatory, non-binding and partial binding arbitration agree-
ments are very rare. Their nature has been questioned, as people doubt
whether they are arbitration agreements at all. Arbitration is characterized
by its mandatory, binding and final nature, which make arbitration
popular due to business efficacy and certainty. Those usual types of

47 Continental Bank NA v Aeakos Compania Naviera SA and Others, [1994] ILPr 413.
48 La société Banque privée Edmond de Rothschild Europe v Mme X, Cour de Cassation, judgment of
26 September 2012.
49 Civil Code, articles 1170 and 1174.
50 2 September 2011 (Judgment No 71 in commercial case No 1193/2010).
51 Sony v RTC, Case No 1831/12, judgment dated 19 June 2012, reasons for the judgment
published on 1 September 2012 (concerning one-way arbitration agreements).
52 Art 7.
53 Mostly in employment and consumer arbitration, see Allen v Tenet Healthcare Corp., 370 F.
Supp. 2d 682, 685 (M.D. Tenn. 2005); Johnson v Long John Silver’s Restaurants Inc., 320 F.
Supp. 2d 656, 667 (M.D. Tenn, 2004). Haloush and Malkawi, 2008: 340.
 Introduction 13
arbitration agreements are usually used in special contracts, such as con-
sumer contracts and employment contracts, to protect the weaker parties’
rights to access to justice.54 Besides, non-mandatory arbitration agreements
are upheld in a few recent Chinese cases. For example, the Shanghai High
People’s Court ruled that the arbitration agreement read ‘Arbitration, if
any, in Hong Kong and English law to apply’ is non-exclusive or non-
mandatory, which only grants jurisdiction to the Hong Kong arbitral tri-
bunal without depriving competent Chinese courts their jurisdiction.55
This interpretation is criticized for being too arbitration unfriendly. There
is also a question as to why the Chinese court does not interpret this clause
pursuant to English law or Hong Kong law, under which the agreement
shall be construed to submit disputes exclusively to arbitration.56 These
special arbitration agreements, anyway, are not covered by this book,
which only considers rules relating to ordinary arbitration agreements in
commercial contracts.

4 Objective of the book

Dispute resolution agreements are special contract terms. Their binding
effects on the parties stem from the contractual nature, while their
enforcement by courts stems from state sovereignty. Only after a country
accepts that private parties have the power to agree on a competent forum
and it is in the country’s interest to recognize the full enforceability of this
agreement, a dispute resolution clause could acquire the effectiveness that
parties intend to have and could provide certainty and predictability to the
parties. This book offers a systematic and comparative study on the pre-
requisites, effectiveness and enforcement of exclusive jurisdiction and
arbitration agreements in international dispute resolution in order to
determine whether the clauses have the identical effects in private inter-
national law. The book also investigates whether they are, or should be,
given the same treatment by most countries in the world. The book com-
pares the treatment of jurisdiction and arbitration clauses mainly in the
US, China, the UK and the EU to demonstrate how, in practice, exclusive
jurisdiction and arbitration agreements are enforced. Law and practice in
other jurisdictions are also considered in due course. This book finally

54 See discussion in Padis, 2013: 665; Reich, 2009: 866; Grossberg, 2008: 673–674; Schmitz,
2004: 68–69; Ribstein and Kobayashi, 2002: 51.
55 Shanghai High People’s Court, (2009) No 275. The same decision was also reached by
the Fujian High People’s Court in Shanghai Youlixin International Freight Agency Co. Ltd v
Xiamen Yaozhong Asia-Pacific Trading Co, [2011] No 818.
56 Supreme People’s Court, ‘Interpretation of the Supreme People’s Court concerning
some issues on the application of the Arbitration Law of the People’s Republic of China’,
Art 16 provides that in deciding the validity and effect of an arbitration agreement, the
court shall apply the law chosen by the parties; in the absence of that, the law of the seat;
in the absence of that, the Chinese law.
14 Introduction
considers whether the Hague Convention could be treated as a litigating
counterpart of the New York Convention and whether it could work
equally successfully to facilitate judicial cooperation and party autonomy
in international commerce.

5 Legal framework

5.1 English law

English law on jurisdiction agreements is complicated by the influence of
EU legislation. England has two systems of law applying to jurisdiction
agreements: the Council Regulation (EC) No 44/2001 of 22 December
2001 on jurisdiction and the recognition and enforcement of judgments
in civil and commercial matters (‘Brussels I’)57 applies to jurisdiction
agreements concluded between the parties, one of which has its domicile
within the EU and a court of an EU Member State is chosen in the
agreement;58 English common law applies to jurisdiction agreements out
of the scope of the Brussels I Regulation.59 The situation will change after
10 January 2015, when the Regulation (EU) No 1215/2012 of the Euro-
pean Parliament and the Council of 12 December 2012 on jurisdiction
and the recognition and enforcement of judgments in civil and commer-
cial matters (recast) (‘Brussels I Recast’)60 will enter into force and replace
the Brussels I Regulation in all Member States. Article 25(1) of the Brus-
sels I Recast removes the domicile requirement to the application of this
provision and applies to all jurisdiction clauses choosing one of the
Member States. After this provision enters into force, English common law
only applies in cases where the court of a third country is chosen and the
English court decides whether to decline jurisdiction. English law is rele-
vantly clearer in arbitration. The Arbitration Act 1996 provides uniform
rules in arbitration, including domestic and international arbitration.

5.2 US law
The US has no federal statute on jurisdiction agreements, the effect of
which is based on case law. The cornerstone case is Bremen v Zapata
Off-Shore,61 which established the common law test in deciding the enforce-
ability of a jurisdiction clause. The effect of a jurisdiction clause is prima
facie upheld, subject to the exception of public policy and unconscionabil-
ity. This case has been followed in most Federal Courts. However, the

57 [2001] OJ L 44/1.
58 Art 23(1).
59 Art 4(1).
60 [2012] OJ L 351/1.
61 407 US 1 (1972).
 Introduction 15
enforcement of jurisdiction agreements in state courts is still uncertain.
The enforcement of arbitration agreements, on the other hand, is set up
in legislation, i.e. the Federal Arbitration Act 1925 clearly provides agree-
ments to submit disputes to arbitration ‘shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the
revocation of any contract’.62

5.3 Chinese law

Chinese law follows the civil law tradition. Laws exist in legislation and the
Supreme Court judicial direction/interpretation. Case law only has refer-
ential value. Two statutes are particularly relevant: the Civil Procedure Law
2012 and the Arbitration Law 1994. The CPR Civil Procedure Law 1991 is
the first legislation that recognizes the effect of choice of court agree-
ments. Prior to that, the Civil Procedure Law (for Trial Implementation)
1982 said nothing about party autonomy, either in domestic or in inter-
national cases.63 The 1991 Civil Procedure Law has been amended twice,
in 200764 and 2012,65 respectively. This Act provides provisions to decide
the validity and enforcement of both jurisdiction and arbitration agree-
ments. The effect of jurisdiction agreements has also been interpreted in
a number of judicial directions published by the Supreme Court, includ-
ing ‘Opinion on Several Issues on the Application of the Civil Procedure
Law of the People’s Republic of China’ (‘1992 Opinion’),66 and ‘Summary
of the Second National Conference on the Adjudication of Commercial
and Maritime Cases with Foreign Elements’ published in 2005 (‘2005
Summary’).67
The effect of an arbitration agreement is established in both the Civil
Procedure Law 2012 and the Arbitration Act 1994.68 Furthermore, the
Supreme Court introduced a unique and controversial internal report-

62 Section 2.
63 For a general introduction to the Chinese civil procedure law and source of law, see
Zhang, 2002: 59.
64 The Civil Procedure Law 1991 was amended in 2007 by the Decision of the Standing
Committee of the National People’s Congress on Amending the Civil Procedure Law of
the People’s Republic of China, adopted at the 30th Meeting of the Standing Committee
of the Tenth NPC on 28 October 2007, and promulgated by the Order of the President
No 75. It entered into effect from 1 April 2008. The translation of statutes in the article is
available at the National People’s Congress, the Database of Laws and Regulations, www.
npc.gov.cn/englishnpc/Law/Integrated_index.html.
65 The Civil Procedure Law was further amended in 2012 by the Decision of the Standing
Committee of the NPC, adopted at the 28th Meeting of the Standing Committee of the
Eleventh NPC on 31 August 2012, entered into force from 1 January 2013.
66 [1992] No 22.
67 Supreme People’s Court, [2005] No 6.
68 Adopted at the Ninth Meeting of the Standing Committee of the Eighth National Peo-
ple’s Congress on 31 August 1994 and promulgated by Order No 31 of the President of
the People’s Republic of China on 31 August 1994.
16 Introduction
and-review procedure to strengthen the effectiveness of arbitration agree-
ments in its judicial direction ‘Notice on Issues about the Handling of
Cross-Border and Foreign Arbitration’ (‘1995 Notice’).69 Another
important judicial interpretation on arbitration is the ‘Interpretation of
the Supreme People’s Court Concerning some Issues on the Application
of the Arbitration Law of the People’s Republic of China’ (‘Interpretation
2006’).70 The Choice of Law on Foreign-Related Civil Relationships Act
2010 (Conflicts Act)71 and its judicial interpretation, ‘Interpretations of
the Supreme People’s Court on Several Issues Concerning Application of
the Law of the People’s Republic of China on Choice of Law for Foreign-
Related Civil Relationships (I)’,72 also include choice of law rules relating
to arbitration agreements.

5.4 International instruments

International harmonization of law is comparatively more advanced in
arbitration than in jurisdiction agreements. The United Nation Conven-
tion on the Recognition and Enforcement of Foreign Arbitral Awards
1958 (New York Convention) has 144 signatory countries. It is remarked
as the most successful international convention in the international com-
mercial area.73 Following the New York Convention, UNCITRAL published
the Model Law on International Commercial Arbitration (amended 2006)
and the Arbitration Rules (amended 2010), which aim to address dif-
ficulties caused by inadequacy and disparity of national arbitration law and
to establish further harmonization and efficiency. Beside the important
harmonization at the international level, there are also two regional arbit-
ration conventions, which deserve some words. The first one is the Euro-
pean Convention on International Commercial Arbitration 1961, which
entered into force in 1964. This Convention aims to improve international
commercial practices involving European states;74 32 European countries
are party, involving non-EU countries.75 The second important regional
arbitration convention is the Inter-American Convention on International

69 (1995) No 18.
70 The judicial interpretation was passed in the 1375th meeting of the Supreme People’s
Court Trial Committee on 26 December 2005 and entered into force from 8 September
2006, Fashi [2006] No 7. Some directions can also be found in the ‘Notice of the
Supreme People’s Court of some issues on the enforcement of the Arbitration Law of the
Peope’s Republic of China’ Fafa [1997] No 4.
71 Adopted at the 17th session of the Standing Committee of the 11th National People’s
Congress on October 28, 2010 and promulgated and entered into force on April 1, 2011.
72 [2012] No 24.
73 Strong, 2012: 127; Park and Yanos, 2006: 257; Westbrook, 2011: 640; Levi-Tawil, 2011:
613–614.
74 Born, 2009: 102.
75 United Nation Treaty Collection, http://treaties.un.org/pages/ViewDetails.aspx?src
=TREATY&mtdsg_no=XXII-2&chapter=22&lang=en, last accessed on 16 April 2013.
 Introduction 17
76
Commercial Arbitration (the ‘Panama Convention’), with the US and 15
South American countries being party. Neither of these conventions con-
flict with the New York Convention, but they provide supplementary rules
to help international arbitration practice.
In terms of jurisdiction, the international harmonization is less success-
ful than arbitration, while regional harmonization is more influential. The
European Union has harmonized jurisdiction rules and recognition and
enforcement of foreign judgments among its Member States. The Brussels
I Regulation, and its future successor, the Brussels I Recast, have been
described above as part of enforcing law in England. At the international
level, the Hague Conference on Private International Law adopted the
Convention on Choice of Court Agreements in 2005, which intends to be
the international instrument to facilitate the enforcement of jurisdiction
agreements and enforcement of judgments given by the chosen country.

76 United Nations Panama Convention Establishing the Latin American Economic System
(SELA), 17 October 1975, 1292 U.N.T.S. 21295.
2 Prerequisites
Contractual requirements

1 Introduction
Before a court considers the effectiveness and enforceability of a jurisdic-
tion or arbitration agreement, the first condition that must be satisfied is
that there is a valid conflicts clause between the parties. Existence and
validity is the preliminary requirement of disputes resolution agreements.
The existence and validity of a dispute resolution agreement is closely
related to the formation and validity of contracts or contract terms, but
they are not the same. On the one hand, a dispute resolution clause is a
contract term, the conclusion of which must follow the ordinary contrac-
tual concepts and principles, i.e. there must be a meeting of minds. On
the other hand, a dispute resolution clause is a special contract term. The
principle of severability usually separates them from underlying contracts
and ordinary contract terms. The invalidity of the main contract or other
contract terms could not automatically mean a conflicts clause in this con-
tract is invalid. Different applicable law might be applied to decide the
validity of a conflicts clause from the main contract. Even if the same
applicable law applies, besides basic contractual principles, special rules
are applied to determine the existence and validity of jurisdiction or arbit-
ration clauses.

2 Existence and validity: the concepts

2.1 Classification between existence and validity

Existence and validity of conflicts clauses are two different concepts. The
former refers to the conclusion of a conflicts clause and incorporation of
this clause into a contract. The latter refers to the quality and authenticity
of the parties’ consent and other issues that may render a conflicts clause
void or voidable.1 In practice, however, it is sometimes hard to distinguish

1 Albon v Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch), per Lightman J; JSC BTA
Bank v Mukhtar Ablyazov 2011 EWHC 587 (Comm), para 34, per Clark J.
 Prerequisites: contractual requirements 19
these two concepts. For example, one party may argue that there is an
implied choice of forum agreement in their contract. It is unclear whether
this is something relating to the existence of a conflicts clause, namely the
dispute resolution agreement is concluded between the parties, or some-
thing relating to the validity of such a choice, namely the agreement,
albeit unexpressed, demonstrates the authentic consents of the parties
and meets specific formal requirements.
Some legislation does not clearly distinguish the existence and validity
of a conflicts clause. In the EU, for example, Article 23(1) of the Brussels I
Regulation (Art 25(1) of the Brussels I Recast) provides uniform require-
ments to determine the formal validity of a jurisdiction clause. Some of
these requirements, however, relate to the existence of a jurisdiction
clause. In Segoura v Bonakdarian,2 for example, the dispute was whether the
jurisdiction clause, which was not orally agreed on by the parties in their
negotiation on the current transaction but existed in their previous trans-
actions, could bind the parties in their current contractual obligations.
The key consideration was whether the jurisdiction clause governing the
parties’ previous transactions was incorporated into the current agree-
ment. It is a question in relation to the formation of the jurisdiction
clause. The decision, however, was based on Article 23(1)(b) of the Brus-
sels I Regulation, which provided formal validity requirements for jurisdic-
tion clauses.3
In the US, before enforcing a jurisdiction clause, a court must be satis-
fied that the existence of the jurisdiction clause is reasonably communic-
ated to the other party.4 This is a requirement in relation to both the
existence and validity of jurisdiction clauses. The expression ‘reasonably
communicate’ concerns the formation of the agreement and the material
validity relating to the quality of consent. First, a jurisdiction clause is not
formed unless it is brought to the other party’s attention. Second, if a jur-
isdiction clause is not made known to the other party, there is no authen-
tic consent and the clause is not materially valid.
The UNCITRAL Model Law distinguishes between existence and valid-
ity of an arbitration agreement.5 For example, Art 7(6) (option 1) states
that an arbitration agreement is in writing if there is a reference in a

2 Case 25/76 [1976] ECR 1851.

3 See also Art 23(1)(c) Brussels I. See Re Jurisdiction in the Case of a Sale Involving the Carriage
of Goods [2010] ILPr 29. There is also an opinion that, in the EU, the distinction is made
between formal validity on the one hand and the formation and substantive validity on the
other, which is mainly because the Rome I Regulation provides a distinct choice of law
rules for them (Art 10 and Art 11). Fawcett and Carruthers, 2008: 286.
4 Spataro v Kloster Cruise 894 F.2d 44, 45–46 (2d Cir. 1990); Hodes v SNC 858 F.2d 905,
909–912 (3d Cir. 1988); Denicola v Cunard Line, 642 F.2d 5, 9 (1st Cir., 1981); Effron v Sun
Line, 67 F.3d 7, 9 (C.A.2 (N.Y.), 1995).
5 UNCITRAL Model Law on International Commercial Arbitration 1985, with amendments
as adopted in 2006.
20 Prerequisites: contractual requirements
contract to any document containing this arbitration clause, provided the
reference makes this clause part of the contract. It shows that the court
must decide first whether the reference has incorporated the arbitration
clause into the contract. If it has not, the court should not use this article
to grant the arbitration clause formal validity. However, regardless of the
language suggesting a distinguished treatment to existence and validity of
an arbitration clause, these issues are rarely treated separately in practice.
It seems that the distinction between existence and validity of a con-
flicts clause is frequently ignored in legislation process and in practice. It
is true that even in theory the strict line between existence and validity of
a conflicts clause is very often blurred and hard to draw. Especially in
common law countries, strict dichotomy does not exist. It is unrealistic to
require a court to always draw a clear line between existence and validity
and apply different rules to determine each, which would induce extra
burden, lead to unnecessary delay and increase litigation cost. On the
other hand, it is necessary to recognize the fact that existence and validity
of conflicts clauses are different issues in theory. If the argument is on the
existence of a conflicts clause, the court should examine offer, acceptance
and intention to create legal relationships.6 Disputes on the existence of
an agreement exist where no valid acceptance is expressed,7 where a con-
flicts clause concluded in a previous contract or included in another docu-
ment is incorporated into the current contract,8 where a jurisdiction or
arbitration clause is entered into impliedly9 and where the latter behaviour
of either party amounts to the repudiation.10 If the dispute is on the valid-
ity of a clause, the focus should be the formal requirements set out by law
and the quality of consent concerning such issues as fraud, mistake, undue
influence, duress and misrepresentation.11 It is accepted that in certain cir-
cumstances, where the issue falls on the borderline between existence and

6 English common law also requires consideration.

7 Nordgemuse di Wihem Krogmann OHG v Gennaro Parrilli, Giustizia civile 1996 I, 811–814;
Alfred Dunhill v Tivoli Group, Giustizia civile 1996 I 2065–2070; Duta Wajar Sdn v Pasukhas
Constructions Sdn Bhd [2012] 4 CLJ 844; Magnus and Mankowski, 2012: para 131.
8 AEL v Socofi SA [2009] EWHC 3223 (Comm); AIG Europe SA v QBE International Insurance
[2001] All ER(D) 50; 7E Communications Ltd v Vertex Antennentechnik GmbH CA TLR [2007]
EWCA Civ 150; TW Thomas v Portsea Steamship [1912] AC 1; Alfred McAlpine Construction
Ltd v RMG Electrical [1998] ADRLJ 33; Extrudakerb (Maltby Engineering) Ltd v Whitemountain
Quarries Ltd, [1996] N.I. 567; Roche Products Ltd v Freeman Process Systems Ltd, (1996) 80
BLR 102; TW Thomas & Co v Portsea Co Ltd [1912] AC 1; The Annefield [1971] P. 168; Skips
AS Nordheim v Syrian Petroleum The Varenna [1983] 2 Lloyd’s Rep. 592; Pine Ton Insurance v
Unione Italiana Analo Saxon Reinsurance [1987] 1 Lloyd’s Rep. 476.
9 Compagnie d’Armement Maritime SA v Compagnie Tunisienne de Navigation SA [1971] AC 572;
Akai [1996] 188 CLC 418; Paul Smith Ltd v H&S International Holding Inc [1991] 2 Lloyd’s
Rep 127; Axa Re v Ace Global Markets Ltd [2006] EWHC 216; Interserve Industrial Services Ltd
v ZRE Katowice SA [2012] EWHC 3205 (TCC).
10 Noble Power Investments Limited & Another v Nissei Stomach Tokyo Co Ltd, CACV 398/2007;
Dubai Islamic Bank PJSC v PSI Energy Holding Co, [2011] EWHC 1019 (Comm).
11 Haines, 2002: paras 12–19; Fawcett and Carruthers, 2008: 286–287.
 Prerequisites: contractual requirements 21
validity, it is unnecessary to apply separate rules and the court could adopt
a synthetic approach to consider the whole situation systematically. In
other cases, where the dispute clearly concerns the formation of a contract
term or the validity of this term, it is necessary to distinguish existence and
validity of conflicts clauses and examine each respectively.

2.2 Classification between formal validity and substantive validity

Deciding validity of a conflicts clause is usually very complicated. Since
there are different types of validity, i.e. formal validity and material valid-
ity, a court shall decide classification first. Formal validity concerns the
external expression of an agreement, such as whether it is in writing,
whether signatures are available, whether digital agreements are accept-
able; while material validity includes all other issues, including the authen-
ticity of the consent, the capacity of the parties, legality of the agreement
and public policy. It is hard to draw a clear-cut line between formal and
substantive validity, as the requirement as to form usually contains the
consideration for the demonstration of consent.
Article 23 of the Brussels I Regulation, for example, provides very wide
definition to formal validity, which concerns not only the external expres-
sion of the agreement and the consent, but also the quality of the consent.
Agreements that are not presented in a way to catch another party’s atten-
tion have been ruled as not being formally valid.12 On the other hand, no
substantive validity has been expressly provided in the Regulation. In
common law countries, unless expressly provided by statutes, the courts do
not examine formal and material validity of dispute resolution agreements
separately. A court is usually ready to search the common consent without
the requirement of rigid form.13 In the US, for example, the only require-
ment for a dispute resolution clause to be valid is conscionableness.14 It is
accepted that strict requirement for separate treatments to form and sub-
stance of a dispute resolution agreement is not in accordance with com-
mercial practice. However, although formal and material validity has been
mixed in many cases in practice and cannot be clearly distinguished, for
the purpose of analysis, the book still keeps the traditional dichotomy to
separate validity into form and substance. A court usually uses the lex fori
to decide the classification.

12 Case 24/76 Colzani v RUWA [1976] ECR 1831; Marine Contractors v Shell Petroleum Develop-
ment [1984] 2 Lloyd’s Rep 77; 7E Communications v Vertex Antennentechnik GmbH [2007]
EWCA Civ 140; Briggs, 2008: para 7.43; Yackee, 2004b: 1182.
13 Roberts & Schaefer v Merit Contracting 99 F.3d 248, 252–253 (7th Cir 1996); Yackee, 2004b:
1182; Tang, 2009: 135–139.
14 M/S Bremen v Zapata Off-Shore 407 US 1 (1972).
22 Prerequisites: contractual requirements
2.3 Applicable law to classification
Classification between existence, formal validity and substantive validity of
a conflicts clause is a question of law and confronts choice of law issues. A
court usually will use the lex fori to decide classification. After the classifica-
tion, a court will continue to decide which substantive law applies to the
preliminary issue in question.

3 Which law decides existence and validity?

There is a trend to harmonize preliminary requirements in jurisdiction
and arbitration agreements in order to improve certainty in international
commerce. In general, rules concerning formal validity of a conflicts
clause are harmonized, at least partially, either at the regional or at the
international level, while rules on formation and substantive validity are
largely left untouched. It is because domestic laws of each country vary
largely in substantive validity and substantive validity is, sometimes, relat-
ing to public interest. In the regional and international harmonization of
conflict of laws, the harmonization on substantive validity of a conflicts
clause incurs the greatest difficulty. A uniform substantive law cannot be
accepted in the New York Convention, UNCITRAL Model Law, Brussels I
Regulation and Hague Choice of Court Convention. The most recent
harmonization in jurisdiction agreements only introduces harmonized
choice of law rules to decide substantive validity.15 Even if a court has used
choice of law to answer this issue, the application of the governing law may
be further restricted by the concern of public policy or mandatory rules of
both the forum and a closely related third country.16 Since there are dif-
ferent domestic laws deciding the preliminary issues of a conflicts clause, a
court or tribunal will first decide which country’s substantive law should
apply to govern this issue.

3.1 Jurisdiction clauses

National courts adopt inconsistent choice of law in deciding the prelimi-
nary issues. Choice usually exists between the lex fori, the governing law to
the main contract, or the law of the chosen court. When contractual
parties enter into jurisdiction agreements, they aim to have a clear picture
as to in which country they would sue or be sued. The diversity of
approaches makes jurisdiction clauses easily evadable. In order to re-
establish certainty and predictability, many countries enter into judicial

15 Regulation (EU) No 1215/2012 of the European Parliament and the Council of 12

December 2012 on jurisdiction and the recognition and enforcement of judgments in
civil and commercial matters (recast), (Brussels I Recast), [2012] OJ L 351/1, Art 25(1);
Hague Choice of Court Convention, Art 5(1) and 6(a).
16 E.g. Hague Choice of Court Convention, Art 6(b) and (c).
 Prerequisites: contractual requirements 23
cooperation by harmonizing either substantive rules or choice of law rules.
The two most important harmonization instruments are the European
harmonization of jurisdiction rules in the Brussels I Regulation, which will
be replaced by the Brussels I Recast from 10 January 2015,17 and the
Hague Convention on the Choice of Court Agreements of 2005.

EU approach
The current Brussels I Regulation harmonizes formal requirements in
relation to jurisdiction clauses within the scope of the Regulation.18
However, there is no uniform rule to decide the applicable law governing
the existence of jurisdiction clauses or validity other than form. Although
Article 10 of the Rome I Regulation has established uniform choice of law
rules to decide the existence of consent to a contract or contract terms,
Article 1(e) of the Rome I Regulation clearly excludes arbitration and
choice of court agreements from its scope. This is because there has been
harmonized Union law on jurisdiction clauses19 and international treaties
in arbitration,20 and it is considered better to avoid overlapping and con-
flicts. Thus, Article 10 cannot be used to decide the existence and material
validity of a jurisdiction or arbitration clause.21
Existence and material validity of a jurisdiction clause, thus, are left to
be decided by the individual Member State. However, examining the
formal requirements in Article 23(1) and the ECJ interpretation to this
provision, it is not difficult to find that the meaning of the uniform formal
requirement is very broad, which covers the issues relating to the existence
and substantive validity of a jurisdiction clause.22 The ECJ’s construction in
formal validity concerns more than simply the ‘form’, but also whether the
form could in some ways demonstrate the parties’ true intention. In the
ECJ’s interpretation, a court should look beyond ‘writing’ to figure out
whether the jurisdiction clause is written in a way that the other party
knows or ought to know the existence and meaning of this clause. The
formal requirements require the clear demonstration of consent to, or

17 Brussels I Recast, Art 81.

18 Art 23(1) Brussels I.
19 The Brussels I Regulation, Art 23. See Guiliano-Lagarde Report, Art 1.5.
20 New York Convention of 1958. All Member States are parties.
21 However, many courts fail to make the distinction in practice and apply Article 10 equally
to decide the existence and validity of dispute resolution clauses. Welex AG v Rosa Maritime
Ltd (The Epsilon Rosa) (No 2) [2003] ILPr 18 (using Article 8 of the Rome Convention to
decide the existence of an arbitration clause).
22 See Art 23(1) of Brussels I. Case 24/76 Colzani v RUWA [1976] ECR 1831; Case 25/76
Galeries Segoura Sprl v Firma Rahim Bonakdarian [1976] ECR 1851; Case 71/83 ‘Tilly Russ’ v
Nova NV [1984] ECR 2417; Case C-106/95 Mainschiffahrts-Genossenschaft eG (MSG) v Les
Gravieres Rhenanes Sarl [1997] ECR I-911; Case C-159/97 Transporti Castelletti Spedizione
Internatzionali SpA v Hugo Trumpy SpA [1999] ECR I-1597.
24 Prerequisites: contractual requirements
acceptance of, a jurisdiction clause, which concerns its formation of a jur-
isdiction clause and the quality of consent.23
As a result, there is an argument that the formal requirements in Article
23(1) are full and sufficient to ensure the genuine consent to a jurisdic-
tion clause exists.24 In other words, no choice of law rule is necessary to
decide the existence and validity. This, however, is not true. Although
some issues relating to the formation and material validity are covered by
the broad wording of Article 23(1), many other issues are left out. The
broad coverage of formal validity is not comprehensive to cover every issue
concerning the authenticity of consent. It can only tackle situations where
jurisdiction clauses are inserted in a contract in a way that prevents the
other party from noticing its existence. It is incapable in dealing with cases
where the jurisdiction clause is clearly expressed, the intention of the
parties has been brought to it and the parties have demonstrated their
consent clearly and unambiguously to the jurisdiction clause, but there
exists coercion, duress or undue influence, which makes consent tainted.
In practice, most courts prefer to treat Article 23(1) separately from the
existence and material validity of a jurisdiction clause. In Coreck Maritime v
Handelsveem,25 the ECJ held that each Member State could apply the con-
flict of law rules of the forum to decide material validity of a jurisdiction
clause choosing a non-Member State. However, since no uniform choice
of law exists within the EU Member States, the practice varies.26 In
Austria,27 the Netherlands, Malta and Poland,28 the failure of intent is
subject to the lex causae; in Cyprus29 and Greece,30 issues beyond formal
validity are decided according to the lex fori.31
In terms of the existence of a jurisdiction clause, Hamblen J said in Polskie
Ratownictwo Okretowe v Rallo Vito32 that Article 23 has two elements: (1) juris-

23 Africa Express Line v Socofi SA [2010] ILPr 15; Case 24/76 Estasis Salotti di Colzani Aimo e
Gianmario Colzani v RUWA Polstereimaschinen GmbH [1976] ECR 1831, Case C106/95 Main-
schiffahrts Genossenschaft eG (MSG) v Les Gravieres Rhenanes Sarl [1997] QB 731; Case
C-387/98 Coreck Maritime GmbH v Handelsveem BV [2000] ECR I-9337; Bols Distilleries BV (t/a
Bols Royal Distilleries) v Superior Yacht Services Ltd [2007] 1 WLR 12.
24 Case C-159/97 Transporti Castelletti Spedizioni Internazionali SpA v Hugo Trumpy SpA [1997]
ECR I-1597, paras 49 and 51; MSG v Les Gravieres Rhenanes Sarl, para 15.
25 Case C-387/98, [2000] ECR I-9337.
26 Hess et al., 2007: para 377.
27 OGH 7 Ob 320/00k, ZfRV 2001/71 = RdW2001/678; 7 Ob 38/01s, RdW 2001/676 =
ÖRZ-EÜ 2001/70 =ZfRV 2001/63 = ecolex 2002, 420 = ELF 2001, 431; 5 Ob 130/02g;
Parenti, ‘Internationale Gerichtsstandsvereinbarungten: Lex fori oder lex causae Anknüp-
fung?’, (2003) ZfRV 221. National Report Austria (Oberhammer/Domej), Study JLS/
C4/2005/03.
28 25 October 2005, I CK 263/05.
29 C Michailidou, ‘The application of Regulation 44/01/EC: National Report Cyprus’, Study
JLS/C4/2005/03.
30 National Report Greece, JLS/C4/2005/03.
31 Hess et al., 2007: para 377.
32 [2009] ILPr 55.
 Prerequisites: contractual requirements 25
diction agreements must exist and (2) the agreements must meet formal
requirements in Article 23(1).33 The claimant should show a good arguable
case that there is a jurisdiction clause between the parties34 and the court
should decide ‘if there was sufficient consensus between the parties as a ques-
tion of fact, without recourse to any rules of national law’.35 The defendant
contested that the jurisdiction clause included in the standard form was not
part of the contract subject to negotiation and acceptance. The court relied
on the common commercial practice, the knowledge of the defendant, and
the content of the contract to conclude that the standard terms were incorp-
orated in the contract. The jurisdiction clause as part of the standard terms
was equally incorporated in the contract even without being referred to spe-
cifically. Some types of commercial contracts regularly address standard
terms, which were right within the knowledge of experienced commercial
participants and their brokers. During negotiation, the existence of standard
terms was brought to the attention of the other and some fundamental terms
in the standard form were negotiated and agreed upon. In Antonio Gramsci
Shipping v Oleg Stepanovs,36 the English court held that the existence and
interpretation of a jurisdiction clause is governed by the lex fori, while the
formal validity and consensus are governed by the uniform EU law.37 This
approach, however, has been criticized as failing to see the inherent broad
coverage of Article 23(1) of the Brussels I Regulation, the interpretation of
which has covered all issues relating to the existence of consent.38
The situation will be clearer after the Brussels I Recast enters into force
on 10 January 2015,39 which provides uniform choice of law rules to decide
the existence and material validity of a jurisdiction clause. The new Article
25(1) provides that the law of the chosen Member State should be applied
to decide the substantive validity of a jurisdiction clause.40 The Brussels I
Recast also permits renvoi by allowing the application of the conflict of laws
of the chosen Member State.41

Hague Convention on choice of court agreements

The Hague Convention also only harmonizes formal requirements for an
exclusive jurisdiction agreement. However, it provides piecemeal require-

33 Ibid., para 35.

34 Canada Trust Co v Stolzenberg (No 2) [1998] ILPr 290; Bols Distilleries BV (t/a Bols Royal Dis-
tilleries) v Superior Yacht Services Ltd [2007] 1 WLR 12; Kolmar Group v Visen Industries [2010]
ILPr 23.
35 Polskie Ratownictwo Okretowe v Rallo Vito, para 36. Collins et al., 2006: paras 12–108.
36 [2011] EWHC 333 (Comm).
37 Ibid., para 31.
38 Kolmar Group AG v Visen Industries Ltd [2010] ILPr 23, para 25.
39 [2012] OJ L 351/1.
40 Art 25(1) and recital 20.
41 Brussels I Recast, recital 20.
26 Prerequisites: contractual requirements
ments for substantive validity. First, the substantive law of the chosen court
can be used to decide the jurisdiction clause ‘null and void’ (Arts 5(1),
6(a), 9(a)); second, a non-chosen court can use its domestic law to decide
if a party lacks capacity (Art 6(1)) or whether the agreement would lead to
a manifest injustice or would be manifestly contrary to the public policy of
this country (Art 6(b) and 6(c)).
During the negotiation of the Hague Choice of Law Convention, the
applicable law to the substantive validity agreements confronted great con-
troversy and debates. Applying the law of the chosen state can lead to cer-
tainty, i.e. wherever the dispute is brought, the same applicable law shall
apply and the decision will be consistent. The weakness is that this approach
may cause unfairness to the rejecting party, especially when this party enters
into the contract under undue influence, fraud or duress. The other party
may choose the competent court, bearing in mind that its domestic law
would enforce contracts concluded under the above circumstances.
Although the Convention eventually adopt the approach to apply the law,
including choice of law, of the chosen state, exception is also given to the
law of the non-chosen state, which is seized to decide the dispute. It is
because a non-chosen court does not feel comfortable to enforce a jurisdic-
tion clause which is valid under the law of the chosen country but neverthe-
less contradicts its overriding mandatory rules and public policy. Exception
is thus given to capacity of a party and fundamental public policy of the non-
chosen country. This exception could avoid moderate unfairness caused by
the application of the law of the chosen court, and could provide the reject-
ing party with a certain level of protection.

Common law approach in England and the USA

The approach adopted in English and US common law is inconsistent and
confusing. English and US common law usually directly applies the lex fori
to decide the existence and validity of a jurisdiction clause.42 Even if the
parties have chosen the applicable law to govern the underlying contract,
the courts would still apply the lex fori to a jurisdiction clause.43 The
application of lex causae, on the other hand, has not been completely

42 Antonio Gramsci Shipping Corporation & Others v Oleg Stepanovs [2011] EWHC 333 (Comm),
per Burton J: ‘English law (i.e. national law) governs the existence (i.e. scope and effect)
and interpretation of a jurisdiction clause, and EU law governs formality and consensus’;
The Varenna [1983] 2 Lloyd’s Rep 592, 594; The Emmanuel Colocotronis (No 2) [1982] 1
Lloyd’s Rep 286, 289; Midgulf International Ltd v Groupe Chimiche Tunisien [2010] 1 CLC
113; Sotrade Denizcilik Sanayi Ve Ticaret A.S. v Amadou LO, Tiger Denrees Senegal, Axa Assur-
ance Senegal, Axa France Assurance S.A. (The ‘Duden’) [2008] EWHC 2762 (Comm), para 44.
43 Yackee, 2004a: 67; Symeonides et al., 1998: 681. Evolution Online Systems, Inc. v Koninklijke
PTT Nederland N.V 145 F.3d 505 (2d Cir. 1998); Afram Carriers v Moeykens 145 F.3d 298
(5th Cir. 1998); Gen Elec Co v G Siempelkamp GmbH 29 F.3d 1095 (6th Cir. 1994); New Moon
Shipping v MAN B & W Diesel AG 121 F.3d 24 (2d Cir. 1997).
 Prerequisites: contractual requirements 27
excluded in court practice, and is advocated by some academic writers.45
44

Although judicial practice generally uses the lex fori to decide validity of a
jurisdiction clause, the American National Conference of Commissioners
on Uniform State Laws drafted a Model Choice of Forum Act in 1968,
which proposed to apply the law of the chosen court to decide validity of a
jurisdiction clause.46

Chinese approach
In China, there is no legislative provision or judicial direction providing
guidance in deciding existence of a jurisdiction clause. The practice shows
great divergence. Most people’s courts apply the lex fori,47 while a few
courts also apply the lex causae.48
The advantage of applying the lex fori is that Chinese courts are most
familiar with Chinese law and could make decisions on the preliminary
issue very quickly. However, some Chinese courts strictly apply the lex fori
and apply Chinese domestic law even if the parties have chosen another
country and that country’s law to govern a jurisdiction clause. They classify
jurisdiction clauses procedure which is exclusively governed by the
Chinese law.49 Since Chinese law has provided relatively more restrictive
requirements for a jurisdiction clause to be valid—for example, a jurisdic-
tion clause can only choose the court that has ‘practical connections’ to
the dispute50—the application of Chinese law would provide possibility for
forum shopping. The party, who wants to avoid a freely entered choice of
court agreement choosing a neutral forum, might bring the action in
China, where the clause would be invalid.

44 Compagnie Tunisienne de Navigation S.A. v Compagnie d’Armement Maritime S.A. [1971] AC

572; Hoerter (Trading as C.F. Mumm) v Hanover Caoutchouc, Gutta Percha & Telegraph Works,
10 T.L.R 103.
45 Kahn-Freund, 1977: 825.
46 Ibid., 830.
47 Shandong Jufeng v Korea MGame Supreme People’s Court, (2009) No 4; Supreme People’s
Court, ‘Annual Report of Intellectual Property Cases in the Supreme Court (2009)’,
[2010] No 173, case 44.
48 The Sumitomo Bank Ltd v Xinhua Estate Supreme People’s Court, (1999) No 194.
49 Shandong Jufeng v MGame, Supreme People’s Court, (2009) No 4; Guangdong Province
High People’s Court, ‘Notice on Issues about Deciding the Five Intermediate People’s
Courts of Guangzhou Municipality on the Territorial Jurisdiction and Jurisdiction by
Forum Level on Civil and Commercial Matters Relating to Hong Kong and Macau’,
[2002] No 191, Art 13; China Point Finance Ltd v Zhuhai City Commercial Bank, Guangdong
Province High People’s Court, (2004) No 263; Zhongshan Shishen v Auli, Guangdong Prov-
ince High People’s Court, (2004) No 239.
50 Chinese Civil Procedure Law (Amended) 2012, Art 34. See subsection 5.2 ‘Material valid-
ity’ below.
28 Prerequisites: contractual requirements
3.2 Arbitration agreements
More diversity exists in deciding applicable law governing arbitration
agreements and the decision may be different depending on whether a
court or a tribunal is seized to decide this issue. If a party challenges the
validity of an arbitration agreement in a court, some courts use domestic
choice of law rules to decide the validity of an arbitration clause. In
general, most countries permit the parties to choose the applicable law to
govern an arbitration clause.51 In the absence of choice, different
approaches are adopted.

International harmonization
Both the New York Convention and the Model Law do not provide
uniform rules on material validity of an arbitration clause, which is left to
be decided by the national law designated by the conflict of laws. More dif-
ficulties arise because the New York Convention does not provide uniform
choice of law rules to decide the material validity of an arbitration clause
either. Article II(3) provides that a seized court should refer the dispute
subject to an arbitration clause to arbitration ‘unless it finds that the said
agreement is null and void, inoperative or incapable of being
performed’.52 It does not clarify under which law the seized court could
find the arbitration agreement null, void and inoperative. Some guidance
may be found in Article V(a), which provides that a court may not enforce
an award if the agreement ‘is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law of the
country where the award was made’. This provision suggests two laws may
be used by the recognition court to refuse enforcing an arbitral award,
namely the chosen law of the parties, and in the absence of choice the law
of the seat of arbitration. Many have suggested that the same applicable
law should be used by the seized court when asked to decide the validity of
an arbitration clause.53 Although the rules only apply at the stage of
enforcement instead of referral, applying the same rule would help con-
sistent decisions. For example, if the referral court applies the lex fori to
find the arbitration agreement valid and refers the dispute to arbitration,
while the enforcement court, by applying the law of the seat, finds the
clause invalid, it will refuse to enforce the award. However, it is also argued
that, during the negotiation of the New York Convention, the suggestion
that the same conflict rules should be included in Article II(2) was refused
because it was inappropriate to force a seized court to enforce an arbitra-
tion clause which was invalid under its national law, including conflict of

51 This approach is implied in Art V(1)(a) of the New York Convention and Art 34(2)(a) of
the UNCITRAL Model Law. Greenberg, Kee and Weeramantry, 2011: 160.
52 The same provision is adopted in the UNCITRIAL Model Law, Art 8(1).
53 Tieder, 2003: 393; Moss, 1999: 291.
 Prerequisites: contractual requirements 29
54
laws. The only international instrument that provides clear guidance is
the European Convention on International Arbitration of 1961, which
provides that the existence or validity of an arbitration agreement should
be decided by the law agreed by the parties, in the absence of which,
under the law of the country where the award is to be made. If both coun-
tries cannot be determined, the conflict of laws of the seized court shall
apply.55

English common law

In England, the court has applied different laws to decide the validity of
an arbitration clause, such as the chosen law by the parties to govern the
arbitration clause, the lex causae,56 the law of the seat or the lex fori.57 The
current trend is that, where there is no choice of law clause choosing the
governing law particularly to govern the arbitration clause, the law applic-
able should be the law of the country where the arbitration is to be seat-
ed.58 The court gives reasons in C v D:59

an agreement to arbitrate will normally have a closer and more real

connection with the place where the parties have chosen to arbitrate
than with the place of the law of the underlying contract in cases
where the parties have deliberately chosen to arbitrate in one place
disputes which have arisen under a contract governed by the law of
another place.

This approach is consistent with the belief of most academic writers and
arbitrators.60 By choosing the place of arbitration, parties have impliedly
given consent to be bound by the procedural law of the place applying to
arbitration and other policy concerning arbitration agreements.61 The
question is whether the lex arbitri is still applicable if the parties have
included a choice of law agreement in their contract. The choice of law
clause may be interpreted narrowly as applying to the substance of the
dispute only, or broadly as an intention to govern all non-procedural
issues of arbitration. It is suggested that since the lex arbitri is based on the

54 Graffi, 2006: 697; Haight, 1958: 27–28.

55 Geneva, 21 April 1961, Art VI.2.
56 BVI v Ferrell International Ltd [2002] 1 All ER (Comm) 627; Union of India v McDonnell
Douglas [1993] 2 Lloyd’s Rep 48. Blackaby et al., 2009: para 3.12. Applying the law of the
seat to decide the validity of an arbitration clause is also adopted in the Scottish Arbitra-
tion Act 2010, s6.
57 Black-Clawson v Papierwerke [1975] AC 591; C v D [2007] EWHC 1541 (Comm); XL
Insurance v Owens Corning [2000] 2 Lloyd’s Rep 500; Blackaby et al., 2009: paras 3.15–3.29.
58 C v D [2007] EWCA Civ 1282.
59 Ibid., para 22
60 Thrope, 1999: 20.
61 Ibid., 20.
30 Prerequisites: contractual requirements
presumption of ‘implied consent’, the possibility of ‘implied consent’ can
be excluded by the express agreement that the true intention of the
parties is to choose a different law. As a result, if the parties have chosen a
different law, the chosen law should apply.

US law
Like jurisdiction clauses, the US courts usually directly apply the lex fori to
decide the prerequisites of an arbitration agreement.62 The US courts treat
validity of arbitration agreements as a matter of procedure and continue
to apply the Federal Arbitration Act (FAA) to decide the validity and inter-
pretation of arbitration agreements, ignoring the parties’ express choice
of law.63 Although directly applying the lex fori is straightforward and con-
venient to the court, this approach may be too rigid. First, it ignores the
consent of the parties. The parties may have the intention to apply the
chosen law to the interpretation and validity of an arbitration agreement.
Second, it ignores the importance of the lex arbitri. Third, the judgment
may be different between the court and tribunal due to the application of
different applicable laws to the validity of arbitration agreements, and
there may be concurrent proceedings due to the different decisions.

Chinese law
Compared to jurisdiction clauses, more mature and developed rules are
established for arbitration agreements. Although the Arbitration Law 1994
is silent on this issue,64 guidance has been provided by the ‘Interpretation of
the Supreme People’s Court concerning Some Issues on Application of the
Arbitration Law of the People’s Republic of China’ in 2006,65 and updated in
the PRC Conflicts Act and its Judicial Interpretation 2012. The parties could
agree on the applicable law to decide the validity of an arbitration clause; in
the absence of such a choice, the law of the place where the arbitration insti-
tution is located or the agreed place of arbitration should apply; if the parties
do not agree on either the applicable law or the place of arbitration, the lex
fori, i.e. Chinese law, should apply.66 The law changes the tendency of some

62 Chloe Z Fishing Co. v Odyssey Re (London) Ltd 109 F. Supp. 2d 1236 (S.D. Cal. 2000); Kamaya
v American Property Consultants, 959 P.2d 1140 (Wash. App. 1998); Westbrook International v
Westbrook Tech, 17 F. Supp. 2d 681 (E.D.Mich. 1998); Yackee, 2004a: 74–76; Malloy, 2002:
51; Jiang, 1992: 188.
63 Ibid.; for criticism, see, in general, Thrope, 1999: 16.
64 PRC Arbitration Law 1994, Adopted at the Ninth Meeting of the Standing Committee of
the Eighth National People’s Congress on 31 August 1994 and promulgated by Order
No 31 of the President of the People’s Republic of China on 31 August 1994.
65 [2006] No 7, Article 16.
66 Art 18, PRC Conflicts Act 2010. 2012 Interpretations on the Conflicts Act, Fa Shi [2012]
No 24, Art 14.
 Prerequisites: contractual requirements 31
Chinese courts to directly apply Chinese law to all arbitration clauses regard-
less of the parties’ intention or the international nature of the dispute. The
choice of law rules for arbitration agreements are advanced and in line with
international conventions. The Chinese practice clearly shows the influence
of international conventions. Chinese practice has put jurisdiction and arbit-
ration agreements on an unequal footing. Uncertainty, inconsistency and
confusion continue to exist in jurisdiction clauses, while the applicable law to
arbitration agreements has been clarified.

Other national approaches

Some countries adopt the principle in favour of arbitration and apply the
law that could validate an arbitration clause. Alternative applicable laws
are provided and the arbitration clause will be valid if it meets the require-
ment of any of them. An example is Swiss law. In Switzerland, an arbitra-
tion agreement will be valid if it conforms to any of the following: the law
chosen by the parties, the law governing the subject matter of the disputes,
or Swiss law.67
Other courts adopt a very flexible approach to seek the real intention
between the parties. The French court, for example, has delivered deci-
sions not to apply the governing law to decide the validity of an arbitration
agreement, but to consider the fact of the case to decide whether the
parties’ common intention can be found.68 French jurists and courts hold
a strong view that arbitration agreements are a clause of party autonomy
and independent from the main contract. The court does not need to
refer to any national law to decide the validity of an arbitration agreement,
but only needs to use discretion to check if there is common intention
between the parties.69 The need to protect parties’ actual consent is more
important than maintaining rigid formal and material validity rules.70

Arbitral tribunal
Where an arbitration tribunal is seized to decide the validity of an arbitra-
tion clause, a tribunal usually prefers to use the law of the seat to decide
this issue;71 others may use the same approach as the local court by relying

67 Art 178 of the Swiss Statute of Private International Law.

68 Société d’études et représentations navales et industrielles (SOERNI) et autres v Société Air Sea Broker
limited (ASB), 8 July 2009, Case no 08–16025; Municipalité de Khoms El Mergeb v Société Dalico,
20 December 1993, Case no 91–16828; L’Entreprise Tunisienne d’Activités Pétrolières (ETAP) v
Bomal Oil, 9 November 1993, Case no 91–15194; Société anonyme Française Entrepose GTM
pour les Travaux Pétroliers Maritimes (ETPM) v Société anonyme Empresa Constructoria Finan-
ciera (ECOFISA), 4 December 1990, Case no 88–13336.
69 Graffi, 2006: 718–720.
70 Ibid., 721.
71 Redfern, 2004: 126; Born, 2009: 111.
32 Prerequisites: contractual requirements
on domestic choice of law to decide the applicable law to the validity of an
arbitration agreement. However, a unique option that is only available to
an arbitration tribunal is the application of non-state principles to decide
the validity of an arbitration clause. This approach is particularly sup-
ported by French arbitral decisions, supported by courts.72 It is argued that
the validity of an arbitration clause is ‘a matter of transnational law or
arbitral practice, determined by the arbitrators themselves by reference to
prior arbitral decisions, without reference to a domestic law’.73 An arbitra-
tion clause thus will usually be valid as long as it is entered into in a way
that is in accordance with ordinary commercial practice.

3.3 Capacity
Capacity is a special issue that can challenge the validity of a jurisdiction
or an arbitration clause. However, it is different from the existence of, and
other formal and substantive validity requirements in relation to, a dispute
resolution agreement. It is necessary to use a separate section to deal with
choice of law applying to capacity. Deciding capacity of the parties in a
dispute resolution clause also involves the issue of choice of law. Since
capacity of the parties is very different from the material validity relating
to ‘consent’, different choice of law rules thus apply to govern them
respectively. The Rome I Regulation provides partially harmonized rules
to decide capacity of a natural person. If both parties have the same habit-
ual residence and have capacity to conclude contracts, a party can invoke
his incapacity pursuant to the law of another country only if the other
party was aware of this incapacity at the time of contracting.74 This provi-
sion, however, is not useful in deciding the capacity of the parties in a
dispute resolution agreement because the Rome I Regulation has
excluded an agreement on jurisdiction or arbitration from its scope of
application.75 Furthermore, in business contracts, capacity usually con-
cerns whether the contractor could act on behalf of a company according
to the substantive company law of a country,76 instead of natural persons.
The Brussels I Regulation does not provide any provision on uniform
rules in deciding parties’ capacity in entering into a jurisdiction clause. The
New York Convention does not provide relevant rules as to capacity at the
stage of deciding jurisdiction of a court or tribunal but rules are provided at
the stage of recognition of arbitral awards. Article V(1)(a) permits a court
to refuse recognizing or enforcing an arbitral award if the parties are ‘under

72 Isover St Gobain v Dow Chemical France (4131/1982) ICC I ICC Awards 146 at 465, affirmed
21 October 1983 [1984] Rev. Arb. 98 Cour d’Appel de Paris; Hecht v Buismans [1972] Rev.
Arb. 67 Cour d’Appel de Paris. See Parish, 2010: 670.
73 Parish, 2010: 670.
74 Art 13.
75 Art 1(2)(e).
76 Schulz, 2002a: 6.
 Prerequisites: contractual requirements 33
the law applicable to them’ under some incapacity. However, this rule is
modified in the UNCITRAL Model Law, which deletes the term ‘under the
law applicable to them’ and comments that it is because the term in the
New York Convention contains an ‘incomplete and potentially misleading’
choice of law rule.77 It seems that a court seized to decide the capacity of the
parties has the liberty to rely on its national law, including choice of law
rules, under both the Brussels I Regulation and the New York Convention.
In the Hague Convention of 2005, a jurisdiction clause is invalid if
either party lacks capacity in either the law of the chosen forum or the law
of the seized forum, including the choice of laws in either country.78 The
chosen court will apply its own substantive law or choice of law to decide
whether the jurisdiction clause is null because of the incapacity of a party;
the seized non-chosen court could apply either the law of the chosen
country or its own law to invalidate a jurisdiction clause.

4 Existence of conflicts agreements

4.1 Implied choice

Parties may enter into a conflicts clause impliedly. In practice, the parties
may not specifically negotiate a conflicts clause, while by their conduct,
their previous courses of dealing, their professional and commercial know-
ledge and other terms of the contract, the court could confidently con-
clude that the parties have made tacit choice.
An implied choice of jurisdiction or arbitration may not be recognized
in all countries. For example, China requires all conflicts clauses to be
concluded expressly. Article 34 of the Chinese Civil Procedure Law 2012
requires jurisdiction agreements in cross-border contracts to be entered
into ‘through written agreements’.79 Article 16 of the Chinese Arbitration
Law requires arbitration agreements to be included in contracts or formed
by other written means.80 No authorized interpretation, however, has been
provided to jurisdiction agreements. However, under Chinese Contract
Law, an acceptance can be made in light of trade practices.81 Arguably, if a
dispute resolution agreement is a contract term in the main contract and

77 Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on International
Commercial Arbitration as amended in 2006, para 54.
78 Art 6(a) and (b). See Hartley/Dogauchi Report, para 150; Minutes No 8 of the Twentieth
Session, Commission II, paras 50–59.
79 This is consistent with Art 242 and Art 25 of the Chinese Civil Procedure Law 2007. The
2012 amendment deleted the previous Art 242 and provides the uniform rules in Art 34
for jurisdiction agreements in both domestic and transnational disputes.
80 Adopted at the Ninth Meeting of the Standing Committee of the Eighth National Peo-
ple’s Congress on 31 August 1994 and promulgated by Order No 31 of the President of
the People’s Republic of China on 31 August 1994, Art 16.
81 Arts 22, 26 PRC Contract Law 1999 (Adopted at the Second Session of the Ninth National
People’s Congress on 15 March 1999).
34 Prerequisites: contractual requirements
the main contract is entered into according to trade practice, the dispute
resolution clause is valid. This suggestion, however, remains an academic
argument, and most courts and tribunals require arbitration agreements
to be formed expressly.
Common law countries traditionally accept contracts implied-in-fact.
England, for example, accepts that both the choice of court and the arbit-
ration clause can be entered into impliedly.82 In the US, the Supreme
Court said in Baltimore & Ohio R Co v United States83 that an implied-in-fact
contract is ‘founded upon a meeting of minds, which, although not
embodied in an express contract, is inferred, as a fact, from conduct of
the parties showing, in the light of the surrounding circumstances, their
tacit understanding’.84 Trade usage and commercial custom are frequently
used by US courts to validate arbitration agreements.85 The courts hold
that there is a valid arbitration clause even if it is not referred to and
agreed upon by the opposing party if it is an industrial custom that an
arbitration clause is likely to exist in certain contracts.86 In the EU, the
Brussels I Regulation provides that a jurisdiction clause exists if it is in a
form according with common usage or practice in international trade or
commerce.87 Implied choice is also accepted in other civil law countries.
Prior to the Brussels Convention coming into force, the French courts
accepted that the choice of court can be inferred from parties’ conduct.88
The French courts also accept that the parties may demonstrate their
intention to be governed by an arbitration agreement, either expressly or
impliedly.89 The German Supreme Court suggested that an arbitration
agreement could be inferred in accordance with customary trade usage.90
However, it is necessary to note that contradict opinions exist, at least
in the area of arbitration agreements. Some commentators believe an
arbitration agreement should exist only with ‘express, unequivocal

82 Stella Shipping v Hudson Shipping Lines [2010] EWHC 2985 (Comm) (arbitration clauses
can be inferred from parties’ conduct); Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v
Sometal SAL [2010] 1 All ER (Comm) 1143; Sea Trade Maritime v Hellenic Mutual War Risks
Association (The Athena) [2006] 2 CLC 710; Cable & Wireless v Muscat 2005 WL 556663
(implied agreement to abandon an arbitration clause); American Design Associates v Donald
Insall 2000 WL 33250594.
83 261 US 592 (1923).
84 Ibid.
85 Coakley, 2000: 148.
86 Ibid.
87 Art 23(1)(c) Brussels I.
88 Société Jansen v Société Heurtey Paris, 27 January 1955, Rev 1955 330. See Lenhoff, 1960: 426.
89 Dallah Real Estate v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46
(quoting the expert’s opinion: ‘is necessary to find out whether all the parties to the arbit-
ration proceedings, including that person, had the common intention (whether express
or implied) to be bound by the said agreement and, as a result, by the arbitration clause
therein’.
90 Judgment of 12 March 1992. See Carbonneau and Janson, 1994: 220.
 Prerequisites: contractual requirements 35
91
agreement’. The concept of implied choice allows a court to impose con-
tract terms even if it is not expressly entered into by the parties. A lot of
courts infer the existence of implied arbitration agreements because
‘arbitration may be the prevalent means of resolving dispute in an
industry’,92 but very likely a meeting of minds might be lacking between
the parties at the time of contracting. No doubt a lot of parties are subject
to the implied arbitration agreements by surprise. Furthermore, it is ques-
tionable whether ordinary contractual principles are always applicable to
arbitration agreements. An arbitration clause is severed from an ordinary
contract and, more importantly, there is different public policy to govern
an arbitration clause which affects a person’s access to justice and ousts a
court’s jurisdiction.93 It has been stated in a US case, Marlene:94

by agreeing to arbitrate a party waives in large part many of his normal

rights under the procedural and substantive law of the State, and it
would be unfair to infer a significant waiver on the basis of anything
less than a clear indication of intent.

However, even Marlene did not completely rule out the possibility of enter-
ing into an arbitration impliedly providing ‘a clear indication of intent’
can be proved by any means.
How could an implied choice be determined? The existence of such an
agreement should be decided by considering all the facts of the case. In
English law, the court uses the general contract principles to find out the
existence of an implied contract. The general rule is that an implied
choice must be inferred with certainty and should not be easily made
unless it is necessary to do so and if the parties’ conduct is more consistent
with the intention to contract than with an intention not to contract.95 In
the US, some courts adopt the case-by-case approach, examining the
‘degree of surprise or hardship’ imposed on the opposing party by an
arbitration agreement.96 The opposing party must show both subjective
and objective surprise. If an arbitration clause was unilaterally inserted in
the confirmation letter, receipt or any document without negotiation or

91 Marlene v Carnac, 45 N.Y.2d 327, 334 (NY 1978); Schubtex v Allen, 49 N.Y.2d 1, 11 (per
Gabrielli J).
92 Schubtex, 9 (per Gabrielli J).
93 Matter of Weinroff, 32 N.Y.2d 190, 198; Woodcrest Fabrics v B&R Textile 95 A.D.2d 656 (NYAD
1 Dept 1983), 663 (per Milonas J).
94 Marlene v Carnac.
95 Cable & Wireless, para 58; The Aramis [1989] 1 Lloyd’s Rep 213; Blackpool and Fylde Aero
Club v Blackpool Borough Council [1990] 1 WLR 1195.
96 Bergquist v Sunroc Co 444 F. Supp 1236 (E.D.Pa 1991), 1245; Schulze v Tree Top; N&D Fash-
ions v DHJ Injus 548 F.2d 722, 726 (8th Cir 1976); Dorton v Collins 453 F.2d 1161 (6th Cir.
1972); Dixie Aluminum v Mitsubishi International 785 F. Supp. 157 (N.D.Ga 1992); Stewart
Sandwiches, Inc. v MSL Indus., Inc., 1990 WL 165630, 3 (N.D.Ill. Oct. 19, 1990); Valmont
Indus., Inc. v Mitsui & Co. (USA), Inc., 419 F. Supp. 1238 (D.Neb.1976).
36 Prerequisites: contractual requirements
sufficient notice, and the opposing party paid no attention to it, subjective
surprise exists.97 However, if the opposing party should have known a juris-
diction or an arbitration clause would be inserted according to the
common practice between the parties, the previous courses of dealing and
the industry custom, there will not be objective surprise.98 Finally, the
opposing party must prove hardship, namely enforcing the clause will
cause substantial economic hardship, and mere inconvenience is not
sufficient.99

Applicable law
There is no general practice to treat the parties’ express choice of law
agreement as the implied choice of jurisdiction. In traditional English law,
the applicable English law is one ground that enables the court to exercise
its discretion to serve a claim form on a defendant out of jurisdiction.100
However, this is not because of the tacit choice, but because of the close
connection and convenience of trial. The governing law is a connecting
factor between the dispute and the court to justify the exorbitant jurisdic-
tion. It is also a factor considered in forum conveniens for English courts to
eventually take jurisdiction. The traditional practice does not suggest the
choice of law is a factor that could be taken into consideration to decide
the existence of implied jurisdiction.101

Common practices between the parties

The most common example is when the parties have long-term dealings
or a commercial relationship between them and they had previously nego-
tiated and agreed upon standard terms and conditions or a master con-
tract. If the current contract does not expressly include or refer to a
conflicts agreement, there is the possibility that both parties know or
ought to have known their current transaction should be subject to the

97 Avedon Engineering v Seatex 112 F. Supp. ed 1090, 1095 (D.Colo., 2000).

98 Ibid., 1095–1096. American v El Paso Pipe and Supply, 978 F.2d 1185, 1191 (10th Cir.
1992); Helen Whiting v Trojan Textile 307 NY360 (1954); N&D Fashions, 722.
99 American v El Paso Pipe and Supply 978 F.2d 1185, 1191; Avedon Engineering, 1196–1197.
100 CPR, Practice Direction 6B, para 3.1(6)(c).
101 On the contrary, existence of a jurisdiction or arbitration clause has been considered as
a strong factor in many English courts to demonstrate that the parties also wish the law
of that country to apply. Recital 12 of the Brussels I Regulation.
 Prerequisites: contractual requirements 37
102
same conflicts terms agreed in previous dealings. Even if a previous
master agreement was not in-print or orally agreed on,103 if it is ‘demon-
strated clearly and precisely’ that the parties have dealt on the basis that
their disputes will be determined by certain forum or law, implied choice
also exists.104 That is because the course of dealing is such that it would be
contrary to good faith for the other party to deny that there was a jurisdic-
tion agreement which is essentially a species of estoppel. Furthermore,
implied choice may also exist where the conclusion of a conflicts clause by
certain means or conduct is a common understanding or common prac-
tice in a particular trade or commerce. To infer the existence of an
implied jurisdiction in these situations is provided by the Brussels I
Regulation.105
Article 23(1)(b) of the Brussels I Regulation provides that jurisdiction
clauses are formally valid if they are consistent with the common practice
between the parties. This usually occurs where there is a long-term rela-
tionship between the parties.106 If the previous contracts between the
parties have contained jurisdiction clauses choosing the same forum, or
the parties have resolved their previous disputes in a particular forum, it is
reasonable to conclude that there is common practice between the parties.
If the current transaction does not include any negotiation on jurisdiction
issues and there is no factor suggesting the parties want to act differently
this time, the court could conclude that an implied choice of court agree-
ment has been entered into by the parties. The ECJ, for example, pro-
vided in Segoura v Bonakdarian107 that, although the jurisdiction clause,
which was not agreed upon in oral agreement but later inserted in the
invoice, was invalid, if the current transaction forms part of a continuing
trading relationship between the parties and the dealings as a whole were
governed by the same general conditions in the invoice, the clause should
be binding. However, whether a common practice is established depends
on the period of time of dealing. In an Austrian case, for example,

102 Case 221/84 Berghoefer GmbH & Co KG v ASA SA [1985] ECR 2699, para 18; AG opinion
on Berghoefer, 2702; Case 71/93 Tilly Russ v Haven & Vervoebedrijf Nova NV [1984] ECR
2417, para 14; Re Jurisdiction in the Case of a Sale Involving the Carriage of Goods (5 U 99/07)
(Oberlandesgericht (Stuttgart)) [2010] ILPr 29; Fiandre v La Société Mothes (French Cour
de Cassation) [2001] ILPr 13; Societa Trasporti Castelletti Spedizioni Internationali SpA v
Hugo Trumpy SpA (Corte di Cassazione) [1998] ILPr 216; ISEA Industrie SpA v SA LU
(Cour d’Appel) [1997] ILPr 823. For US cases, see: Insteel Wire v Dywidag WL 2253198
(M.D.N.C. 2009); Noble Drilling v M/V, 2011 WL 1399243 (E.D.La, 2011)(NO CIV.A
10–2865); Revlon v United Overseas 1994 WL 9657 (S.D.N.Y 1994).
103 Case 25/76 Galeries Segoura Sprl v Firma Rahim Bonakdarian [1976] ECR 1851, para 11.
104 Kolmar Group AG v Visen Industries Ltd [2010] ILPr 23, para 29.
105 Art 23(1)(b) and (c) of the Brussels I Regulation.
106 It is provided by Austrian courts that if a party sent general terms to another at the start
of their business relationship, it does not establish a common practice. OGH 7 Ob
336/97f.
107 Case 25/76, [1976] ECR 1851.
38 Prerequisites: contractual requirements
repeated delivery of bills and notes to the other party after conclusion of
contracts during the 11-month relationship was not sufficient to establish
common practice.108 In a German case, Re Jurisdiction in the Case of a Sale
Involving the Carriage of Goods (5 U 99/07),109 a French company and a
German company had been in a business relationship for more than 10
years. In the recent transaction, the German company sued for non-
payment of the purchase price for goods delivered by a carrier from
Germany to France. The general conditions of the contract, which
included a jurisdiction clause choosing German courts, were in German
and printed on the reverse of the invoice. The court, however, found that
there existed a valid jurisdiction clause, because it would be unreasonable
for the party to argue that the general terms were not validly agreed on
after 10 years’ collaboration, where repeated conclusion of contracts and
reference to the general terms existed between the parties. If both parties
should have been aware of the existence of the jurisdiction clause, which
is within the framework of their continuing business relationship, it is con-
trary to good faith to deny its existence.110 Under the existing case law, jur-
isdiction clauses in standard terms in continuing relationship are usually
construed as part of the parties’ choice in their later transactions even if
no express reference or acceptance exists; the common conduct of the
parties in previous transactions which demonstrates common understand-
ing can also show the existence of implied choice.111
The past conduct of dealing is also adopted in many courts to infer the
existence of an arbitration clause.112 In a US case, Schutex v Allen Snyder,113
the court accepted that a prior course of dealing was relevant to decide if
the parties had agreed to submit to arbitration. If a party argues that there
is an oral agreement, the previous course of dealing can also be con-
sidered to decide whether the oral agreement on arbitration can be
inferred.114 In this case, however, the court found there were two prior
dealings between the parties, an arbitration clause was inserted in the con-
firmation of an oral order sent to the buyer, no evidence to show the oral
negotiation included arbitration agreements and there was no evidence to
show the parties had ever used arbitration in prior dealings. The court
refused to accept there was an implied choice. It shows that, although

108 OGH 7 Ob38/01s, RdW 2001/676 = RZ-EÜ 2001/70 = ZfRV 2001/63 = ecolex2002, 420.
109 [2010] ILPr 29.
110 Case 221/84 Berghoefer GmbH & Co KG v ASA SA [1985] ECR 2699, para 18; Kolmar Group
AG v Visen Industries Ltd [2010] ILPr 23.
111 Kolmar Group AG v Visen Industries Ltd [2010] ILPr 23.
112 For the account of Lithuanian law, see Svenska Petroleum v Lithuania [2006] EWCA Civ
1529, para 23. English practice: The Athena (No 2) [2007] 1 Lloyd’s Rep 280; Habas Sinai
v Sometal SAL, [2010] EWHC 29 (Comm); US practice: Nobel Drilling; WM Schloser v School
Bd of Fairfax County 980 F.2d 253 (C.A.4(Va) 1992); Avedon Engineering v Seatex 112 F.
Supp. 2d 1090 (D.Colo, 2000).
113 49 N.Y.2d 1 (NY 1979).
114 Ibid., 5.
 Prerequisites: contractual requirements 39
previous courses of dealing could demonstrate the existence of implied
choice, evidence is required to prove that real consent exists between the
parties.115
The Schutex approach, however, has been largely replaced by the
modern approach to tackle the hardship and unfair surprise of a unilater-
ally inserted term. The previous course of dealing, again, is a relevant factor
in the modern approach. If the parties have prior dealings with them and
the opposing party should have known that a dispute resolution clause is
likely and is usually included in invoices, receipts or confirmation docu-
ments, the party should not be surprised objectively by this clause. Without
prompt objections, an implied acceptance of an arbitration clause exists.

Trade custom and usage

Industrial practice or trade custom or usage could help the court to infer
implied jurisdiction or arbitration agreements. In Mainschiffahrts-
Genossenschaft eG (MSG) v Les Gravieres Rhenanes (LGR),116 a German
company, MSG, chartered a vessel to a French company, LGR, by oral
agreement, without choice of court agreements. MSG sent a letter of con-
firmation containing a jurisdiction clause, as well as an invoice with the
same term, which was paid by LGR. In deciding whether the jurisdiction
clause is valid, the ECJ held that117

under a contract concluded orally in international trade or com-

merce, an agreement conferring jurisdiction will be deemed to have
been validly concluded under that provision by virtue of the fact that
one party to the contract did not react to a commercial letter of con-
firmation sent to it by the other party to the contract or repeatedly
paid invoices without objection where those documents contained a
pre-printed reference to the courts having jurisdiction, provided that
such conduct is consistent with a practice in force in the field of inter-
national trade or commerce in which the parties in question operate
and the latter are aware or ought to have been aware of the practice in
question. . . . A practice exists in a branch of international trade or
commerce in particular where a particular course of conduct is
generally followed by contracting parties operating in that branch
when they conclude contracts of a particular type. The fact that the

115 Jones Apparel v Petit 75 A.D.2d 504 (NYAD 1980); Woodcrest Fabrics; Just In-Material Designs
v ITAD 94 A.D.2d 103 (NYAD 1983); Orkal Industries v Array Connector 2011 WL 2138486
(NY Sup 2011); Diskin v JP Stevens 836 F.2d 47 (1st Cir. (Mass) 1987); Schulze and Burch v
Tree Top 831 F.2d 709 (7th Cir. (Ill) 1987); Conagra v William E Martin 1994 WL 270304
(N.D Ill 1994); Peterson v Beale 1995 WL 479425 (S.D.N.Y. 1995); J&C Dyeing v Drakon
1994 WL 584669 (S.D.N.Y 1994); Waldron v Goddess 473 N.Y.S.2d 136 (NY 1984).
116 Case C-106/95, [1997] ECR 911.
117 Case C-106/95, [1997] ECR 911, para 25.
40 Prerequisites: contractual requirements
contracting parties were aware of that practice is made out in par-
ticular where they had previously had trade or commercial relations
between themselves or with other parties operating in the branch of
trade or commerce in question or where, in that branch, a particular
course of conduct is generally and regularly followed when conclud-
ing a certain type of contract, with the result that it may be regarded
as being a consolidated practice.

The decision is interpreted differently between Member States. For

example, Austrian courts interpret it as meaning the existence of common
usage is determined by lex causae,118 while English courts believe common
usage is given an independent definition.119 Some Member States adopt a
low standard to decide whether usages exist. For example, the Irish court
gave effect to a jurisdiction clause written on the reverse side of an invoice
without a reference on the face of it on the ground that this was common
in international sale of hardware;120 standard term insurance contracts
were considered common usage by English courts.121 A higher standard,
however, is applied in more states, such as Germany, where a usage exists
if it is the same practice recognized or practised in several countries,122
and Italy, where a usage can only be found with well-established
practice.123
In O’Connor v Masterwood,124 the Irish Supreme Court decided that
common usage includes the fact that businessmen are presumed to be
aware of terms included in printed conditions. If they choose not to read
them, they are still regarded as making consent and a jurisdiction clause is
concluded.125 This ground is accepted in the Brussels I Regulation.126 A
narrower interpretation was provided by Italian courts. In Lloyd’s Syndicate
v Shifco,127 the Italian court ruled that the usage must not only exist in
international commerce, but also relate to the specific sector. The usage
thus is industry specific instead of applicable to international commerce in
general. The presumed knowledge of the usage can be proved if the
opposing party has either prior transactions with the same party or with
other parties, or the particular course of conduct is generally and regularly

118 OGH 7 Ob38/01s.

119 ‘National Report England and Wales’, Response to Report on the Application of Regula-
tion Brussels I in the EU countries, Study JLS/C4/2005/03, 91–93.
120 Clare Tavern’s v Gill, [2001] 1 IR 286.
121 Standard Steamship Owners Protection & Indemnity Association (Bermuda) Ltd v GIE Vision Bail
[2004] EWHC 2919.
122 Oberlandesgericht Köln (12/21/2005–16 U 47/05).
123 Corte di Cassazione, 29.1.2002, n 1150. ‘National Report Italy’, Response to Study JLS/
C4/2005/03, IT-15.
124 [2010] ILPr 18.
125 Ibid., para 19.
126 Art 23(1)(c).
127 (Italian Corte di Cassazione) [2009] ILPr 18.
 Prerequisites: contractual requirements 41
followed to conclude this type of contract. The only reason that standard
form contracts exist is because ordinary commercial practice is not suffi-
cient. This mode to incorporate a dispute resolution agreement must also
be regular practice within the specific industry and particular type of
contracts.
Industry usage and customs are also frequently used to decide that an
arbitration agreement exists, albeit not expressed.128 However, the US
court adopts restriction based on the test of unfair surprise and hard-
ship.129 Even if inserting an arbitration clause in standard terms unilater-
ally is a customary practice in certain industry, like textiles, the clause is
not concluded if it causes an unreasonable surprise and harshness for
performance.130

4.2 Incorporation
Jurisdiction and arbitration agreements can be incorporated in a contract
by reference. In the Brussels I Regulation, a jurisdiction clause is formally
valid if it is written on the reverse side of a contract, or is written in the
general terms of the parties, and it is referred to by clear language in the
contract.131 Incorporation of an arbitration agreement by reference is
clearly accepted in the UNCITRAL Model Law, Article 6(7) of which pro-
vides that: ‘The reference in a contract to any document containing an
arbitration clause constitutes an arbitration agreement in writing, pro-
vided that the reference is such as to make that clause part of the
contract.’132 Chinese law recognizes arbitration agreements incorporated
from other contracts or documents.133 However, it is unclear when arbitra-
tion agreements written in other documents are successfully incorporated
in the current contract. More guidance has been provided by English
courts. Although inconsistent decisions exist, English courts generally
adopt different standards for incorporation of an arbitration clause in
standard terms or in another contract between the same parties (single-
contract case) and incorporation of such a term in a contract between dif-
ferent parties (two contracts case).134 In the former, the general language
of reference is sufficient to make the incorporation of arbitration

128 Valmont Industries; Schubtex v Allen. Cf. Jones Apparel (‘vague, unspecific reference . . . to
the effect that “in the textile industry arbitration is the usual accepted method of resolv-
ing disputes” is not an acceptable substitute . . . for finding a specific agreement to
arbitrate’).
129 Bergquist v Sunroc Co; Schulze v Tree Top; N&D Fashions v DHJ Injus; Dorton v Collins; Dixie
Aluminum v Mitsubishi International; Stewart Sandwiches, Inc. v MSL Indus., Inc; Valmont
Indus., Inc. v Mitsui & Co. (USA).
130 Schulze v Tree Top, 713.
131 Estasis Salotti v RUWA; Credit Suisse Financial Products v Société Generale d’Enterprises.
132 See also s6(2) of English Arbitration Act.
133 Supreme People’s Court, ‘Arbitration Law Interpretation 2006’, Art 11.
134 Tweeddale and Tweeddale, 2010: 656.
42 Prerequisites: contractual requirements
agreements successful.135 The same test is equally applied to jurisdiction
clauses in Article 23(1) of the Brussels I Regulation (Art 25(1) of the Brus-
sels I Recast). English courts have stated in a few cases that there is no
need for specific reference to the jurisdiction clause to establish the real
consent.136 General reference to the standard terms should be enough and
whether the other party has a copy of the standard terms is irrelevant.
In two-contract cases, however, it may not be obvious to one party that
the proposed incorporation by another party refers not only to the sub-
stantive terms but also to the arbitration clause. The language used to
incorporate the arbitration clause in the ‘two-contract’ case must specifi-
cally refer to the arbitration clause.137 It is not clear whether the same
approach is adopted for jurisdiction clauses under the Brussels I Regula-
tion. However, in AIG Europe v QBE International,138 the court refused to
enforce a jurisdiction clause choosing French courts. The jurisdiction
clause was concluded in the insurance contract and referred to by using
general language, ‘all terms as original’, in the reinsurance contract. The
court held that the word ‘all’ did not demonstrate clearly and precisely the
consensus to include the jurisdiction clause in the original contract into
the reinsurance contract. The court’s reasoning is based on the strict inter-
pretation of the consensus requirement in Estasis Salotti, and the rule of
severability of a jurisdiction clause.139 The reasoning, however, cannot
survive the latter development in English law where the incorporation of
jurisdiction clauses does not concern the rule of severability. A better justi-
fication for the AIG decision is that this is a two-contract case: the parties
of the original insurance contract and those of the reinsurance contract
are not identical. The decision may suggest that specific language is
required to incorporate jurisdiction clauses in two-contract cases.
However, it is necessary to admit that there are a lot of divergences in this
issue and there is no consensus. Since the Brussels I Regulation should be
given independent community meaning, the approach in other Member
States is relevant for the consideration. In Italy, for example, specific refer-
ence to jurisdiction clauses is required even in a single-contract case.140

135 Habas Sinai v Sometal, [2010] Bus LR 880; The Athena [2007] 1 All ER (Comm) 183;
Modern Buildings (Wales) v Limmeer & Trinidad [1975] 1 WLR 1281; Tracomin v Sudan Oil
Seed [1983] 1 WLR 1026; Excomm v Ahmed [1985] 1 Lloyd’s Rep 403; Lexair v Edgar
(1993) 65 BLR 87; Co-operative Wholesale v Saunders & Taylor (1994) 39 Con LR 77.
136 7E Communications v Vertex Antennentechnik [2008] Bus LR 472; Credit Suisse [1997] CLC
168, 171–172. See also Habas Sinai v Sometal SAL, [2010] Bus LR 880, 898–899; Coys of
Kensington v Pugliese [2011] EWHC 655 (QB).
137 Sea Bridge Shipping v AC Orssleff’s Eftf’s A/S (The Delos) [1999] 2 Lloyd’s Rep 685; The
Athena, ibid.; Cf. Aughton, 31 Con LR 60; TW Thomas [1912] AC 1; Federal Bulker [1989] 1
Lloyd’s Rep 103; Heyman v Darwins [1942] AC 356; Bremer Vulkan Schiffbau v South India
Shipping [1981] AC 909.
138 [2001] CLC 1259.
139 Para 26.
140 Lloyd’s Syndicate v Shifco-Somali High Seas (Italian Corte di Cassazione) [2009] ILPr 18.
 Prerequisites: contractual requirements 43
4.3 Variation of conflicts agreements
A conflicts clause, as a contract term, can be varied by the parties at
anytime. The variation of a conflicts agreement is a new agreement, which
equally requires demonstration of consent. The old conflicts agreement,
after variation has been successfully made, will come to an end as soon as
the new agreement is formed and enters into force.
As the formation of a conflicts clause, the variation of this clause can be
done expressly or impliedly. Parties could enter into a new contract
expressly including the new conflicts clause. Parties could also, by their
conduct, vary the clause that they have previously entered into.

Intention of repudiation
A valid jurisdiction or arbitration clause can be repudiated at a later stage
by the conduct of one party or both parties. If a jurisdiction/arbitration
clause is repudiated by one party, he waived his benefit from the clause
and cannot rely on it without the permission of the other party. In Traube
v Perelman,141 the parties entered into an arbitration agreement to submit
all disputes to a specific arbitration tribunal. However, one party later
argued that there were undetermined illegalities in the contract, which
caused the chosen tribunal to refuse jurisdiction. This party has repudi-
ated the arbitration clause and cannot rely on it to apply for an anti-suit
injunction restraining the other party from bringing proceedings in
courts.
The intention of repudiation must be communicated to the other party
‘in clear and unequivocal terms’.142 In Downing v Al Tameer,143 the parties
entered into an agreement with an arbitration clause. After one party
denied that the contract was ever concluded, the other wrote to accept
this was a repudiatory breach and claimed for damages in court. The
Court of Appeal applied normal contractual principles and held that the
statement of the party that no contract was concluded was a clear commu-
nication of repudiation and the commencing of court proceedings by the
other party was an acceptance. The arbitration clause was thus repudiated.
On the other hand, delay to bring arbitration proceedings144 or the refusal
to finance arbitration145 does not clearly demonstrate the intention to
repudiate.

141 2001 WL 1251816.

142 The ‘Kanchenjunga’ [1990] 1 Lloyd’s Rep 391, 398; The Mercanaut [1980] 2 Lloyd’s Rep
183; The Golden Anne [1984] 2 Lloyd’s Rep 489.
143 Downing v Al Tameer [2002] CLC 1291.
144 Andre et Cie SA v Marine Transocean Ltd (The Splendid Sun) [1980] 1 Lloyd’s Rep 333; Paal
Wilson & Co A/S v Partenreederei Hannah Blumenthal (The Hannah Blumenthal) [1983] 1 AC
854; Gulf Shipping Lines Ltd v Jadranska Slobodna Plovidba (The Matija Gubec) [1981] 1
Lloyd’s Rep 31; Anna Maria, [1980] 1 Lloyd’s Rep 192.
145 Paczy v Haendler & Natermann GmbH (No 2) [1981] 1 Lloyd’s Rep 302.
44 Prerequisites: contractual requirements
Suing in a non-chosen country in breach of an exclusive jurisdiction
clause, or suing in a court instead of an arbitration tribunal, is normal in
practice. Is the conduct of breaching the clause a valid expression of inten-
tion to repudiate? Some judges believe that commencing court proceed-
ings for a dispute falling within an arbitration agreement is ‘highly
arguable’ as being a repudiatory breach.146 However, other cases hold that
commencing court proceedings is not sufficient to bring an arbitration
agreement to an end.147 A very restrictive test is adopted in Dubai Islamic
Bank v PSI,148 where there was an exclusive jurisdiction clause in the con-
tract in dispute choosing English courts. The bank later brought proceed-
ings in Bahrain and the defendant brought the counter-claim. The
question is whether the Bank’s activity was repudiation and the counter-
claim acceptance. The court said that the test for repudiatory breach is
whether there is another explanation for the Bank’s conduct. If there is,
the court cannot infer an intention to repudiate. The reason for the bank
to bring proceedings in Bahrain is that around $50 million of the bank’s
money was spent in Bahrain and the bank was advised that the only quick
way of freezing assets in Bahrain is instituting proceedings. The court con-
cluded that Bahraini proceedings did not ‘clearly and unequivocally’ point
to an intention to no longer be bound by the jurisdiction clause.149 Repu-
diation breach thus could not be inferred too lightly.

Acceptance
After one party has expressly stated, or has done a conduct which demon-
strates, the intention to repudiate a conflicts clause, the other party could
accept it by express communication or by conduct. The acceptance must
also be communicated to the other party in a clear and unequivocal man-
ner.150 If after receiving the information of repudiation of an arbitration
agreement, the other party commences legal proceedings as a response,
this can be considered as acceptance, as stated by Potter LJ:151

The question whether or not the issue in service of proceedings is an

unequivocal acceptance of the repudiation will depend upon the
previous communications of the parties and whether or not, on an
objective construction of the state of play when the proceedings
are commenced, the fact of the issue and service of the writ amounts
to an unequivocal communication to the defendant that his earlier

146 Delta Reclamation Limited v Premier Waste Management Limited [2008] EWHC 2579 (QBD),
para 35.
147 Lloyd v Wright, [1983] QB 1065.
148 [2011] EWHC 1019 (Comm), aff’d [2011] EWCA Civ 761.
149 Para 59.
150 Downing v Al Tameer [2002] CLC 1291, para 35.
151 Ibid.
 Prerequisites: contractual requirements 45
repudiatory conduct has been accepted, in the sense that it is clear
that the issue of such proceedings (i) is a response to the defendant’s
refusal to recognise the existence of the arbitration agreement or any
obligation thereunder and (ii) reflects a consequent decision on the
claimant’s part himself to abandon the remedy of arbitration in favour
of court proceedings.

In terms of whether the counter-claim was an unequivocal acceptance pre-

suming the proceedings were repudiation, the court in Downing said that
the defendant by pleading counter-claim must demonstrate that further
proceedings to be taken by the bank could not be brought in the chosen
jurisdiction. Otherwise, simply entering a counter-claim is not enough to
bring the jurisdiction clause to an end.152

5 Validity of dispute resolution agreements

5.1 Formal validity

Relaxation of written form

Requirements to formal validity vary largely from country to country. The
written form is the most common and standard form of contracts. It can
satisfy all the purposes as to the formal validity of a contract term, namely
the evidence of the existence and content of the clause and the security
and genuineness of such evidence. The black letter evidence cannot be
easily revised without trace and forgery is relatively easy to identify. The
literal meaning of ‘in writing’ is not difficult to understand. It means the
parties write down or print the clause on paper. Almost all countries
accept jurisdiction and arbitration agreements entered into in writing.
The international trend is the relaxation of requirements as to form.
First, many countries have provided flexible interpretation as to what ‘in
writing’ means. Given the development of modern technology and elec-
tronic communication, the meaning of ‘in writing’ has been extended to
include all digital data stored in hardware devices, such as computers,
mobiles, laptops, mailboxes and iPads®. For example, Chinese contract law
extends the written form to cover any form capable of reproducing
information contained in tangible forms.153 Electronic data are qualified
written forms, provided the information can be printed out.154 The
Supreme People’s Court also provides that arbitration agreements made
by ‘written means’ should include not only paper contracts and exchange
of letters, but also electronic communication, such as telegraph, fax and

152 Paras 62–65.

153 PRC Contract Law, Art 11.
154 Art 11.
46 Prerequisites: contractual requirements
email.155 The Hague Choice of Court Convention permits a jurisdiction
clause to be concluded ‘by any other means of communication which
renders information accessible so as to be usable for subsequent
reference’.156 The UNCITRAL Model Law provides that ‘in writing’
includes written by electronic means, if the information is ‘accessible so as
to be useable for subsequent reference’.157
Second, the newest development shows that some countries and inter-
national harmonization of law do not require a dispute resolution clause
to be concluded ‘in writing’. Oral agreements ‘evidenced in writing’ are
expressly accepted in, for example, the Brussels I Regulation,158 the UNCI-
TRAL Model Law on Arbitration,159 and English Arbitration Act 1996.160
The 2005 Hague Convention does not accept pure oral agreements, unless
they are documented in writing and there is means to access the agree-
ment for subsequent reference.161 In China, Chinese Civil Procedure Law
expressly requires the parties to choose the court ‘through written
agreement’,162 and the Chinese Arbitration Law states that arbitration
agreements must be concluded by ‘any written means’,163 which implies
that dispute resolution agreements entered into orally are not valid;164
neither are agreements concluded by conduct. It is not clear if a dispute
resolution clause entered into orally and evidenced in writing is valid
under Chinese law. The legislation does not clearly distinguish the
concept of ‘in writing’ and ‘evidenced in writing’. Nevertheless, in Jufeng v
MGame,165 the Supreme People’s Court said that it accepts a jurisdiction
agreement if certain written forms are there to confirm and ascertain this
agreement. It implies that a jurisdiction agreement ‘evidenced in writing’
might be valid under Chinese law.
Third, further relaxation is witnessed where some conventions do not
require any formal written evidence recording the dispute resolution

155 Interpretation to some issues in relation to the application of the Arbitration Law 2006,
Art 1.
156 Art 3(c) of the Hague Convention 2005. Hartley and Dogauchi, 2007: para 112.
157 Art 7(4): Electronic communication means any communication that the parties make by
means of data messages—information generated, sent, received or stored by electronic,
magnetic, optical or similar means, including electronic data interchange, electronic
mail, telegram, telex or telecopy.
158 Art 23(2).
159 Ibid.
160 s5(4).
161 Hartley and Dogauchi, 2007: para 114. The meaning of ‘documented in writing’ is the
same as ‘evidenced in writing’, but the Hague Convention deliberately avoided using the
term ‘evidence’ to avoid the impression of providing ‘evidence’ rules.
162 PRC Civil Procedure Law (Amended) of 2012, Art 34.
163 Supreme People’s Court, ‘Re the request for setting aside China International Economic
and Trade Arbitration Commission [2008] No 44 Award’, [2009] No 1.
164 Quanshun v Jinsheng, Chongqing Municipal No 1 Intermediate People’s Court, 23 August
2001.
165 Supreme People’s Court, (2009) No 4.
 Prerequisites: contractual requirements 47
agreement but allow the agreement to be proved by trade custom, usages
and previous dealings between the parties. For example, the Brussels I
Regulation accepts jurisdiction agreements in a form pursuant to the
common practice between the parties or in accordance with the common
usage of international trade.166 This very flexible formal requirement,
nevertheless, has not been accepted in other jurisdictions.

Relaxation of formal requirements in arbitration

A typical example of the gradual relaxation of formal requirements is
found in the United Nations in its harmonization of arbitration rules. In
1958, the New York Convention required an arbitration agreement to be
‘in writing’, ‘signed by the parties’ or ‘contained in an exchange of letters
or telegram’. This requirement is very restrictive and rigid.167 It fails to
take into account most common commercial practices where the parties
agree terms orally without putting things in writing and the confirmation
of terms is prepared by one party subsequently and sent to another; many
arbitration agreements are contained in standard terms of a company,
which is not directly included in the current written contract between the
parties but only referred by written or non-written means; the letter or tel-
egram restriction for the exchange of communications does not consider
the development of modern technology, where many communications are
done through electronic means. The UNICITRAL Model Law (Amended
2006) has provided a more flexible interpretation, which relaxes the ‘in
writing’ requirement. Under the Model Law, ‘in writing’ includes: (1)
agreements that are concluded in writing; (2) agreements entered into by
any means and evidenced in writing168 (this validates an arbitration agree-
ment entered into orally or by conduct but recorded in written confirma-
tion169); (3) agreements contained in an exchange of statements between
the parties after disputes have arisen in which the existence of the
agreement is alleged by one party and not denied by the other;170 (4) a
written arbitration agreement contained in another instrument;171 and (5)
written by electronic means, if the information is ‘accessible so as to be
useable for subsequent reference’.172 The explanatory note also clarifies
that the requirement of signature and the exchange of messages are not

166 Art 23(1). The same rule exists in the Brussels I Recast, Art 25(1).
167 For criticism, see Graffi, 2006: 691–692; Hill, 1998: 11; Cohen, 1997: 273.
168 Art 7(3).
169 Ibid.
170 Art 7(5).
171 Art 7(6).
172 Art 7(4): Electronic communication means any communication that the parties make by
means of data messages—information generated, sent, received or stored by electronic,
magnetic, optical or similar means, including electronic data interchange, electronic
mail, telegram, telex or telecopy.
48 Prerequisites: contractual requirements
mandatory.173 Many Contracting States of the New York Convention also
provide more flexible interpretation to ‘in writing’.174 In England, for
example, the Arbitration Act 1996 expressly requires an arbitration agree-
ment to be ‘in writing’,175 and provides constructions similar, but not
identical, to that in the UNICITRAL Model Law. The term ‘in writing’ is
construed to include three forms: (1) An agreement is made in writing,176
including information being recorded by any means,177 which implies that
electronic communication is an accepted form for formation of arbitra-
tion agreements. The parties’ signature is not mandatory.178 (2) The agree-
ment is made by exchange of communications in writing.179 This means
the agreement is contained in an exchange of statements between the
parties in which the existence of the agreement is alleged by one party
and not denied by the other.180 (3) The agreement is evidenced in
writing,181 if the agreement not made in writing, but is recorded by the
parties or their agents.182 (4) If the parties, by other means, refer to written
terms, the arbitration agreement meets the requirement of ‘in writing’.183
Regardless of the trend to further relax the formal requirement of an
arbitration clause and to adopt the more commercial sensational
approach,184 the written requirement for an arbitration agreement,
however, remains in most countries. The common approach is to intro-
duce more flexible interpretation to written forms, instead of abandoning
the requirement of ‘in writing’ all together or permitting an arbitration
agreement to be concluded by alternative means. Although most courts
provide very flexible rules to the requirement of ‘in writing’, there must
be, at least, written evidence demonstrating the existence of an arbitration
clause. For example, in Netherlands, an arbitration agreement must be
proved by documents ‘in writing’ if its existence is under challenge.185
Although the court will not by its own motion invalidate the arbitration
agreement not recorded in a written form if parties do not challenge the

173 Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on Inter-
national Commercial Arbitration as amended in 2006, para 19.
174 Graffi, 2006: 692.
175 Art 5(1).
176 s5(2)(a).
177 s5(6).
178 s5(2)(a).
179 s5(2)(b).
180 s5(5).
181 s5(2)(c).
182 s5(4).
183 s5(3).
184 Kaplan, 1996: 27; Landau, 2002; Graffi, 2006: 693.
185 Art 1021(1) of the Dutch Code on Civil Procedure (amended). See Lazic, 2007: para
3.3.1.
 Prerequisites: contractual requirements 49
existence of the arbitration agreement, a written form is compulsory once
the agreement is challenged by one party.186
Finally, one issue that arises is whether the written requirement in the
New York Convention must be met if the arbitral award is sought recogni-
tion and enforcement between Contracting States. If the New York Con-
vention provides uniform rules for arbitration agreements falling within
its scope, the restrictive formal condition must be met.187 If an arbitration
agreement only meets the more flexible standard of a national law but not
the New York Convention, the court still recognizes its enforceability and
refers the dispute to the chosen tribunal, but the award made cannot be
enforced under the New York Convention.188 A possible way out is that the
court may construe that Article II(2) of the New York Convention provides
the maximum standard for an arbitration agreement, which only prevents
national courts from establishing more stringent rules to refuse to enforce
an arbitration agreement or an arbitral award, but does not prevent any
Contracting State from providing more arbitration-friendly rules to vali-
date these clauses.189 UNCITRAL also recommends that Article II(2)
should be interpreted as providing a non-exhaustive circumstances where
arbitration agreements may meet the requirement of being in writing.190

Signature
Must the written dispute resolution clause be signed by the parties before
it can be valid? Signature is traditionally used to prove the identity of the
signatories and their genuine consent. By signing their names on the
document, the signatories expressly show that (a) they read, know and
understand the terms of the contract, and (b) they express their consent
to be bound by the terms. The practical functioning of signature is still
important nowadays. However, many jurisdictions have abandoned the
rigid requirement for the existence of signatures for a contract to be valid.
If there are other means to establish parties’ consent to an agreement, the
agreement can continue to be binding. Signatures are not necessary in
certain contracts where consent can be demonstrated by parties’ conduct.
For example, the offeree conducted the performance directly after

186 Cf. The French practice to look for common consent between the parties and to validate
arbitration agreements may suggest an abandonment of written forms.
187 However, the national law of some countries may provide more restrictive formal
requirement to an arbitration clause than that in the NYC. See e.g. the Italian case Cara-
pelli SpA v Ditta Otello Mantovani [1981] ECC 183.
188 Graffi, 2006: 692; Pietro and Platte, 2001: 81.
189 Graffi, 2006: 692; Pietro and Platte, 2001: 81.
190 Recommendation Regarding the Interpretation of Article II, Paragraph 2, and Article
VII, Paragraph 1, of the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, Done in New York, 10 June 1958, Adopted by the UNCITRAL on 7 July
2006, at its Thirty-Ninth Session.
50 Prerequisites: contractual requirements
receiving the offer. In some cases, requiring signatures in every contract is
impractical. For example, mass market contracts do not require the signa-
ture of every consumer, passenger or audience for making the purchase.
Furthermore, in wrap contracts, the opening of a box by a party demon-
strates the consent to the terms printed on the box. Requiring written sig-
natures in every contract is no longer practical in the modern commercial
world. However, although strict requirement of written signature is no
longer necessary, there is much higher risk for a contract without
signatures.
The Hague Convention 2005 abandons the requirement of signature
for a written jurisdiction clause to be valid.191 However, signature may be
necessary for a jurisdiction clause concluded ‘in writing’ in the Brussels I
Regulation. Although Article 23(1)(a) (and Art 25(1)(a) of Brussels I
Recast) does not expressly require a written jurisdiction clause to be
signed, it nevertheless provided, by the ECJ, that the written form must
clearly and precisely demonstrate the consensus between the parties.192
The ECJ held in Galeries Segoura v FA Rahim Bonakdarian193 that the failure
to object does not constitute acceptance of jurisdiction agreements, unless
this is a common practice between the parties. In Six Constructions v Paul
Humbert,194 a jurisdiction clause was incorporated in the contract of
employment and the employee performed its obligation without raising
objection. The company argued it was sufficient evidence that the
employee accepted the clause and there was no requirement of signature
of the employee.195 The French Supreme Court, based on the ECJ’s deci-
sion, held that the lack of signature of the employee made the jurisdiction
clause not compliant with the written requirement.196 A more rigid
approach is found in a decision of the Luxembourg Court of Appeal,197
which held that a jurisdiction clause in the judgment convention could be
considered as expressly and particularly accepted by a person if this par-
ticular clause was signed by this person. The signature of the contract as a
whole was insufficient.198 This approach, however, is not accepted by most
latter cases because it is contrary to general trade practice and not com-
mercially sensational. The only relaxation is that there is no need to

191 Hartley and Dogauchi, 2007: paras 110 and 112.

192 Case 24/76 Estasis Salotti v RUWA [1976] ECR 1831, 1841.
193 [1976] ECR 1851. See also Société Microstof Textiles v Société Laine Freres [1990] ILPr 364.
194 [1990] ILPr 22.
195 Ibid.
196 Such as German courts, see BGH NJW 2001, 1731; Implants International v Stratec Medical
[1999] 2 All ER (Comm) 933; Magnus and Mankowski, 2012: 406–407. See also Alpina
Compagnia v Agenzia Marittima (the ‘Ice Express’) (Italian tribunale), [1990] ILPr 263.
197 Jurgen Weber v SA Eurocard Belgium-Luxembourg (Luxembourg Court of Appeal) [1993]
ILPr 55.
198 Para 11.
 Prerequisites: contractual requirements 51
require special form of signature, a signature, thus, can be entered into by
initials or stamps.199
The situation in arbitration is different. Before the New York Conven-
tion was established, English courts traditionally tried to find out the real
intention of the parties and, as part of common law tradition, approve
arbitration agreements without being signed if the parties’ consent could
be established by their conduct. In Baker v Yorkshire Fire and Life
Assurance,200 the court held the claimant submitted to arbitration included
in the insurance policy even if he did not sign it, because the claimant
relied on the policy to bring the action and could not disaffirm part of it
while relying on another.201 Although the New York Convention requires
signature for an arbitration clause to be formally valid, signature of the
parties is not mandatory in the domestic law of many countries.202 In the
US, the lack of signature was treated by the court as a possible lack of con-
sent.203 But once consent is proved, the lack of signature does not question
the formal validity of the arbitration clause. The New York Convention
also accepts a written arbitration agreement contained in an exchange of
letters or telegrams.204 In international commercial practice, where the
parties exchange letters or telegrams, usually one or both parties would
not sign. UNCITRAL Model Law further clarifies this issue by permitting
any form of communication to be classified as ‘in writing’. An arbitration
agreement can also be contained in an exchange of statements of claim
and defence in which the existence of an agreement is raised by one but
not denied by the other.205 The form of the original arbitration agreement
is not important. There is also no need for signatures any more.206
Why is the signature generally required in Brussels I but not in the
Hague Convention or in certain cases in the New York Convention? Does
Brussels I provide more rigid formal requirements to a dispute resolution
agreement on the cost of commercial efficacy? The reason is that Brussels

199 Re Jurisdiction Agreement (Case 2 Ob 280/05y) (Austrian Oberster Gerichtshof) [2008]

ILPr 38.
200 [1892] 1 QB 144, 145.
201 Followed by Hickman v Kent or Romney Marsh Sheepbreeders’ Association [1915] 1 Ch 881;
Morgan v William Harrison, [1907] 2 Ch 137; Anglo-Newfoundland Development v King,
[1920] 2 KB 214; Bankers & Shippers Insurance v Liverpool Marine & General Insurance
(1925) 21 Ll. L. Rep 86; Zambia Steel & Building Supplies v James Clark & Eaton, [1986] 2
Lloyd’s Rep 225.
202 English law: Arbitration Act, s5(2)(a). Lafarge (Aggregates) v London Borough of Newham,
[2005] EWHC 1337 (Comm).
203 Chastain v Robinson-Humphrey 957 F.2d 851 (C.A.11(Ga), 1992); Rollins v Foster 991 F.
Supp 1426 (M.D.Ala. 1998).
204 Art II(2).
205 Art 6(5).
206 Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on Inter-
national Commercial Arbitration as amended in 2006, para 19.
52 Prerequisites: contractual requirements
I also establishes two alternative forms to validate a jurisdiction clause.207
These alternative forms provide flexible conditions for a jurisdiction
clause to be entered into, and all the situations where the party does not
sign but demonstrates consent by other means fall into the alternatives.
Brussels I also aims to protect the opposing parties from being subject to a
jurisdiction clause by surprise. As a result, pure performance of a contract
without negotiation on a jurisdiction clause unilaterally inserted into the
contract by the other party will not be construed as consent in Article
23(1)(a) of the Brussels I Regulation (Art 25(1)(a) of the Brussels I
Recast) unless this conduct is common in the parties’ trading practice or
in the international trade of custom.208 The New York Convention does
not provide alternative forms other than written ones, and the only means
to provide flexibility in compliance with commercial practice is to provide
flexible interpretation to the term ‘in writing’.
However, is signature the only possible way to demonstrate parties’
consent in a case where there is no trade usage or common practice
between the parties? The answer should be negative. The exchange of
letters between the parties or the record of negotiation could prove the
consent, even though the final clause may not be signed. This form has
been accepted in the New York Convention as being ‘in writing’ but its
effect is in doubt in Brussels I if the parties do not have prior dealings or
there is no such trade usage. It is thus suggested that, since the only
requirement of ‘in writing’ is to show clear and precise consent, if parties’
consent can be proved, there is no strict requirement that a signature is
compulsory for Article 23(1)(a) of the Brussels I Regulation (Art 25(1)(a)
of the Brussels I Recast) to be satisfied. This approach is also adopted in
English decisions. In Claxton Engineering v TXM Olaj-es Gazkutato Kit,209 the
English court held an exclusive jurisdiction clause inserted by the offeree
into the offeror’s standard terms and conditions was validly ‘in writing’
even though there was no signature of both parties to certify the change,
because the offeror’s continued trading with the offeree amounted to
acceptance.

Format
Another question that frequently arises is whether the ‘manner’ on which
a dispute resolution clause is written down or expressed may invalidate
this clause. The ECJ has ruled in a few cases that a jurisdiction clause does
not satisfy the requirement of ‘in writing’ if it is not written in a way that
can attract the other party’s attention. For example, in Estasis Salotti v

207 Art 23(1)(b) and (c).

208 Art 23(1)(a) and (b).
209 [2011] ILPr 13.
 Prerequisites: contractual requirements 53
210
RUWA, a jurisdiction clause was held not to be in writing when it was
printed on the reverse side of a contract without a reference to it on the
front of the contract. Comparatively, in Credit Suisse Financial Products v
Société Generale d’Enterprises,211 a written contract referred to a master con-
tract where an English jurisdiction clause was contained. The court held
nevertheless that, since the offeree had signed the written contract with
clear written reference on it, the offeree agreed to the incorporated terms
of the main contract, including the jurisdiction clause.212 Comparing the
two case decisions, one could realize the difference. In Salotti, the jurisdic-
tion clause was on the reverse side of the contract with no reference made
on the face to it where the parties signed; in Credit Suisse, the contract
showed the reference directing to the jurisdiction clause on its face where
the parties signed. The court concerns whether the party that intends to
insert the jurisdiction clause into the contract has made an effort to bring
attention of the other party to the jurisdiction clause. In Salotti, it was very
possible that the party who signed the contract did not turn it around to
read the reverse side, while in Credit Suisse, the offeree should be able to
read the reference in the contract which it signed. Whether or not the jur-
isdiction clause is expressly written in full in the contract is not crucial. It
could be incorporated into the contract by referring to it, or to another
contract that contains it. Where the standard terms are referred to
expressly in the current contract, there is no need for a specific reference
to the jurisdiction clause.213
This decision is also helpful in many contracts signed online. It is
common practice that a website does not display full terms and conditions,
including jurisdiction clauses, on the page where the party is required to
click ‘I agree’ to show his consent. The website owner usually only pro-
vides a weblink referring to terms and conditions. The party who is
required to ‘sign’ usually is required to tick a box showing ‘I have read
and agreed to the terms and conditions’ to show he has read and fully
understood those terms, including a jurisdiction clause. According to the
above decisions, it is not crucial if the jurisdiction clause is not directly

210 Case 24/76. See also Luz v Bertram (Italian Corte di Cassazione) [1992] ILPr 537.
211 [1997] CLC 168 CA.
212 [1997] CLC 168 CA, ‘a “guarantee” of real consent does exist where there is an express
reference in the written contract itself by way of incorporation of other written terms
which include a clause conferring jurisdiction. Indeed, given such an express reference,
it seems to me self evident that the profferee of the written contract, by signing without
reservation, has agreed in writing the incorporated terms (and thus the clause confer-
ring jurisdiction) for the simple reason that the very words of the signed written contract
itself are to that effect . . . the consensus is incontrovertibly established by the express ref-
erence in the written contract itself.’
213 7E Communications Ltd v Vertex Antennentechnik GmbH [2007] 1 WLR 2175. For more
discussion on formal validity in the Brussels I Regulation and the relevant case law, see
Merrett, 2009: 551–553.
54 Prerequisites: contractual requirements
included in the page showing other contract terms, such as the descrip-
tion of goods and display of price, but included in a link directing to it.
The difficulty here is that such requirements may go too far and beyond
the requirement as to form. It enters the field of substantive validity
because it starts to consider not only the external expression of the
consent, but also the inherent authenticity and quality of the consent.
Because of this reason, many jurisdictions do not expand the formal valid-
ity to cover the circumstances when consent is made or the format of a
written clause, and believe these should be left to the scrutiny of material
validity. The additional requirement as to the format of writing is not
adopted in the 2005 Hague Convention. The Hague Choice of Court Con-
vention accepts agreements written in a foreign language; it does not
require a jurisdiction clause to be written in a particular form and a clause
in small and fine print or printed on the reverse side of the contract
without a reference on the front would still be valid as to form.214 If the
authenticity of consent is in doubt, the court can refer to material validity
requirements to invalidate it. It is questionable whether the ECJ require-
ments are still up to date. A particular reason for the ECJ to provide
extended meaning to the requirement of ‘in writing’ is because of the lack
of substantive requirements in the Brussels I Regulation. In a few cases,
the ECJ decides that formal validity alone is sufficient to determine the
substance of jurisdiction clauses.215 Although this opinion is severely criti-
cized by commentators, it is consistent with the ECJ’s common approach
to provide more valuable consideration to the written requirement and to
require ‘writing’ to show substantive consent.
The New York Convention does not expressly require the format of
writing to make an arbitration agreement formally valid. But the Contract-
ing States may use their national law to invalidate an arbitration agree-
ment on the ground that the format of writing taints the quality of
consent. The German court has invalidated an arbitration clause in a con-
sumer contract because it was one of those terms in small print extending
over several pages and it was written in a way difficult even for an attentive
and educated person to understand.216 Japanese courts are also reluctant
to allow an arbitration clause in small print to deprive a person of his
access to courts.217 In the US, a court might invalidate an arbitration clause
concealed in excessively small print or on the reverse side of contracts, or
one that uses unclear language, which may lead a court to find the

214 Hartley and Dogauchi, 2007: para 110.

215 C-214/89, Powell Duffryn v Petereit, ECR 1992, I-1745; C-106/95, MSG Mainschiffahrtsgenos-
senschft v Le Gravières Rhenanes SARL, ECR 1997 I-911.
216 Richard Zellner v Phillip Alexander Securities (Case 6 O 186/95) (Landgericht, Krefeld)
[1997] ILPr 716. Hess et al., 2007: para 376.
217 See discussion in Oldendorff v Libera [1996] CLC 482, 490.
 Prerequisites: contractual requirements 55
218
procedural unconscionability. However, the US courts enforced arbitra-
tion clauses printed on the reverse side of a contract with a reference to it
on the front,219 and clauses printed on the reverse side in bold form
without a reference on the front.220 Both are sufficient notices to the other
party.

Oral agreements evidenced in writing

Pure oral agreements may be invalid in some countries. The most
important reason is the impossibility to prove the existence and content of
the agreement. Some jurisdictions, especially common law countries, do
not require strict form of jurisdiction clauses. An oral agreement can be
valid, as far as it can be proved in a certain way. If both parties accept that
they have entered into a jurisdiction clause orally, there is no reason for a
court to invalidate such an agreement simply because it is in an oral form.
However, if a country does not accept oral agreement per se, it may still
accept the written evidence of an oral agreement. In some cases, the
parties have entered into an oral agreement. Afterwards, one sends written
confirmation containing this agreement to the other. If the other party
does not object in any means, the written confirmation is acceptable
written evidence of the agreement, which could make the agreement valid
in form.221 In Berghoefer GmbH & Co v ASA SA,222 the parties entered into
oral agreement, including jurisdiction clauses. One party sent the other
written confirmation afterwards, which was not disputed by the recipient.
The ECJ held that the jurisdiction clause was evidenced in writing and,
thus, valid.223 The UNCITRAL Model Law also provides that an arbitration
agreement may be entered into orally and it is valid as far as the content is
recorded.224
One important requirement for the ‘evidence in writing’ is that the sub-
sequent written document must simply confirm what was already agreed
upon orally, instead of inserting anything new in addition to what was dis-
cussed, or anything different from what was agreed upon. For example, in

218 Velazquez v Brank Energe 2011 WL 864857 (WDLa 2011) (validating arbitrating clauses in
capital letters); Stachurski v DirecTV 642 F. Supp. 2d 758 (NDOhio 2009), 767–768 (vali-
dating arbitration clauses printed in bolded, capital letters); In re Olympus Healthcare
Group 352 BR 603 (Bkrtcy.D.Del, 2006); Harris v Green Tree Financial 183 F.3d 173
(C.A.3(Pa), 1999), 182; Rollins v Foster 991 F. Supp. 1426.
219 Troshak v Terminix 1998 WL 401693 (E.D.Pa 1998).
220 McCullough v Shearson Lehman Brothers 1988 WL 23008, 3 (W.D.Pa, 1998). Cf Harris v
Green Tree 183 F.3d 173 (C.A.3(Pa) 1999); Doctor’s Assocites v Casarotto 517 US 681 (1996).
221 Hague Convention, official documents.
222 Case 221/84, [1985] ECR 2699.
223 For more discussion, see Merrett, 2009: 559–560.
224 Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on Inter-
national Commercial Arbitration as amended in 2006, para 19.
56 Prerequisites: contractual requirements
Segoura v Bonakdarian,225 the parties entered into an oral contract for the
sale of goods, but they did not discuss jurisdiction issues during negoti-
ation. When the seller performed his obligation, he delivered a docu-
ment/receipt stating the sale was subject to terms and conditions printed
on the reverse side of the document, which included a jurisdiction clause.
The buyer did not raise objection. The ECJ, however, believed that in this
case there was no valid jurisdiction agreement. The jurisdiction clause
contained in the terms and conditions was not agreed orally. The latter
document provided a new term which was consented by the other party,
instead of only confirming the agreement that was entered into by the
parties, which does not require the re-expression of consent.

5.2 Material validity

Lack of genuine consent

Parties should enter into agreements with authentic consent. Consent that
is tainted by misrepresentation, mistake, fraud, duress or undue influence
will make jurisdiction or arbitration clauses invalid. However, if the claim
is that duress or undue influence makes the main contract void, it will not
necessarily make jurisdiction or arbitration agreements void under the
doctrine of severability.226 In English common law, the court will consider
each case to decide whether the nature of duress or fraud could directly
invalidate the dispute resolution agreement.227 The same decision is held
in US courts. Although fraud or duress is sufficient to render a dispute res-
olution clause unenforceable,228 general claims that fraud or duress exists
in conclusion of the underlying contract cannot invalidate the dispute res-
olution clause.229 The opposing party must prove the dispute resolution

225 Case 25/76.

226 AstraZeneca v Albemarle International [2010] 1 CLC 715; El Nasharty v J Sainsbury [2007]
EWHC 2618 (Comm); Harbour Assurance v Kansa General International [1993] QB 701;
Westacre v Jugoimport-SDPR Holding, [1998] CLC 409. See Ch 3 below.
227 Westacre v Jugoimport-SDPR Holding; Israel Discount Bank of New York v Hadjipateras, [1984]
1 WLR 137.
228 Nagrampa v Mailcoups, 469 F.3d 1257 (C.A.9 (Cal) 2006); Walker v Ryan’s Family Steak
Houses, 400 F.3d 370 (C.A.6 (Tenn) 2005); Cooper v MRM Investment 367 F.3d 493 (C.A.6
(Tenn) 2004); Great Earth Companies v Simons 288 F.3d 878 (C.A.6 (Mich) 2002); Perry v
Thomas 482 US 483 (1987); Doctor’s Associations v Casarotto 517 US 681 (1996); Mitsubishi
Motors v Soler Chrysler-Plymouth 723 F.2d 155 (1st Cir. 1983); KKM v Gloria Jean’s Gourmet
Coffees Franchising 184 F.3d 42 (C.A.1(R.I.) 1999).
229 Preferred Capital v Associations of Urology, 453 F.3d 718, 722 (6th Cir. 2006) Wong v Party
Gaming Ltd 589 F.3d 821 (C.A.6 (Ohio), 2009); Buckeye Check Cashing v Cardegna, 824
So.2d 228, 230 (Fla.Dist.Ct.App. 2002); Southland v Keating, 465 US 1 (1984); Afram
Carriers v Moeykens 145 F.3d 298 (C.A.5 (Tex) 1998).
 Prerequisites: contractual requirements 57
230
agreement itself is included as the result of fraud or duress. This could
be the case where the dispute resolution is unilaterally imposed, or is uni-
laterally inserted by one party after the main contract is concluded.231

Connection between the chosen court and the dispute/defendant

The neutral nature of arbitration makes it common practice to select an
arbitral tribunal seated in a country with no connections to the dispute.
This restriction only applies to jurisdiction agreements but not arbitration
agreements. Most countries permit the parties to choose a neutral court to
decide their disputes,232 but some countries provide extra requirements as
to which courts can be chosen.233 For example, China Mainland requires
‘practical connections’ between the chosen court and the dispute,234 which
include the place where the defendant has his domicile, where the con-
tract is performed, where the contract is concluded, where the plaintiff
has his domicile or where the object of the action is located.235
Restricting the scope of courts that can be chosen may serve the
purpose of preventing parties from abusing the process and protecting the
parties from being deprived of their legal rights. However, the restriction
is no longer necessary. First, the nature of party autonomy is to give the
parties the right to decide their disputes. The law usually adopts a hands-
off approach to the choice, with the exception of certain sensitive and
fundamental issues and safeguarding of mandatory rules and public
policy. It is common practice for the parties to take their disputes to a
neutral forum where none of the parties may receive any advantage or
prejudice. Second, most countries have adopted exclusive jurisdiction to
prohibit choice of jurisdiction in actions where subject matters of which
concern the fundamental national interest or are under absolute and
effective state control, where jurisdiction should be taken exclusively for
the purpose of administration and enforcement. For all other issues, there
is no strong state interest involved and it is permissible for the parties to
decide on their own courts. Third, there are already formal requirements
and substantive contract law that supervise the background and circum-
stances under which jurisdiction clauses are entered into. Additional

230 Great Earth v Simons, 288 F.3d 878, 884, 890 (6th Cir. 2002); Associations of Urology; Binder
v Medicine Shoppe 2010 WL 2854308 (E.D.Mich. 2010); Fazio v Lehman Brothers 340 F.3d
386 (6th Cir. (Ohio) 2003); Inland Bulk Transfer v Cummins Engine 332 F.3d 1007 (6th
Cir. (Ohio) 2003); Greenview Hospital v Wooten 2010 WL 2835742, 5 (W.D.Ky. 2010); Albert
M. Higley v N/S Co 2004 WL 5550700 (N.D.Ohio, 2004).
231 Nagrampa v MailCoups. For the EU approach under Article 23 of the Brussels I Regula-
tion, see Merrett, 2009: 557–560.
232 Haines, 2002: para 2.
233 Ibid., paras 2–4.
234 Chinese Civil Procedure Law (Amended) 2012, Art 34.
235 Ibid., Art 34.
58 Prerequisites: contractual requirements
restrictions as to which court can be chosen in order to protect the parties
from being abused in process are redundant. The most recent inter-
national development in choice of court agreements, the 2005 Hague
Convention and the Brussels I Regulation and the Brussels I Recast, do
not require the chosen court to have any connections to the dispute.

Public interest
Dispute resolution clauses are substantively invalid if they are contrary to
the public interest. The definition of public interest is, again, uncertain. It
may be classified into different categories. First, there is public interest to
prevent a party from abusing its bargaining power in contracts with the
inequality of bargaining power. This will render dispute resolution clauses
invalid in certain contracts, such as consumer contracts,236 insurance
contracts,237 employment contracts,238 agency contracts239 and franchise
contracts.240 Second, there is public interest to ensure the parties will not
escape overriding mandatory rules or public policy of the state which is
affected by the parties’ contractual activities. If the parties choose a foreign
country to hear the dispute in order to evade the overriding mandatory
rules of the state of performance, the state of performance has sufficient
reasons to invalidate the jurisdiction clause even if it is concluded with the
authentic consent of both parties.241 Third, there is policy not to permit
party autonomy in areas concerning important public interest, the func-
tioning of public authority or administrative agencies, and the interest of
third parties. Law does not allow parties to choose the competent forum
in every matter. Some subject matters have been considered essential in
terms of a country’s sovereignty, public interest and policy. A country
claims exclusive jurisdiction over it and precludes party autonomy from
playing. For example, the parties cannot choose the competent court in
deciding the transaction of immoveable property.242 There are other
issues, where the parties could make agreement on the competent court,
but they cannot submit the subject matter to arbitration. This is relating to
arbitrability. It is recognized that not every subject matter is arbitrable.
Arbitrability is a matter of domestic law. National law could make reserva-
tion as to which subject matter should be heard exclusively in court.
Although most commercial matters are arbitrable, exceptions exist in

236 Section 4 of the Brussels I Regulation.

237 Section 3 of the Brussels I Regulation.
238 Section 5 of the Brussels I Regulation.
239 Case C-381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc. 2000 ECR I-9305.
240 Zimmerman, 1998: 759; Kubis & Perszyk Assocsiation v Sun Microsystems, 680 A.2d 618 (N.J.
1996); Haines, 2002: para 21.
241 Haines, 2002: para 21; Ingmar GB Ltd v Eaton.
242 Hartley and Dogauchi, 2007: para 67. For more on the exclusive jurisdiction, see Ch 4.
 Prerequisites: contractual requirements 59
243
antitrust matters, crimes, capacity of the parties, family law issue and
contracts including the weaker party.244 Fourth, enforcing agreements
entered into under duress or fraud can also be held against public poli-
cy.245 Finally, public policy may also come into play if the enforcement of
jurisdiction or arbitration clauses will cause, directly or indirectly, the loss
of statutory interest or access to justice of a party. For example, dispute
resolution agreements which may prevent a consumer from participating
in class action held in another state had been held against public policy of
California.246
US courts frequently use public policy to invalidate jurisdiction or arbit-
ration agreements. Dispute resolution clauses are invalidated if they are
‘unconscionable’.247 As the common law tradition, the concept of ‘con-
scionableness’ is uncertain. It may cover the situation where a dispute res-
olution clause designates an unfriendly/hostile jurisdiction,248 a clause
provides biased conditions between the parties and one party is obviously
in a disadvantageous situation compared to another249 or the process of
conclusion of the clause is unfair.250 All factors, including the presentation
of a clause, the circumstances to conclude the clauses and the con-
sequence of applying the clause, are all relevant. A dispute resolution
clause is invalid if it is obtained by fraud or overreaching, or the enforce-
ment is unreasonable or unjust.251
However, commercial soundness is a very important principle adopted
by US courts to decide the validity of a forum selection clause. US courts
have, in many cases, upheld dispute resolution clauses contained in

243 It was not arbitrable in old US law. See Mitsubishi Motors v Soler Chrysler-Plymouth, 473 US
614 (1985).
244 Private tenancy agreements are not arbitrable in Germany. See s1030(2)
Zivilprozessordnung.
245 Kaufman v Gerson [1904] 1 KB 591; Royal Boskalis Westminster NV v Mountain [1999] QB
674 (CA).
246 Doe1 v AOL LLC, 2009 WL 103657 (9th Cir. Jan. 16, 2009).
247 Haines, 2002: paras 17–19.
248 In Continental Grain Export v Ministry of War Etka, 603 F. Supp. 724 (1984), the choice of
Iranian courts was held unreasonable; Scott v Tutor Time Child Care Systems, Inc. 33 S.W.3d.
679 (Mo, 2000); Investors Guaranty Fund, Ltd v Compass Bank, 779 So.2d 185 (Ala. Sup.
Crt. 2000).
249 Bolter v Superior Court, 87 Cal.App. 4th 900, 908 (2001); Nagrampa v MailCoups, Inc. 469
F.3d 1257 (C.A.9 (Cal.),2006); Leasefirst v Hartford Rexall Drugs, Inc., 168 Wis.2d 83, 483
N.W.2d 585 (Wis.Ct.App.1992); First Federal Financial Service, Inc. v Derrington’s Chevron,
Inc., 230 Wis.2d 553, 602 N.W.2d 144 (Wis.Ct.App.1999); Feldman, 513 F. Supp. 2d,
242–243; Carnival Cruise Lines, Inc. v Shute, 499 US 585 (1991), 593; Swain v Auto Services,
Inc., 128 S.W.3d 103, 108–109 (Mo.Ct.App.2003).
250 Cottonwood Financial, Ltd v Estes, 339 Wis.2d 472, 810 N.W.2d 852, 856 (Wis.Ct.App.2012);
Tricome v Ebay Inc., No 09–2492, 2009 WL 3365873, at 2 (E.D.Pa. Oct.19, 2009); Alexander
v Anthony Int’l., L.P., 341 F.3d 256, 265 (3d Cir.2003); Grant v Phila. Eagles, LLC, No
09–1222, 2009 WL 1845231, 6. (E.D.Pa. June 24, 2009).
251 Bremen v Zapata Off-Shore, 15.
60 Prerequisites: contractual requirements
standard form contracts with or without the signature of the other party.
In such contracts, the courts examine the size and the format of the
warning notice, whether it could direct the reader’s attention to its terms
and conditions,252 and the language used in the clause—whether it is
drafted in a clear and unambiguous manner.253 As far as the clause is dem-
onstrated clearly and made available to the other party, it is valid, and
whether the reader in fact takes the chance to read it is not a serious con-
cern.254 Furthermore, even if a clause chooses a foreign country to decide
a dispute between two parties with the same habitual residence, and the
other party is a weaker one, such as passengers, as far as the chosen forum
has connections to the contract, the clause should be valid.255

6 Interpretation and scope of dispute resolution

agreements

6.1 Introduction
Sometimes, there is no dispute over the existence and validity of a dispute
resolution agreement, but the disagreement is over whether the disputed
matter is subject to the dispute resolution agreement, which requires the
forum to consider the construction and scope of an agreement. A classic
challenge on the scope of a dispute resolution agreement is whether it
covers non-contractual claims. In international commercial practice, a
dispute resolution agreement is usually concluded before a dispute has
arisen and concluded as part of commercial contract. The wording usually
says any dispute ‘arising out of ’, ‘in connection with’ or ‘in relation to’ the
contract should be submitted to the chosen forum. While disputes occur
on tort or other non-contractual claims, one party that wants to escape the
dispute resolution agreement always argues that the dispute in question
does not fall within the scope of the agreement.
It is necessary to know that not all countries permit the parties to
choose a competent forum to decide non-contractual disputes. In arbitra-
tion, the New York Convention accepts that parties could submit all dis-
putes, ‘contractual or not’, to arbitration.256 Contracting States thus have
treaty obligations to permit the parties to enter into an arbitration agree-
ment to resolve their non-contractual dispute. English courts accept an
arbitration clause could cover tort claims if there was a sufficient close

252 Effron v Sun Line, 9.

253 Ibid., 9.
254 Ibid., 9.
255 Ibid., 9; Hollander v K-Lines Hellenic Cruises, 670 F. Supp. 563, 566 (S.D.N.Y. 1987);
Damigos v Flanders Companiea Naviera, 716 F. Supp. 104, 107 (S.D.N.Y. 1989).
256 Art II.1.
 Prerequisites: contractual requirements 61
257
connection between the tort and the contract. The construction of an
arbitration agreement only concerns whether it covers all, or some, of the
disputed matter. In JSC BTA Bank v Ablyazov,258 for example, the arbitra-
tion agreement reads: ‘Any disputes, differences or claims arising from
this contract (agreement) or in connection therewith, including the ones
relating to its performance, breach, termination or invalidity.’ The claim-
ant bank sued the defendant for intentional fraud and wrongdoing, and
claimed that the agreement did not cover non-contractual obligations.
The parties agreed that Kazakh law governed the agreement. Kazakh law
requires an arbitration agreement to be interpreted according to its literal
meaning.259 The English court considered the literal interpretation of
‘arising from’ and ‘in connection therewith’ should include a tort claim
relating to the contract.260 The claimant’s claim is dismissed.
In jurisdiction agreements, the common practice in the world is that
parties are permitted to choose competent courts in almost all civil and
commercial matters except those subject to exclusive jurisdiction. For
example, choice of court is allowed in both contractual and tort actions in
the Brussels I Regulation.261 The Hague Convention 2005 does not exclude
the choice of court in tort from its scope.262 However, some countries
restrict the scope of jurisdiction clauses and permit only choice of court
for contractual relationships. For example, Article 34 of the Chinese Civil
Procedure Law 2012 permits the parties to choose the competent court
for ‘a dispute over a contract concluded with foreign element or over
property rights and interests involving foreign element’. A strict literal
reading may suggest that parties are not allowed to choose the competent
forum for non-contractual, non-property obligations, such as tort.
However, Chinese courts in practice prefer more flexible interpretations
and would apply jurisdiction clauses to at least contract-related tort
claims.263

6.2 Construction of dispute resolution agreements

If a country permits the parties to choose a forum in any cross-border rela-
tionship not subject to exclusive state control or restriction, the parties are

257 Empresa Exportadora De Azucar (CUBAZUCAR) v Industria Azucarera Nacional SA (IANSA)

[1983] 2 Lloyd’s Rep 171; Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic
Grace) [1995] 1 Lloyd’s Rep 87.
258 [2011] EWHC 587 (Comm).
259 Para 64.
260 Ibid.
261 Art 23(1) of the Brussels I Regulation.
262 Hartley and Dogouchi, 2007: 16 and para 39.
263 See Lai v ABN AMRO Bank, Shanghai Municipality High Court, (2010) No 49; Watanabe
v Culture & Art Press, Shanghai Municipality No 1 Intermediate Court, (2008) Hu Yi
Zhong Min Wu (Zhi) Chu No 210. Discussed below.
62 Prerequisites: contractual requirements
free to draft dispute resolution clauses to govern particular relationships
or to cover all disputes arising between them. The scope of a conflicts
clause is usually decided by considering the language used and all the cir-
cumstances of contracting. For example, if a jurisdiction clause provides
that: ‘All contractual disputes arising between the parties shall be heard by
the court of Hong Kong’, it shows that the jurisdiction clause does not
apply to non-contractual obligations. If, on the other hand, the parties
enter into jurisdiction agreements after the tort activity has been done to
address the dispute arising out of the tort action, the jurisdiction clause
clearly governs the dispute in question. Questions may arise if the parties
use ambiguous language by saying, for example, ‘The parties agree to
submit disputes to English courts’. It then depends on the court to inter-
pret whether the parties submit only their contractual disputes to English
courts, or the parties intend to submit all contract-related, non-contractual
disputes to English courts.
In England, construction of a conflicts clause ‘should start from the
assumption that the parties, as rational businessmen, are likely to have
intended any dispute arising out of the relationship into which they have
entered or purported to enter’ to be governed by the conflicts clause
unless the language clearly suggests to the contrary.264 It is stated by Lord
Hope that265

The proposition that any jurisdiction or arbitration clause in an inter-

national commercial contract should be liberally construed promotes
legal certainty. It serves to underline the golden rule that if the parties
wish to have issues as to the validity of their contract decided by one
tribunal and issues as to its meaning decided by another, they must say
so expressly. Otherwise they will be taken to have agreed on a single
tribunal for the resolution of all such disputes.

It is clear that the presumption will be made that a conflicts clause will be
broad enough to cover all the disputes arising out of the agreement,
unless the language clearly states otherwise. Furthermore, some clauses
are drafted in a particularly broader manner that they should cover dis-
putes arising ‘in relation to the contract’, which could extend the coverage
to closely related matters or other related contracts.266 However, English
courts also held that this presumption is rebuttable. If the applicable
law requires the dispute resolution clause to be construed according to
its literal meaning, the court cannot apply the ‘rational businessman’

264 Fiona Trust and Holding v Privalov [2007] UKHL 40, para 13, per Lord Hoffmann.
265 Fiona Trust and Holding v Privalov, para 26.
266 Cinnamon European Structured Credit Master Fund v Banco Commercial Portugues SA [2010]
ILPr 11.
 Prerequisites: contractual requirements 63
presumption but have to consider the actual words used and the literal
meanings of the dispute resolution agreement.267
In the US, courts consider the ‘factual allegations’ rather than ‘the
causes of action asserted’ to decide whether jurisdiction clauses cover the
action.268 In Terra v Mississippi Chem,269 proceedings may arise out of a con-
tract if: (1) they ‘ultimately depend on the existence of a contractual rela-
tionship between the parties’; (2) ‘resolution of the claims relates to
interpretation of the contract’; or (3) ‘contract-related tort claims involve
the same operative facts as a parallel claim for breach of contract’.270 In
Cfirstclass v Silverjet,271 the buyer claimed against the successor of a seller
for tortious interference with an advantageous business relationship, tor-
tious interference with contract and unjust enrichment. All the claims
were fundamentally based on terms of sales agreements between the seller
and the buyer and should be subject to the jurisdiction clauses in the sales
agreement. In Attachmate v Public Health Trust,272 for example, a manufac-
turer of software sued the purchaser for infringement of copyright and
breach of the licence agreement. The purchaser purchased the software
by issuance of purchaser orders which contained a clause agreeing that
any litigation regarding the performance of the contract shall be submit-
ted to Florida. The purchaser then was provided with copies of the end
user licence agreement. The question is whether the jurisdiction clause in
the purchaser order can be used to govern the claim on infringement of
copyright. The action does not involve interpretation of the term in, or
the performance of, the purchase order, instead it is based solely on the
license agreement, which is a separate contract. The court believed that
the two contracts concerned different matters and were independent of
each other. The jurisdiction clause thus did not cover the claim in action.
Delictual claims frequently arise out of contracts. In England, for
example, if an employee is injured during the course of his employment,
an audience is injured in a premise, a passenger is injured during carriage
or a consumer is injured by the defect of a product, the victim could sue
the other party for breach of common law duty of care and statutory duty,
and/or for the breach of contractual obligations. Non-contractual obliga-
tions also arise during the negotiation or the conclusion of a contract,

267 JSC BTA Bank v Ablyazov, para 64.

268 Phillips v Audio Active 494 F.3d 378, 388 (C.A.2 (NY) 2007); Roby v Co of Lloyd’s 996 F.2d
1353, 1360–1361 (2d Cir. 1993); Worldwide Network v DynCorp International 496 F. Supp.
2d 59, 63 (D.D.C.2007); Cheney v IPD Analytics 583 F. Supp. 2d 108, 122 (D.D.C., 2008).
269 119 F.3d 688, 693–694 (8th Cir. 1997).
270 Ibid., 694, as cited in Cheney v IPD Analytics, 122; Coastal Steel Corp. v Tilghman Wheelabra-
tor Ltd, 709 F.2d 190, 203 (3d Cir.1983); Manetti-Farrow, Inc. v Gucci America, Inc., 858
F.2d 509, 514 (9th Cir.1988); Lambert v Kysar, 983 F.2d 1110, 1121–1122 (1st Cir. 1993));
Worldwide Network Servs., 496 F. Supp. 2d at 62; Gullion v JLG Serviceplus, Inc., Civil Action
No H-06–1015, 2007 WL 294174, 5 (S.D.Tex. Jan. 29, 2007).
271 560 F. Supp. 2d 324 (S.D.N.Y 2008).
272 Attachmate Co v Public Health Trust 686 F. Supp. 2d 1140, 1150 (W.D. Wash., 2010).
64 Prerequisites: contractual requirements
such as fraud or misrepresentation, which causes the conclusion of a con-
tract, negotia gestro and contra in comprehendo. The third situation is where
the parties have entered into a contract to build up a long-term commer-
cial relationship and, during the relationship, one party commits business-
related tort, such as infringement of the other parties’ property rights.
In practice, some plaintiffs may try to avoid a valid conflict clause by
relying on non-contractual claims. Some US judges adopted a narrow
interpretation to a jurisdiction clause. If a clause does not clearly state that
it will apply to ‘any’ claims between the parties, or specify it applies to non-
contractual obligations, the courts refuse to apply jurisdiction clauses to
non-contractual claims.273 However, most courts prefer to provide jurisdic-
tion clauses a broad meaning. Unless the parties provide otherwise, a juris-
diction clause shall be applied to non-contractual obligations arising out
of or in relation to the contract which contains the jurisdiction clause. The
same approach is adopted in China in order to prevent the party from
manipulating the claim in order to avoid the dispute resolution clause. In
Lai v ABN AMRO Bank,274 for example, the claimant wanted to avoid the
jurisdiction clause in the investment agreement by formulating his claim
on fraud. The claimant argued that the jurisdiction clause only applied to
contractual obligations. The court decided that the scope of a jurisdiction
clause is broad enough to cover not only contractual claims, but also other
claims arising out of or in relation to the contract where the jurisdiction
clause is included. In another case, Watanabe v Culture & Art Press,275 a Jap-
anese writer and a Chinese press concluded a publication contract, choos-
ing Japan as the exclusive forum. Watanabe sued the Chinese publisher in
China for infringement of his copyright, and claimed that the jurisdiction
clause was invalid because the dispute was not one based on the publica-
tion contract. The court decided that, if the contractual parties have
expressly agreed on the competent court to decide disputes, they should
not freely choose or change the basis of the claim to escape their agree-
ment. The Supreme People’s Court also expressly provides in the Arbitra-
tion Law Judicial Interpretation (2006 Interpretation) that, if the parties
state that ‘contractual disputes’ (he tong zheng yi) are subject to arbitration,
any disputes arising out of contracts should be submitted to arbitration.276

7 Harmonization and cooperation

It is ideal that, after the parties enter into a dispute resolution agreement,
they will voluntarily perform their promise. However, in practice, disputes

273 See e.g. Morgan Trailer Mfg. Co. v Hydraroll, Ltd, 759 A.2d 926, 931 (2000); Jacobson v Mail-
boxes, Etc. USA, Inc., 419 Mass. 572 (1995). Haines, 2002: para 8.
274 Lai v ABN AMRO Bank, Shanghai Municipality High Court, (2010) No 49.
275 Watanabe v Culture & Art Press, Shanghai Municipality No 1 Intermediate Court, (2008)
Hu Yi Zhong Min Wu (Zhi) Chu No 210.
276 Art 2.
 Prerequisites: contractual requirements 65
concerning the existence and validity of dispute resolution agreements
arise frequently. Different national law in this issue causes uncertainty,
while jurisdiction or arbitration agreements are held valid in one country,
but not in another. This level of disparity can lead to the ineffectiveness of
dispute resolution agreements. International harmonization, as a result, is
necessary and helpful.
The current legal framework shows that harmonization in formal valid-
ity of a dispute resolution agreement is much easier than harmonization
of substantive validity. Domestic contract law of most countries represents
great similarity in the formal requirements of a contract. The contract
freedom principle and idea to reduce business costs and to improve effi-
ciency call for the relaxation of the requirements for formation and
formal validity, especially as the result of the development of telecommu-
nications technology. Against this background, harmonization of formal
validity of dispute resolution agreements is fairly successful at both the
international and the regional level and in both jurisdiction and arbitra-
tion agreements.
Harmonization of substantive validity, on the other hand, is more diffi-
cult. Domestic law varies largely in its content on material validity. Further-
more, some issues relating to substantive validity connect closely with a
country’s policy, public interest and concept of justice and fairness. Sub-
stantive validity covers a large number of issues, including the subject and
scope of a dispute resolution agreement, the requirement of genuine
consent and fair deal, including duress and coercion, capacity of a party,
protection of the weaker parties, the effect and influence of dispute res-
olution agreements and the involvement of third parties. It is difficult, if
not impossible, to harmonize these issues, even at the regional level.
Harmonization can only be achieved in uniform choice of law rules.
However, exceptions should be given to public policy of a country. In
arbitration, the general concept is not to harmonize either substantive law
or choice of law in arbitration agreements. The same level of certainty
does not exist in arbitration, but it does not seriously hamper the effective-
ness of arbitration agreements in international commerce. It is because
most national courts understand the importance of party autonomy in
international arbitration and bear in mind the general policy to validate
and enforce arbitration agreements in the absence of fundamental public
policy infringement.
A question arising during the comparative study is whether the prelimi-
nary requirements are identical for jurisdiction and arbitration agree-
ments, and whether it is necessary and practical to provide the same set of
rules to decide existence and validity for the two different types of dispute
resolution agreements. The practice in common law countries clearly
shows a level of similarity and the court, when being asked to decide valid-
ity of jurisdiction agreements, frequently refers to previous judgments in
arbitration agreements, and vice versa. In China, however, the legislative
66 Prerequisites: contractual requirements
provisions differ widely between jurisdiction and arbitration agreements.
It is because the rules applying to arbitration agreements have mirrored
relevant provisions in the New York Convention, and the law-markers fail
to consider the relevance and connection between the two dispute resolu-
tion agreements when drafting provisions on jurisdiction agreements.
Arguably, the contractual characteristic of both agreements makes it
possible to impose the same rules for formation and validity. Applying the
same rules to them could provide certainty and efficiency to the parties. In
practice, however, more flexibility may be given to validate arbitration
agreements than jurisdiction agreements. Especially when an arbitral tri-
bunal is seized to decide the validity of an arbitration agreement, the tri-
bunal may not apply the law of any particular country but instead find out
the genuine intention of the parties at the time of contracting. Even if a
court is seized to decide this issue, a court may nevertheless preserve more
judicial discretion to validate arbitration agreements.277 Further difference
exists in substantive validity, where public policy may be used more fre-
quently to invalidate judicial agreements than arbitration agreements. The
subjective matter scope also differs between jurisdiction and arbitration
agreements. While some countries prevent the parties from submitting
issues relating to state sovereignty or public interest to the other country’s
jurisdiction, some of these issues are nevertheless arbitrable. This is why
the same validity requirements for jurisdiction and arbitration agreements
are rarely found in civil law jurisdictions. The common law jurisdictions
provide the same test for both agreements and leave discretion to the
court to make decisions on a case-by-case basis. It is thus submitted that
jurisdiction and arbitration agreements are similar, but not identical, in
the perspective of contractual law. The same rules on prerequisites, thus,
are inappropriate for jurisdiction and arbitration agreements.

277 Such as French courts, see e.g. SOERNI v ASB; Municipalité de Khoms El Mergeb v Société
Dalico; ETAP v Bomal Oil; ETPM v ECOFISA.
3 Prerequisites
Which forum decides?

1 Introduction
If a party challenges the existence and validity of a dispute resolution
clause, which courts or tribunals have jurisdiction to decide the preliminary
issue and jurisdiction of either themselves or others? The challenge to the
preliminary issue of a dispute resolution clause may arise in two circum-
stances. First, the claimant may argue that the main contract has never been
concluded or the main contract is invalid. Since a dispute resolution clause
is part of the contract, this argument also questions the existence and valid-
ity of the dispute resolution clause. The doctrine of separability usually
applies to deal with this situation, under which the dispute resolution agree-
ment is deemed independent from the main contract and the non-
existence or invalidity of the main contract cannot necessarily invalidate the
dispute resolution agreement. Second, a claimant may directly challenge
the existence or validity of a dispute resolution agreement. The question is
whether the chosen forum is competent to rule on its own jurisdiction
when the dispute resolution agreement that confers power to this forum is
under challenge. The doctrine of kompetenz-kompetenz applies to grant the
chosen forum the competence to examine its own jurisdiction. The doc-
trines of separability and kompetenz-kompetenz work together to promote the
effectiveness of dispute resolution agreements and party autonomy.1 This
chapter examines the theory and the practice of the doctrine of separability
and kompetenz-kompetenz in cross-border dispute resolution.

2 The doctrine of separability

2.1 Introduction
In practice, the existence and validity of the main contract is frequently
under dispute. The claimant could commence the action arguing that the

1 Coe, 2009: 1378. These two doctrines are related but are different and work in different
situations. See Rosen 1994: 602.
68 Prerequisites: which forum decides?
alleged contract is terminated, repudiated, invalid or not concluded. The
court or tribunal thus is required to decide the alleged non-existence or
invalidity of the main contract. Before a court or tribunal could decide the
substance of a dispute, it must be satisfied that, first of all, it has jurisdic-
tion. If the claimant sues in the chosen court challenging the validity and
existence of the main contract, the defendant may argue that when the
claimant raises this claim the claimant must believe the jurisdiction clause,
as part of the contract, does not exist or is invalid. The claimant is thus
estoppeled from relying on the jurisdiction clause in bringing the action
in the chosen court. Furthermore, the chosen court cannot assert jurisdic-
tion while the existence and validity of the jurisdiction clause is in ques-
tion. The same difficulty arises in arbitration agreements.
If a party is barred from bringing proceedings in a chosen forum when-
ever he starts to question the validity and existence of a contract, it makes
exclusive jurisdiction clauses or arbitration agreements practically useless.
It may also violate the intention of the parties, who, when entering into
the agreement, consented to submit literally ‘all’ disputes to the chosen
forum. The party who wants to breach the dispute resolution clause that is
freely entered into can do it simply by adding an additional claim ques-
tioning the validity of the main contract and bringing the case to another
country. In order to protect party autonomy and to hold parties to their
agreement, the common practice in deciding jurisdiction on the existence
and validity of a main contract is the doctrine of separability. It means that
jurisdiction and arbitration clauses are treated severable and independent
from the main contract. The non-existence or invalidity of the main con-
tract does not affect the parties’ right to bring the action to the chosen
court.2

2.2 The doctrine of separability in English law

The doctrine of separability has been accepted widely in the world but not
without scepticism. In England, some early authorities believed that arbi-
trators could not decide the validity of a contract because a challenge on
the validity of the underlying contract simultaneously challenges the valid-
ity of an arbitration agreement.3 Limited separability was adopted in some
early authorities, distinguishing arguments between the initio invalidity or
inexistence of a contract, and the latter repudiation or frustration of a

2 UR Power v Kuok Ails [2009] 1 Lloyd’s Rep 495, 503; Novasen S.A. v Alimenta S.A. 2011
EWHC 49 [Comm]; Scherk v Alberto-Culver Co 417 US 506 (1974); Mackender v Feldia AG
[1967] 2 QB 590; Deutsche Bank AG v Asia Pacific Broadband Wireless Communications [2008]
EWCA (Civ) 1091, para 24; Mackender v Feldia [1967] 2 QB 590; Fiona Trust v Privalov
[2008] 1 Lloyd’s Rep 254; Ryanair v Bravofly [2009] ILPr 41.
3 Johannesburg Municipal v D Stewart 1909 SC(HL) 53; Jureidini v National British and Irish
Millers Insurance [1915] AC 499; Hirji Mulji v Cheong Yue Steamship [1926] AC 497. Halsbury’s
Laws of England, (4th ed., 1991), para 612.
 Prerequisites: which forum decides? 69
4
contract. If a contract ceases to exist or is rendered unenforceable at a
later stage, the dispute resolution clause in the contract continues to have
effect;5 if the contract is void ab initio, so is the dispute resolution agree-
ment.6 The logic of the orthodox view is ‘nothing can come from
nothing’.7 However, the justification is later criticized as failing to construe
the meaning and coverage of an arbitration agreement.8 Even if the
parties have intention to have ‘everything’ arising out of their relationship
submitted to arbitration, including the alleged initio invalidity or non-
existence of a main contract, their intention cannot survive if the contract
is void ab initio.9
English courts gradually adopt the doctrine of separability in full, by
regarding a dispute resolution agreement ‘a self-contained contract collat-
eral to the containing contract’.10 However, at the early stage, a ‘construed
intention’ approach is adopted, under which the effect of a dispute resolu-
tion clause largely depends on the language used. For example, it is con-
strued by some judges that an arbitration clause covering all disputes
‘arising under’ the contract does not show the parties have the intention
to submit the void ab initio contract to arbitration, but a clause expressly
covering disputes ‘arising out of ’ the agreement does.11 The House of
Lords later said in Fiona Trust v Privalov that the language used to draft a
dispute resolution clause was not decisive12 because the different word
made no difference in commercial practice.13 While an underwriter drafts
a standard term contract including an arbitration or jurisdiction clause,
the underwriter will not consider the slightest difference between ‘under’
and ‘out of ’.14 Based on this reason, a ‘presumed intention’ approach is
established. It is presumed that, by inserting a dispute resolution clause,
the parties have the intention to have all disputes in relation to their con-
tract decided by the chosen forum irrespective of the invalidity of the
main contract,15 unless the parties explicitly state otherwise.16

4 Heyman v Darwins [1942] AC 356; Harbour Assurance v Kansa General International Insurance
[1993] QB 701
5 Heyman v Darwins.
6 Ibid.
7 Harbour Assurance v Kansa General, 710.
8 Ibid., 711.
9 Ibid., 711.
10 Ibid., 711.
11 Heyman v Darwins; Overseas Union Insurance v AA Mutual International Insurance [1988] 2
Lloyd’s Rep 63; Fillite (Runcorn) v Aqua-Lift (1989) 26 Con LR 66, 76; MacKender v Feldia
AG [1967] 2 QB 590. Cf Union of India v EB Aaby’s Rederi A/S [1975] AC 797.
12 [2007] 4 All ER 951, para 12.
13 Ibid.
14 Ibid.
15 Ibid., para 13. See the reference to German law, Decision of 27 February 1970 of the
Federal Supreme Court of the Federal Republic of Germany (Bundesgerichtshof) (1970)
6 Arbitration International 79, 85.
16 Vee Networks v Econet Wireless [2005] 1 All ER (Comm) 303.
70 Prerequisites: which forum decides?
The ‘presumed intention’ approach saves the court effort in consider-
ing the specific language used by a dispute resolution agreement to decide
whether the parties have intention to submit disputes on the very exist-
ence and initio validity of a contract to their chosen forum. The technical
analysis of the language used is not realistic and may depart from the
actual intention of the parties. This approach is certain, efficient and easy
to apply; it is consistent with the commercial practice and reality. This
approach is consistent with section 7 of the Arbitration Act 1996, which
provides:17

Unless otherwise agreed by the parties, an arbitration agreement

which forms or was intended to form part of another agreement
(whether or not in writing) shall not be regarded as invalid, non-
existent or ineffective because that other agreement is invalid, or did
not come into existence or has become ineffective, and it shall for that
purpose be treated as a distinct agreement.

The English courts justify the doctrine of separability primarily on the

grounds of party autonomy and commercial practicability. However,
although the commercial parties, by entering a dispute resolution clause,
have intention to submit their contractual disputes to the chosen forum,
which will not be affected by the later frustration and repudiation, it is
questionable whether such intention exists where the contract is not
formed from the very beginning. Furthermore, a contract may be ren-
dered void ab initio by different reasons, some of which concern the sub-
stance of the contract, such as the illegality of the transaction, and some of
which concern the existence and quality of consent. Within the latter, dif-
ference exists between consent to the main contract terms and consent to
the contract as a whole. If a contract is unenforceable, because a party is
adduced into the contract by fraud, duress or undue influence relating to
terms of price, delivery, quality and quantity of goods, it does not affect
the intention of the parties to conclude the dispute resolution clause; if a
party has no intention to enter into the contract at all but is forced to sign
the agreement under duress, the duress also taints the intention to enter
into the dispute resolution clause. The doctrine of separability could
provide practical convenience for a court to decide a dispute, but separat-
ing a dispute resolution clause from the main contract is not always a real-
istic option.

17 Although there is no domestic legislation confirming the same approach is applicable to

jurisdiction agreements, the English courts rule that the same treatment should be used
for the choice of jurisdiction. Deutsche Bank v Asia Pacific Broadband Wireless, [2009] ILPr
36.
 Prerequisites: which forum decides? 71
2.3 Doctrine of separability in the European law
The doctrine of separability has been accepted in the EU. The ECJ
affirmed the doctrine of separability in Benincasa v Dentalkit.18 Mr Benin-
casa and a company entered into a franchising contract, which contained
an exclusive choice of court agreement choosing Italian courts. Benincasa
later brought proceedings in Germany seeking to declare the franchising
contract void under German law. He claimed that the choice of court
clause could derogate German courts of jurisdiction because the action
was to declare the main contract void, including the jurisdiction clause as
a contract term. The German court referred the question to the ECJ for
the clarification as to whether the court of a Member State designated in
an exclusive jurisdiction clause under the Brussels Convention (precedent
of the Brussels I Regulation) had exclusive jurisdiction when the action
was for a declaration of the invalidity of the main contract.19 The ECJ
answered the question by applying the principle of separability. The ECJ
drew a distinction between a jurisdiction clause and other substantive con-
tractual provisions.20 The former served a procedural purpose and was
governed exclusively by the uniform jurisdiction rules of the Brussels Con-
vention, while the latter was governed by the lex causae.21 The invalidity of
the underlying contract may not mean the invalidity of a jurisdiction
clause given the different applicable law. Furthermore, the aim of legal
certainty requires the seized court to decide its jurisdiction without having
to consider the substance of the case.22 This requires the court not to con-
sider the validity of the contract before deciding whether or not to take
jurisdiction. This purpose, however, would be jeopardized if one party
simply claimed the contract was void and was permitted to sue in a non-
chosen forum.23 The doctrine of separability is further ascertained in the
Brussels I Recast; Article 25(5) expressly provides that:

an agreement conferring jurisdiction which forms part of a contract

shall be treated as an agreement independent of the other terms of the
contract. The validity of the agreement conferring jurisdiction cannot
be contested solely on the ground that the contract is not valid.

18 Case C-269/95, Benincasa v Dentalkit [1997] ECR I-3767.

19 Ibid.
20 Para 24.
21 Para 25.
22 Para 27.
23 Para 29. Prorogation jurisdiction ‘sets out to designate, clearly and precisely, a court in a
Contracting State which is to have exclusive jurisdiction in accordance with the consensus
formed between the parties, which is to be expressed in accordance with the strict require-
ments as to form laid down therein. The legal certainty which that provision seeks to secure
could easily be jeopardised if one party to the contract could frustrate that rule of the Con-
vention simply by claiming that the whole of the contract was void on grounds derived from
the applicable substantive law.’ For comments, see Purdie, 2008: 1489; Harris, 1998: 279.
72 Prerequisites: which forum decides?
2.4 Doctrine of separability in the USA
Most modern US cases adopt the doctrine of separability to all types of
dispute resolution agreements unless the clauses express to the contrary.24
The doctrine of separability in the US is first accepted in arbitration agree-
ments. US courts traditionally treated an arbitration agreement severable
from the main contract in order to, ironically, invalidate the arbitration
agreement but enforce the terms of the main contract.25 After the Federal
Arbitration Act entered into force,26 many courts used the doctrine of sep-
arability to enforce an arbitration agreement in an alleged invalid contract
based on the federal policy to promote arbitration.27 The doctrine of
separability is later extended to jurisdiction clauses by the liberal and flex-
ible interpretation of the judgment in Bremen v Zapata.28 The Bremen case
states that a choice of forum clause is effective if it is freely negotiated and
unaffected by fraud.29 This decision is interpreted by some courts to mean
that a dispute resolution clause is unenforceable only if the clause itself,
instead of the main contract, is the product of fraud or coercion.30
However, the US courts do not unanimously adopt the doctrine of sepa-
rability to all jurisdiction clauses. Some courts use a ‘consent test’ by
enquiring ‘whether the parties assented to all the promises as a single
whole, so that there would have been no bargain whatever, if any promise
or set of promises were struck out’.31 Others consider the whole circum-
stances of the case to decide if the parties have real intention to submit
the claim challenging the main contract to the chosen forum. In eBay v

24 Robert Lawrence v Devonshire Fabrics 271 F.2d 402 (CA2 1959); Watkins v Hudson Coal 151
F.2d 311 (3 Cir 1945); Petition of Prouvost Lefebvre 102 F. Supp 757 (1952); Kulukundis Ship-
ping v Amtorg Trading 126 F.2d 987 (2 Cir 1942); Almacenes Fernandez v Golodetz, 148 F.2d
625; In re Pahlberg Petition, 131 F.2d 968 (2 Cir 1942); Arnold v Goldstar Financial Systems,
2002 WL 1941546 (N.D.Ill 2002); Haynsworth v Corporation, 121 F.3d 956, 964 (C.A.5 (Tex)
1997); Robert Lawrence v Devonshire Fabrics, 410; Intecall Telecommunication v Instant Impact,
376 F. Supp. 2d 155, 160 (D.Puerto Rico, 2005); Curran v Radiaguard Intern, 2009 WWL
276793 (D.Puerto Rico, 2009); Mitsui & Co (USA) v Mira, 111 F.3d 33 (C.A.5 (La) 1997).
Force 2011: 413.
25 Hamilton v Hoe Insurance 137 US 370 (1890); US Asphalt Refining v Trinidad Lake Petroleum,
222 F 1006 (1915).
26 It was established in 1925. Robert Lawrence; Watkins v Hudson Coal; Petition of Prouvost Lefeb-
vre; Kulukundis Shipping; Almacenes Fernandez v Golodetz; In re Pahlberg Petition; Arnold v Gold-
star Financial Systems; Haynsworth v Corporation.
27 Robert Lawrence; Cf. Prima Paint v Flood & Conklin Mfg, 388 US 395, 421 (US NY 1967).
28 Bremen v Zapata, 407 US 1 (1972). Intecall Telecommunication; Curran v Radiaguard Intern;
Mitsui & Co (USA) v Mira.
29 407 US 1, 13.
30 Scherk v Alberto, 417 US 506, 519 (1974).
31 US v Bethlehem Steel 315 US 289, 298 (1942); Lichter v US, 68 S.Ct 1294, 1302 (US.Cal.
1948); Hellenic Linces v Louis Dreyfus 372 F.2d 753, 756 (2nd Cir. (NY) 1967); Weaver v
American Oil 276 NE2d 144, 147 (Ind. 1971); Muschany v US, 65 S.Ct 442, 447 (1945);
Whitin Machine v US, 175 F.2d 504, 507 (1st Cir. (Mass) 1949); First Nat Bank v Pepper, 454
F.2d 626, 636 (2nd Cir. (NY) 1972).
 Prerequisites: which forum decides? 73
32
Digital Point Solutions, the court refused to apply the doctrine of separa-
bility when the dispute was on whether the defendant was a party to the
contract. The court distinguished the challenge to the very existence of a
contract from the challenge to the invalidity of a contract. If a contract was
invalid due to fraud, it did not invalidate the parties’ intention to have all
disputes between them submitted to the chosen forum; if a contract did
not exist at all, there was no such intention between the parties.

2.5 Doctrine of separability in Chinese law

PRC Arbitration Law 1994 explicitly adopts the doctrine of separability for
the arbitration agreement. It states that the arbitration agreement is inde-
pendent from the main contract. The termination or invalidity of the
main contract does not affect the validity of an arbitration agreement.33
The position has been restated in the Supreme People’s Court in its Inter-
pretation Concerning Some Issues on Application of the Arbitration Law
of PRC.34
Chinese law, however, does not contain any provisions granting the
doctrine of separability to choice of court agreements. Neither is there any
judicial direction provided by the Supreme People’s Court. However, such
a position can be implied in some courts’ practice. First of all, most
Chinese courts apply the lex fori to decide the validity of a jurisdiction
clause, instead of the lex causae.35 It shows these courts have treated juris-
diction clauses separately from other contract terms. By applying different
applicable law, the validity of the jurisdiction clause may not follow the
validity of the main contract. Second, some Chinese courts have classified
jurisdiction clauses’ procedural issues.36 This position may not be theoreti-
cally sound, but it clearly distinguishes the jurisdiction clause from the

32 2009 WL 2523733 (N.D.Cal 2009).

33 Art 19(1).
34 [2006] No 7, Art 10.
35 Shandong Jufeng v Korea Mgame, Supreme People’s Court, (2009) No 4; Supreme People’s
Court, ‘Annual Report of Intellectual Property Cases in the Supreme Court (2009)’,
[2010] No 173, case 44. Cf. The Sumitomo Bank Ltd v Xinhua Estate, Supreme Court, (1999)
No 194.
36 Shandong Jufeng v Mgame; Supreme People’s Court, ‘Answers to economic disputes relat-
ing to Hong Kong or Macau’, [1987] No 28, Art 3(1) and (2); Guangdong Province High
People’s Court, ‘Notice on Issues about Deciding the Five Intermediate Courts of
Guangzhou Municipality on the Territorial Jurisdiction and Jurisdiction by Forum Level
on Civil and Commercial Matters Relating to Hong Kong and Macau’, [2002] No 191, Art
13; China Point Finance Ltd v Zhuhai City Commercial Bank, Guangdong Province High
People’s Court, (2004) No 263; Zhongshan Shishen v Auli, Guangdong Province High
People’s Court, (2004) No 239.
74 Prerequisites: which forum decides?
underlying contract.37 Since the doctrine of separability has not been
firmly established in law, in practice, some courts might fail to treat a juris-
diction clause as a separate agreement from the main contract.

2.6 Conclusion
The doctrine of separability is justified on the grounds of respecting the
parties’ intention,38 protecting legal certainty,39 promoting international
comity40 and facilitating the effectiveness of the dispute resolution clause.41
No matter which reason is adopted, the doctrine of separability eventually
shows the importance of practicability and pragmatism in cross-border
dispute resolution. It can simplify litigation procedure, reduce cost and
time in arguing jurisdiction, and provide certainty and predictability.
However, it has to be admitted that this approach is sound in practice but
not in theory. The doctrine of separability is based on a ‘presumption’
that a dispute resolution clause is independent from the main contract.
Nevertheless, a dispute resolution clause is, as a matter of fact, integrated
part of the underlying contract. It is concluded during the same pro-
cedure and in the same backgrounds with the main contract. If one party
did not give authentic consent to the main contract, nor did he to the jur-
isdiction clause; if one party is incapable of expressing consent at the time
of contracting, he cannot consent the jurisdiction clause either; where the
total context for the conclusion of the contract is so unconscionable that
it makes the contract invalid, so is the jurisdiction clause as a contract
term. Although some countries provide extra validity requirements to a
dispute resolution clause,42 these additional requirements only make such
a clause more easily invalidated than the main contract.

3 The doctrine of kompetenz-kompetenz

In a contract with a dispute resolution agreement, the doctrine of
kompetenz-kompetenz specifically means the chosen forum should have the

37 Jurisdiction agreements relate to procedure but they are different from pure procedure.
They are agreements concluded by parties. Although there are additional rules concern-
ing their enforceability, the existence and validity of jurisdiction clauses are subject to
contract principles.
38 Fiona Trust v Privalov. Rosen, 1994: 607.
39 Benincasa.
40 Mitsubishi Motors v Soler Chrysler-Plymouth.
41 Mitsubishi Motors v Soler Chrysler-Plymouth. Rosen, 1994: 607.
42 For example, in China, jurisdiction clauses must be in writing, while a contract can be
concluded orally.
 Prerequisites: which forum decides? 75
43
competence to decide its own jurisdiction. There is a logic circle in the
application of the doctrine of kompetenz-kompetenz.44 Where the existence
and validity of party autonomy is under challenge, the doctrine of
kompetenz-kompetenz requires the chosen forum to presume, first of all, the
valid consent exists, and to take jurisdiction based upon the presumption.
If the chosen forum, after taking jurisdiction, finds the dispute resolution
agreement invalid, it will decline jurisdiction in hearing the substance of
the dispute. However, the decision cannot affect the fact that jurisdiction
has already been taken to decide the validity of the dispute resolution
clause. The resisting party has been prejudiced by being forced to attend
the proceedings in a forum not agreed upon by him. Nevertheless, the
doctrine of kompetenz-kompetenz is fundamental and inherent to civil pro-
cedure of every country. Without this doctrine, a court can never decide
jurisdiction and assert a dispute.45 No country will prevent its court from
deciding its own competence under a dispute resolution clause.
The doctrine of kompetenz-kompetenz, however, cannot preclude conflicts
of jurisdiction, parallel proceedings and irreconcilable decisions. Countries
also permit their courts, if competent otherwise, to decide the preliminary
issue of the dispute resolution agreement. A broad application of kompetenz-
kompetenz, or negative kompetenz-kompetenz, requiring the dispute on the pre-
liminary issue of a dispute resolution agreement to be decided exclusively
by the chosen forum, may prevent the conflict of jurisdiction.46 Pursuant to
the negative kompetenz-kompetenz a non-chosen forum that is competent
otherwise should always refer the dispute on the existence, validity and
scope of the dispute resolution agreement to the chosen forum. However,
the negative kompetenz-komptenz is barely adopted by any countries.47
Examining the application of the doctrine of kompetenz-kompetenz in
dispute resolution clauses requires one to consider four issues: first, is the
chosen forum competent to decide its own jurisdiction where the exist-
ence, validity and scope of the dispute resolution clause are under chal-
lenge? Second, if the chosen forum is competent to rule on its own
jurisdiction, does it preclude other fora from taking jurisdiction to decide
the same issue at the adjudication stage? Third, if both the chosen forum
and the seized forum take jurisdiction to decide the preliminary questions

43 Rosen, 1994: 608. Two reasons are provided to support the doctrine: (1) there is a rebut-
table presumption that the parties have intention to grant the chosen forum jurisdiction
to decide arguments on the dispute resolution clause; (2) the doctrine is inherent in all
judicial organs to permit them to function well. There is no reason to deprive this power
in cases with dispute resolution agreements.
44 Schlosser, 1992: 203.
45 Fraterman, 2011: 913–914.
46 Inoue, 2006: 178; McLachlan, 2008: 233–234; Walt, 1999: 375–376.
47 Even where there is judicial cooperation, such as the Brussels I Regulation and the Hague
Convention on Choice of Court Agreements, the negative kompetenz-kompetenz is not
accepted.
76 Prerequisites: which forum decides?
at the adjudication stage, which forum has priority? Fourth, if a non-
chosen forum does not take jurisdiction to decide the preliminary issue at
the adjudication stage, does it have the power to review this issue at the
recognition and enforcement stage?

3.1 Kompetenz-kompetenz in jurisdiction agreements

Competence of the chosen court

Every country accepting the prorogation power of a jurisdiction agree-
ment does not prevent the chosen court from taking jurisdiction to decide
its own jurisdiction. Based on party autonomy, there is a rebuttable pre-
sumption that the parties would wish all disputes, including the dispute on
the existence of the valid jurisdiction clause, to be heard by the chosen
court. This presumption is adopted for the purpose of commercial con-
venience. The claimant may submit a few claims in relation to one con-
tract and the parties would not have the intention to split the procedure
by submitting different issues to different courts.

Competence of the non-chosen forum

Most countries do not provide the chosen forum exclusive jurisdiction to
decide the existence and validity of a jurisdiction clause. Even though the
jurisdiction clause is exclusive in nature, a non-chosen forum, if com-
petent under other jurisdiction grounds, is still entitled to decide the pre-
liminary issues. When a non-chosen court is seized by the claimant to hear
a case with a foreign jurisdiction clause, this court will usually not directly
refer the parties to the chosen court, but decide, first of all, whether the
jurisdiction clause is valid.48 The doctrine of kompetenz-kompetenz also

48 English cases: Mackender v Feldia AG. [1967] 2 QB 590 (English courts decided the validity
of a Belgium jurisdiction clause); Dubai Electricity v Islamic Republic of Iran Shipping Lines
(The Iran Vojdan) [1984] 2 Lloyd’s Rep 380 (deciding whether a German jurisdiction
clause is valid under German law); Trendtex Trading v Credit Suisse [1980] QB 628 (English
court decided whether to stay jurisdiction in favour of an exclusive Geneva jurisdiction
clause and whether the clause was valid). Chinese cases: Shandong Jufeng v Korea Mgame,
the Supreme Court, (2009) No 4 (Chinese court decided whether a Singapore jurisdic-
tion clause was valid under Chinese law [lex fori]); Lai v Abn Amro Bank, Shanghai Muni-
cipality High Court, (2010) No 49 (Shanghai court decided whether an exclusive
jurisdiction clause choosing Hong Kong court was valid). US cases: Bremen v Zapata, 407
US 1 (1972); Wong v PartyGaming 589 F.3d 821 (C.A.6 (Ohio), 2009) (Court of Appeals
Sixth Circuit [Ohio] decided whether the clause choosing Gibraltar was valid); Krendel v
KerznerIntern Hotels, 579 F.3d 1279 (C.A.11(Fla) 2009) (Florida courts considered whether
a jurisdiction clause choosing the court of Bahamas was reasonably communicated to the
consumers); Braspetro Oil v Modec (USA) 240 Fed.Appx 612 (C.A.5 (Tex) 2007) (Texas
court decided whether the Brazil jurisdiction clause was invalid under US law); Abbott Lab-
oratories v Takeda Pharmaceutical 476 F.3d 421 (C.A.7 (Ill) 2007) (Illinois court decided the
validity of a jurisdiction clause choosing Japanese courts).
 Prerequisites: which forum decides? 77
provides the non-chosen forum the competence to decide its own jurisdic-
tion. Without judicial cooperation, there is no reason to expect a non-
chosen court to give up its judicial capacity and to rely on the decision of
the chosen court.
Although judicial cooperation creates a context where the negative
kompetenz-kompetenz is possible to be adopted between the Contracting
States, it is not adopted in either the EU or the Hague Convention. Under
the Hague Convention on Choice of Court Agreements 2005, both the
chosen court and the non-chosen court have the competence to decide
the validity of a jurisdiction clause. Article 5(1) provides that:

The court or courts of a Contracting State designated in an exclusive

choice of court agreement shall have jurisdiction to decide a dispute
to which the agreement applies, unless the agreement is null and void
under the law of that State.

It means the chosen court could use its own domestic law, including
choice of law, to decide whether a jurisdiction clause is valid as to sub-
stance. Article 6 further provides that a non-chosen court shall stay or
dismiss proceedings in favour of the chosen court unless the jurisdiction
agreement is invalid under the law of the chosen court,49 a party is incap-
able to conclude a jurisdiction clause under the law of the seized court,50
the enforcement of the jurisdiction clause leads to a manifest injustice or
would be manifestly contrary to its public policy,51 or the agreement
cannot be enforced for unexpected reasons.52 It suggests that a non-
chosen court, if seized by the claimant, also has the power to decide
whether the foreign jurisdiction clause is valid or unenforceable. During
the negotiation of the Hague Convention, the delegates felt that the prac-
tice to permit any seized court to decide the preliminary questions of a
jurisdiction clause should be changed only if different decisions would be
given by different courts seized, which jeopardizes consistency and pre-
dictability.53 Since the Convention provides uniform rules on formal valid-
ity and partially harmonizes choice of law rules to decide the substantive
validity,54 the level of harmonization can largely reduce the inconsistent
results. There is no need to introduce negative kompetenz-kompetenz to the
Convention, which may be too radical and may prevent many countries
from signing or ratifying the Hague Convention.
In the EU, the current Brussels I Regulation does not clarify which
court is competent to hear the dispute on the preliminary questions of an

49 Art 6(a).
50 Art 6(b).
51 Art 6(c).
52 Art 6(d).
53 Schulz, 2002b: 11.
54 Arts 5 and 6 of the Hague Convention.
78 Prerequisites: which forum decides?
exclusive jurisdiction clause either. Under the civil law tradition, a court
that has jurisdiction granted by law should not decline exercising it
without the legislative support. Pursuant to the civil law tradition, if a
Member State has jurisdiction under any grounds of the Brussels I Regula-
tion and the Regulation does not include a provision to permit the com-
petent forum to stay or decline jurisdiction, it cannot decline jurisdiction
by using its discretion. The presence of an exclusive jurisdiction clause
does not prevent a non-chosen Member State from taking jurisdiction to
decide the existence and validity of this clause, given this Member State is
competent under other jurisdictional grounds of the Brussels I Regula-
tion. In Gasser v MISAT,55 an Austrian company and an Italian company
entered into a contract allegedly containing an exclusive jurisdiction
clause choosing the Austrian courts. After disputes arose, the Italian
company questioned the existence and validity of this jurisdiction clause
and brought an action in Italy. The Austrian company subsequently sued
in Austria based on the jurisdiction clause. The ECJ recognizes that the
Italian court, though not chosen in the agreement, has jurisdiction to
decide the preliminary issue of the jurisdiction clause.56 It is true that
under the current law the EU has only accepted kompetenz-kompetenz in a
narrow sense. Any court, including the chosen court and an otherwise
competent court, can take jurisdiction to decide the existence and validity
of an exclusive jurisdiction clause.
Broad kompetenz-kompetenz, or negative kompetenz-kompeetenz, however, is
adopted in the Brussels I Regulation to decide the preliminary issues of a
jurisdiction clause entered into between the parties domiciled in non-EU
countries choosing one of the Member States as the competent court.
Article 23(3) of the Brussels I Regulation provides that, in such circum-
stances, ‘the courts of other Member States shall have no jurisdiction over
their disputes unless the court or courts chosen have declined jurisdic-
tion’. This type of jurisdiction clause falls outside the uniform jurisdiction
rules of the Brussels I Regulation, which only applies to jurisdiction clauses
concluded by at least one EU domiciliary and one of the Member States is
chosen. The possible explanation for the different treatments to jurisdic-
tion clauses within and outside the scope of the Brussels I Regulation is
that, where a jurisdiction clause is outside of the regulation of Brussels I,
each Member State uses its domestic rule to decide the exclusivity, validity
and existence of the jurisdiction clause.57 Inconsistent judgments are likely
to be given by different Member States. If a jurisdiction clause is within the
scope of Brussels I, there are uniform rules to decide its formal validity,

55 Case C-116/02 Gasser v MISAT [2003] ECR 14693.

56 The most important decision of the Gasser case is not the competence to decide the pre-
liminary question of a jurisdiction clause, but the priority between different courts when
seized to make decision.
57 Art 4(1).
 Prerequisites: which forum decides? 79
exclusivity and enforceability. Although discrepancy still exists in issues
such as material validity, uniform decisions are expected to be achievable
in most cases.58 The negative kompetenz-kompetenz adopted in Article 23(3)
is so strong that it excludes all non-chosen Member States the competence
to decide the preliminary issue of a jurisdiction clause even if the jurisdic-
tion clause is non-exclusive in nature. Applying the negative kompetenz-
kompetenz rule to non-exclusive jurisdiction clauses is controversial, which
can hardly be justified in terms of commercial certainty and party auto-
nomy. Furthermore, Article 23(3) cannot completely prevent parallel pro-
ceedings from arising. Since the Brussels I Regulation cannot bind any
third countries, a non-chosen third country still can take jurisdiction
under its domestic law to examine the chosen Member State’s jurisdiction.
The negative kompetenz-kompetenz doctrine is not adopted in the Brussels
I Recast either. Although Article 29(2) provides that, if the court chosen
in an exclusive jurisdiction clause is seized, other courts shall stay jurisdic-
tion until the chosen court makes decision on its competence. It means
that if the chosen court is not seized to decide the validity of a jurisdiction
clause, courts of other Member States are competent to decide this issue.
Non-chosen courts only have the obligation to stay jurisdiction in cases,
where both the non-chosen and the chosen courts are seized, in order to
avoid parallel proceedings in deciding the preliminary issue.

Conflict of jurisdiction between the chosen and non-chosen forum

Since the negative kompetenz-kompetenz in jurisdiction clauses is not
adopted, where the parties have disagreement on the preliminary issues of
a jurisdiction clause, there may be parallel proceedings. Suppose a US
company and a UK company agreed that all disputes arising out of their
contract should be heard exclusively by the English courts. The UK
company brought the action in England according to the jurisdiction
clause, while the US company commenced proceedings in the US, chal-
lenging the existence and validity of the jurisdiction clause. Both countries
have jurisdiction to decide the preliminary issue and both may proceed to
give judgments.
Many countries have adopted some instruments to prevent concurrent
proceedings. In common law countries, a court can use forum non conven-
iens to stay jurisdiction in favour of a foreign court if the court is satisfied
that the foreign court will be a more appropriate forum and it is in the

58 Especially when the interpretation to the formal validity is very broad, which covers issues
beyond a written form and examines the authentic consent of the parties. See e.g. Case
24/76 Estasis Salotti v RUWA [1976] ECR 1831; Galeries Segoura v FA Rahim Bonakdar-
ian[1976] ECR 1851; Credit Suisse Financial Products v Société Generale d’Enterprises [1997]
CLC 168 CA; 7E Communications Ltd v Vertex Antennentechnik GmbH [2007] 1 WLR 2175;
Case 221/84, Berghoefer GmbH & Co v ASA SA [1985] ECR 2699.
80 Prerequisites: which forum decides?
interest of justice to do so;59 a court can also issue an anti-suit injunction
restraining a party from continuing or commencing proceedings in
another country if the foreign proceedings are vexatious or oppressive.60 It
is relatively easy to satisfy an English court that it should exercise its discre-
tion to stay jurisdiction if there is a valid exclusive jurisdiction clause
choosing a foreign country, or to issue an anti-suit injunction if the
English court is granted exclusive jurisdiction by the agreement.61
However, the presence of a jurisdiction clause cannot automatically
generate forum non conveniens or anti-suit injunctions. Before a court can
make such decisions, it should satisfy that such a jurisdiction clause does
exist and is valid. Forum non conveniens and anti-suit injunctions can only
tackle parallel proceedings in deciding the substance of a dispute, but
cannot prevent concurrent proceedings from deciding the existence and
validity of a jurisdiction clause.
The conflict of jurisdiction in deciding the preliminary issue of a juris-
diction clause cannot be prevented by the unilateral approach such as
forum non conveniens and anti-suit injunctions, which do not establish pri-
ority between different competent courts. The order of priority is usually
provided between the countries with judicial cooperation. In the EU, judi-
cial cooperation and mutual trust are established between the Member
States, and the order of priority in deciding the existence and validity of a
jurisdiction clause is created by the doctrine of lis pendens. Lis pendens

59 See Fawcett and Carruthers, 2008: 426–455; Spiliada Maritime v Cansulex, [1987] AC 460;
Connelly v RTZ [1998] AC 854; Lubbe v Cape [2001] 1 WLR 1545; Cherney v Deripaska [2010]
2 All ER (Comm) 456; Novus Aviation v Onur Air Tasimacilik [2009] 1 Lloyd’s Rep 576;
Chadha v Dow Jones [1999] ILPr 829; Askin v Absa Bank [1999] ILPr 471; Vao Exportkhleb v
Navigation Maritime Bulgare (No 2) [1994] 2 Lloyd’s Rep 41; Hamed el Chiaty v Thomas Cook
[1994] 1 Lloyd’s Rep 382; Re Harrods (Buenos Aires) [1991] 4 All ER 335; Irish Shipping v
Commercial Union Assurance [1990] 2 WLR 117; Holmes v Holmes [1989] 3 WLR 302.
60 Airbus Industries v Patel [1999] 1 AC 119; Continental Bank v Aeakos Compania Naviere [1994]
2 All ER 540; General Star International Indemnity v Stirling Cooke Brown Reinsurance Brokers
[2003] ILPr 19; Lubb v Cape [2000] 1 WLR 1545; Donohue v Armco [2002] 1 All ER 749;
Kuwait Oil Tanker v Qabazard [2004] 1 AC 300; Sabah Shipyard v Pakistan [2003] 2 Lloyd’s
Rep 571; Royal Bank of Canada v Cooperative Centrale Raiffeisen-Boerenleenbank BA [2004] 2
All ER (Comm) 847; Jameel v Dow Jones [2005] QB 946; OT Africa Line v Magic Sportswear
[2006] 1 All ER (Comm) 32; Seismic Shipping v Total E&P [2005] 2 All ER (Comm) 515;
Grovit v De Nederlandsche Bank [2008] 1 All ER (Comm) 106; Kolden Holdings v Rodette Com-
merce [2008] 3 All ER 612; Glaxo Group v Genentech [2008] Bus LR 888; Masri v Consolidated
Contractors International Co [2009] QB 503; Elektrim v Vivendi Holdings [2009] 2 All ER
(Comm) 213; Deutsche Bank v Highland Crusader Offshore Partners [2010] 1 WLR 1023.
61 Koonmen v Bender [2007] WTLR 293; Breams Trustees v Upstream Downstream Simulation Serv-
ices [2004] EWHC 211 (Ch); Limit v PDV Insurance [2005] 2 All ER (Comm) 347; Dornoch
v Mauritius Union Assurance [2006] 2 All ER (Comm) 385; HIT Entertainment v Gaffney
International Licensing [2007] EWHC 1282 (Ch); Donohue v Armco; Sabah Shipyard v Paki-
stan; American International Specialty v Abbott Laboratories [2003] 1 Lloyd’s Rep 267; Welex v
Rosa Maritime ((No 2) [2003] 2 CLC 207; Royal Bank of Canada; OT Africa Line; Advent
Capital v GN Ellinas [2005] 1 CLC 1058; Samengo-Turner v J&H Marsh & McLennan [2007]
2 All ER (Comm) 813.
 Prerequisites: which forum decides? 81
establishes the order of priority between the competent courts depending
on the chronological order in which the court is seized to hear the dis-
pute.62 The second seized court must, by its own motion, stay jurisdiction
in favour of the court first seized in deciding the same cause of action
between the same parties. In the Gasser case,63 the non-chosen Italian court
was seized first to make a negative declaration of the existence of a valid
Austrian exclusive jurisdiction clause. The Austrian court, which was
chosen by the parties but seized second in time, must stay jurisdiction and
wait for the Italian court to make decision.64 It means that, under the
current Brussels I Regulation, the non-chosen court not only has the com-
petence to decide the preliminary issue of a jurisdiction clause, but also
may take priority over the chosen court if the non-chosen court is seized
earlier to make decision.65
The Hague Convention, on the other hand, completely leaves the pri-
ority issue undetermined. No court is obliged to give priority to another
when it is seized to decide the preliminary issue of the same jurisdiction
clause. This could sometimes lead to inconsistent decisions.66 The Hague
Convention deals with the inconsistency at the recognition stage, by
making the chosen forum’s decision decisive. In other words, if the non-
chosen court decides the jurisdiction clause invalid, while the chosen
court holds it valid, the recognition court should enforce the chosen
court’s decision.67 As a result, when a non-chosen court is seized to answer
the preliminary question while the same issue is pending in the chosen
court, the non-chosen court, by considering the possible effect of recogni-
tion and enforcement of judgment, and the efficient management of cost
and administration of judicial resources, might voluntarily stay
jurisdiction.
Recognition and enforcement of judgments, however, cannot offer a
perfect solution. First, staying jurisdiction depends on the motive of a non-
chosen court and is not compulsory. If a non-chosen court continues juris-
diction, nothing could prevent it from doing so. The judgment cannot be
recognized in the recognition country, but the procedure itself leads to
burden, inconvenience and cost to the resisting party. Second, there is a
possibility that the non-chosen country will be the requested country to
recognize and enforce the judgment. The Hague Convention requires the

62 Art 27(1) of the Brussels I Regulation.

63 Case C-116/02 Gasser v MISAT [2003] ECR 14693.
64 Ibid.
65 For criticisms, see Fentiman, 2006; Hartley, 2005; Mance, 2004; Hartley, 2009: 255;
Simons, 2003; Sifakis, 2006: 307–312; Hueske, 2009: 433; Clarke, 2007: 105, 124; Kulpers,
2009: 1510–1516.
66 For example, the jurisdiction clause is valid under the law of the chosen country, but it is
invalid because one of the parties has no capacity to conclude this agreement under the
law of a seized non-chosen country.
67 Arts 8(1) and 9(a).
82 Prerequisites: which forum decides?
requested court to recognize the chosen court’s decision if the chosen
court has determined the agreement valid,68 but recognition can be
denied if a party lacks capacity under the law of the requested country to
conclude the jurisdiction clause,69 or recognition would be manifestly
incompatible with the public policy of this country.70 This provides ground
for the non-chosen court to continue jurisdiction. Furthermore, the recog-
nition country may be a non-Contracting State of the Hague Convention.

Review at the recognition stage

In the Brussels I Regulation, a court, either chosen or non-chosen, should
have no competence to review the basis of jurisdiction at the recognition
stage.71 That means, if a party has sued in a non-chosen Member State
challenging the validity of a jurisdiction clause falling in Article 23(1) of
the Brussels I Regulation, and the seized Member State makes decision
denying the validity of such a clause, this decision is automatically enforce-
able in other Member States. If the recognition court is the chosen court,
and if the chosen court may reach a different decision on the validity of
the jurisdiction clause, the chosen court has no power to challenge the
decision of the non-chosen court at the recognition stage. Based on the
strict application of lis pendens rule in the Gasser case, within the context of
the EU, a non-chosen Member State, if seized first, could provide decision
on the validity of a jurisdiction clause choosing another Member State,
and the chosen Member State, while being seized second, must stay juris-
diction. Once the first seized court makes decision to take jurisdiction by
holding the jurisdiction clause invalid, the chosen court must dismiss the
case even though it might decide otherwise. After the first seized court
gives judgment, the judgment will be recognized and enforced in the
chosen Member State.
The power of review, however, partially exists in the Hague Convention.
Article 8(1) of the Hague Convention provides:

A judgment given by a court of a Contracting State designated in an

exclusive choice of court agreement shall be recognized and enforced
in other Contracting States . . . Recognition or enforcement may be
refused only on the grounds specified in this Convention.

The grounds to refuse recognizing the judgment given by the chosen state
are provided in Article 9, one of which is that ‘the agreement was null and
void under the law of the State of the chosen court, unless the chosen

68 Arts 8(1) and 9(a).

69 Art 9(b). Hartley and Dogauchi, 2007: para 183–184.
70 Art 9(e).
71 Arts 32 and 33 of the Brussels I Regulation.
 Prerequisites: which forum decides? 83
court has determined that the agreement is valid’. It means that if the
chosen Contracting State decides that the jurisdiction clause is valid and
gives the judgment to the substance of the case, a requested Contracting
State must enforce the judgment.72 The chosen state’s decision upholding
the validity is unreviewable at the recognition stage. However, if the
chosen court directly takes jurisdiction to decide the substance of the
dispute without examining the validity of the jurisdiction clause, a
requested court is allowed to review this issue by applying the law of the
chosen country at the recognition stage. Furthermore, whether or not the
chosen court has made the decision on the validity of the jurisdiction
clause does not prevent the requested Contracting State from reviewing
the capacity of the parties in concluding this agreement under the law of
the requested state.73
The Hague Convention does not provide any rule in recognizing and
enforcing the judgment delivered by a non-chosen Contracting State. If a
non-chosen Contracting State decided that a jurisdiction clause is invalid
because a party is incapable of concluding such an agreement under its
domestic law and gave the judgment on the substance of the case, the
requested Contracting State is not required to recognize the judgment.
Recognition and enforcement of the judgment fall outside of the scope of
the Hague Convention and the requested state should rely on its domestic
law to decide whether it should review the validity of the jurisdiction
clause and whether to enforce the judgment of the non-chosen state.

3.2 Kompetenz-kompetenz in arbitration agreements

The application of kompetenz-kompetenz is more complicated in arbitration.
An arbitration clause designates a private tribunal to the exclusion of the
competence of a court. In the old days, it was contrary to public policy to
permit the parties to grant a private organ the power superseding a court.
In both the US and the UK, arbitration clauses were treated unfavoura-
bly.74 Arbitration is now accepted as one of the most popular alternative
dispute resolution methods in transnational commerce, and it is estab-
lished in both international instruments and domestic law that a court
shall stay jurisdiction or refer the parties to arbitration if a valid arbitration
agreement exists.75 However, the power of an arbitrator to decide its own
jurisdiction is nevertheless more restrictive than that of a court. A court
has inherent power generated from state sovereignty to examine its juris-
diction. An arbitral tribunal has all its competence stemmed from party

72 Art 9(a).
73 Art 9(b).
74 Rosen, 1994: 617 and 628; Korn, 1991: 74; Dean Witter Reynold v Byrd, 470 US 213, 219–221
(1985).
75 Art II.3 of the New York Convention; Art 8(1) of the UNCITRAL Model Law.
84 Prerequisites: which forum decides?
autonomy and the effect of party autonomy usually needs to be verified by
authorities, namely the court.76 The doctrine of kompetenz-kompetenz in
arbitration permits a tribunal to rule on its own competence,77 but a super-
visory court has inherent power to supervise and review the tribunal’s
decision.

Competence of arbitral tribunals and supervisory courts

Although the New York Convention does not expressly provide that an
arbitral tribunal has the competence to decide its jurisdiction, the doctrine
of kompetenz-kompetenz is expressly accepted in both the UNCITRAL Model
Law78 and the UNCITRAL Rule of Arbitration;79 both provide that ‘(t)he
arbitral tribunal may rule on its own jurisdiction, including any objections
with respect to the existence or validity of the arbitration agreement’.
The arbitral tribunal’s competence, however, is limited by the review
power of the supervisory court. That means an arbitral tribunal’s ruling on
its jurisdiction may not be final.80 In English law, the Arbitration Act 1996
provides that, unless the parties agree otherwise, an arbitral tribunal may
rule on its own jurisdiction as to the validity and the scope of the arbitra-
tion agreement.81 However, a person who does not take any steps in the
arbitral proceedings can require the court to review the jurisdiction of the
arbitral tribunal and apply for a negative declaration or an injunction pre-
venting the other party from commencing or continuing arbitration.82
Where arbitration is already in progress and both parties have taken part
in the proceedings, the court has the power to review the arbitral tribu-
nal’s jurisdiction upon the application by both parties,83 or with the per-
mission of the arbitral tribunal, if the court is satisfied that taking
jurisdiction is likely to save adjudication cost, the application is made
promptly and there are good reasons to decide the issue by the court.84
Furthermore, in Excalibur Ventures v Texas Keystone,85 Globster J said that
s30 of the Arbitration Act 1996 only permits but does not require an

76 For example, the USA refused to accept the doctrine of kompetenz-kompetenz in relation to
arbitration for a long time. See Wyss, 1997; Interocean v National Shipping and Trading 462
F.2d 673, 676 (2d Cir. 1972); Pollux Marine Agencies v Louis Dreyfus 455 F. Supp. 211,
216–217 (S.D.N.Y. 1978).
77 China Minmetals Materials Import and Export v Chi Mei, 334 F.3d 274, 288, 9C.A.3 (N.J.)
2003.
78 Arts 16(2) and (3). Explanatory Note, para 26.
79 UNCITRAL Arbitration Rules (revised in 2010), Art 23.
80 Rosen, 1994: 635. Harbour Assurance v Kansa General International; Shine, 2008: 202.
81 s30(1). Departmental Advisory Committee Report on the Arbitration Bill 1996, para
137–139, cited in Azov Shipping v Baltic Shipping (No 3) [1999] CLC 1425.
82 72(1).
83 s32(2)(a).
84 s32(2)(b).
85 2011 EWHC 1624 (Comm). For more comments, see Holland, 2012: 81.
 Prerequisites: which forum decides? 85
86
arbitral tribunal to decide its own jurisdiction. The Act also ‘does not
require a party who maintains that there is no arbitration agreement to
have the question decided by an arbitral tribunal’.87
In China, the challenge to the validity of an arbitration clause can be
brought either to the chosen tribunal or to the people’s court.88 If the
same challenge has been brought to both fora, priority should be given to
the court.89 Although China accepts the doctrine of kompetenz-kompetenz in
arbitration agreements, the competence of an arbitral tribunal is super-
seded by that of a court.90 However, if the arbitral tribunal has ruled on
the validity of an arbitration agreement, the parties should not bring the
same preliminary issue to the courts.91 French law, however, provides more
comprehensive authority to an arbitration tribunal.92 Although judicial
review is also available, a review on arbitrability can only be conducted
after the arbitral procedure is completed, or before the commencement
of such a procedure if the clause is obviously invalid.93 The French courts
frequently refuse jurisdiction in deciding the validity of a French arbitra-
tion agreement and refer the parties back to the arbitral tribunal.94
It is fair to say that the practice in different countries shares the similar
component: restricted kompetenz-kompetenz is provided to arbitral tribunals.
Although every tribunal is competent to decide the preliminary issue of an
arbitration agreement, it is subject to judicial control.95 Practice varies on
the level of control permissible. However, there is no one regime that has
adopted negative kompetenz-kompetenz to exclude the supervisory court’s
review power in arbitration.

Competence of a non-supervisory court to review a foreign tribunal’s

jurisdiction
A supervisory court usually has inherent power to review the jurisdiction
of a tribunal seated in this country. The power of a non-supervisory court

86 Para 64.
87 Para 64.
88 Art 20 of the Arbitration Law of China.
89 Ibid.
90 Wang, 2009: 321; Zhao, 2006: 439.
91 Supreme People’s Court, ‘Interpretation of the Supreme People’s Court concerning
some issues on the application of the arbitration law of the People’s Republic of China’,
2006, Art 13.
92 Rosen, 1994: 638.
93 China Minmetals Materials Import and Export, 288; Rosen, 1994: 643–647; French Civil Pro-
cedure Code, Arts 1458 and 1466.
94 Rosen, 1994: 642–643; Société Impex v Société PAZ, 18 May 1971, Cass. Civ. 1re, 1971 Bull.
Civ. I, No 161, at 134.
95 China Minmetals Materials Import and Export, 288; Telenor Mobile Communications v Storm
LLC, 524 F. Supp. 2d 332, 351 (S.D.N.Y. 2007); UNCITRAL Model Law, Art 16; Walt 1999:
378.
86 Prerequisites: which forum decides?
to decide the primary issue of an arbitration agreement choosing foreign
arbitration is more controversial. Neither the New York Convention nor
the Model Law precludes the power of a foreign court from reviewing the
competence of an arbitral tribunal. The review may exist where the parties
have entered into an agreement choosing the arbitral tribunal seated in
another country, but one party later submitted the dispute to a non-
supervisory court that may otherwise have jurisdiction to hear the sub-
stance of the dispute, alleging the arbitration agreement invalid.
In England, the review power granted in s30 and s72 of the Arbitration
Act 1996 does not apply when the English courts are non-supervisory
courts.96 An English court may take jurisdiction to decide the validity of an
arbitration agreement choosing a foreign tribunal according to its jurisdic-
tion rules.97 In practice, the English court may nevertheless decide to stay
jurisdiction under the doctrine of forum non conveniens because it is more
appropriate for the supervisory court to review the competence of an
arbitral tribunal.98 In most cases, if the claimant applies for an English
court to examine the validity of a foreign arbitration clause, the English
court will be reluctant to do so based on the ground of forum non conven-
iens. The English courts, however, are more ready to take jurisdiction to
examine a foreign tribunal’s jurisdiction if the applicant argues that the
arbitration agreement is not concluded at all between the parties. The
English court in such cases will consider it inappropriate and unfair to
send the applicant to a jurisdiction which it has never given consent to
subject itself to. In Albon v Naza Motor Trading,99 the English court took jur-
isdiction to decide the competence of a Malaysian tribunal because the
claimant proved an arguable case that his signature to the arbitration
agreement was forged; in Excalibur Ventures v Texas Keystone,100 the English
court took jurisdiction to decide whether the claimants were parties of the
New York arbitration agreement; in Claxton Engineering v TXM,101 the
English court took jurisdiction where the applicant challenged the very
existence of the arbitration agreement between the parties.

96 s2(1) and 2(2) of the AA 1996.

97 Dallah Real Estate & Tourism Holding Co v Pakistan [2010] UKSC 46, [2011] 1 AC 763; Al-
Naimi (t/a Buildmaster Construction Services) v Islamic Press Agency Inc [2000] 1 Lloyd’s Rep.
522; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC
[2011] EWCA Civ 647, (2011) 108(25) L.S.G. 18; Glencore International AG v Metro Trading
International Inc. (No 3) [2002] EWCA Civ 528; Albon (t/a NA Carriage Co) v Naza Motor
Trading Sdn Bhd [2008] 1 All ER (Comm) 351; Elektrim SA v Vivendi Universal SA [2007] 2
Lloyd’s Rep. 8. See CPR, PD 6B. See also R Merkin, Arbitration Law (looseleaf) (Informa,
2011 update), para 9.35.
98 Weissfisch, [2006] 1 CLC 424.
99 [2007] 2 CLC 782.
100 [2011] EWHC 1624 (Comm).
101 [2011] 2 All ER (Comm) 128.
 Prerequisites: which forum decides? 87
Conflict of jurisdiction between a non-supervisory court and a tribunal
An arbitral tribunal does not need to wait for the court, either supervisory
or not, to make decision before taking jurisdiction. If a supervisory court
has given judgment on the validity of an arbitration agreement, the tri-
bunal usually is expected to follow the court’s decision. Otherwise, the
arbitral award may be set aside by the supervisory court.102 On the other
hand, a non-supervisory court’s judgment does not need to be followed by
the arbitral tribunal at all. Parallel proceedings and inconsistent decisions
may occur if a non-supervisory court and an arbitral tribunal decide differ-
ently on the existence and validity of an arbitration agreement.
Because of the existence of the risk of irreconcilable judgments, an
arbitral tribunal and a court can use interim measures to prevent the pro-
ceedings from continuing in another forum. Some countries adopt the
instrument of anti-arbitration injunctions to restrain a party from suing in
an arbitration tribunal.103 In England, the court has power to grant an
anti-arbitration injunction against a tribunal seated in another country
under the Senior Courts Act,104 though in exceptional circumstances.105
The English courts must be satisfied that the foreign arbitration proceed-
ings are vexatious or oppressive and that continuing the arbitration pro-
ceedings would infringe the applicant’s equitable rights. In practice, an
English court usually will not grant an anti-arbitration injunction to
restrain foreign arbitration because doing so would infringe the doctrine
of kompetenz-kompetenz,106 and the natural forum to decide the competence
of a foreign arbitral tribunal usually should be the supervisory court.107 An
anti-arbitration injunction will be granted if there is probability that the

102 E.g. s67, AA 1996.

103 Brazil: Campanhia Paranaense de Engergia-COPEL v UEG Araucaria Ltda, Case No
24.334/2003, 3rd State Court of Curitiba, PR (Brazilian court issues an injunction pre-
venting ICC proceedings based on the finding that the arbitration agreement was null
and void). US cases: In re Neutral Posture, 135 S.W.3d 725 (Tex.App-Houston [1 Dist]
2003); Certain Underwriters at Lloyd’s v Bristol-Myers Squibb Co. 51 F. Supp. 2d 756 (E.D.Tex
1999). English cases: Claxton Engineering Services v TXM Olaj-Es Gazkutato Ktf, [2011]
EWHC 345; Kazakhstan v Istil Group Inc [2007] EWHC 2729 (Comm); Excalibur Ventures
LLC v Texas Keystone Inc 2011 EWHC 1624 (Comm); Albon (t/a NA Carriage Co) v Naza
Motor Trading Sdn Bhd [2007] EWCA Civ 1124; Elektrim SA v Vivendi Universal SA [2007] 1
CLC 227; Intermet FZCO v Ansol Ltd [2007] EWHC 226 (Comm).
104 s37. Excalibur Ventures LLC v Texas Keystone Inc, para 54–60.
105 Black Clawson International Ltd v Papierwerke Waldhof-Aschaffenberg AG [1981] 2 Lloyd’s
Rep. 446, 458; Cetelem SA v Roust Holdings Ltd [2005] 2 Lloyd’s Rep 494, para 74 (per
Clarke LJ); Weissfisch v Julius [2006] 1 Lloyd’s Rep 716, para 33, per Lord Phillips CJ; Ele-
ktrim SA v Vivendi Universal (No 2) [2007] 2 Lloyd’s Rep 8, para 51; Albon v Naza Motor
Trading Sdn Bhd (No 4) [2007] 2 Lloyd’s Rep 420; aff’d [2008] 1 Lloyd’s Rep 1 ; Claxton
Engineering Services v TXM [2011] EWHC 345; Excalibur Ventures v Texas Keystone, [2001]
EWHC 1624 (Comm).
106 Weissfisch v Julius [2006] 1 CLC 424.
107 Ibid. See also supra subsection B.
88 Prerequisites: which forum decides?
arbitration agreement has never been concluded between the parties.108
Such an injunction is issued where there is an arguable case that the appli-
cant’s signature was forged,109 where the applicant is a third party to the
arbitration agreement110 and where the parties did not enter the arbitra-
tion agreement at all or replaced the arbitration clause with a jurisdiction
clause in their latter agreement.111
An arbitral tribunal, at the same time, also has the power to issue an
anti-suit injunction preventing the parties from bringing the issue to a
foreign court. Such a power is accepted by the UNCITRAL Model Law.112
The English Arbitration Act 1996 permits arbitrators to issue interim meas-
ures, including anti-suit injunctions.113 The US courts also accept such
power of arbitral tribunals.114 However, the power of an arbitrator to issue
an injunction against court proceedings is very restrictive. In Quebec, for
example, arbitral tribunals do not have the autonomy to adjunct court jur-
isdiction and, if such an injunction is granted, it can only have legal effects
after being recognized and enforced by courts.115 In Service Bérubé ltée c.
General Motors du Canada ltée,116 the Quebec Court of Appeal accepted that
injunctions can be granted by arbitral tribunals in limited circumstances
and only when the parties had shown intention to be bound by arbitra-
tion. It clearly excludes the possibility for a tribunal to grant injunction
against the court proceedings where the parties’ intention to submit to
arbitration is in challenge.
If both the non-supervisory court and the arbitral tribunal have issued
injunctions to restrain each other’s proceedings, neither fora believe the
other has jurisdiction and will enforce the other’s injunction. In Claxton
Engineering v TXM 117 an anti-arbitration injunction was issued by the
English court against the Hungarian arbitration proceedings, while an
anti-suit injunction was issued by the Hungarian tribunal against the
English court action. The non-supervisory court and the tribunal do not
need to enforce each other’s injunctions. The injunctions may be ren-
dered useless in practice. The chance for the issuing court or tribunal to

108 Collins et al., 2010: para 16–0–88; Dallah Real Estate and Tourism v Ministry of Religious
Affairs of the Government of Pakistan [2010] UKSC 46; Excalibur Ventures v Texas Keystone,
para 56–57.
109 Albon v Naza Motor Trading [2007] 2 CLC 782.
110 Excalibur Ventures v Texas Keystone.
111 Claxton Engineering v TXM.
112 Art 17: Unless otherwise agreed by the parties, the arbitral tribunal may, at the request
of a party, order any party to take such interim measure of protection as the arbitral tri-
bunal may consider necessary in respect of the subject matter of the dispute. The arbitral
tribunal may require any party to provide appropriate security with such measure.
113 Arts 38 and 39 of the English AA 1996. CMA v Hyundai [2009] 1 Lloyd’s Rep 213.
114 Merrill Lynch v DeCaro, 577 F. Supp. 616 (W.D.Mo 1983); Levy, 2005: 122.
115 Canadian Royalties Inc v Nearctic Nickel Mines Inc [2010] QCCS 4600.
116 [2011] J 2781.
117 [2011] ILPr 13.
 Prerequisites: which forum decides? 89
enforce its injunctive order depends on: (1) whether the enjoined party
has assets in its country, which it can freeze to enforce a penalty; (2)
whether the final decision can be enforced. As to the arbitral tribunal, its
awards will be enforced in the court of all Contracting States of the New
York Convention, unless the enforcement court finds the arbitration
agreement invalid. If the award is expected to be enforced by the non-
supervisory court, the arbitral tribunal might have to seriously consider
the effect of the anti-arbitration injunction. In other cases, an arbitral
award has more chance of being enforced than a court judgment because
there is not yet an international treaty in force which facilitates the recog-
nition and enforcement of court judgments.118

Conflicts of jurisdiction between the supervisory and non-supervisory

courts
Conflicts may also arise if both the supervisory and the non-supervisory
courts take jurisdiction to decide the arbitral tribunal’s jurisdiction. As
stated above, the power to supervise arbitral jurisdiction is more appropri-
ately exercised by the supervisory court.119 However, nothing can prevent a
non-supervisory court from examining the preliminary issue upon the
claimant’s application pursuant to its domestic law. The competence of an
arbitral tribunal may cause conflict not only between a tribunal and a
court, but also between the courts in different countries.
England believes that a supervisory court usually should be the natural
forum to decide the competence of an arbitral tribunal.120 If the English
court is the supervisory court, it has the inherent power to restrain a
foreign court from taking jurisdiction to decide the competence of an
arbitration tribunal seated in England.121 The Arbitration Act 1996122 pro-
vides that an English court has the power to make orders in support of
arbitral proceedings, including granting an interim injunction.123 CPR
62.5 permits the English courts to serve a claim form out of jurisdiction
for the injunction order (s44 order).124
From the perspective of international comity, every country has the
competence to decide its own jurisdiction free from the intervention or
guidance from other countries. An anti-suit injunction cannot be issued

118 The Hague Convention on Choice of Court Agreements 2005 has not entered into force
yet. In the EU, although judicial cooperation is established between the Member States
to enforce each other’s judgments, the New York Convention will take priority. The
Brussels I Regulation only has effects within the territory of the EU.
119 Claxton Engineering Services v TXM Olaj-Es Gazkutato Ktf, para 44.
120 Weissfisch.
121 Midgulf International Ltd v Groupe Chimiche Tunisien [2010] 2 Lloyd’s Rep. 543.
122 s44(2)(e).
123 s44(1), s11(2)(e).
124 R62.5(1)(b).
90 Prerequisites: which forum decides?
lightly. Usually, an injunction can be granted to enforce contractual obli-
gations. If an English court finds there is a valid English arbitration clause
and a party brings the dispute subject to arbitration to a foreign court in
breach of agreement, an injunction is usually granted based on the breach
of contract.125 However, if the resisting party does not directly bring the
substantive claim to a foreign court, but applies for a declaration on
whether the alleged arbitration agreement was concluded or valid in a
foreign court, the party does not breach its contractual obligation. The
court has to consider the purpose in commencing the foreign court action
and whether the foreign action is vexatious or oppressive. In Midgulf Inter-
national Ltd v Groupe Chimiche Tunisien,126 the defendant disputed the exist-
ence of a London arbitration agreement and pursued the Tunisian court
for a declaratory relief after the London arbitration was commenced. The
claimant applied for an anti-arbitration injunction from the English court.
The English court asserted jurisdiction to decide the competence of the
London tribunal. After holding a valid arbitration agreement existed, the
English court restrained the defendant from asking the Tunisian court for
the declaratory relief, holding that the sole purpose of the Tunisian pro-
ceedings was to undermine the English arbitration.
What if the supervisory court and the non-supervisory court make dif-
ferent decisions on the preliminary issue? The worst situation could occur
where the non-supervisory court finds the arbitration agreement invalid,
while the supervisory court rules differently. Because there is not yet har-
monized choice of law rules provided by any international instruments,
different judgments likely exist. The supervisory court might issue an anti-
suit injunction against further proceedings in the non-supervisory court,
while the non-supervisory court may grant an anti-arbitration injunction to
prevent the party from continuing foreign arbitration.127 The conflict of
injunctions thus occurs, which generates difficult questions in terms of
international comity, certainty and predictability, and the ends of justice.

Review at the enforcement stage

An arbitral tribunal’s decision on its jurisdiction is frequently challenged
at the enforcement stage. The New York Convention permits the courts of
a Contracting State to refuse recognizing or enforcing an arbitral award if
a party has no capacity to enter into the agreement, the arbitration agree-
ment is invalid either under the law chosen by the parties to govern this
agreement or, in the absence of choice, under the law of the country
where the award was made,128 the award deals with issues outside the scope

125 XL Insurance v Owens Corning, [2001] CLC 914.

126 [2010] 2 Lloyd’s Rep. 543.
127 Telenor Mobile Communications v Storm 584 F.3d 396 (C.A.2(NY) 2009).
128 Art V(1)(a).
 Prerequisites: which forum decides? 91
129 130
of the arbitration agreement or the subject matter is not arbitrable. It
is clear that the courts of a Contracting State have the power to compre-
hensively review the preliminary issue before enforcing the award.

3.3 Kompetenz-kompetenz in dispute resolution clauses

Although the doctrine of kompetenz-kompetenz grants the chosen forum jur-
isdiction to determine its own jurisdiction, the doctrine has quite a few
limitations. Although international cooperation exists in both jurisdiction
and arbitration, none of the instruments have adopted a negative
kompetenz-kompetenz rule to exclude all non-chosen fora their jurisdiction to
examine the existence and validity of a dispute resolution clause. This is
an unfortunate situation. If the chosen forum’s competence to rule on its
own jurisdiction is not exclusive, conflicts of jurisdiction in deciding the
existence and validity of a dispute resolution clause would likely occur.
The negative kompetenz-kompetenz doctrine can be established within a
regime with sufficient judicial cooperation. Cooperation requires Con-
tracting States to have mutual respect to each other’s jurisdictional com-
petence and to trust each other to decide its own jurisdiction. Against this
background, it is possible to set up the rule requiring only the chosen
forum to take jurisdiction to decide the preliminary issues of the dispute
resolution clause, and to demand all other courts suspend proceedings
until the chosen forum makes decision.131
Compared to exclusive jurisdiction clauses, more difficulties and con-
troversies exist in arbitration. Parallel proceedings may exist between an
arbitral tribunal and its supervisory court, between an arbitral tribunal and
a non-supervisory court, and between the supervisory court and the non-
supervisory court. The negative kompetenz-kompetenz doctrine certainly
cannot be accepted to exclude the supervisory court’s jurisdiction from
reviewing the competence of an arbitral tribunal. Instead, an alternative
form of kompetenz-kompetenz doctrine may be accepted to grant the chosen
tribunal jurisdiction to decide its own competence, and only the super-
visory court the jurisdiction of supervision. All non-supervisory courts
should decline jurisdiction in deciding the preliminary issues of an arbit-
ration agreement. This approach is more consistent with the doctrine of
arbitral autonomy and compatible with international arbitration practice.

129 Art V(1)(c).

130 Art V(2)(a).
131 This proposal has been accepted in European Commission, Proposal for a Regulation of the
European Parliament and of the Council on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (Recast), December 2010, COM(2010) 748 final,
Article 32 of which provides that ‘where an agreement . . . confers exclusive jurisdiction
to a court or the courts of a Member State, the courts of other Member States shall have
no jurisdiction over the dispute until such time as the court or courts designated in the
agreement decline their jurisdiction’.
92 Prerequisites: which forum decides?
4 Conclusion
Dispute resolution clauses could provide certainty and predictability,
reduce dispute resolution cost, simplify the process to decide jurisdiction
and reduce parallel proceedings and conflicts of jurisdiction. However, all
these benefits are compromised if the existence and validity of the dispute
resolution clause is subject to dispute. When the dispute is whether the
chosen forum is indeed ‘chosen’ by the parties, it is questionable whether
the chosen forum or an otherwise competent non-chosen forum has the
competence to decide this issue.
The current practice worldwide demonstrates the triumph of prag-
matism over theoretical soundness. The establishment and adoption of
both the doctrine of separability and the doctrine of kompetenz-kompetenz
shows the trend. Both doctrines have the advantage of producing practical
convenience and both are justified by the presumption that the parties
should have agreed to submit the dispute, including the dispute relating
to the chosen forum’s competence, to the chosen forum. The two doc-
trines help to simplify the complicated issue, but neither could escape the
logic dilemma by permitting a forum, the jurisdiction of which stems from
party autonomy, to examine the existence and validity of the autonomy.
Regardless of the logic circle, there is, by far, no better approach to decide
jurisdiction in the existence of choice of jurisdiction. If the chosen forum
has no jurisdiction to decide its own jurisdiction, it fundamentally under-
mines the doctrine of party autonomy. If only a competent non-chosen
forum can decide the competence of the chosen forum, the chosen forum
has to enforce a non-chosen forum’s decision and cannot decide the issue
by itself. This result is impractical and unrealistic. As a result, the doctrines
of separability and kompetenz-kompetenz should continue to be used in decid-
ing jurisdiction of the chosen forum.
From the practical perspective, applying the doctrine of separability
does not generate many difficulties. However, the current application of
the doctrine of kompetenz-kompetenz proves insufficient to prevent parallel
proceedings and irreconcilable judgments. It has been suggested that, in a
regime where international cooperation is established, negative kompetenz-
kompetenz can be adopted to provide an order of priority between different
competent fora. An alternative negative kompetenz-kompetenz doctrine
should be adopted in arbitration to grant only the arbitral tribunal the
power to decide its jurisdiction and only the supervisory court the power
to review, while depriving any non-supervisory courts the power to
examine the competence of a foreign arbitration.
4 Subject matter scope

1 Introduction
Not all disputes can be submitted to the chosen court or arbitral tribunal.
Procedural autonomy in deciding the method and forum of dispute res-
olution is limited by the subject matter. Whether a subject matter can be
submitted to arbitration is called ‘arbitrability’. Arbitration is widely known
as having ‘a private proceeding with public consequences’;1 some matters
are reserved exclusively by courts, in order to protect public interest.2 Arbi-
trability is determined exclusively by state law and there is no international
uniform standard.
Comparatively, the scope of jurisdiction agreements is much broader.
Although the parties, by using private agreements, decide the forum to
dispose their disputes, the disputes are determined by court authorities,
with state power behind the proceedings and judgments. Most disputes, as
a result, can be subject to jurisdiction agreements, except those where
state interest is involved and foreign disposal is inappropriate in relation
to state sovereignty.

2 Arbitrability
Some states adopt the concept of public policy to ring-fence arbitrable
matters,3 while others do not blindly exclude all public policy related dis-
putes from arbitration.4 It is suggested that developing countries may have
more political interest to reserve public-related disputes for the courts,
worrying liberal rules and private disposal of disputes may render the
national interest to unfair advantages of parties stronger in economic
power.5 Regardless of the divergence in domestic law, public policy is one

1 Blackaby et al., 2009: para 2.113; Mante, 2012: 34.

2 Blackaby et al., 2009: para 2.111 ff.
3 Mante, 2012: 34; Greenberg et al., 2011: 188–189.
4 Mante, 2012: 34; Brekoulakis, 2009: 20; Premium Nafta Products Ltd v Fili Shipping company
Limited [2007] UKHL 40.
5 Mante, 2012: 34–35.
94 Subject matter scope
criterion in determining whether a subject matter is arbitrable. The diffi-
culty is that the concept of public policy is also ambiguous.
Another criterion is whether the subject matter is freely disposable by
its owner or whether it has an economic value.6 Under German law, any
claim involving an economic interest is arbitrable. ‘Claims not involving
an economic interest shall have legal effects to the extent that the parties
are entitled to conclude a settlement on the dispute in question.’7 Swiss
law also provides that ‘any dispute involving property can be the subject
matter of arbitration’.8 If the claim is characterized as ‘economic’ the
dispute involves property.9 English law has not drawn a clear line to distin-
guish arbitrable and non-arbitrable matters.10 The court should consider
arbitrability on a case-by-case basis. However, in general, matters may not
be arbitrable if they concern public interest or affect the interests of third
parties.11
Although national law on arbitrability differs in different jurisdictions,
some disputes are commonly excluded from arbitration, including civil
status of persons (citizenship), validity of marriage, child custody and
criminal liability.12
Arbitrability may be decided at different stages of the procedure and by
different authorities. In most cases, arbitrability is determined by arbitral
tribunals; it can also be determined by courts, when the opposing party
challenges it in courts; it may be decided by the enforcement court at the
recognition and enforcement stage.13

2.1 Choice of law

Arbitrability is a question of law and is determined by the applicable law.
Practice differs from different jurisdictions and depends on whether arbi-
trability is decided by courts or tribunals. Options usually are made
between the chosen law by the parties, the governing law of the contract,
the law of the seat, the lex fori (if a court is seized to hear the disputes) and
the law of the enforcement courts.14

6 De Werra, 2012: 301.

7 German Code of Civil Procedure of 1998 (CCP), s1030.
8 Swiss Federal Act on International Private Law of 1987, Art 177.1.
9 Levy, 2002: 77.
10 Mustill and Boyd, 1989: 149.
11 Born, 2009: 768; cited in Fulham Football Club (1987) v Richards, [2011] EWCA Civ 855,
para 39.
12 Singaporean Law, Aloe Vera of America v Asianic Food [2006] 3 SLR 174, 205; Chinese Arbit-
ration Law 1994, Art 3(1).
13 Hanotiau, 1998: 756.
14 Moses, 2012: 72.
 Subject matter scope 95
Arbitrability decided by courts
The issue of arbitrability may be raised in courts at different stages of arbit-
ration. The party may directly apply to the supervisory court challenging
the enforceability of an arbitration agreement before the commencement
of arbitration proceedings; it may apply to the supervisory court to set
aside the arbitral awards after the arbitration proceedings commence on
the ground of non-arbitrability; it may challenge recognition and enforce-
ment of arbitral awards in the enforcement courts at the enforcement
stage.
A court usually intends to apply the lex fori to decide arbitrability of a
dispute. It is because arbitrability concerns public interest and the national
provisions determining arbitrability are usually classified as mandatory
rules. The New York Convention clearly provides that, at the stage of
recognition and enforcement of arbitral awards, the enforcement court
will consider the lex fori. If the subject matter is not arbitrable at the lex fori,
recognition and enforcement will be refused.15 Although without express
support from international legal instruments, the supervisory court usually
will apply the lex fori, i.e. the law of the seat, to decide arbitrability.
Nothing can prevent a court from applying the lex fori to an issue con-
cerning public interest. However, it is questionable whether applying the
lex fori in all cases irrespective of the parties’ intentions and the connec-
tions with the dispute is reasonable. It is hard to argue that arbitrability
concerns matters that are ‘crucial’ to safeguard a country’s fundamental
social order. In other words, national provisions on arbitrability are not
classified as ‘overriding mandatory rules’ which should override the other-
wise governing law.16 Where disputes have no connections with the
enforcement forum or the place of the seat, it is doubtful whether the
court should use the lex fori to invalidate an arbitration agreement.

Arbitrability decided by arbitral tribunals

It is even harder to ascertain the applicable law by an arbitral tribunal. In
some tribunals, the law applicable to arbitrability will be the law governing
arbitration agreements.17 If the parties have expressly chosen the national
law to govern the arbitration agreement, the chosen law shall apply.18 In
most cases, the parties may only choose the law governing the substance of
the contract without designating the law governing the arbitration agree-
ment. Most countries will apply the chosen law to decide the validity of an

15 New York Convention, Art V(2)(a).

16 See Art 9(1) of the Rome I Regulation on the definition of overriding mandatory rules.
Fawcett and Carruthers, 2008: 728–741; Clarkson and Hill, 2011: 230–236.
17 Arts II(1) and V(1)(a) of the New York Convention.
18 Hanotiau, 1998: 764.
96 Subject matter scope
agreement.19 Without any express choice, arbitrators have the wide power
to determine the applicable law and may even decide that non-state law/
lex mercatoria applies.
Subject of arbitrability to party autonomy is not free from doubt. The
parties may choose the law of a country that would validate such a choice
in order to avoid the mandatory rules of a country which has close connec-
tions to the transactions or the arbitration proceedings. Furthermore,
such a choice may be ignored by a supervisory court or an enforcement
court. A dispute that is held arbitrable by the tribunal may be considered
non-arbitrable by a court.20 Regardless of the above concerns, this
approach is frequently adopted in arbitration practice. Arbitrators are not
judges in courts. They usually do not consider themselves servants of
national law or that they should enforce any national mandatory rules in
particular. Their power is originated from the parties’ agreement. As a
result, they apply the parties’ choice of law to decide arbitrability in prac-
tice and do not consider the doctrine of mandatory rules or public policy.
Although arbitrators are likely to apply the chosen law, the law of the
seat usually will also be relevant. Parties may have the intention to validate
their arbitration agreements and deliberately choose the law of a country
that recognizes the arbitrability of the subject matter, as against the seat of
arbitration. However, if the subject matter is not capable of settlement by
arbitration under the law of the seat, the award may be vacated by the
supervisory court.21 If the supervisory court is seized to decide arbitrability,
it is likely that the court will apply the law of the seat to invalidate arbitra-
tion agreements. A tribunal usually should also consider the consequence
and apply the law of the seat. Applying the law of the seat, however, is criti-
cized by some commentators as the ‘seat’ usually is chosen for the conven-
ience of the parties, instead of any real connections between the country
and the dispute.22
Although arbitral tribunals are not obliged to consider the law of the
enforcement jurisdiction, from a pragmatic perspective, arbitral tribunals
would consider the risk of refusal to recognize and enforce arbitral awards.
The law of the enforcement court thus will have practical effect which
obliges arbitrators to take it into consideration. However, the law of the
enforcement court may not be relevant if the parties agree to voluntarily
enforce the awards or if the awards can be enforced in more than one
jurisdiction.23 Furthermore, a tribunal can only consider the law of the
enforcement court after it can reasonably predict which party is likely to
win and which country is likely to be the place of enforcement. If both

19 Ibid., 764.
20 Lehmann, 2004: 758–759.
21 Moses, 2012: 72–73; UNCITRAL Model Law of Arbitration, Art 34(2)(b)(i).
22 Lehmann, 2004: 758.
23 Moses, 2012: 73.
 Subject matter scope 97
parties have assets located in more than one country, it is unpractical to
take this issue into consideration.

2.2 Controversial matters

Bribery and corruption

Corruption is defined in a broad term. It includes not only the abuse of
power by government officials but also other private misuse of power or
position for illegitimate gain or benefits.24 The corruption of government
officials by abusing their authorities or by receiving bribes are usually pun-
ishable as criminal offences, which will be excluded from the scope of
arbitration. Disputes, however, concerning the enforceability or perform-
ance of a contract allegedly being procured by corruption or allegedly
facilitating the payment of bribes, could be brought to arbitration.25
Bribery was not arbitrable at an early stage26 because the activity is
against international public policy which forfeits the parties their rights to
seek remedies and justice in arbitration.27 Regardless of the early position
held by international organizations,28 matters concerning commercial
bribery or corruption are arbitrable in modern times.29 The early develop-
ment of the modern approach is due to the confusion of the issue of arbi-
trability in corruption with separability.30 Many tribunals or courts decided
that arbitrators have the power to rule whether a contract is tainted by cor-
ruption upon the allegation, because the illegality of the underlying con-
tract would not affect the validity of an arbitration agreement.31 In
England, the ICC award made in Switzerland was enforced though the tri-
bunal ruled on the allegation of bribery.32 The court bases the decision on
three grounds: first, the parties entered into arbitration agreements and
the intention should be respected; second, the doctrine of kompetenz-
kompetenz grants jurisdiction to the arbitral tribunal; and third, the doc-
trine of separability decides that the illegality of the underlying contract

24 Transparency International UK (TI UK), ‘Corruption in the UK: Overview and Policy
Recommendations’, 1.
25 Youssef, 2009: 54.
26 ICC Award No 1110 of 1963.
27 Wetter, 1994: 277, cited in Redfern, 2004: 143.
28 Blackaby et al., 2009: para 2.134.
29 Hwang and Lim, 2011: paras 92–93; National Power v Westinghouse, Tribunal Federal, Lere
Cour Civile, Recours de Droit Public du Sept 2, 1993, (1994) 12 ASA Bull 244; McDou-
gall, 2005: 1041; Westacre Investments Inc. v Jugoimport-SPDR Holding Co. Ltd, [1998] 2
Lloyd’s Rep. 111 (QB).
30 Youssef, 2009: 54; Redfern, 2004: 143.
31 Muller, 2004: 178–3.6, 178–3.6; Art 16.1, UNCITRAL Model Law 2006; Art 23.1, UNCI-
TRAL Arbitration Rules 2010; Art 23.1, LCIA Arbitration Rules.
32 Westacre Investments v Jugoimport SPDR Holding Co, [1999] QB 740; Zadkovich, 2011: 106.
98 Subject matter scope
will not affect the validity of the arbitration agreement.33 This, however, is
not the same as arbitrability. Arbitrability concerns whether arbitrators
have power to adjudicate the existence of corruption or bribery, or
whether corruption should be reserved by judicial authorities.
Nonetheless, some countries still exclude corruption claims from arbit-
ration. In Pakistan, for example, the Supreme Court decided in Hubco v
Wapad34 that prima facie corruption cases were inarbitrable. This decision
was primarily based on public policy. The Supreme Court of Pakistan
stated that public policy required issues relating to corruption to be
decided by the court.35 This view remains in the minority. However,
although corruption is genuinely held arbitrable, arbitrators’ power is
simply limited to civil remedies, and arbitrators do not have authority to
impose criminal sanctions against corruption.36

Insolvency
Although the insolvency law of every country differs, the common practice
is that insolvency per se is inarbitrable.37 It is justified by two reasons. First,
‘pure’ insolvency proceedings do not concern commercial disputes but
execution of debts.38 Pure bankruptcy proceedings are described by Lord
Hoffmann as proceedings not to determine the existence of rights but ‘to
provide a mechanism of collective execution against the property of the
debtor by creditors whose rights are admitted or established’.39 Second,
insolvency proceedings affect not only private interests between imme-
diate contractual parties but the public at large, which should be reserved
for jurisdiction of courts.40 However, disputes that are not ‘pure’ insol-
vency matters, but in relation to insolvency proceedings, such as the exist-
ence of debt, restitution claims and post-insolvency sales, are generally
arbitrable.41 In the USA, disputes between the estate representatives of

33 Westacre Investments v Jugoimport SPDR Holding Co, [1999] QB 740; Zadkovich, 2011: 106.
34 Hub Power Co Ltd (HUBCO) v Pakistan WAPDA and Federation of Pakistan (2000) 15(7)
Mealeey’s International Arbitration Report, Section A.1, A-15 and 16.
35 Ibid.; Nicholls et al., 2011: 330.
36 Zadkovich, 2011: 106.
37 Blackaby et al., 2009: para 2.128; Mantilla-Serrano, 1995: 69; Lazic, 1999: s4. Singapore
cases: Re Sanpete Builders (S) Pte. Ltd, High Court, Singapore, [1989] SLR 164; Petroprod Ltd
(in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) v Larsen
Oil and Gas Pte Ltd [2010] SGHC 186; Lithuanian cases: BUAB Briauna v BITC Mobel AB
(2–178/2009); Belaja Rus v Westintorg Corp (3K-3–562/2008); UAB Rimi Lietuva v UAB
Vegida (3K-3–142); AMIR-S v BUAB Ekoela (2T-44/2009).
38 Lew et al., 2003: 206.
39 Cambridge Gas Transportation v Official Committee of Unsecured Creditors of Navigator Holdings
[2007] 1 AC 508, para 14.
40 Mistelis, 2006: 367.
41 Poudret and Besson, 2007: 307.
 Subject matter scope 99
affiliated companies are arbitrable, but court approval is required where
bankruptcy proceedings are pending.42
Others may argue that insolvency of a company may make an arbitra-
tion agreement invalid as the original contractual party subject to the
agreement loses its legal personality.43 This, however, is overruled by most
courts in practice.44 Where a company is bankrupt, its rights and obliga-
tions under arbitration agreements may be transferred to its estate.45
When the insolvency proceedings start in courts, arbitration proceedings
will not be terminated automatically.46 The (potential) bankruptcy of one
party does not affect the enforceability of an arbitration agreement.47 This
practice is adopted in the USA,48 Germany, France,49 Switzerland and
Spain.50

Competition and antitrust

Competition concerns public interest and state regulation of economic
order. Competition claims are traditionally non-arbitrable based on the
grounds of public policy.51 Some competition disputes, especially antitrust
disputes, involve companies with dominant power and may deprive the
weaker party’s right by forcing the adhesive party into a dispute resolution
method out of court.52 The complexity of antitrust disputes also over-
weighs the arbitral procedure.53 The restriction, however, is relaxed in
the modern commercial world.54 The US Supreme Court decided in
Mitsubishi that competition/antitrust disputes are arbitrable,55 subject to

42 Gropper, 2012: 229; Zimmerman v Continental Airlines, 12 F.2d 55 (3rd Cir. 1983), cert.
denied, 464 US 1038, 104 S.Ct. 699, 79 L.Ed.2d 165 (1984); Hays and Co. v Merrill Lynch,
Pierce, Fenner and Smith, Inc, 885 F.2d 1149 (3rd Cir. 1989). Lazic, 1999.
43 Poudret and Besson, 2007: 306.
44 Swiss cases: 16 October 2012 (Case reference cases: 4A_50/2012); Vivendi SA and others v
Deutsche Telekom AG and others, 4A_428/2008; Dutch cases: Rb. Amsterdam, 24 November
1906, W 8561; Rb. Amsterdam, 13 June 1979, NJ 1980, 254; Rb. Zwolle, 16 October 1987,
upheld by Hof Arnhem, 3 March 1987; French cases: Société Soules v Société Henry-Maitre
Texier, Cass. com. 4 February 1986, (1988) Rev. Arb. 718; Société Technique d’avant-garde
(T.A.G.) v Société Entertainment Media France Corp. (B.M.P.C.) et autres, Cass. com., 12
February 1985, (1985) Rev. Arb. 275. See Lazic, 1999: s3.1.
45 Poudret and Besson, 2007: 306; Lazic, 1999: s3.1.
46 Poudret and Besson, 2007: 306; and cases in footnote 44.
47 Gropper, 2012: 237; Lazic, 1999: s3.1; cases in footnote 44.
48 Gropper, 2012: 237; US Lines, Inc. v Am. S.S. Owners Mut. Prot. (In re US Lines, Inc.), 197
F.3d 631, 641 (2d Cir. 1999); MBNA American Bank v Hill, 436 F.3d 104 (2d Cir. 2006).
49 Gropper, 2012: 237–239.
50 Blackaby et al., 2009: para 2.131.
51 American Safety Equipment v J.P. Maguire & Co., 391 F.2d 821 (2d Cir. 1968).
52 Soltysinski, 1986: 349.
53 Ibid., 349.
54 For more discussion, see Landi, 2005.
55 Mitsubishi Motors Co v Soler Chrysler-Plymouth, 473 US 614 (1985).
100 Subject matter scope
the condition that arbitrators are bound to apply national competition law
as a court does.56 In the EU, there is no case specifically dealing with arbi-
trability of competition disputes. However, many commentators believe
the ECJ decision in Eco Swiss China Time Ltd v Benetton International NV 57
infers EU competition law is arbitrable.58
Supporters of arbitrability of antitrust disputes argue that this approach
improves party autonomy and prevents a party from avoiding arbitration
by maliciously bringing antitrust elements into their disputes.59 Opponents
basically base their objections on public policy grounds and on the limit of
arbitral tribunals to impose sanctions, though damages are available. It is
also likely that awards concerning competition/antitrust are difficult to
enforce in another country, which holds a strong stand in public policy.

Intellectual property disputes

Intellectual property (IP) disputes involve different types of claims. In
general, rights between private parties—for instance, patent owners
license others to use the patent, or copyright owners assign copyright to
publishers—are freely disposable by the right owners. Disputes arising out
of these activities can be arbitrated as all other private civil and commer-
cial activities.60 On the other hand, claims on validity and nullity of IP
rights may not be completely private. In some countries, IP disputes con-
cerning purely the power of state authorities, such as deposition and regis-
tration of patents, trademarks, designs, etc., are not arbitrable.61 It is also
believed by some countries that the ‘adjudication of industrial property
monopolies is a matter of public interest and should belong to the exclu-
sive jurisdiction of courts or special administrative agencies’.62 Other coun-
tries, however, take a more flexible approach allowing arbitrators to rule
on the validity of IP rights.63 In the USA, for example, section 294 of the
US Code 1983 provides that disputes relating to patent validity or infringe-
ment can be submit to arbitration, and the arbitral awards only bind the
current parties and have no effect on any third parties.64
Problems may arise if the parties submit disputes on the licence of trade-
marks or patents between private parties to arbitration, but the ruling
depends on the determination of the validity of the IP right. In judicial

56 Ibid.
57 Case C-126/97, [1999] ECR I-3055.
58 Landi, 2005: 322.
59 Soltysinski, 1986: 349.
60 Blackaby et al., 2009: para 2.118; De Werra, 2012: 301; Moses, 2012: 32.
61 Blackaby et al., 2009: para 2.118; Soltysinski, 1986: 348.
62 Soltysinski, 1986: 348.
63 Such as the USA, Canada and Switzerland. See De Werra, 2012: 303; Soltysinski, 1986:
348.
64 Soltysinski, 1986: 348.
 Subject matter scope 101
practice, if the defendant argues the IP rights in dispute are void, as a
defence to the alleged breach of contract or infringement, it becomes an
‘Italian Torpedo’. The court proceedings on the substantive dispute will be
stayed until the court that has exclusive jurisdiction to decide the validity of
IP rights decide this issue first.65 This, however, is not the case in arbitra-
tion. Arbitrators can make decision on validity as a prerequisite to decide
the substantive dispute between the parties. As far as the decision on valid-
ity does not have an effect erga omnes, this should not be a problem.66

Contracts with the inequality of bargaining power

There is no common practice to make contracts with the inequality of bar-
gaining power non-arbitrable. In Italy, employment disputes are arbitrable.67
In the USA, employment and consumer disputes are arbitrable in principle,
subject to fairness and conscionability.68 The fairness and conscionability
test, however, in theory challenges the material validity of the arbitration
agreements instead of the arbitrability of these claims. On the other hand,
in Brazil, the Employment Appeal Tribunal stated in Righetti v Organizacao
das Nacoe Unidas (ONU)69 that employment disputes are arbitrable and the
view that labour rights are indispensable is outdated. The Superior Labour
Tribunal, however, held that labour disputes generally are non-disposable
and should not be subject to arbitration. The arbitration agreement was
upheld in this case on exceptional factual grounds.70 Under the EU Unfair
Terms in Consumer Contracts Directive, compulsory arbitration agreements
deprive consumers’ access to justice and are unenforceable against consum-
ers.71 Such agreements are nevertheless enforceable against businesses and
non-compulsory arbitration agreements are still valid.72 It is hard to argue
that consumer disputes are completely non-arbitrable.

2.3 Conclusion
Although it is commonly understood that disputes concerning public
interest are not arbitrable, the general trend is that the threshold for

65 Knorr-Bremse Systems v Haldex Brake Products GmbH [2008] ILPr 26; Fawcett and Torremans,
2011: 386.
66 De Werra, 2012: 303.
67 Sasson, 2007: 2.
68 Finizio, 2004: 89. E.g. United Steelworkers of America v American Manufacturing Co, 363 US
564 (1960) (labour disputes are arbitrable); United Steelworkers of America v Warrior & Gulf
Navigation Co. 363 US 574 (1960); Green Tree Financial Corp.-Alabama v Randolph, 531 US
79 (2000); Berger, 2004: 753.
69 Unreported case. See comments in de Oliveira, 2012: N25.
70 Righetti v Organizacao das Nacoe Unidas (ONU), ibid.; de Oliveira, 2012: N25.
71 Council directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts,
[1993] OJ L 95/29, Annex 1(q).
72 Hill, 2008: 215; Tang, 2009: 157.
102 Subject matter scope
arbitrability is gradually lowered. Most countries now allow matters that
are non-arbitrable in history to be submitted to arbitration. The scope of
arbitrability, however, differs from country to country. Following the trend
of extending the scope of arbitrable matters and providing certainty to
contractual parties, some commentators advocate a transnational
approach of arbitrability,73 which means that the tribunal should not apply
national law, but should refer to international custom, usages and general
principals of laws to decide arbitrability.74 In practice, a tribunal should
consider all matters arbitrable unless there is ‘international public policy’
against it.75 In order to find out the ‘international public policy’, an
arbitral tribunal might refer to the recent practice of courts and tribunals
in one or more countries, no matter whether they are relevant to the
dispute or arbitration.76 This approach, however, may cause difficulty in
practice because a state court may not wish to adopt the same approach,
especially if a dispute is non-arbitrable in its domestic law due to the
infringement of its public policy and the dispute has close connections to
this country. Inconsistent practice between courts and tribunals may cause
concurrent proceedings and conflict decisions.77

3 Matters subject to jurisdiction agreements

Although most countries accept that private parties have the freedom to
decide competent courts to hear their disputes, the freedom only exists to
handle private issues. As to other issues, where state power is involved, a
country will wish to exercise its firm control over these subject matters
which cannot be left for the free disposal of private parties. Choice of
court agreements cannot have effect in the subject matters governed by
exclusive jurisdiction. Some states also provide protections for weaker
parties of contracts and prevent (or restrict) choice of court agreements
in contracts with the inequality of bargaining power.

3.1 Exclusive jurisdiction

There is no international uniform concept of exclusive jurisdiction.
However, compared to arbitrability, it is not as difficult to decide on the
applicable law concerning exclusive jurisdiction. Exclusive jurisdiction is

73 Mistelis, 2009: 15; Lehmann, 2004: 766–768.

74 ICC Case No 4131 (1982); Dow Chemical v Isover-Saint Gobain, 110(4) J.D.I. 899 (1983), IX
Y.B. Com. Arb. 131 (1984); ICC Case No 4381 (1986); ICC Case No 5065 (1986). Kovacas,
2012: s5.1.4.
75 Lehmann, 2004: 766–768.
76 Award in ICC Case No 4604 (1984), reprinted in 111 J. Droit Int’l 973 (1985); Award in
ICC Case No 8423 (1994); Award in ICC Case No 4604 (1984). Referred to in Lehmann,
2004: 762–763.
77 Mistelis, 2009: 15.
 Subject matter scope 103
classified as a question of procedure, and it is designated to protect the
fundamental interest and sovereignty of a country. A court will apply the
lex fori to decide whether a dispute is subject to its exclusive jurisdiction
and will not consider the law of any other countries. Although exclusive
jurisdiction differs from country to country, the common grounds to
establish exclusive jurisdiction include the disposal of immoveable prop-
erty, exercise of state administrative power, insolvency and matters con-
cerning public registration, such as registration of IP rights and
registration of companies.
Some countries have very broad exclusive jurisdiction. These countries
usually consider jurisdiction an expression of state sovereignty and zeal-
ously protect such power. For example, Chinese law requires many matters
that may be subject to party autonomy in other countries to be decided
exclusively in Chinese courts. These matters include the performance of
contracts for Chinese–foreign joint ventures, Chinese–foreign cooperative
exploration and development of natural resources in China,78 disputes
concerning immoveable property,79 disputes concerning harbour opera-
tion where the harbour is located in China80 and succession, where the
deceased had domicile in China upon his death or where the principal
location of assets is in China.81

Disputes in relation to immoveable property

Countries assert exclusive jurisdiction over immoveable property located
within their territories, and parties are deprived of the right to agree on
jurisdiction governing disputes concerning immoveable property. Common
law countries distinguish jurisdiction in rem from jurisdiction in personan.82
Party autonomy on jurisdiction generally is only allowed in jurisdiction in
personan.83 Civil law countries also exclude party autonomy from dealing
with disputes with object rights in rem in immoveable property.84 From the
perspective of the enforcement, a country has absolute and exclusive
control of immoveable property located in its territory. A foreign court’s
decision relating to the disposal of land located in another country is
considered an intervention of the state’s sovereignty.85 Most countries
reserve exclusive jurisdiction over the immoveable property and exclude
party autonomy from being used. As a result, international harmonization

78 Chinese Civil Procedure Law (Amended) 2012, Art 266.

79 Ibid., Art 33(1).
80 Ibid., Art 33(2).
81 Ibid., Art 33(3).
82 Clarkson and Hill, 2011: 60; Fawcett and Carruthers, 2008: 353–422; Hartley, 2009: 11–12.
83 Hartley, 2009: 15–16.
84 Chinese Civil Procedure Law 2012, Art 33; Brussels I Regulation, Art 22(1).
85 Hartley, 2003: 11.
104 Subject matter scope
of jurisdiction rules usually excludes immoveables from its scope and
choice of court agreements shall not have effect.86

Disputes in relation to companies and legal persons

It is generally recognized that there are three types of actions in relation
to companies or legal persons. The first relates to their existence, validity,
creation and dissolution. The second relates to their internal affairs,
between shareholders and between companies and shareholders. The
third is between companies and third parties in relation to external affairs
and transactions.87 The creation and dissolution of legal persons is usually
the result of exercise of sovereign power of a state. Allowing the court of
any other country to decide on this issue consists of the review of the exer-
cise of administration power of another country, which intervenes into
state sovereignty.88 The first type of claim, as a result, excludes the employ-
ment of choice of forum agreements. Choice of court agreements,
however, can be safely used in the second and third types of actions in
relation to companies or legal persons.
The People’s Republic of China has provided extra restrictions to
parties’ choice of court agreements. Chinese people’s courts have make
reservations over a number of important matters which may not be subject
to exclusive jurisdiction in many other countries. The Chinese people’s
court has exclusive jurisdiction over disputes concerning Sino-foreign joint
venture contracts, Sino-foreign cooperative enterprise contracts and Sino-
foreign cooperative exploration or development of natural resources con-
tracts, which are performed in the territory of China. There have been
criticisms over whether such restrictions are necessary or meet the require-
ments of international investment. It is true that China has the closest con-
nections to these contracts, but this is not a reason to exclude party
autonomy. The Chinese legislation aims to protect the interests of the
Chinese party of these contracts—in particular, state-owned enterprises.
Party autonomy will be excluded safely under the ground of public policy
and the protection of fundamental national interest, instead of the interest
of one of the parties. There is no sufficient reason to justify that any Sino-
foreign joint venture or Sino-foreign cooperative enterprise contracts
concern Chinese public and national interests to the extent that it is reas-
onable to exclude parties’ freedom to choose a competent court. If the
performance of the contract relates to the disposal of state property or
natural resources, exclusive jurisdiction is granted anyway under the
heading of immoveable property. It is thus suggested that there is no
general need to exclude party autonomy from Sino-foreign joint venture

86 See e.g. Hague Convention 2005, Art 2(2)(i); Brussels I Regulation, Arts 22 and 23(1).
87 Kessedjian, 1997: para 28.
88 Hartley, 2003: 11.
 Subject matter scope 105
and cooperative enterprise contracts all together. The proper legislation
should recognize such choices in general, subject to exception of public
policy.

Insolvency
Insolvency proceedings are administrative in nature and do not deal with
the substantive rights and obligations. Insolvency procedures and any
related rescue methods are not open to parties’ choice of court. Insol-
vency is excluded from the Hague Choice of Court Convention.89 In EU,
insolvency is dealt with exclusively by the Insolvency Regulation 2000,
which provides special jurisdiction rules overriding any inconsistent choice
of court agreements.90 However, if insolvency arises as an incidental issue
to a dispute in question, the parties still can choose the competent court
to govern their dispute.91 An example is that the parties entered into a sale
of goods contract containing a choice of court agreement and the seller
went into bankruptcy. The buyer’s restitution claim is the main cause of
action, and the choice of court clause is valid though insolvency exists as
an incidental question.92

Intellectual property rights disputes

Some countries have broader subject matter limitations on jurisdiction
over foreign intellectual property rights. In English common law, for
example, it is difficult for an English court to take jurisdiction over the
creation, validity and infringement of foreign IP rights, including regis-
tered and unregistered trademark and patent, as well as copyrights.93 This
practice, however, is inconsistent with the international trend, under
which IP claims are distinguished between claims in relation to state
register and claims in relation to the private right between the parties. In
most countries, the registration and validity of intellectual property rights
is subject to exclusive jurisdiction and the parties could not agree on the
competent court to hear the dispute.94 It is because the trademark and
patent are granted by the act of a country and only a sovereign state can
decide the validity of such an action.95 Disputes on license or infringement
of IP rights are usually private matters between the parties and freely

89 Art 2(2)(e).
90 Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings,
[2000] OJ L160/1; Magnus and Mankowski, 2012: 451.
91 Magnus and Mankowski, 2012: 451.
92 Hartley, 2003: para 15; Magnus and Mankowski, 2012: 451.
93 Tyburn Productions Ltd v Conan Doyle [1991] Ch 75; Apple Co v Apple Computer [1992] FSR
431. Fawcett and Torremans, 1998: 43–45.
94 Schulz, 2002a: 13.
95 Schulz, 2002b: 12.
106 Subject matter scope
disposable without states’ intervention. They can be subject to choice of
court agreements.96
The Hague Choice of Court Convention, on the other hand, makes dif-
ferent distinction between copyrights and other intellectual property
rights.97 Copyrights usually do not need state registration and disposition.
Copyrights and related rights, such as rights of performers, rights of
record producers and rights of broadcasting companies, can be subject to
jurisdiction agreements, even if the dispute is on the validity.98 However,
judgment on validity of copyright can only bind the parties of the dispute
and will not have in rem effects to bind any third party.99 As to other IP
rights (patent, trademark, design, etc.), the parties cannot choose the
competent court to hear the validity of these IP rights, but can choose jur-
isdiction to decide the contractual obligations arising out of the private
disposal of the IP rights, such as paying royalties, and validity and enforce-
ment of licensing agreements. If the defendant raises invalidity as a
defence, the chosen court can decide it as an incidental question.100 An
important exclusion in the Hague Convention is the infringement of IP
rights without contractual relationship between the parties.101 In other
words, only when a party infringes IP rights by breaching contracts, the
choice of court agreement can apply. The choice of court agreement
cannot cover pure tort claims for infringing IP rights, even if the agree-
ment is entered into after disputes have arisen.

Competition disputes
There are different types of competition disputes. Disputes concerning
‘unfair competition’ include, for example, trademark infringement and
passing off, defamation, misrepresentation, unconscionable contracts, etc.
These actions can be classified as general tort or breach of contract and
usually concern private right and obligations between the parties. There is
no problem for the parties to choose a competent court. Other competition
disputes, such as antitrust and anti-dumping, may require the exclusion of
party autonomy. Such disputes usually involve the state authorities exercis-
ing administrative power. Some actions are criminal proceedings. Even if
private proceedings might likely exist in rare cases, they concern the interest
of the general public and are not freely disposable by the parties.102

96 Schulz, 2002a: 13; Schulz, 2002b: 12.

97 Art 2(2)(n) and (0). Hartley and Dogauchi, 2007: para 33.
98 Hartley and Dogauchi, 2007: para 73.
99 Ibid., para 34.
100 Ibid., paras 37–38. However, it is different from choosing a court to hear the validity of
patent or trademark. The decision in the incidental question is not entitled for auto-
matic recognition and enforcement pursuant to the Convention.
101 Art 2(2)(0); Hartley and Dogouchi, 2007: paras 79–82.
102 Hartley, 2003: 10.
 Subject matter scope 107
3.2 Protecting weaker parties
Development of private international law in the late twentieth century
demonstrates the introduction of value consideration to the original tech-
nical conflict rules. Protective jurisdiction has been established to protect
the weaker parties in contracts with inequality of bargaining power, such
as consumer contracts, employment contracts and insurance contracts.
This trend originated from some European continental states,103 but was
followed later in the European harmonization of private international
law.104 Pursuant to the protective jurisdiction rules under the Brussels I
Regulation, parties’ choice of court agreements in consumer contracts are
prima facie invalid unless such a choice can expand the consumer’s
option, the choice was concluded after disputes have arisen or the
common domicile of both parties was chosen at the time of contracting.105
The rule in protecting the weaker party does not completely exclude the
adoption of choice of court agreements in deciding a competent court,
but it largely limits the effectiveness of such a choice.
The rationale for the limitation is to protect the weaker party from dis-
advantaged bargaining power. It is believed that the stronger party can
unilaterally insert a jurisdiction clause into a contract, choosing the court
that is most convenient to itself, which usually is the domicile or habitual
residence of the stronger party. The weaker party is placed in the take-it-
or-leave-it position and usually enters into the contract without reading.
Choice of court agreements, as a result, are not subject to authentic or
genuine consent between the parties and should be unenforceable.106
The protective jurisdiction, however, is not universally adopted. In the
USA, for example, common law jurisdiction rules apply equally to ordinary
contracts and adhesive contracts. Under a controversial case, Carnival
Cruise Lines v Shute,107 the US court enforced a choice of court agreement
in a cruise ticket against the consumer passenger. The same approach was
adopted in Ware Else & Ware Enterprises v Susan Ofstein108 and Nowland v
Hill-Rom,109 where the courts enforced jurisdiction agreements which
required the employees to sue their employers out-of-state. These deci-
sions are justified in terms of economic efficiency. Such jurisdiction agree-
ments reduce commercial costs and risks, and the weaker parties also
benefit from the reduced prices and, probably, job opportunities with
higher wages.110

103 Jenard, 1979: 33; Schlosser, 1979: 117.

104 Brussels Convention, section 4; Brussels I Regulation, section 4. For general, see Tang,
2009: 6–8.
105 Art 17 of Brussels I.
106 Tang, 2009: 8–9.
107 Carnival Cruise Lines v Shute 499 US 585 (1991).
108 Ware Else & Ware Enterprises v Susan Ofstein 865 So 2d 1079 (Fla app 5 Dist 2003).
109 Nowland v Hill-Rom 2008 WL 1909217 (D Or 2008).
110 Carnival Cruise Lines v Shute 499 US 585, 594 (1991).
108 Subject matter scope
No consensus can be made on whether jurisdiction clauses should be
restricted or excluded in contracts with the inequality of bargaining
power. This is one of the issues which prevents the Hague Conference on
Private International Law from adopting a fuller judgment convention
covering consumer and employment contracts. Every state continues to
use its domestic law to decide the subjective scope of choice of court
agreements, i.e. whether they can be applied to contracts with the
inequality of bargaining power.

4 Subject matter scope: comparing arbitration and

jurisdiction clauses
It is easily taken for granted that the subject matter scope of arbitration
and jurisdiction is the same. It is true that similar considerations have
been given to decide what subject matters can be freely disposed by the
parties. Restrictions to arbitrability and the subject matter scope of juris-
diction clauses include public policy, protection for third parties and
involvement of state sovereign interest and administrative power. Bribery,
fraud, intellectual property rights, antitrust and competition, insolvency,
contracts involving weaker parties, etc. are controversial areas in both jur-
isdiction and arbitration agreements.
In general, the subject matter scope of arbitration agreements is
broader than jurisdiction agreements. Development of arbitration in the
past 50 years witnesses the relaxation of rules on arbitrability. Most coun-
tries are willing to limit the reach of state power and public policy, and
allow party autonomy in wider areas. Arbitrators now could stretch their
arms to areas that were traditionally non-arbitrable, including certain
issues relating to bribery, corruption, competition and IP rights. There is,
however, no such development in the area of jurisdiction agreements. All
countries have exclusive jurisdiction, which excludes parties’ choice of
court. Some commentators suggest that arbitrability can be defined by
referring to exclusive jurisdiction.111 Some domestic law explicitly makes
matters subject to exclusive jurisdiction non-arbitrable.112 While a court
reserves certain issues exclusively to its jurisdiction, it excludes party auto-
nomy to opt for both another country’s court and arbitration. However,
the fact that a subject matter is within the range of exclusive jurisdiction of
a particular country does not render this issue non-arbitrable. Arbitrability
cannot always be referred from the concept of exclusive jurisdiction.113
Exclusive jurisdiction sometimes is provided exclusively in deciding alloca-
tion of jurisdiction between courts. The legislator has no intention to

111 Poudret and Besson, 2007: 293.

112 German law, ZPO, s1030(3); Belgian Law, CJB, Art 1676(3); Swiss Law, CIA, Art 5;
Poudret and Besson, 2007: 293–294.
113 Poudret and Besson, 2007: 294; Lazic, 2007: 6.
 Subject matter scope 109
extend the rules to the scope of arbitration. An example is exclusive juris-
diction established in the Brussels I Regulation.114 Although the Regula-
tion provides exclusive jurisdiction in a number of disputes relating to the
exclusion of jurisdiction agreements, this rule does not apply to arbitra-
tion.115 In China, the Civil Procedure Law provides notoriously broad
exclusive jurisdiction. The Chinese exclusive jurisdiction rules only
exclude the parties’ freedom to choose a foreign court to hear the specifi-
cally defined disputes,116 but do not exclude the freedom to submit these
disputes to arbitration. Article 305 of the ‘1992 Opinion’ provides that the
parties could not choose the court of any other countries for disputes
subject to exclusive jurisdiction, except arbitration agreements. In other
words, if the parties have chosen an arbitral tribunal, either seated in
China or abroad, this choice is not invalid even if the subject matter is
subject to exclusive jurisdiction. Furthermore, Article 3 of the Chinese
Arbitration Law provides the following matters non-arbitrable, including
marriage, adoption, guardianship, support, succession and administrative
disputes,117 which differs from exclusive jurisdiction. Contractual disputes
arising out of Sino-foreign joint ventures, for example, are not subject to
jurisdiction agreements but can be submitted to arbitration. In Desputeaux
v Éditions Chouette,118 the Supreme Court of Canada also ruled that the stat-
utory provisions providing exclusive jurisdiction to the copyright dispute
did not exclude arbitration.

114 Art 22.

115 Art 1(2)(d) excludes arbitration from the scope of the Brussels I Regulation. Poudret
and Besson, 2007: 294.
116 Arts 33 and 266 of PRC Civil Procedure Law 2012.
117 Art 3, PRC Arbitration Law 1994.
118 Supreme Court, Canada, [2003] 1 SR. 178, 2003 SCC 17, as cited in UNCITRAL 2012
Digest of Case Law on the Model Law on International Commercial Arbitration, para
12.
5 Enforceability of dispute
resolution agreements

1 Introduction
After a forum is satisfied that a valid jurisdiction or arbitration agreement
is concluded by the parties to govern the dispute in question, the forum
will move to consider the enforceability of this agreement. It is necessary
to know that a valid dispute resolution clause does not mean it will be
enforced by the forum. Validity decides whether an agreement meets the
preliminary requirements of law to be legally sound. Enforceability, on the
other hand, means what effect should be given to the legally sound agree-
ment. The former refers mainly to contractual requirements of a dispute
resolution clause, and the latter considers a country’s policy to give party
autonomy its binding effect. Enforcement of a dispute resolution agree-
ment is exclusively the procedure issue of a court. Although different
choice of law rules may apply to decide the validity of a dispute resolution
agreement, enforceability or effectiveness of this agreement is governed
exclusively by the lex fori.1
The enforceability of choice of forum clauses depends on many differ-
ent elements. Usually, a valid arbitration agreement will be given its full
effectiveness: a court will dismiss the case and refer the dispute to the
arbitral tribunal. This effect has been clearly provided by the New York
Convention and the UNCITRAL Model Law.2 The effectiveness given to
jurisdiction clauses, however, is uncertain. Not all jurisdiction clauses have
the same effect as an arbitration agreement to derogate a non-chosen
court from its jurisdiction. Furthermore, many countries, although accept-

1 Kahn-Freund, 1977: 834. Validity and enforceability are frequently confused and comin-
gled in both practice and academic writings. Some issues do not strictly relate to the con-
tractual concept on validity agreements, such as whether a conflicts clause could choose an
unrelated court and whether the conflicts clause can be enforced in consumer contracts.
These issues can be considered part of validity, or can be considered something relating to
the enforceability. As a result, strict dichotomy between validity and enforceability is not
necessary in practice. However, for the purpose of effective analysis, the book defines
enforceability narrowly, which concerns the legal effect given by a court to a conflicts
clause, which is not tainted in any way by preliminary conditions.
2 Art II.3, New York Convention; Art 8(1), Model Law.
 Enforceability of dispute resolution agreements 111
ing that courts, if competent under the domestic law, should decline
jurisdiction in favour of arbitration, do not grant the same rule to an
exclusive foreign jurisdiction clause. In common law countries, a court
chosen by the parties in a valid prorogation jurisdiction agreement may
refuse to take jurisdiction if it is inappropriate to do so. The effectiveness
of a jurisdiction clause thus depends on a lot of different factors: first,
whether the jurisdiction clause is exclusive or non-exclusive; second,
whether the court which is seized to enforce the clause is the chosen court
or non-chosen court; third, whether the court has discretion in face of a
valid jurisdiction agreement; fourth, whether there is any judicial coopera-
tion between the seized court and the chosen court, or any other courts
which have connections to the dispute or defendant.
This chapter compares the practice in major jurisdictions in the
enforcement of arbitration and jurisdiction agreements. It aims to analyse
why the different effectiveness is given to jurisdiction and arbitration
agreements in national law and to explore how the effectiveness of juris-
diction clauses can be improved in the future.

2 Enforcement in China

2.1 Arbitration agreements

Legislation
Full effectiveness is given to arbitration agreements in China. China is a
civil law country and traditionally refuses courts’ discretion to decline jur-
isdiction. Under the traditional jurisprudence, all jurisdictional grounds
and all possibilities for a court to decline jurisdiction shall be permitted by
law.3 The Chinese Civil Procedure Law has, in a few provisions, ascertained
the derogation effect of an arbitration agreement to courts’ jurisdiction.
Article 124(2) provides that, if both parties have entered into arbitration
agreements in writing, the claimant should not bring the action in court.
Article 124(3) further provides that the court should refer the claimant to
the other dispute resolution organ, if, according to law, the dispute should
be decided by organs other than courts. This provision can also be inter-
preted as a provision to support the derogation power of an arbitration
agreement. In addition, Article 271 provides rules for dealing with inter-
national arbitration, which provides that the parties can bring their
dispute to the people’s court only if there is no arbitration clause in their
contracts or no arbitration agreement is concluded in writing after the

3 Art 111 of PRC Civil Procedure Law 2007 provides that a Chinese court ‘must’ hear a case
if it has jurisdiction. This sentence is revised in the 2012 amendment but there is nothing
to positively suggest that Chinese courts could use discretion to decline jurisdiction
granted by law.
112 Enforceability of dispute resolution agreements
contract is concluded. If an arbitration agreement exists, the parties could
not commence actions in the people’s court. Besides the Civil Procedure
Law, Article 5 of the PRC Arbitration Law 19944 also provides: ‘If the
parties have concluded an arbitration agreement and one party institutes
an action in a people’s court, the people’s court shall not accept the case,
unless the arbitration agreement is null and void.’
Chinese statutes are consistent in terms of the derogation effect of an
arbitration agreement. This is a mandatory requirement for a Chinese
court to decline jurisdiction where a valid arbitration agreement exists.

Challenging court’s jurisdiction

Although a Chinese court is compelled to decline jurisdiction in face of a
valid arbitration agreement, a Chinese court is not obliged to use its own
motion to find out whether there is a valid arbitration agreement between
the parties. If the claimant did not disclose the existence of an arbitration
agreement to the court, the defendant must challenge court’s jurisdiction
by proving a valid arbitration agreement exists and covers the dispute in
question. The reason is that the contractual parties have freedom to waive
their rights under the arbitration agreement at any time. If the claimant
commences an action in a people’s court in breach of an arbitration
agreement and the defendant simply appears to defend, the defendant
has submitted to the court’s jurisdiction.5
If the defendant wants to use the arbitration clause to challenge jurisdic-
tion, the defendant must plea before the trial commences.6 If the defendant
does not raise the defence on time, the arbitration agreement is deemed to
be repudiated. Establishing a time limit to challenge courts’ jurisdiction is
reasonable in that it could prevent wasting time and judicial resources.
It makes a difference if the defendant of a contract, where an arbitration
clause exists, does not enter an appearance. The Supreme People’s Court
provides in its judicial direction that in this circumstance the people’s courts
should examine the validity of an arbitration agreement. If the arbitration
agreement is valid, the court should decline jurisdiction.7 It is clear that the
Supreme People’s Court aims to protect the effectiveness of an arbitration
agreement and it imposes the duty to the court to examine ex officio the
validity of an arbitration agreement. However, applying this direction
depends on the condition that the court must have been given sufficient
information prior to the hearing that there is an arbitration agreement

4 Adopted at the Ninth Meeting of the Standing Committee of the Eighth National People’s
Congress on 31 August 1994 and promulgated by Order No 31 of the President of the Peo-
ple’s Republic of China on 31 August 1994.
5 PRC Civil Procedure Law, Art 127; PRC Arbitration Law, Art 26.
6 PRC Arbitration Law, Art 26.
7 Supreme People’s Court, ‘Response about how to handle the case where a party in a con-
tract with an arbitration agreement fails to enter an appearance’, (2008) No 3.
 Enforceability of dispute resolution agreements 113
between the parties. If the claimant fails to disclose this fact, the court has
no obligation to examine the likely existence of arbitration agreements.

Internal Report-and-Review procedure

Although a Chinese law requires Chinese courts to decline jurisdiction in
hearing a dispute subject to an arbitration agreement, many Chinese
courts have the tendency to expand their jurisdiction and ignore the
parties’ intention to submit disputes to arbitration. These courts would
not blindly breach the law by taking jurisdiction regardless of a valid arbit-
ration clause. The common approach taken by these courts is to rule an
arbitration clause invalid before taking jurisdiction.8 In order to protect
the reasonable effectiveness of an arbitration agreement, the Supreme
People’s Court introduces the Internal Report-and-Review procedure to
prevent local courts from unduly competing with the arbitral tribunal in
jurisdiction.9 The Intermediate People’s Court has jurisdiction of the first
instance to hear a case with foreign elements. If an Intermediate People’s
Court holds an international arbitration agreement to be invalid, before it
can move to take jurisdiction, it must refer the decision to the High
People’s Court for a review. If the High People’s Court overrules the deci-
sion, the Intermediate People’s Court must decline jurisdiction and send
the parties to arbitration. If the High People’s Court affirms the decision,
the High People’s Court should refer the case to the Supreme People’s
Court for the second review. Only after the Supreme People’s Court
affirms the intermediate court’s jurisdiction can this court continue the
proceedings.10
The Internal Report-and-Review procedure is a special procedure only
available in China. It aims to properly protect the enforcement of arbitra-
tion agreements and prevent protectionism in local courts. The pro-
cedure, however, is not a judicial process. It is rather an administrative
procedure granting supervisory power to the court that has a higher hier-
archy. The local intermediate court should, by its own motion, report the
decision to the local High Court and voluntarily stay jurisdiction. If the
local intermediate court fails to report, the higher court would not review

8 Many Chinese courts conducted a check of the validity and existence of an arbitration
clause. E.g. Liantai Photo-Voltaic Jiangsu Province High People’s Court (2009) No 179. Du,
2007: 157.
9 Supreme People’s Court, ‘Notice on Issues about the Handling of Cross-Border and
Foreign Arbitration’, (1995) No 18, Art 1.
10 Shanghai Municipal High People’s Court Trial Committee, ‘Opinions on Several Issues
Relating to the Execution of “Arbitration Law of the People’s Republic of China” ’, 3
January 2001, Article 8(2); Supreme People’s Court, ‘Liberia Liberia Power Shipping, the
claimant, and China Chongqing Xinfu Food, the respondent, on the dispute on jurisdiction
in the contract for the carriage of goods by sea’, [2006] No 26; ‘Re asking for instruction
about the validity of an arbitration agreement in CECT and Korea Mobile, Shanghai Ausheng
Investment dispute on jurisdiction in Joint Venture Contract’, [2006] No 19.
114 Enforceability of dispute resolution agreements
the lower court’s jurisdiction, unless one of the parties appeal the lower
court’s decision.11 For example, in Ningxia Hebin Minzhu Electric Power v HK
Qilong Industry,12 the Yinchuan Municipal Intermediate People’s Court
held the arbitration agreement invalid because one party of the arbitra-
tion agreement no longer existed. The intermediate court, however, did
not report the order to the Ningxia High Court pursuant to the judicial
direction. The resisting party had to appeal the order to the High Court.
The High Court upheld the appeal by stating that the rights and obliga-
tions of the original party of the arbitration agreement were subrogated to
the current defendant and the arbitration agreement was enforced.
One may wonder why the Internal Report-and-Review procedure is
necessary if the party could achieve the same result by appeal. The reason
is that the internal procedure could save litigation cost and is usually
quicker.13 Furthermore, the resisting party only has one chance to appeal
an order.14 If the High Court affirmed the intermediate court’s decision
that the arbitration agreement was invalid in an appeal, the resisting party
has no further chance to appeal to the Supreme Court. In the Internal
Report-and-Review procedure, even if the High Court approves the inter-
mediate court’s decision, the decision will be referred to the Supreme
People’s Court for a second review. In practice, although most referrals
have been approved by the Supreme Court, there are also cases where
both the intermediate and the High Courts have decided to take jurisdic-
tion while the Supreme People’s Court order the courts to decline juris-
diction to give effect to the arbitration agreement.15 If the courts fail to
voluntarily enforce the report-and-review procedure, the resisting party
then loses the second chance provided in the Internal Report-and-Review
procedure.
Furthermore, the procedure only applies where the local intermediate
court take jurisdiction based on the ruling that the arbitration clause is
invalid. It does not apply where the intermediate court simply takes juris-
diction without considering the existence and validity of an arbitration
agreement. The consideration is that, if a local court simply ignores an
arbitration agreement, this court would not have the sufficient knowledge
or motion to refer the decision to the higher court. Taking jurisdiction in
breach of an arbitration agreement in this situation can only be chal-
lenged by appeal.

11 Art 154 of the PRC Civil Procedure Law 2012.

12 Ningxia Province Yinchuan Municipal Intermediate People’s Court, (2004) No 19, rev’d,
Ningxia High People’s Court, (2004) No 4.
13 Du, 2007: 159.
14 PRC Civil Procedure Law, Art 175.
15 E.g. Hubei Province Import and Export Co, Hubei Donghu Disk Technology Ltd v Kangweike Tech-
nology (Chengdu), No 4 Civil Tribunal of the Supreme People’s Court, [2004] No 34; Inner
Mongolia Zhicheng Mining Ltd v South Africa Huajin International Group Ltd, No 4 Civil Tri-
bunal of the Supreme People’s Court, [2001] No 26.
 Enforceability of dispute resolution agreements 115
It is also argued that the Internal Report-and-Review procedure
increases the court’s workload, especially the Supreme People’s Court.
Although the review system is supposed to be quick, in practice, delay is
observed in the Supreme Court. In China Pacific Insurance v Sunglide
Maritime,16 for example, the referral and review took eight months. In
Zhangjiagang Electro v Best-Better Worldwide Ltd,17 the Supreme People’s
Court took 15 months to decide that the local court should not take juris-
diction. In other cases, the review procedure usually takes around 3–6
months.18 It is also observed that the Supreme People’s Court has taken
increasing time to consider the referral. It is probably because more and
more local courts now have proper understanding of the importance of
arbitration agreements and the purpose of the Internal Report-and-Review
procedure. As a result, more cases are reported voluntarily to the higher
court. The increased case number has overloaded the Supreme People’s
Court. There is the worry that delays will become more and more severe in
the future. Since the majority of cases that have been reported by the High
Courts to the Supreme Court have been affirmed, there is doubt whether
the ‘double review’ system is still necessary. The system could probably be
simplified by a single review of the High Court. With the improved know-
ledge of the local court, the procedure may nevertheless be abolished in
the future.

2.2 Jurisdiction agreements

In contrast to legislative provisions granting explicit derogation effect to
arbitration agreements, no such clear effect is provided for jurisdiction
agreements. As a result, in comparison with the enforcement of arbitra-
tion agreements, the enforcement of jurisdiction agreements in Chinese
courts is problematic.19

Prorogation effect of jurisdiction agreements

There is not much difficulty for a court to accept prorogation effect of a
valid jurisdiction clause. The PRC Civil Procedure Law 1991 provided the

16 No 4 Civil Tribunal of the Supreme People’s Court, [2008] No 50.

17 No 4 Civil Tribunal of the Supreme People’s Court, [2006] No 1.
18 Dongguan ACE Medical Packaging, No 4 Civil Tribunal of the Supreme People’s Court,
[2007] 45; Rent Co v Zhongcheng Ningbo Import & Export, No 4 Civil Tribunal of the
Supreme People’s Court, [2008] No 4; Tianjing Goubuli Dumpling, No 4 Civil Tribunal of
the Supreme People’s Court, [2007] No 37; Bejing Ailisheng v Japan Sunglide, No 4 Civil
Tribunal of the Supreme People’s Court, [2007] No 14; Shenzhen Huahan v Xionghai, No 4
Civil Tribunal of the Supreme People’s Court, [2005] No 41; Shengmei v Hangzhou Huangs-
hun, No 4 Civil Tribunal of the Supreme People’s Court, [2005] No 4; China People Insur-
ance v Zhongcheng International Transport, No 4 Civil Tribunal of the Supreme People’s
Court, [2004] No 39.
19 For more discussion, see in general, Tang, 2012b: 459–484.
116 Enforceability of dispute resolution agreements
parties in international contracts the right to choose a Chinese court to
hear their dispute. The provision remains in the amended Civil Procedure
Law in 2007 and 2012. Article 34 of the PRC Civil Procedure Law
(Amended) of 2012 provides:

Parties to a dispute over a contract or other property rights and inter-

ests may, through written agreement, choose the court of the place
where the defendant has his domicile, where the contract is per-
formed, where the contract is concluded, where the claimant has his
domicile, where the subject matter is located, or other places which
has practical connections with the dispute to exercise jurisdiction.
Such a choice should not violate the provisions of this Law on jurisdic-
tion by forum level and on exclusive jurisdiction.

As a result, the prorogation effect of a jurisdiction clause will be enforced

if this jurisdiction clause is valid according to Chinese law and if it is con-
sistent with the Chinese legislation on jurisdiction by forum level and on
exclusive jurisdiction.20 However, even if a Chinese jurisdiction clause vio-
lates the jurisdiction by forum level, it will not automatically invalidate
such a clause. Chinese courts have taken a flexible approach to allow the
claimant to vary the jurisdiction clause and make it consistent with the
internal allocation of jurisdiction. For example, in Xu v Yan,21 a Chinese
resident and a Hong Kong citizen entered an exclusive jurisdiction agree-
ment choosing the Fujian Province Quanzhou Municipal Intermediate
People’s Court. However, the dispute had no connections to Quanzhou
City, which violated the requirement asking for the ‘practical connections’
between the dispute and the chosen court.22 The claimant then sued in
Fujian Province Zhangzhou City, which was a competent court under
Article 241 of the Civil Procedure Law 2007 (Article 34 of CPL 2012).23
The court took jurisdiction and treated the claimant’s voluntary change of
jurisdiction as acceptable. Although the claimant sued in a non-chosen
court, it is the correct court in the chosen jurisdiction. If the Zhangzhou
court refused jurisdiction and insisted the claimant sue in the chosen court,
the chosen court would nevertheless transfer the case back to the
Zhangzhou court. Zhangzhou court thus took jurisdiction which was

20 ‘Jurisdiction by forum level’ is called Ji Bie Guan Xia in Chinese. It allocates jurisdiction
within one territory to different levels of authorities, formed by the basic people’s courts,
Intermediate People’s Court, High People’s Court and Supreme People’s Court.
21 Fujian Province High People’s Court, (2010) No 78.
22 Art 34 of PRC CPL 2012 (Art 35 of CPL 2007).
23 Art 34 provides that a Chinese court can take jurisdiction over a dispute on contract or
other property rights or interest against a non-domicile defendant, if the contract is con-
cluded or performed in China, the subject matter is located in China, the defendant has
enforceable property located in China, the defendant has a representative in the territory
of China or the tort occurs in China.
 Enforceability of dispute resolution agreements 117
considered an effective method and avoided extra procedural steps to
transfer jurisdiction.
Furthermore, the Supreme People’s Court makes the choice of a
Chinese court compulsory. This is provided in the judicial interpretation
entitled ‘Summary of the Second National Conference on the Adjudica-
tion of Commercial and Maritime Cases with Foreign Elements’ issued in
2005.24 This interpretation means that, if a Chinese court is chosen in a
valid jurisdiction clause, this court must take jurisdiction and cannot
decline jurisdiction by any reasons—for example, there is another forum
which is more appropriate to hear the dispute, the same cause of action is
pending in another forum, the case has been heard and decided in
another forum or the jurisdiction clause is non-exclusive in nature.

Derogation effect of jurisdiction agreements

More uncertainty, however, exists as to the derogation effect of a jurisdic-
tion agreement.25 The ‘2005 Summary’ provides instead that, even if the
parties agree in their contract that a foreign court has exclusive jurisdic-
tion, this agreement could not exclude jurisdiction of other competent
courts.26 As a result, the derogation effect of a valid jurisdiction clause is
not compulsory and the Supreme People’s Court, at least in 2005, still rec-
ognizes the Chinese court’s power to take jurisdiction irrespective of a valid
jurisdiction clause granting exclusive jurisdiction to a foreign country.
Chinese courts, thus, have discretion as to whether to give the deroga-
tion effect to a foreign jurisdiction clause. The recent judicial practice
shows that more and more Chinese courts recognize the importance of
party autonomy and intend to decline jurisdiction in favour of a chosen
foreign court. In Lai v ABN AMRO Bank,27 the claimant was a private inves-
tor who entered into a contract out of his trade or profession. The con-
tract was a standard contract unilaterally drafted by the bank and the
claimant signed without proper understanding of contract terms. The jur-
isdiction clause was also an asymmetric clause, granting the bank the
freedom to sue Lai in any competent court while the claimant could only
sue the bank exclusively in Hong Kong. Unfortunately, there was no law to
regulate unfair contract terms, or to protect consumers in adhesive con-
tract. The only protection for the claimant is that the Chinese court would
exercise discretion not to enforce the jurisdiction clause.
The courts held that a foreign exclusive jurisdiction should exclude jur-
isdiction of Chinese courts. The courts refused to exercise discretion but

24 Supreme People’s Court, ‘2005 Summary’, [2005] No 6, Art 11.

25 The existence of a foreign exclusive jurisdiction clause is not listed in Art 124 of PCL
2012.
26 [2005] No 6, Art 11.
27 Lai v ABN AMRO Bank, Shanghai Municipal High People’s Court, (2010) No 49.
118 Enforceability of dispute resolution agreements
rather treated the exclusive jurisdiction clause as a compulsory require-
ment for the courts to decline jurisdiction. The Shanghai Municipal High
People’s Court confirmed the intermediate court’s decision to decline jur-
isdiction in favour of Hong Kong, which was chosen in the parties’ juris-
diction agreement.
Does it mean Chinese courts, in their practice, have avoided the judicial
direction in the ‘2005 Summary’ by giving foreign exclusive jurisdiction
clauses full derogation effects? An empirical study has shown that most
Chinese courts have voluntarily recognized the derogation effects of
foreign exclusive jurisdiction clauses and declined jurisdiction to enforce
party autonomy.28 However, some Chinese courts still refuse to decline jur-
isdiction in favour of a chosen court. These cases can be separated into
two categories: (1) the Chinese courts simply fail to respect party auto-
nomy; (2) the Chinese courts have considered the necessity to enforce
judgment and decide to take jurisdiction for the purpose of enforcement.
The first category is simply wrong and does not require further discus-
sion. The second category, however, demonstrates the more fundamental
reason limiting the proper functioning of party autonomy in Chinese
courts. In international commercial practice, the parties want certainty,
predictability and security. They enter into jurisdiction clauses to reduce
litigation cost and risk, and they also want to have judgments eventually
recognized and enforced. If the chosen court’s judgment cannot be
enforced, requiring the parties to sue in the chosen court would deprive
judgment creditors their rights. The necessity of recognition and enforce-
ment of judgments has been referred to as one of the most important ele-
ments that a Chinese court should consider when making discretion. If
the judgments of the chosen court cannot be enforced in China, the
Chinese court may take jurisdiction to hear the dispute regardless of the
fact that the parties have chosen another forum.29
An example is NKK (Japan) v Beijing Zhuangsheng,30 where a sale of
goods contract between a Japanese company and a Chinese company
included a clause submitting all disputes to Hong Kong to the exclusion of
all other courts. Since at the time of dispute there was no judicial coopera-
tion between China and Hong Kong, the Hong Kong judgments based on

28 Yacheng Automobile Parts v Huifeng, Jiangsu Province Wuxi Municipal Intermediate

People’s Court, (2006) No 23; Sojitz v Xiao, Shanghai Municipal High People’s Court,
(2004) No 72; Wenzhou Light Article Industry v CMA (France), Fujian Province High People’s
Court, available at www.chinalawinfo.com, reference code: CLI.C.21767; Junichirou
Watanabe v Culture & Art Press, Shanghai Municipal No 1 Intermediate People’s Court,
(2008) No 210.
29 Tang, 2012b: 459.
30 NKK (Japan) v Beijing Zhuangsheng, Beijing Municipality High Court, (2008) Gao Min
Zhong Zi No 919.
 Enforceability of dispute resolution agreements 119
31
the jurisdiction agreement cannot be enforced in China. Considering
the procedural efficiency and the importance to have judgments enforced,
the Chinese court took jurisdiction irrespective of the choice of court
agreement.32
Unfortunately, the grounds for Chinese courts to recognize and enforce
foreign judgments are narrow, with no exception given to party autonomy,
which means that even if the parties have chosen a foreign court, and this
choice is valid under both Chinese law and the law of the chosen court,
judgments based on the jurisdiction clause cannot be enforced in China
in most cases. This provides Chinese courts with reasons to take jurisdic-
tion irrespective of a valid jurisdiction clause choosing a foreign state,
without judicial cooperation or reciprocity with China. Therefore, the
enforcement of jurisdiction clauses in China is very complicated because it
directly connects to the profound issue of recognition and enforcement of
judgments. Without an improvement of law of recognition and enforce-
ment of foreign judgments and without being more open and more ready
to enter into international judicial cooperation, giving party autonomy the
weight that it desires would not truly happen.33

2.3 Assessment
Chinese law and judicial practice has demonstrated great divergence in
enforcing arbitration agreements and jurisdiction agreements. Chinese
law has expressly granted arbitration agreements full enforceability and
has ordered the Chinese courts to give up jurisdiction in favour of arbitral
tribunals. The Supreme People’s Court even introduced an Internal
Report-and-Review procedure to ensure every local court has paid due
respect to arbitration agreements. On the other hand, the enforcement of
jurisdiction is very much in doubt. Although Chinese courts are required
to recognize the prorogation effect of a jurisdiction clause choosing
Chinese courts, they have discretion as to whether or not to recognize the
derogation effect of a foreign jurisdiction clause. More importantly, some-
times it is improper for a Chinese court to enforce an exclusive foreign
jurisdiction clause because judgments made pursuant to such a clause
cannot be enforced in China.

31 Hong Kong–China judicial cooperation now exists. The Supreme People’s Court and the
Government of Hong Kong Special Administrative Region entered into the ‘Arrangement
on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial
Matters by the Courts of the Mainland and of the Hong Kong Special Administrative
Region’ in 2006.
32 Another example is Kwok & Yih Law Firm v Xiamen Huayang Color Printing Company,
Xiamen Municipality Intermediate People’s Court, 13 August 2003.
33 For more on recognition and enforcement of judgments in China, see Ch 8. See also
Tang, 2012b: 459.
120 Enforceability of dispute resolution agreements
The Chinese practice is a typical example of the important influence of
international treaties in domestic law. China is one of the Contracting
States of the New York Convention. Pursuant to the New York Convention,
China has the treaty obligation to enforce valid arbitration agreements
and to recognize and enforce arbitral awards made in a Contracting State.
China later enacted the Arbitration Law 1994 and the Supreme People’s
Court published the judicial interpretation to fulfil Chinese treaty obliga-
tion to give effects to a valid arbitration agreement.
There is no international judicial cooperation in court judgments and
choice of court agreements. Chinese courts have no treaty obligations to
enforce choice of court agreements choosing another country. Further-
more, China has very narrow grounds to recognize and enforce foreign
judgments. If Chinese courts take the possibility of recognition and
enforcement of foreign judgments as one important element to exercise
the Chinese-style forum conveniens, Chinese courts will refuse giving full
effectiveness to a lot of jurisdiction clauses choosing foreign courts.34 The
Hague Convention of 2005 has not yet entered into force and China has
not yet signed the Convention. Presumably, if China joins the Hague Con-
vention, the enforcement dilemma in foreign jurisdiction agreement may
be resolved. However, it still depends on the international acceptance of
the Hague Convention. If the Hague Convention is as successful as the
New York Convention and is accepted by most countries in the world,
joining the Hague Convention will largely improve the current situation in
China. Otherwise, the difficulty will continue to exist unless the domestic
law in recognition and enforcement is fundamentally improved.

3 Enforcement in England

3.1 Enforcement of arbitration clause—statutory obligation

Pursuant to s9 of the Arbitration Act 1996, a party to an arbitration
agreement may apply to the court to stay the court proceedings.35 The
time for application must be between taking the appropriate procedural
step to acknowledge the proceedings and taking any step to answer the

34 See more discussion in Ch 8.

35 s9(1). Aeroflot-Russian Airlines v Berezovsky, [2012] EWHC 1610 (Ch); Fiona Trust v Privalov
[2007] 1 All ER (Comm) 891; Al-Naimi v Islamic Press Agency [2000] 1 Lloyd’s Rep 522;
Anglia Oil v Owners and/or Demise Charterers of the Marine Champion (The Marine Champion)
[2002] EWHC 2407 (Admlty); Best Beat v Rossall, [2006] EWHC 1494 (Ch); Bovis Homes
Ltd v Kendrick Construction Ltd [2009] EWHC 1359 (TCC); Downing v Al Tameer Establish-
ment, [2002] 2 All ER (Comm) 545; El Nasharty v J Sainsbury Plc, [2004] 1 All ER (Comm)
728; Excalibur Ventures LLC v Texas Keystone Inc, [2012] 1 All ER (Comm) 933.
 Enforceability of dispute resolution agreements 121
36
substantive claim. Any substantive response will be considered as a sub-
mission to the jurisdiction and waive of the arbitration agreement. If the
resisting party applies for summary judgment from the English court, the
application for a stay may be refused because the applicant is deemed to
have accepted the court’s jurisdiction. On the other hand, if the applica-
tion for a summary judgment is made on the condition that the applica-
tion for stay is failed, a stay may be granted.37 The court, upon the
application, ‘shall grant a stay unless satisfied that the arbitration agree-
ment is null and void, inoperative, or incapable of being performed’.38 In
other words, only a valid arbitration clause can be enforced and lead to
the stay of court’s proceedings.39 The word ‘shall’ demonstrates that the
court has no discretion but must recognize the derogation power of a valid
arbitration clause. Furthermore, the court has no power to stay jurisdic-
tion upon its own motion. Finally, the mandatory stay of jurisdiction
applies to all types of arbitration agreements, regardless of the seat of
arbitration.
English courts also clarify that the application can be made by both
defendant and claimant acting in the counter-claim.40 Questions may arise
as to why the claimant, when bringing the claim in the court, is not
deemed as repudiating an arbitration agreement and is allowed to raise
the arbitration clause as a defence to the counter-claim. The possibility is
that an arbitration claim does not cover the original claim but only the
counter-claim. This, however, would not happen frequently in practice.
Furthermore, the proceedings that must be stayed are in respect of a
matter which ‘is to be referred to arbitration’. It, as a result, does not
include the court’s supervisory power of arbitration. If a party brings the
court proceedings to issue an anti-suit injunction against another party
suing in a foreign court, this action is not a matter covered by the arbitra-
tion agreement and should not be stayed under s9. Even if a party brings
the court proceedings to review the existence and validity of an arbitration
agreement, the court does not need to stay jurisdiction under s9. Section
9 of the Arbitration Act 1996, as a result, does not derogate a court from
its power to ‘supervise’ arbitration or consider preliminary issues of an
arbitration agreement.41

36 s9(3). Capital Trust Investments Ltd v Radio Design TJ AB [2001] 1 All ER (Comm) 1079;
Pitchers Ltd v Plaza (Queensbury) Ltd [1940] 1 All ER 151; Eagle Star Insurance Co Ltd v Yuval
Insurance Co [1978] 1 Lloyd’s Rep. 357; Patel (Jitendra) v Patel (Dilesh) [2000] QB 551.
37 Capital Trust Investments v Radio Design [2001] 1 All ER (Comm) 1079.
38 s9(4). Aeroflot-Russian Airlines v Berezovsky, [2012] EWHC 1610 (Ch), para 104–112; Ahad v
Uddin, [2005] EWCA Civ 883; Albon v Naza Motor Trading Sdn Bhd, [2007] 2 All ER 1075;
Cigna Life Insurance Co of Europe SA NV v Intercaser SA de Seguros y Reaseguros [2002] 1 All ER
(Comm) 235; Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd [2004] EWCA
Civ 1757.
39 Aeroflot-Russian Airlines v Berezovsky [2012] EWHC 1610 (Ch), paras 104–112.
40 s9(1). Nomihold Securities v Mobile Telesystems Finance SA [2012] EWHC 130 (Comm).
41 For more details, see Fawcett and Carruthers, 2008: 450–455.
122 Enforceability of dispute resolution agreements
3.2 Enforcement of exclusive jurisdiction clause—common law
discretion
The enforcement of exclusive jurisdiction clauses, however, is under dis-
cretion of a court. Although, after the cornerstone case Eleftheria, a valid
jurisdiction clause will be held prima facie effective, the court still has dis-
cretion not to enforce it under specific circumstances.42

Prorogation effect
English common law preserves the discretion to determine the effect of a
prorogation jurisdiction clause. Although it is relatively unusual for a
chosen court to decline jurisdiction on the ground that it is more appro-
priate for a non-chosen forum to hear the case, the discretionary prob-
ability exists in theory. If the claimant brings proceedings in the court
stimulated in the exclusive jurisdiction clause, the court will normally
assert jurisdiction. Although the defendant can apply for a stay based on
forum non conveniens, it is hard for the court to refuse jurisdiction, because
the exclusive jurisdiction clause creates a prima facie case that the chosen
forum is appropriate and the proceedings elsewhere are ‘oppressive and
vexatious’.43 From this perspective, declining jurisdiction granted by a
valid agreement may only have theoretic value without practical
significance.
There is an argument that a jurisdiction clause may not be enforced if
something unforeseeable at the time of contracting occurs.44 However, it
also depends on the effect of such unexpected facts. If the unexpected
events only increase ordinary difficulties to the parties or increase litiga-
tion expenses at a reasonable level, there is no strong reason to avoid party
autonomy. Only where such events make enforcement of the jurisdiction
clause impractical may the court use discretion not to enforce the jurisdic-
tion clause.

Derogation effect
The derogation effect of a foreign jurisdiction clause, however, is relatively
easy to be ignored. In a few cases, English courts refused to stay jurisdiction

42 [1970] P 94.
43 Seismic Shipping Inc & Anor v Total E & P UK Plc (The Western Regent) [2005] 2 CLC 182;
Elektrim SA v Vivendi Universal SA [2007] 2 Lloyd’s Rep. 8; Claxton Engineering Services Ltd v
TXM Olaj-Es Gazkutato Kft [2011] 2 All ER (Comm) 128; Society of Lloyd’s v White & Ors
[2000] CLC 961; Donohue v Armco Inc [2002] 1 All ER 749; Sohio Supply Co v Gatoil (USA)
Inc [1989] 1 Lloyd’s Rep. 588; Star Reefers Pool Inc v JFC Group Co Ltd [2012] 1 CLC 294.
44 Beazley v Horizon Offshore Contractors [2005] ILPr 11.
 Enforceability of dispute resolution agreements 123
45
in favour of a foreign jurisdiction clause. The courts usually consider the
balance of private and public interest and conclude that, despite the juris-
diction clause designating a foreign court, English courts should be the
more appropriate forum. In The Fehmarn,46 a party brought the proceed-
ings in England, though a Russian exclusive jurisdiction clause existed.
The English court, however, took jurisdiction on the ground that England
had closer connections to the dispute and the defendant would not object
to submit to England if he could avoid giving security. In this case, the
valid jurisdiction clause was departed from too lightly. Although the juris-
diction clause was contained in a standard form contract not subject to
negotiation between the parties, it might not be the reason for the court
to give it little weight, bearing in mind that both parties are sophisticated
businessmen with equal bargaining power. There is no different treatment
to standard form contracts and non-standard ones, except the contra profer-
entem rule applied to the interpretation of ambiguous terms. The possible
explanation is that The Fehmarn was decided at the end of the 1950s, when
the Eleftheria test was not provided. The court in The Fehmarn took a differ-
ent approach to decide the effectiveness of a foreign jurisdiction clause.
In Evans Marshall & Co. Ltd v Bertola S.A.,47 an English distributor (D1)
and a Spanish wine producer entered into an exclusive distribution con-
tract under which the English distributor was the sole agent to distribute
the producer’s wine in England. An exclusive jurisdiction clause was con-
cluded providing Spanish courts jurisdiction. The producer later claimed
that the performance of D1 was unsatisfactory and appointed another
company (D2) as the agent to replace the distributor. D1 sued the pro-
ducer and D2 as co-defendants in England, claiming conspiracy, breach of
contract on the part of the producer and interference with performance
of contract on the part of D2, and applied for injunction preventing the
producer and D2 from selling wine in England. The English court,
however, took jurisdiction regardless of the foreign exclusive jurisdiction
clause. The reason given is that: the distribution dispute solely concerned
England; the performance of D1 occurred in England exclusively; English
witnesses were involved to testify D1’s performance; proceedings would be
slower in Spain and no interlocutory relief was available there. The
approach is the same with The Fehmarn where ordinary connecting factors
are considered and used to derogate from the jurisdiction clause. The
only difference is that, in Evans Marshall, a third party to the jurisdiction
clause was involved. If a dispute concerns the rights of a third party, who is
not bound by the exclusive jurisdiction, and enforcing the jurisdiction

45 Aratra Potato Co Ltd v Egyptian Navigation Co (‘The El Amria’) [1981] Lloyd’s Rep 119, CA;
Citi-march Ltd and Another v Neptune Orient Lines Ltd and Others [1996] 1 WLR 1367; The
Athenee, 11 Ll L Rep 6; The Fehmarn [1957] 1 WLR 815; Mahavir Minerals Ltd v Cho Yang
Shipping Co Ltd (‘The MC Pearl’) [1997] CLC 794.
46 [1958] 1 WLR 159.
47 [1973] 1 WLR 349.
124 Enforceability of dispute resolution agreements
clause inevitably leads to split of proceedings and inconsistent result, a
court may exercise its discretion not to enforce the jurisdiction clause.
Evans Marshall only treats the third party interest as an ordinary factor.
After The Eleftheria,48 the traditional approach to treat such a clause as
only one factor in forum non conveniens is generally abandoned. English
courts adopt the modern approach established in The Eleftheria to treat
exclusive jurisdiction clauses prima facie effective unless the resisting party
shows strong reasons proving contrary. The new approach greatly
improves the effectiveness of a foreign exclusive jurisdiction clause. Many
English courts have enforced a valid jurisdiction clause choosing a foreign
court by refusing to issue a claim form out of jurisdiction or granting forum
non conveniens.49
English courts, however, in a couple of cases continue to assert jurisdic-
tion regardless of valid foreign jurisdiction clauses. In Aratra Potato Co Ltd
v Egyptian Navigation Co (‘The El Amria’),50 the English Court of Appeal
refused to decline jurisdiction in favour of the chosen court. The contract
contained an exclusive jurisdiction clause choosing Egyptian courts and
Egyptian law should apply. Nevertheless, the English court held that the
disputed matter existed in England, the evidence was located in England
and it would be impossible for an Egyptian court to understand the tech-
nical evidence, the parties could not obtain full and thorough investiga-
tion in Egypt and it was impossible to permit all witnesses to be fully heard
in Egypt. The English court held that England was the more appropriate
forum and the weight of the exclusive jurisdiction clause was overridden
by other factors pointing to England. The same approach was also adopted
by the Canadian court in Anraj Fish Products Industries v Hyundai Merchant
Marine Co Ltd.51 The Canadian court continued jurisdiction in breach of a
valid jurisdiction clause choosing the Seoul Civil District Court (Korea).
The court applied The Eleftheria and considered the location and availabil-
ity of evidence and the litigation cost in both countries. Some witnesses
would travel from France and some evidence was located in New York.
Although the dispute had limited connections to Canada, evidence was
more readily available there. It seems, however, the discretion has been
applied too lightly in both cases. It is true that the parties may have made
a choice of a court which is not the most convenient and inexpensive
forum in the world. However, it is doubtful whether a court shall have the
discretion to intervene. The parties’ choice may be unreasonable or
unwise, but as far as it is genuine and bona fide, and it does not affect the
right of a third party or contradict public policy, there is no reason for the

48 [1970] P 94.
49 Fawcett and Carruthers, 2008: 444. Mackender and Others v Feldia A. G., [1967] 2 QB 590;
Konkola Copper Mines Plc v Coromin [2005] 1 CLC 1021.
50 Aratra Potato Co Ltd v Egyptian Navigation Co (‘The El Amria’) [1981] Lloyd’s Rep 119, CA.
51 [2000] ILPr 717.
 Enforceability of dispute resolution agreements 125
court to correct the choice. Permitting the parties to freely handle their
business is the utmost goal of party autonomy.
The third party’s interest and the necessity to consolidate proceedings
are exceptional grounds used to depart from a valid jurisdiction clause.52
In Citi-March v Neptune Orient Lines,53 goods were damaged during shipping
and the holder of the bill of lading sued the shipper and others respons-
ible for storage in England. There was a clause in the bill of lading desig-
nating Singapore as the exclusive jurisdiction. The English court, however,
refused to stay the proceedings based on the ground that this was a multi-
defendant’s litigation and the parties other than the shipper were not
subject to the jurisdiction clause. Requiring the claimant to sue in Singa-
pore under the jurisdiction clause would split proceedings and cause the
risk of inconsistent decisions. Furthermore, evidence from the defendants
not subject to the jurisdiction clause was important to decide liability.
Suing in Singapore would prevent the claimant from getting the evidence.
Therefore, strong causes were shown to depart from the jurisdiction
clause. In Mahavir Minerals v Cho Yang Shipping,54 the Queen’s Bench Divi-
sion (Admiralty Court) refused to enforce the Korean exclusive jurisdic-
tion clause because it was considered necessary to concentrate all parties’
disputes in one forum.
Time-bar in the chosen forum may also form a basis to avoid the
enforcement of a valid foreign exclusive jurisdiction clause in England.
However, English courts usually treat this factor with caution. The English
courts should balance the policy of preventing a party from allowing time
to run out in the chosen court and the policy not to deprive the claimant
of his right to access to justice.55 In Citi-March v Neptune Orient Lines, the
court held that, if there was no strong cause showing English courts should
not enforce a foreign jurisdiction clause, the claimant may rely on the
time-bar of the chosen forum as far as he did not act unreasonably to allow
the time to run out.56 The unreasonableness is determined by all the cir-
cumstances, including the awareness of the time-bar, the explanation for
the failure to preserve time and the appropriateness of the chosen forum
in hearing the dispute.57 If the claimant deliberately or negligently leaves
the time to run out, the court will consider whether there are other strong
causes in favour of English jurisdiction. If there are not, the English court
will decline jurisdiction; if there are other strong causes, an explanation
from the claimant is required.58 However, it is unclear how much weight
should be given to the explanation, and what if there is no legitimate

52 Skype v Joltid, [2011] ILPr 8., para 34.

53 [1996] 1 WLR 13367.
54 [1997] CLC 794.
55 The Adolf Warski [1976] 2 Lloyd’s Rep 241 (CA), 112–113.
56 [1996] 1 WLR 1367, 1374C–F.
57 Ibid.
58 Mahavir Minerals v Cho Yang Shipping, 807.
126 Enforceability of dispute resolution agreements
explanation other than the claimant believes England is a more conven-
ient or natural forum? In Mahavir Minerals v Cho Yang Shipping, the claim-
ant did not commence proceedings in time in the chosen jurisdiction of
South Korea. The court said that the failure was either deliberate strategy
or oversight. No better explanation could be provided by the claimant.
The English court took jurisdiction anyway, deciding there were strong
causes in favour of English jurisdiction. Finally, English courts also have
the power to stay jurisdiction in favour of the chosen forum on the con-
dition that the other party waives the time-bar defence in the chosen
jurisdiction.59

3.3 Enforcing jurisdiction agreements within the Brussels I Regulation

After the UK acceded to the Brussels Convention in 1979, the civil law
approach in the Brussels I Regulation was applied to enforce jurisdiction
agreements falling within the scope of the Brussels I Regulation. The
Regulation applies where one of the parties has his or her domicile within
one of the Member States and the parties have chosen one of the Member
States to hear the dispute.60 The Brussels I Regulation requires the chosen
court to take jurisdiction. Forum non conveniens cannot be used to decline
jurisdiction.61 If both parties have their domiciles out of the Member
States but have chosen the court of a Member State, the Brussels I Regula-
tion does not require the chosen court to take jurisdiction, but demands
non-chosen Member States to stay jurisdiction until jurisdiction is estab-
lished by the chosen court.62
The distinction between EU and non-EU parties has generated criti-
cism. There is no reason to leave uncertainty in enforcement of jurisdic-
tion clauses by a Member State where parties in third parties are involved.
Judgments resulting from such a jurisdiction clause also cannot be recog-
nized and enforced in other Member States subject to the Regulation
rules. The uncertainty has been recognized by the legislator and, in the
Brussels I Recast, the uniform rules on enforcement have been extended
to all jurisdiction clauses choosing a Member State, irrespective of the
country of domicile of the parties.63

59 Baghlaf Al Safer Factory Co BR for Industry Ltd v Pakistan National Shipping Co & Anor [1998]
CLC 716.
60 Art 23(1).
61 Case C-412/98, Group Josi Reinsurance v Universal General Insurance [2000] ECR I-5925;
Case C-159/02, Turner v Grovit [2004] ECR I-3565.
62 Art 23(3).
63 Art 25(1) of the Brussels I Recast: ‘If the parties, regardless of their domicile, have agreed
that a court or the courts of a Member State are to have jurisdiction to settle any disputes
which have arisen or which may arise in connection with a particular legal relationship,
that court or those courts shall have jurisdiction . . .’
 Enforceability of dispute resolution agreements 127
3.4 Assessment
In England, the effect and enforceability of an arbitration agreement is
clearly stated in the statute, while the effectiveness of a valid jurisdiction
clause in common law is uncertain. Discretion of a court is used in the
latter instead of the former. The situation in jurisdiction clauses is much
clearer in cases falling within the scope of the Brussels I Regulation, which
establishes unambiguous duties for Member States to give full effective-
ness to jurisdiction clauses. No discretion can be exercised in this
scenario.
Certainty in jurisdiction agreements will be further improved after the
Brussels I Recast enters into force, which extends the certain and predict-
able jurisdiction rules to all jurisdiction clauses choosing one of the
Member States. Whenever English courts are chosen, the court must exer-
cise jurisdiction and have no power to use discretion under the Eleftheria.
When another Member State is chosen, the English court must decline
jurisdiction and there is no room for it to assert jurisdiction for the
purpose to achieve the end of justice. Common law rules can only be used
where a non-EU Member State is chosen.

4 Enforcement in the USA

4.1 Enforcement of arbitration agreements

It has been observed by many commentators that US state courts tradition-
ally held hostile attitudes towards arbitration agreements.64 However, the
Federal Arbitration Act (FAA) of 1925 established a policy in favour of the
enforcement of an arbitration agreement.65 The purpose of the FAA is to
encourage the use of arbitration to reduce cost of litigation and to protect
the commercial parties’ freedom of contract.66 The enforceability of an
arbitration agreement is the same as all other contract terms and only
subject to the contract theory.67 In other words, after the court is satisfied
that the arbitration agreement is valid, the court has no discretion not to
enforce it. This rule pre-empts the law of individual states and guarantees
the enforceability of arbitration agreements in the USA.68 Arbitration
agreements are enforced in claims in relation to statutory violation.69

64 Ritter, 2012: 44; Cunningham, 2012: 129; Crystal and Giannoni-Crystal, 2012: 238.
65 Ritter, 2012: 45; Moses H. Cone Mem’l Hospital v Mercury Construction., 460 US 1, 24–25
(1983).
66 Crystal and Giannoni-Crystal, 2012: 238.
67 Cunningham, 2012: 129.
68 Ritter, 2012: 45; Crystal and Giannoni-Crystal, 2012: 240.
69 Shearson/American Express Inc v McMahon, 482 US 220, 226 (1987); Crystal and Giannoni-
Crystal, 2012: 239.
128 Enforceability of dispute resolution agreements
Furthermore, US court practice demonstrates a distinction between
domestic arbitration and international commercial arbitration. Although
the courts also protect domestic arbitration, more flexibility and favour is
given to international arbitration. The standard of arbitrability is relaxed
in international arbitration, where the US Supreme Court upheld an arbit-
ration agreement involving claims of fraud pursuant to the Securities
Exchange Act of 1934.70 There is argument that the implementation of the
New York Convention contributes, at least partly, to the favourable atti-
tudes towards international arbitration agreements.71 The justification is
that more uncertainties exist in international contracts than in domestic
contracts caused by the relevance of different domestic law.72 Arbitration
agreements in international commercial contracts could produce predict-
ability and, because it is reached with the mutual consent of the parties, it
could prevent the possibility that the dispute is submitted to a forum
hostile to the interest of one party.73 This reason demonstrates the higher
necessity to enforce arbitration agreements in international than in
domestic disputes.
The enforcement of arbitration agreements is strengthened after the
implementation of the New York Convention. It becomes a duty of US
courts to enforce arbitration agreements and to recognize and enforce
foreign arbitral awards falling within the scope of the New York Conven-
tion. Some commentators even argue that the US now has a strong culture
in favour of arbitration and some judgments even turn hostile to litiga-
tion.74 This is probably an overstatement. However, it is true that, unlike
jurisdiction agreements, the enforcement of which is established by case
law and the practice in each state is still inconsistent, the enforcement of
arbitration clauses in the US shows consistency and certainty. The effec-
tiveness of arbitration agreements is reassured by federal statutes and
international treaties.75 There is no evidence showing a US court could use
discretion to refuse the enforcement of a valid arbitration agreement. Dis-
cretion, if it exists, should only rely on public policy, i.e. enforcing an
arbitration agreement may harm US national interest. Even so, Mitsubishi
still states that the court ‘must weigh the concerns of American safety
against a strong belief in the efficacy of arbitral procedures for the resolu-
tion of international commercial disputes and an equal commitment to
the enforcement of freely negotiated choice of forum clauses’.76 It is
uncertain whether the New York Convention permits Contracting States

70 Scherk v Alberto-Culver, 417 US 506; Crystal and Giannoni-Crystal, 2012: 242.

71 Crystal and Giannoni-Crystal, 2012: 242.
72 Scherk, 417 US 506, 516.
73 Ibid.
74 Cunningham, 2012: 129; Siegel, 2006: 1139–1146. AT&T Mobility v Vincent Concepcion et
ux. 131 S. Ct. 1740 (2011).
75 Crystal and Giannoni-Crystal, 2012: 246; Mitsubishi, 473 US 614, 636–640.
76 473 US 614, 630.
 Enforceability of dispute resolution agreements 129
to refuse enforcing an arbitration agreement based on public policy,
though it is clearly listed as a ground to refuse recognition and enforce-
ment of arbitration awards.

4.2 Enforcement of jurisdiction agreements

Enforcement of jurisdiction agreements in the USA is generally based on
common law. Pursuant to Bremen, a jurisdiction agreement must be
enforced unless the opposing party can show that ‘enforcement would be
unreasonable and unjust’, ‘the clause was invalid for such reasons as fraud
or overreaching’ or enforcement is contrary to public policy.77 In deciding
whether enforcement is unreasonable, the court will consider whether the
chosen court is ‘seriously inconvenient for the trial of the action’.78 ‘Con-
venience’ here includes the proximity between the chosen forum and the
dispute, such as in a case where two Americans choose a foreign court to
resolve essentially local disputes,79 the remoteness is such a nature that the
stronger party deprives the weaker party of his rights in an adhesive
contract,80 or the parties did not consider the particular dispute and thus
made an unreasonable choice.81 However, US court practice is very
unclear as to whether the Bremen rule is reserved in US courts determining
all disputes brought to the US courts, or the Bremen rule would be subject
to the applicable law. The US court could apply the law of another country
to decide the enforceability of choice of court clause.82 The Bremen test
replaces the ordinary forum non conveniens in deciding jurisdiction in cases
where there are jurisdiction agreements.83
Enforcement of choice of court agreements is reinforced in Carnival
Cruise Lines v Shute,84 where a jurisdiction agreement in a standard con-
tract between a carrier/company and a passenger/consumer was enforced.
The Supreme Court did not accept the argument that the passenger had
no opportunities to bargain, thereby rendering the jurisdiction clause
unenforceable. The Supreme Court held that, first, the business had
an interest to limit its commercial risk in terms of where to be sued;
second, the jurisdiction provided certainty to both parties; third, the pas-
senger probably received benefits by reduced fares associated with higher

77 Bremen v Zapata Off-Shore, 407 US 1, 15 (1972); Dubay, 2011: 15; Moberly, 2009: 275.
78 Bremen, 407 US 16.
79 Bremen, 407 US 17.
80 Bremen, 407 US 17.
81 Bremen, 407 US 17. Dubay, 2011: 15.
82 Dubay, 2011: 17.
83 Pelleport Investors v Budco Quality Theatres, 741 F.2d 273, 280 (9th Cir. 1984); Aguas Lenders
Recovery v Suez, S.A., 585 F.3d 696, 700 (2d Cir. 2009); Evolution Online System v Koninklijke
PTT Nederland, 145 F.3d 505, 509–510 (2d Cir. 1998); cited in Dubay, 2011: 19–20. For
more on Bremen, see Holt, 2009: 1913; Corsico, 2003: 1853; Marcus, 2008: 973; Moberly,
2009: 265; Brittain, Jr., 2001: 305.
84 Carnival Cruise Lines, Inc. v Shute, 499 US 585 (1991).
130 Enforceability of dispute resolution agreements
commercial safety; fourth, the clause was not induced by fraud or over-
reaching; fifth, the chosen forum was the principal place of business and
was not chosen for the purpose of preventing consumers from suing; and
sixth, the consumer was informed of the existence of the clause and had
the option to reject.85 Carnival Cruise Line thus adopted the same test to
adherent contracts and believed that discretion was enough to achieve
fairness and justice in individual cases.
Although the US Federal Court has consistently followed the Bremen test
to enforce a valid jurisdiction clause, US state courts use different stand-
ards when deciding enforceability of jurisdiction clauses.86 In New York,
for example, the choice of New York courts requires the jurisdiction agree-
ment to be governed by New York law and the value of transaction to be
above one million dollars.87 The power to refuse enforcing a jurisdiction
clause choosing US courts by forum non conveniens is still maintained by
state courts.88 Even though many state courts believe the opposing party
has a strong burden to show the jurisdiction clause should not be
enforced, they, at least, permit a valid jurisdiction clause to be set aside.89
Enforceability of a jurisdiction clause may also be denied if such a
clause may prevent its party from participating in class action. It is true
that a jurisdiction clause is not a class action waiver agreement. It,
however, has the potential to prevent consumers from bringing class
actions in another country. In Doel v AOL,90 the parties entered into an
exclusive jurisdiction clause choosing courts of Virginia. The plaintiffs
brought the class action in California. The defendant did not defend the
plaintiffs’ right to bring class action, but asked for the court to enforce the
jurisdiction clause, which was freely entered into between the parties. The
Ninth Circuit refused the argument based on public policy. The jurisdic-
tion agreement required all disputes to be heard by courts ‘of ’ Virginia,
instead of courts ‘in’ Virginia. It was interpreted as referring to state courts
of Virginia, instead of the federal courts within Virginia. Since state courts
of Virginia did not allow class actions, enforcing the jurisdiction clause

85 Carnival Cruise Lines, 499 US 585, 592–593. More on Carnival Cruise Lines, see Wright,
2011: 1625.
86 Stewart Organization v Ricoh, 487 US 22, 29 (1988). Dubay, 2011: 20–22; Moberly, 2009:
265.
87 New York General Obligations Law, s5–1402, as cited in Nygh, 1999: 16.
88 Nygh, 1999: 16; May v US HIFU, LLC., 98 A.D.3d 1004, 951 N.Y.S.2d 163 (N.Y.A.D. 2
Dept., 2012); Bumpus v Ward, Ohio App. 5 Dist., 2012 (Oct 09, 2012); In re Marriage of
Ricard and Sahut, 975 N.E.2d 1220 (Ill.App. 1 Dist., 2012).
89 March USA v Hamby, 28 Misc.3d 1214 (Sup. Ct., N.Y. County 2010); Banco Ambrosiano v
Artoc Bank and Trust, 62 N.Y.2d 65 (1984); National Union Fire v Source One Staffing, 36
Misc.3d 1224(A) (N.Y.Supp., 2012); K2M3, LLC v Cocoon Data Holding Pty. Ltd, Not
Reported in S.W.3d, 2012 WL 2469705 (Tex.App.-Corpus Christi, 2012); RWI Acquisition
LLC v Todd, Not Reported in A.3d, 2012 WL 1955279 (Del.Ch., 2012). For the practice in
Arizona, see Moberly and Lisenbee, 2010: 54; practice in Texas, see Yetter, 2010: 274.
90 2009 WL 103657 (9 Cir. Jan 16, 2009).
 Enforceability of dispute resolution agreements 131
effectively prevented Californian consumers from exercising their rights
to participate in class actions. The effect violated the public policy of Cali-
fornia, in which the current action was brought.91

4.3 Assessment
The US practice distinguishes conflicts between states and international
disputes, and upholds party autonomy more in the latter cases. In general,
a policy to support party autonomy has been established. The difference is
that the policy is enforced more readily in arbitration agreements than in
jurisdiction agreements. The above discussion shows that jurisdiction and
arbitration agreements have a similar history in the USA, and the US
courts’ attitude changes from hostility to support.92 The difference exists
in the reason for change. The change of attitude in arbitration agree-
ments was initiated by the statutes and reinforced by treaty duties; the
change in jurisdiction agreements was initiated by judgments. The differ-
ent sources also show that enforcement of arbitration agreements is more
certain and consistent in US courts, while the enforcement of jurisdiction
agreements is uncertain, subject to courts’ discretion. Although the Bremen
test established criteria to decide the enforceability, there lacks consistent
interpretation as to how the criteria should be interpreted. Questions arise
as to what it meant by reasonableness, and when public policy can be used
to refuse the enforcement of jurisdiction clauses.

5 Enforcement by and against the third party

5.1 General rule

It is also necessary to know that a common exception to the enforcement
of a valid dispute resolution agreement is that it usually could not bind a
third party. A third party does not enter into the agreement. If one of the
parties, after disputes have arisen, applies to add a third party into the pro-
ceedings, where the action is brought under a jurisdiction clause which
prorogates jurisdiction to an otherwise incompetent forum, the applica-
tion could not be successful. The question as to which party is subject to
the agreement is determined under the lex fori. In the US, the court will
consider all the circumstances of case and the contract terms to interpret
the meaning and scope of a dispute resolution clause. In YA Global Invest-
ments v Cliff,93 the Superior Court of New Jersey held that a personal guar-
antor was a third party to the financing agreement between the guarantee

91 Bremen v Zapata Off-Shore Co, 407 US 1 (1972). See also America Online v Superior Court of
Alamed County, 108 Cal. Rptr.2d 699 (Cal. App. 2001).
92 Crystal and Giannoni-Crystal, 2012: 247.
93 15 A.3d 857 (N.J.Super.A.D., 2011).
132 Enforceability of dispute resolution agreements
and the lender, even if the guarantor signed the agreement acknowledg-
ing its existence, because the body of the agreement implied that only the
lender and the guarantee were parties to the agreement. The agreement
signed by the guarantor has used clear language stating that it is a contract
‘by and among’ A and B, and the body also used the language ‘the other
party’ in the singular term to demonstrate only two parties are bound by
the agreement.94 In Asoma v SK Shipping,95 the court held that a charterer
should be bound by the jurisdiction clause in charter party and will not be
influenced by the bill of lading. In EU, the uniform interpretation is pro-
vided to determine the effect of a jurisdiction clause against a third party.
Pursuant to a recent case, Refcomp SpA v Axa Corporate Solutions Assurance
SA,96 the ECJ decided that a jurisdiction clause concluded in the contract
between the manufacturer and the buyer would not bind the third party
who is the sub-buyer in the re-sale or chain contract. The same general
principle applies to arbitration agreements. Arbitrators’ power is solely
originated from parties’ consent and, as a result, arbitrators have no power
to extend the arbitration agreement to a third party.97
However, a third party is bound by a dispute resolution clause if he
takes over the rights and obligations of one of the original parties under
the rule of subrogation,98 expressly gives his consent to the clause,99 has
acquired benefit from express terms of the original contract100 or has a
close relationship with the original contract or with one of the original
parties.101

5.2 Taking over the rights and obligations of the other party
It is a common practice that a jurisdiction or arbitration clause in a bill of
lading binds the litigation activity of the holder even if it is a clause
entered into by the carrier and the shipper. In Tilly Russ,102 the ECJ
decided that as far as the third party, by acquiring the bill of lading,

94 15 A.3d 862–863.
95 467 F.3d 817 (C.A.2 (N.Y.), 2006).
96 Case C-543/10, Refcomp SpA v Axa Corporate Solutions Assurance SA, unreported 7 February
2013. See comments in Note, ‘Jurisdiction clause does not bind subsequent purchaser
without his assent’ (2013) 305 EU Focus 8.
97 Ambrose, 2001: 415, 415–416; Blackaby et al., 2009: s1.112.
98 Brand and Herrup, 2008: 261; Gunerozbek, 2011: 279; Hartley and Dogauchi, 2007:
paras 97, 142, 143 and 294; Hess et al., 2007: paras 285–291; Hartley, 2009: 175; Ambrose,
2001: 416. Case C-387/98, Coreck Maritime v Handelsveem, [2000] ECR I-9337, para 22;
Case 71/83, Tilly Russ v Nova, [1984] ECR 2417.
99 Case C-543/10, Refcomp SpA v Axa Corporate Solutions Assurance SA.
100 Contracts (Rights of Third Parties) Act 1999, section 1. Case 201/82, Gerling v Amminis-
trazione del Tesoro dello Stato [1983] ECR 2503.
101 Lu v Dryclean-USA of California, 11 Cal.App.4th 1490 (Cal.App. 1 Dist. 1992).
102 Case 71/83, Tilly Russ and Ernest Russ v NV Haven- & Vervoerbedrijf Nova and NV Goeminne
Hout [1984] ECR 2417.
 Enforceability of dispute resolution agreements 133
succeeds to the shipper’s rights and obligations, the jurisdiction clause will
bind the third party. The holder is vested with all the rights and obliga-
tions mentioned in the bill of lading, including the jurisdiction agree-
ment.103 This is also expressly accepted in the UK Carriage of Goods by
Sea Act 1992.104
A third party who is an assignee will also be bound by a jurisdiction
clause concluded by its assignor.105 In Glencore International AG v Metro
Trading International (No 1) and Metro Trading International v Itochu Petroleum
(No 1),106 multiple proceedings were brought by multiple parties. A seller
entered into a sale of goods contract with some companies, which included
an exclusive jurisdiction clause choosing England. After the seller went
bankrupt, a receiver was appointed. A French bank that financed the sell-
er’s business commenced actions in France against the seller and other
parties to recover the amounts due. The receiver brought the action in
England in the name of the seller to recover payment of the purchase price
from one of the buyers. This buyer joined the bank as a third party to
ensure that they would be bound by the court’s decision. Although the
bank was an assignee of the seller, the bank claimed that it was a third party
and did not know the existence of the exclusive jurisdiction clause. Under
English law, an assignee cannot be better off than the assignor when taking
over the latter’s rights. The assignee must, in the same time, be bound by
all the obligations that are originated from the contract together with the
rights.107 Since Article 17 of the Brussels Convention (same content of Art
23 of the Brussels I Regulation) applied to the dispute, the English court
considered whether an assignee should be bound by the jurisdiction clause
entered into by the assignor. The court believed that a third party in assign-
ment had the same status as it did in a bill of lading.108 The court also
believed that requiring an assignee to be bound by the exclusive jurisdic-
tion clause would not undermine the principles of prorogation jurisdiction
under the Brussels Convention. The court states that:109

The assignee of a debt, as a recipient of rights, but not of obligations,

will always be the claimant in an action between himself and the
debtor and the agreement will not therefore derogate from his right
under the Convention to be sued in the courts of his own country of
domicile when he is a defendant. For his part, the debtor has agreed
to be sued in the chosen jurisdiction and has therefore agreed to any
such derogation.

103 [1984] ECR 2417, para 25.

104 s2(1).
105 Firswood Lea v Petra Bank, [1996] CLC 608.
106 [2000] ILPr 358.
107 Ibid.
108 Case 71/83, Tilly Russ [1984] ECR 2417.
109 Glencore International AG v Metro Trading International Inc, 99.
134 Enforceability of dispute resolution agreements
The same applies to arbitration agreements. In The Hari Bhum (No 2),110
the insurer of the shipper settled the damage claim for losses and sued the
insurer of the liable haulage company to recover the costs. The English
court requires the claimant to bring the action in arbitration pursuant to
the arbitration agreement in the original contract between the shipper
and the haulage company because both insurance companies were treated
as the assignees or transferees of the original contract parties.

5.3 Expressly granting the benefits to a third party

While bill of lading and assignment both vest the third party all the rights
and obligations of the original contractor, the third party beneficiary in an
insurance contract acquires its rights and obligations in the jurisdiction
and arbitration clause by a different means. In Gerling v Amministrazione del
Tesoro dello Stato,111 there was a contract concluded between the insured
and the insurer but expressly for the benefit of the third party beneficiary.
The ECJ believed that the insurance contract was made for the benefit of
the third party and gave him the right to rely on it to bring an action
against the insurer. The insurer, when entered into the agreement, agreed
to be sued by either the policy holder or the beneficiary according to the
jurisdiction clause. As a result, the beneficiary, though not a party to the
agreement, is totally entitled to sue the insurer according to the jurisdic-
tion clause.
This practice is recognized by legislation in the UK Third Parties
(Rights Against Insurers) Act 1930. In non-insurance cases, if a Himalaya
clause is concluded to confer rights to the third parties, the courts will still
hold the third parties bound by the dispute resolution agreement con-
cluded in the original contract, treating the third parties as entering into
the original contract.112 More development exists in the Contracts (Third
Parties) Act 1999, which provides that if the third party wants to enforce a
contract term that confers him substantive rights subject to an arbitration
clause in the original contract, the third party shall be treated as a party of
the arbitration clause and be bound by the arbitration agreement.113 The
substantive benefit is a ‘conditional’ benefit subject to a procedural con-
dition of submitting to arbitration.114
The same decision was held in the USA. In Taag Linhas Aereas de Angola
v Transamerica Airlines,115 the court held that a third party beneficiary of an

110 [2005] 1 CLC 376.

111 Case 201/82, Gerling v Amministrazione del Tesoro dello Stato [1983] ECR 2503.
112 Ambrose, 2001: 417.
113 s8(1).
114 Fortress Value Recovery Fund v Blue Skye Special Opportunities Fund, [2013] EWCA Civ 367,
para 42 (per Lord Toulson).
115 915 F.2d 1351 (9th Cir 1990). See Eric H Lu v Dryclean-USA of California, 11 Cal.App.4th
1490 (Cal.App. 1 Dist. 1992).
 Enforceability of dispute resolution agreements 135
insurance contract should be bound by the choice of court agreement in
the contract because ‘it is well-settled contract law that the scope of a
third-party beneficiary’s rights is defined by the contract’. This is justified
as the third-party must have the knowledge of the contract and the juris-
diction clause therein and, as a result, must have reasonably foreseen the
application of the jurisdiction clause in order to enforce his contractual
rights.

5.4 Consent and knowledge of the third party

Where a third party has given consent or has knowledge of the dispute res-
olution clause, when taking over rights and obligations of an original
party, there is no problem to bind the third party by the dispute resolution
clause. In China, for example, the Supreme People’s Court provided judi-
cial direction that if the third party has taken over all, or part of, the rights
and obligations of the original party of an arbitration agreement, the
agreement is effective to the successor, unless the third party expressly
objects to or has no factual or constructive knowledge of an arbitration
agreement not written within their main contract.116
However, it is questionable as to whether a third party’s consent or
knowledge to the existence and content of the jurisdiction clause is man-
datory before the clause can be enforced against him. In Tilly Russ, the
ECJ made its decision solely on the legal effect of subrogation, namely the
holder of the bill of lading acquired all the rights and obligations of
the shipper as set out in it. ECJ specifically stated that the requirement of
safeguard to the third party’s intention was irrelevant.117 In Metro Trading,118
the court rejected the defendant assignee’s argument that it did not have
actual knowledge of the existence of the jurisdiction clause. The court
believed that assignment was a straightforward procedure to transfer rights
and obligations under a contract to another party. The third party thus
completely takes the original party’s shoes. The contract thus is enforce-
able between the third party and one of the original parties without extra
test as to which obligations the third party was aware of. The binding effect
originates from the legal consequence of the assignment and subrogation,
instead of the consent to conclude each contract term by the third party.
Substantive knowledge on the part of a third party is considered immate-
rial for the exclusive jurisdiction clause to bind the third party.
However, in other cases, the court has considered the knowledge of the
third party and required at least constructive knowledge of the existence
of the jurisdiction clause. In Firswood Lea v Petra Bank,119 for example, when

116 ‘Arbitration Law Interpretation 2006’, Art 9.

117 Para 24.
118 [2000] ILPr 358.
119 [1996] CLC 608.
136 Enforceability of dispute resolution agreements
justifying the decision to bind an assignee to a jurisdiction clause con-
cluded by the assignor, Schiemann LJ considered the elements as follows:
(1) the contract subject to assignment is the type of contract the benefit of
which is frequently assigned; (2) the other contractual party suffers no
advantage from being sued in the chosen court by a different claimant;
(3) ‘there would be nothing unreasonable in holding the assignee bound
by a jurisdiction clause of which he had knowledge and which was clearly
set out in the agreement the benefit of which has been assigned to him’.120
The simple existence of a jurisdiction clause was not enough to bind the
assignee, but there must be elements suggesting the assignee was aware of
the existence of the jurisdiction clause. In Gerling, although it was the third
party who relied on the jurisdiction clause, the ECJ still took the fact that
the original contract party knew and was aware of the jurisdiction clause.
It is true that binding the holder of a bill of lading to a jurisdiction
clause contained in it is a common practice and it is a custom not to
require the holder to express its consent or to sign the agreement.
However, it does not mean constructive knowledge is completely unneces-
sary for a dispute resolution clause to bind a third party. If two contractual
parties have a long-term business relationship and have a dispute resolu-
tion clause binding them, without a written contract to clearly set the
clause out, a third party subrogator will have no opportunity to know the
existence of such a clause and will be prejudiced by the lack of knowledge.
Although the actual knowledge is not required, the dispute resolution
clause should at least be provided to the third party and be observable in
the contract. Otherwise, there must be either common practice between
the assignor, assignee and the other party, or common usage in trade and
commerce, to support the constructive knowledge.

5.5 Close relationship with the third party

Where the third party has not taken over the original party’s rights and
obligations and is not expressly named in the original contract, it may still
be bound by the dispute resolution agreement if it is closely related to the
original contractual relationship or with one of the original parties. In Lu
v Dryclean-USA of California,121 the franchise agreement between the fran-
chisee and franchiser included a jurisdiction agreement. The claimant
later brought an action to rescind the franchise contract based on misrep-
resentation and tried to avoid the jurisdiction agreement by claiming two
defendants did not sign the franchise contract and were not parties to the
jurisdiction agreement. The court, however, held that the two defendants
were closely connected to the franchise contract and they were alleged by
the claimant to have participated in the misrepresentation. They were also

120 [1996] CLC 608, 618.

121 Lu v Dryclean-USA of California, 11 Cal.App.4th 1490 (Cal.App. 1 Dist. 1992).
 Enforceability of dispute resolution agreements 137
alleged to be the alter ego of the franchiser. The third parties, thus, had
close relationship with the contract and one of the parties.
A similar approach is applied in arbitration. In Dow Chemical France v
Isover (France),122 the French tribunal pierced the corporate veil between
the parent company, a US company and a French subsidiary in the same
corporate group and took jurisdiction over all the relevant parties, though
not all of them signed the arbitration agreement, since all the companies
were involved and played substantive roles in the negotiation, conclusion
and performance of one contract. In England, the English court also
allows arbitration clauses to bind a closely related third party by relying on
the doctrine of corporate veil, though the test standard is much higher in
English common law.123
What relationships are considered close enough? They include parent–
subsidy, director–company, principal–agent, successor–predecessor, con-
trolling shareholder–company, guarantor–guarantee, and affiliated
companies.124 These relationships usually have the potential to make the
related parties jointly liable for a specified obligation. The justification is
that, if a jurisdiction clause does not bind a closely related third party, this
situation may be abused by both original parties to escape a valid jurisdic-
tion clause. The non-related original party may escape a valid jurisdiction
clause by bringing actions against a closely related third party.125 The
related original party may also escape the clause by allowing the third
party to bring actions instead. Furthermore, the close relationship makes
the third party reasonably foresee it may be bound by the chosen court.
Extending jurisdiction against them may not breach their expectation.
Finally, according to the principle of mutuality, the third party that can
foresee being bound by a jurisdiction clause is also entitled to enforce this
clause positively against the other party.126
In Venard v Jackson Hole Paragliding,127 the claimant signed agreements
to obtain membership with the US Gliding and Paragliding Association
(GPA), which submitted all disputes to the court of California. The claim-
ant then suffered injury when attending paragliding training offered by a

122 (1984) IV Yearbook Commercial Arbitration 131.

123 See Roussel-Uclaf v GD Searle Co [1978] 1 Lloyd’s Rep 225. Blackaby et al., 2009: s2.45.
124 Venard v Jackson Hole Paragliding 292 P.3d 165, 172 (Wyo., 2013). Medtronic, Inc. v End-
ologix, Inc., 530 F. Supp. 2d 1054, 1057 (D.Minn. 2008); Marano Enters. v Z–Teca Rests.,
L.P., 254 F.3d 753, 757 (8th Cir. 2001)); Cooper v Meridian Yachts, Ltd, 575 F.3d 1151,
1170 (11th Cir. 2009); Holland Am. Line, Inc. v Wartsila N. Am., Inc., 485 F.3d 450, 456
(9th Cir. 2007); Lipcon v Underwriters at Lloyd’s, 148 F.3d 1285, 1299 (11th Cir. 1998).
Blackaby et al., 2009: s2.40, s2.49.
125 11 Cal.App.4th 1490, 1494.
126 Venard v Jackson Hole Paragliding 292 P.3d 165, 172; Frietsch v Refco, Inc., 56 F.3d 825,
827–828 (7th Cir. Ill. 1995); General Electric Co. v Siempelkamp GmbH & Co., 809 F. Supp.
1306, 1310 (S.D.Ohio 1993), aff’d, 29 F.3d 1095 (6th Cir. 1994); Buffet Crampon S.A.S. v
Schreiber & Keilwerth, 2009 WL 3675807, 9, 2009 US Dist. (N.D.Ind. 2 November 2009).
127 292 P.3d 165 (Wyo., 2013).
138 Enforceability of dispute resolution agreements
paragliding company and brought action against the paragliding company
in Wyoming. The defendant claimed that the jurisdiction clause should
apply because they were also members of the same association. The
defendant had relationship with one of the original parties to the contract,
but this relationship is not close enough to make the defendant and the
GPA share any liability. The court then refused the petition to allow the
third party to enforce the jurisdiction agreement.

6 Conclusion
The recent development in international commerce and the wide accept-
ance of party autonomy determine the trend to favour dispute resolution
agreements, including both jurisdiction and arbitration agreements.
However, comparing jurisdiction and arbitration agreements, evidence
shows that more effectiveness and respect is given to the parties’ consent
to submit their dispute to arbitration than to the court of another country.
In the USA, UK and China, enforceability and effectiveness of arbitration
agreements is established by clear and unambiguous statutory provisions.
In order to protect the enforcement of arbitration agreements, China has
even adopted a unique internal report and review scheme to ensure the
better enforcement of arbitration agreements. In the US and England, the
court has no discretion to take jurisdiction irrespective of a valid arbitra-
tion agreement. The common law doctrine of forum conveniens has no
place in disputes involving arbitration agreements.
Comparatively, the enforcement of jurisdiction agreements is more
uncertain. In all three countries, enforceability of jurisdiction agreements
is not clearly expressed in statutes, with one exception to the Brussels I
Regulation. Proper enforcement of a jurisdiction agreement requires the
court to recognize both its prorogation power, by taking jurisdiction if it is
the chosen court, and its derogation power, by declining jurisdiction if it
is not chosen. While most courts now readily recognize the prorogation
effect of a jurisdiction clause, some still hold a sceptical attitude against
the derogation effect. It is probably because a court does not like its statu-
tory power of jurisdiction to be ousted by private parties, and feels
extremely uncomfortable to give up its power to a court with equal author-
ity in another sovereign state. Although arbitration agreements also ‘oust’
a court’s jurisdiction, the derogation power of arbitration agreements has
been widely accepted. A court does not feel uneasy to let a private body
take the power to decide private parties’ dispute, considering it is in the
best interest of commercial convenience to permit the parties free disposal
of their disputes in arbitration.
In English and US law, enforceability of a jurisdiction clause is subject
to common law, which establishes a basic test to assess the enforceability of
such a clause but nevertheless lacks clearer guidance. Discretion is left
to judges in making decisions on a case-by-case basis. Furthermore, the
 Enforceability of dispute resolution agreements 139
traditional common law doctrine of forum non conveniens still plays a role in
disputes involving a choice of court agreement. Uncertainty remains an
issue.
One of the most important reasons contributing to the difference is the
existence of international treaty obligations in enforcing arbitration agree-
ments. While most countries have ratified the New York Convention, they
should fulfil their treaty obligations to give full effectiveness to arbitration
agreements. The lack of the same obligations partially causes the uncer-
tainty in enforcement of jurisdiction agreements. In England, for example,
uncertainty remains in the traditional common law, but great certainty
exists for cases covered in the regime of the Brussels I Regulation. It is
reasonable to predict that if the Hague Choice of Court Convention is rati-
fied by many countries, jurisdiction clauses will have enforceability not less
than arbitration agreements.
Refusing the derogation effect of a jurisdiction clause usually stems
from two reasons: state sovereignty and enforcement of judgments. As to
the first reason, it is believed that the jurisdiction is based on an external
expression of state sovereignty. Private parties may have autonomy to
decide their own affairs, but they do not have the power to exclude states’
jurisdiction they may otherwise have. Private parties cannot intervene into
state sovereignty. In this sense, the derogation effect of a jurisdiction
clause may be considered as something against public policy of the
country which has jurisdiction in the absence of jurisdiction. Second,
without judicial cooperation, decisions made pursuant to jurisdiction
clauses cannot be enforced easily in the other country. If there is no
chance for the judgment to be enforced and one party sued in the non-
chosen country where enforcement will be sorted, the court may assert jur-
isdiction in breach of the exclusive jurisdiction clause based on the reason
of easy enforcement of judgment.128

128 This is the case in China. In NKK, the court mainly based the decision to take jurisdic-
tion on the ground that Hong Kong decisions could not be enforced in China
Mainland.
6 Supporting party autonomy
Lis pendens, forum non conveniens and
anti-suit injunctions

1 Introduction
Party autonomy is an effective instrument to resolve the problem of con-
flict of jurisdiction. In the ideal scenario, where all countries have the
same set of rules in deciding the validity and enforceability of a jurisdic-
tion agreement and all courts strictly follow these rules, the existence of a
valid exclusive jurisdiction clause could diminish both positive and
negative conflict of jurisdiction. The chosen court is the only competent
one and must take jurisdiction pursuant to the agreement, while all non-
chosen fora should decline jurisdiction. However, this ideal situation does
not exist. Jurisdiction agreements, as a result, cannot completely end
forum shopping or conflict of jurisdiction. The traditional instruments,
such as lis pendens, forum non conveniens and anti-suit injunctions, continue
to be applied in cases where an exclusive jurisdiction agreement exists.1
Conflict of jurisdiction may also exist between courts and arbitral tribu-
nals. Compared to jurisdiction, there is better harmonization in inter-
national arbitration in the effectiveness of an arbitration agreement, but
differences continue to exist in terms of existence and validity of arbitra-
tion agreements. There is the possibility that both an arbitral tribunal and
a court assert jurisdiction to decide the subject matter and deliver differ-
ent decisions. In arbitration, conflicts of jurisdiction may exist between the
arbitral tribunal and the supervisory court, between the tribunal and a
non-supervisory court, and between the supervisory and non-supervisory
court. There is no rule of lis pendens relating to arbitration, but forum non
conveniens and anti-suit/anti-arbitration injunctions are still available to
handle the parallel proceedings arising out of arbitration.

1 See Tang, 2012a: 321.

 Supporting party autonomy 141
2 Lis pendens and conflicts agreements

2.1 Lis pendens

Lis pendens means pending lawsuits in concurrent proceedings on the
same or related matters.2 It usually occurs where the claimant sues the
defendant in one of the competent fora, while the defendant subsequently
sues the claimant in another competent forum on the same subject mat-
ter.3 Sometimes, the defendant sues the claimant in the second seized
court on unidentical but related disputes, which also causes lis pendens in a
broad sense.4 In unusual cases, the same claimant may bring two proceed-
ings in different courts.5 Lis pendens can also occur at the enforcement
stage, where one court has delivered judgment which is sought for
enforcement by the claimant in another country, but the defendant brings
an action on the same or related matter in a different forum. In all these
cases, there will be more than one action existing concurrently.
It is not difficult to see why concurrent proceedings should be avoided.
Concurrent proceedings would almost inevitably cause delay, expense and
inconvenience to the parties, and waste judicial resources and public
funds.6 More problems would arise where irreconcilable judgments are
given and both seek recognition and enforcement in the same country.
This reason is recognized in the EU, which provides, in the Brussels I Regu-
lation, that ‘(i)n the interests of the harmonious administration of justice it
is necessary to minimise the possibility of concurrent proceedings and to
ensure that irreconcilable judgments will not be given in two Member
States’.7 The problem in enforcing irreconcilable judgments is considered
more severe among countries with judicial cooperation. Irreconcilable
judgments and concurrent proceedings between Member States or Con-
tracting States would undoubtedly affect mutual trust between countries.
The lis pendens rule in countries with judicial cooperation requires the
second seized court to stay jurisdiction in favour of the first one.8 However,
if there is no judicial cooperation facilitating sound administration of
justice and reciprocal recognition and enforcement of judgments, the only
consideration that may encourage a country to handle lis pendens is inter-
national comity and the practical concern of the waste of public recourses
if the decision is not going to be enforced in another country. A country
may not intend to avoid lis pendens, especially where the defendant has dis-

2 Clarkson and Hill, 2011: 114–122; Fawcett and Carruthers, 2008: 303ff.; Hartley, 2009:
237ff.
3 E.g. Art 27(1) of the Brussels I Regulation.
4 Art 28(1) of the Brussels I Regulation.
5 McLachlan, 2008: 227.
6 McLachlan, 2008: 216.
7 Recital 15 of the Brussels I Regulation.
8 Arts 27(1) and 28(1) of the Brussels I Regulation.
142 Supporting party autonomy
trainable property under the control of this country and judgments are
likely to be enforced here.9 Some countries believe jurisdiction is based on
sovereignty and they would be reluctant to stay their jurisdiction or to inter-
fere in other countries’ jurisdiction to avoid concurrent proceedings.

2.2 Lis pendens and jurisdiction agreements in civil law countries

Using the chronological order to deal with concurrent proceedings is orig-
inated in civil law countries handling internal lis pendens between domestic
courts.10 For example, the PRC Civil Procedure Law provides that: if the
plaintiff brings the lawsuit in two or more people’s courts that have juris-
diction over the lawsuit, the people’s court in which the case was first
entertained shall have jurisdiction.11 The reason for the adoption of lis
pendens in the domestic context is to guarantee that only one competent
domestic court should hear a dispute and no irreconcilable judgments
should be provided in different domestic courts at the same hierarchic
level of one country. However, extending domestic lis pendens to cross-
border disputes is much more difficult. Almost no civil law countries
expressly adopt the lis pendens rule in dealing with concurrent proceedings
with other countries, unless required by treaty obligations.12

Lis pendens and jurisdiction agreements in countries without judicial

cooperation
Civil law countries traditionally make jurisdiction compulsory and a court
cannot refuse exercising jurisdiction unless expressly provided by legisla-
tion.13 For example, although Chinese law accepts the lis pendens rule to
combat conflict of jurisdiction between two Chinese courts, this rule is not
equally applied in cross-border cases. The Supreme People’s Court has, on
more than one occasion, directed Chinese courts that the existence of the
same proceedings in another country could not prevent a competent
Chinese court from taking jurisdiction, unless provided otherwise by
treaties.14 It does not matter if the foreign court is seized first. In practice,

9 A typical example is the legal practice in China. Since Chinese courts have very narrow
grounds to enforce foreign judgments, Chinese courts would not give consideration to lis
pendens when taking jurisdiction.
10 Schlosser, 2000: 81; McLachlan, 2008: 270ff.
11 CPR Civil Procedure Law 2012, Art 35.
12 McLachlan, 2008: 271; Nuyts, 2007: 100.
13 Schlosser, 2000: 54.
14 Supreme People’s Court, ‘Summary of the Second National Conference on the Adjudica-
tion of Commercial and Maritime Cases with Foreign Elements’, [2005] No 26, Art 10;
Du, 2007; Kwok & Yih Law Firm, Xiamen Municipal Intermediate People’s Court, 13
August 2003. Supreme People’s Court, ‘Opinions on Several Issues on the Implementa-
tion of the Civil Procedure Law of the People’s Republic of China’, [1992] No 22, Art
306.
 Supporting party autonomy 143
Chinese courts rarely consider if a foreign action is pending on the same
matter or if a foreign court has already given judgment on the issue in dis-
pute.15 Because the lack of judicial cooperation between China and most
countries in recognition and enforcement of judgments, and because
Chinese domestic law provides very narrow grounds to enforce a foreign
judgment, Chinese law permits the party to bring the same action in China
after a foreign court gives judgment, as far as the judgment cannot be
enforced in Chinese courts.16 Without judicial cooperation, most civil law
countries will not voluntarily adopt lis pendens to stay their jurisdiction in
favour of a first seized foreign court, or to expect a foreign court to stay its
jurisdiction in favour of them.
A limited number of civil law countries, however, adopt lis pendens in
cross-border cases with many extra conditions. For example, the Civil
Code of Quebec provides that:

(o)n the application of a party, a Québec authority may stay its ruling
on an action brought before it if another action, between the same
parties, based on the same facts and having the same object is pending
before a foreign authority, provided that the latter action can result in
a decision which may be recognized in Québec, or if such a decision
has already been rendered by a foreign authority.17

However, the influence of an exclusive jurisdiction clause to lis pendens is

unclear. It is very likely that these courts are more willing to give full effect
to a jurisdiction clause than staying jurisdiction based on lis pendens. Once
there is an exclusive jurisdiction clause, these courts, though accepting
unilateral lis pendens, will not consider the concurrent proceedings any
more, but will give the exclusive jurisdiction clauses a full effect.18
Unlike lis pendens, which is not unilaterally adopted by most civil law
countries in cross-border disputes, many civil law countries expressly
provide effects and enforceability to exclusive jurisdiction clauses. For
example, the Civil Code of Quebec expressly provides that, although
the court of Quebec might have jurisdiction based on one of the five

15 Kwok & Yih Law Firm. Shanghai Saifeng International Trade v CICB Changzhou, Jiangsu Prov-
ince Changzhou Intermediate Court, (2006) No 26; Jiangmen Xinhua Paper Mill v HK Tak
Lee Metals & Paper, Guangdong High Court, (1999) No 322.
16 Supreme Court, Opinion 1992, Art 318; Russian National Orchestra Application on the Recog-
nition of Judgments of English High Court, Beijing Municipal No 2 Intermediate People’s
Court, (2004) No 928; Zhuo v Nanjing Diansheng, Jiangsu Province Nanjing Municipal
Intermediate People’s Court, (2004) No 7.
17 Art 3137.
18 See more discussion on the rule dealing with exclusive jurisdiction clauses in Quebec in
the next paragraph.
144 Supporting party autonomy
jurisdictional grounds,19 a Quebec court has no jurisdiction ‘where the
parties, by agreement, have chosen to submit all existing or future disputes
between themselves relating to a specified legal relationship to a foreign
authority’.20 Germany, the Netherlands, Switzerland, Greece and Japan all
demand the court to decline jurisdiction while there is a foreign exclusive
jurisdiction clause.21 Some countries do not have express statutory provi-
sions demanding the enforcement of foreign exclusive jurisdiction clauses
to the exclusion of competent domestic jurisdiction, but their courts
provide interpretation to their law to the same effect. In Brazil, for
example, Article 12 of the Introductory Law of the Civil Code provides
that: ‘Brazilian courts shall have jurisdiction in any case in which the
defendant is domiciled here, or the contract must be performed in Brazil.
(1) Only Brazilian courts are competent to hear cases involving real estate
situated in Brazil.’22 The Brazilian court interpreted it as meaning that jur-
isdiction granted in Article 12 of the Code can be derogated from by
parties’ intention to exclude its jurisdiction, except cases falling within
subsection 1.23 The Argentine court also interpreted its ordinary jurisdic-
tion rules as default rules deciding the jurisdictional competence of
Argentine courts ‘in the absence of parties’ agreement’.24 Since most civil
law countries accept the derogation effect of a jurisdiction clause but not
lis pendens, courts in these countries will dismiss an action with a foreign
jurisdiction clause without considering whether another court has taken
the action first. For the same reason, these courts will exercise jurisdiction
based on a jurisdiction clause regardless of whether concurrent proceed-
ings exist with a foreign country.
There are also civil law countries which do not have clear legislation or
judicial legislation to the enforceability of jurisdiction clauses. Uncertainty
thus exists. For example, in China, different approaches have been
adopted by courts. Some take jurisdiction regardless of the existence of a
foreign exclusive jurisdiction clause;25 others decline jurisdiction on the

19 Art 3148, (1) the defendant has his domicile or his residence in Québec; (2) the defend-
ant is a legal person, is not domiciled in Québec but has an establishment in Québec, and
the dispute relates to its activities in Québec; (3) a fault was committed in Québec,
damage was suffered in Québec, an injurious act occurred in Québec or one of the obli-
gations arising from a contract was to be performed in Québec; (4) the parties have by
agreement submitted to it all existing or future disputes between themselves arising out
of a specified legal relationship; (5) the defendant submits to its jurisdiction.
20 Art 3148.
21 Fawcett, 1995: 47–50.
22 Translation is acquired from Aballi, 1968: 203.
23 Martinelli v Columbia, 115 Achivo 319 (1955); Aballi, 1968: 202.
24 Aballi, 1968: 205.
25 NKK (Japan) v Beijing Zhuangsheng, Beijing Municipality High Court, (2008) Gao Min
Zhong Zi No 919; Kwok & Yih Law Firm v Xiamen Huayang Color Printing Company, Xiamen
Municipality Intermediate People’s Court, 13 August 2003. Tang, 2012b: 459.
 Supporting party autonomy 145
26
ground that such a clause exists. It is questionable whether consideration
might be given to lis pendens in certain circumstances when deciding
whether a Chinese court would want to enforce the derogation agreement
choosing another court. Since China does not expressly recognize the rule
of lis pendens or the derogation effect of an exclusive jurisdiction clause, it
causes great uncertainty and confusion in practice.

Lis pendens and jurisdiction agreements in countries with judicial

cooperation
The civil law practice of lis pendens is adopted between countries with judi-
cial cooperation to facilitate sound administration of justice in the treaty
framework. A typical example is the Brussels I Regulation, which provides
mandatory and absolute rule of lis pendens. Article 27 provides that

1. Where proceedings involving the same cause of action and between

the same parties are brought in the courts of different Member States,
any court other than the court first seised shall of its own motion stay
its proceedings until such time as the jurisdiction of the court first
seised is established.
2. Where the jurisdiction of the court first seised is established, any court
other than the court first seised shall decline jurisdiction in favour of
that court.

The rule is mechanical. It does not require the court to consider any sub-
stance or merit of its or other courts’ jurisdiction grounds, but only con-
sider which country is seized in a chronological order. This is an
equivalent copy of internal rules in civil law countries when dealing with
competing domestic courts. The question, however, arises as to whether lis
pendens applies where the courts are seized to decide which court has juris-
diction instead of the substance of the claim, and where there is a jurisdic-
tion clause granting all disputes, including the disputes on the validity and
enforceability of this clause to the second seized court.27 Under the
current EU law, the second seized court must stay jurisdiction in favour of
the first seized one, regardless of which court is chosen in an exclusive jur-
isdiction clause.28 This approach has been criticized and the Brussels I
Recast has adopted a negative kompetenz-kompetenz rule to exclude the

26 Lai v ABN AMRO Bank, Shanghai Municipal High People’s Court, (2010) No 49; Yacheng
Automobile Parts v Huifeng, Jiangsu Province Wuxi Municipal Intermediate People’s Court,
(2006) No 23; Sojitz v Xiao, Shanghai Municipal High People’s Court, (2004) No 72;
Wenzhou Light Article Industry v CMA (France), Fujian Province High People’s Court, avail-
able at www.chinalawinfo.com, reference code: CLI.C.21767; Junichirou Watanabe v Culture
& Art Press, Shanghai Municipal No 1 Intermediate People’s Court, (2008) No 210.
27 See Ch 7.
28 Case C-116/02 Gasser v MISAT, [2003] ECR 14693.
146 Supporting party autonomy
application of lis pendens in cases where an exclusive jurisdiction clause
exists.29
It is believed by some commentators that, even with international judi-
cial cooperation, lis pendens should not be a proper approach to deal with
competing jurisdictions where an exclusive jurisdiction clause exists. It is
believed better for legal certainty and contractual freedom to give the
chosen court exclusive jurisdiction not only on substance but also on the
existence, validity and enforceability of the jurisdiction clause. The Hague
Convention 2005 does not provide any rules on lis pendens. It is presumed
that the Convention rules on exclusive jurisdiction clauses require all
chosen courts to exercise jurisdiction, all non-chosen courts to decline jur-
isdiction and only judgments of chosen courts should be recognized and
enforced in other Member States. There is thus no need for lis pendens
rules as the non-chosen court should not take jurisdiction in the first
place. However, lis pendens can continue to exist under the scenario of the
Hague Convention if a party sues in a non-chosen forum which, applying
its domestic rule, decides that one party lacks capacity or that giving effect
to the agreement would lead to a manifest injustice or be contrary to its
public policy and decides to take jurisdiction;30 or if two courts are chosen
to decide the validity of the jurisdiction clause. The Hague Convention
does not provide the rule as to which country should decide this issue and,
as a result, any country seized by the parties could take jurisdiction to
make the declaration. The Hague Convention does not require the chosen
court to consider pending proceedings in any other courts either. The
chosen court could directly take jurisdiction to decide the validity of a jur-
isdiction clause even if a non-chosen court has been seized to make a
negative declaration.31
Lis pendens is an effective tool to deal with concurrent proceedings only
between countries with judicial cooperation. Such a tool can operate
effectively and appropriately only where certain rules are provided con-
cerning its relationship with exclusive jurisdiction clauses. Two approaches
exist: first, a strict mechanical lis pendens takes over jurisdiction clauses.
That means the first seized court should always take jurisdiction to decide

29 Article 31(2) of the Brussels I Recast. For more discussion see Ch 7, s6.1. This rule was
proposed in the Commission Recast Proposal in the Brussels I Regulation European Com-
mission, ‘Proposal for a Regulation of the European Parliament and of the Council on
jurisdiction and the recognition and enforcement of judgments in civil and commercial
matters (Recast)’, (‘Recast Proposal’), December 2010, COM(2010) 748 final, Art 32(2).
It was later accepted in the amendment propositioned by the Denmark Presidency in
2012, see Council of the European Union, ‘Proposal for a Regulation of the European
Parliament and of the Council on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (Recast)—First Reading—General approach’,
(‘Denmark Presidency Amendment’) 10609/12 JUSTCIV 209 CODEC 1495 ADD 1, Brus-
sels, 1 June 2012, Art 32(2). It is finally accepted in the Recast Regulation.
30 Art 6.
31 Kruger, 2006: 453.
 Supporting party autonomy 147
its own jurisdiction while the second seized court, even if the chosen court
in an exclusive jurisdiction clause, should always give priority to the first
seized court to decide this issue. The second approach is that exclusive
jurisdiction clauses should always take priority. That means, where there is
an alleged exclusive jurisdiction clause in the contract, all non-chosen
countries should stay jurisdiction and wait for the decision of the chosen
country. The current trend is clear. More weight will be given to the
parties’ choice of court which overrides the mechanical certainty of the lis
pendens rule.32 In other words, the chosen court should take jurisdiction
and all other courts should stay proceedings albeit first seized. This
approach could prevent the parties from rushing to the court, forum
shopping and initiating Italian Torpedo for the sole purpose of hamper-
ing the other party from suing in the chosen court.33

2.3 Lis pendens and jurisdiction agreements in common law countries

There is no chronological lis pendens rule in common law countries. Lis
pendens is not treated as a stand-alone negative jurisdiction rule in
common law countries, but as only one factor that a judge takes into
account when deciding which country is a natural forum.34 Since the juris-
dictional philosophy of common law countries is to consider the ends of
justice of an individual case, the relative time to seize the court is insignifi-
cant.35 The concurrent proceedings in different countries are undesirable
but it is only one factor to be considered when deciding if it is the end of
justice to continue the proceedings, to stay the local proceedings or to
restrain the foreign proceedings. If the local court is the natural forum,
the concurrent proceedings would rarely justify the stay of jurisdiction.
Especially if there is a jurisdiction clause choosing the local court, the
English court will not exercise discretion to depart from party autonomy
simply based on the ground that parallel proceedings exist.36 Much weight
is given to lis pendens if the foreign proceedings are having substantial pro-
gress and a judgment is expected to be delivered in a reasonable period of
time.37 Lord Goff said in De Dampierre v De Dampeirre that:38

Genuine proceedings have been started and have not merely been
started but have developed to the stage where they have had some

32 See the Recast Proposal and the Denmark Presidency Amendment of the Brussels I, Art
32(2).
33 See Ch 7.
34 McLachlan, 2008: 214; Fawcett, 1995: 29–31; De Dampierre v De Dampierre [1988] AC 92.
35 EI Du Pont de Nemours v Agnew [1987] 2 Lloyd’s Rep 585, 589 (per Bingham LJ).
36 The El Amria, [1982] 2 Lloyd’s Rep. 28; Celltech R&D v Medimmune, [2004] EWHC 1522
(Pat); Breams Trustees v Upstream Downstream Simulation Services [2004] EWHC 211 (Ch).
37 McLachlan, 2008: 313; Fawcett, 1995: 29.
38 [1988] AC 92 at 98.
148 Supporting party autonomy
impact on the dispute between the parties, especially if such impact is
likely to have a continuing effect, then this may be a relevant factor to
be taken into account when considering whether the foreign jurisdic-
tion provides the appropriate forum for the resolution of the dispute
between the parties.

On the other hand, if foreign proceedings were not progressing well, with
substantial difficulty in acquiring evidence or witnesses, less weight will be
given to lis pendens.39
In the US, concurrent proceedings are also considered acceptable. In
Quaak,40 it is stated as an ‘accepted proposition’ to have parallel proceed-
ings on the same in personam claim to take place simultaneously.41 Even if
a court has power to restrain a foreign action, the court must account for
the presumption in favour of concurrent jurisdiction before issuing an
injunction.42
Comparatively, the exclusive jurisdiction clause is a much more
important factor in common law countries. Although commonwealth
countries reserve discretion not to give effect to an exclusive choice of
court clause, the starting point is that such a clause is prima facie effective
unless strong causes are shown to the contrary.43 In the USA, a jurisdiction
clause shall be honoured unless: (1) the inclusion of the clause in the
agreement was the product of fraud or overreaching; (2) the party wishing
to repudiate the clause would effectively be deprived of his day in court
were the clause enforced; (3) the law to be applied in the selected forum
is fundamentally unfair; and (4) enforcement would contravene a strong

39 Fawcett, 1995: 29; Arkwright Mutual Insurance v Bryanston Insurance [1990] 2 Lloyd’s Rep
70, 80.
40 361 F.3d 11 (1st Cir. 2004).
41 Ibid.
42 Ibid.
43 The Eleftheria, [1970] P 94; The El Amria [1981] 2 Lloyd’s Rep 119 (CA); Apple Computer v
Apple Co [1990] 2 NZLR 598; The Vishva Apurva [1992] 2 SLR 175 (CA); Oneon Insurance v
Moshe, 17 PD 646 (1963); Carvalho v Hull Blyth, [1979] 3 All ER 280; Trendtex Trading
Co v Credit Suisse [1980] QB 629; Import Export Metro v Compania Sud Americana de Vapores
SA, [2003] 1 All ER (Comm) 703; Citi-March Ltd v Neptune Orient Liens [1996] 2 All ER
545; Donohue v Armco [2002] 1 All ER 749; Konkola Copper Mines v Coromin [2006] 2 All ER
(Comm) 400; Benarty v EG Thomson, [1985] QB 325; Alberta v Katanga Mining [2009] 1
BCLC 189; Sinochem International Oil v Mobil Sales, [2000] 1 All ER (Comm) 758; Fawcett,
1995: 47.
 Supporting party autonomy 149
44
public policy of the forum in which suit is brought. Since stronger weight
has been given to an exclusive jurisdiction clause than concurrent pro-
ceedings, a common law country usually enforces exclusive jurisdiction
clauses without giving much consideration to lis pendens.
English courts have considered the interrelationship between lis pendens
and exclusive jurisdiction clauses in a few cases, all treating exclusive juris-
diction clauses as more weighty factors. In Dubai Islamic Bank v PSI Energy
Holding,45 the parties entered into an agreement giving exclusive jurisdic-
tion to England. The claimant brought an action in Bahrain instead where
the defendant would dissipate its assets. The claimant subsequently
brought the same action in England. The defendant applied for the
English proceedings to be stayed based on the ground that Bahrain was
first seized by the same claimant to hear the same action. It argued that
the claimant was deemed to give up the exclusive jurisdiction clause and
was estopped from relying on it and the concurrent proceedings gave rise
to the risk of irreconcilable judgments on the same matter. The English
court held that bringing the action in a non-chosen forum did not mean
the claimant definitely repudiated the agreement. The Bahrain proceed-
ings were sought for the reason of precautionary relief over assets which
were not mutually exclusive to the English proceedings.46 Furthermore,
very strong reasons should be shown by the opposing party to depart from
an exclusive jurisdiction clause. The judge considered the primary motive
of the claimant to get protective relief following the advice of Bahraini
lawyers was bona fide. The judge agreed the claimant’s proposal that two
proceedings should continue and the party should stay one procedure
depending on which court made the first decision.

44 M/S Bremen v Zapata Off-Shore, 407 US 1 (1972); Carnival v Shute; Cal-State Business v Ricoh
12 Cal App 4th 1666 (Cal App 3 Dist 1993); Reynolds-Naughton v Norwegian Cruise Line 386
F3d 1 (Cal (Mass) 2004); Lee v New Seaescape 1998 WL 730873 (ND Cal 1998); Stewart
Organization, Inc. v Ricoh Corp., 108 S.Ct. 2239, (US Ala. 20 June 1988); Scherk v Alberto-Cul-
ver Co., 417 US 506, (US Ill. 17 June 1974); Huffington v T.C. Group, 637 F.3d 18, (1st Cir.
(Mass.) 25 February 2011); Rafael Rodriguez Barril, Inc. v Conbraco Industries, Inc., 619 F.3d
90 (1st Cir.(Puerto Rico) 8 September 2010); Royal Bed and Spring Co., Inc. v Famossul
Industria e Comercio de Moveis Ltda., 906 F.2d 45 (1st Cir.(Puerto Rico) 26 June 1990);
Aguas Lenders Recovery Group v Suez, S.A., 585 F.3d 696(2nd Cir.(N.Y.) 23 October 2009);
Phillips v Audio Active Ltd, 494 F.3d 378 (2nd Cir.(N.Y.) 24 July 2007); Evolution Online
Systems, Inc. v Koninklijke PTT Nederland N.V., 145 F.3d 505 (2nd Cir.(N.Y.) 27 May 1998);
New Moon Shipping Co., Ltd v MAN B & W Diesel AG, 121 F.3d 24, (2nd Cir.(N.Y.) 18 June
1997); Roby v Corporation of Lloyd’s, 996 F.2d 1353 (2nd Cir.(N.Y.) 2 June 1993); Blanco v
Banco Indus. de Venezuela, S.A., 997 F.2d 974 (2nd Cir.(N.Y.) 30 April 1993); Jones v Wei-
brecht, 901 F.2d 17 (2nd Cir.(N.Y.) 11 April 1990); Red Bull Associates v Best Western Intern.,
Inc., 862 F.2d 963, (2nd Cir.(N.Y.) 29 November 1988).
45 [2011] EWHC 1019 (Comm).
46 China National Foreign Trade Transportation v Evlogia Shipping (The Mihaios Xilas) [1979] 1
WLR 1018; Motor Oil Hellas (Corinth) Refiners SA v Shipping Co of India (The Kanchenjunga)
[1990] 1 Lloyd’s Rep 391.
150 Supporting party autonomy
More importantly, some English courts give an English non-exclusive
jurisdiction clause the same weight as an exclusive one and refuse to stay
jurisdiction granted by even a non-exclusive jurisdiction clause to avoid
parallel proceedings with another country. In Highland Crusader Offshore
Partners LLP v Deutsche Banke AG,47 Toulson LJ considered the relationship
between lis pendens and a non-exclusive jurisdiction clause:48

However undesirable it is that parallel proceedings may proceed and

in theory result in conflicting judgment, whether and to what extent it
happens in practice . . . is another matter. Experience suggests that
when parallel cases continue to be fully fought after the initial juris-
diction battles the courts will do their best to use their management
powers to prevent tactical obstructionism and to achieve a just and
orderly disposal of the litigation, taking into account the progress of
the parallel proceedings as may be appropriate.

In Antec International v Biosafety USA,49 a distribution agreement was con-

cluded where the English manufacturer would produce products in the
UK which were distributed by the American distributer to the US. A non-
exclusive jurisdiction was concluded to choose English courts. After the
conclusion of the agreement, the English company became fully owned by
a US company. The dispute arose and the claimant sued in England pur-
suant to the non-exclusive jurisdiction clause and the defendant argued
that the US should be the natural forum and it would bring the proceed-
ings against the American owner in the US. The English court, however,
applied the same Eleftheria test, requiring the opposing party to show
strong causes to relieve it from its bargain. The court expressly stated that
the undesirability of parallel proceedings in this case was not a strong or
compelling reason to do so. It is necessary to note that, in this case, the
parallel proceedings did not even exist at the time of the plea and
remained a possibility.
Of course, some English courts realized the difference between exclu-
sive and non-exclusive jurisdiction clauses.50 In BP International v Energy
Infrastructure Group,51 for example, Morison J stated:

A non-exclusive jurisdiction clause in an agreement gives the parties a

right to commence proceedings in this jurisdiction as to their respec-
tive rights and duties under the contract. The right to commence
proceedings is not absolute. The Court retains discretion, and a

47 [2009] 2 Lloyd’s Rep 617.

48 [2009] 2 Lloyd’s Rep 617.
49 [2006] EWHC 47 (Comm).
50 BP International v Energy Infrastructure Group, [2003] EWHC 2924 (Comm).
51 Ibid., 552.
 Supporting party autonomy 151
significant factor in the balance is the existence of other proceedings
in another jurisdiction, where there is a risk that those proceedings
will overlap and potentially conflict with the proceedings in this
country. There is a distinction, clearly, between an exclusive and a
non-exclusive jurisdiction clause.

This statement expressly makes the concurrent proceedings in another

country a significant factor in deciding whether to take jurisdiction
granted by a non-exclusive jurisdiction clause. It also implies that lis
pendens, comparatively, is not an important factor when making decisions
in cases with an exclusive jurisdiction clause. Nevertheless, the court also
stated that, if there were parallel proceedings between England, which was
chosen in the non-exclusive jurisdiction clause, and Texas, which was a
non-chosen court, the non-exclusive jurisdiction would make England the
only sensible place for the whole litigation.52 That means even if concur-
rent proceedings exist, they are insufficient to require a chosen court in a
non-exclusive jurisdiction to stay jurisdiction. Other factors are required
to support the stay of jurisdiction. The court stayed jurisdiction in the
current case because the claimant submitted to the Texas jurisdiction
before bringing the current proceedings. It was the submission, not the
nature of the jurisdiction clause, which made the difference to the
decision.
In many cases, a common law country not only continues jurisdiction
regardless of concurrent proceedings in another country, but, if there is
an exclusive jurisdiction clause giving the common law country jurisdic-
tion, it will issue an anti-suit injunction to restrain a party from continuing
jurisdiction in the other country, even if the other court is the first seized
one.53 However, such an injunction usually will be exercised with caution
and only be granted if it could actually stop concurrent proceedings. In
Donohue v Armco,54 for example, the House of Lords confirmed that when
considering whether an injunction could be issued the court should give
effect to an exclusive jurisdiction clause unless very strong reasons were
shown to the contrary. These strong reasons include the interest of both
parties and the likelihood of parallel proceedings. However, in the current
case, strong reasons have been found, as some foreign defendants could
not be the joint defendants in English courts under the exclusive jurisdic-
tion clause or under English rules for service out of jurisdiction. If an
injunction was granted, concurrent proceedings were likely to exist in
England and New York. The court refused to grant an injunction for the

52 Ibid., para 25.

53 Society of Lloyd’s v White (No 2), [2002] ILPr 11; Beazley v Horizon Offshore Contractors, Inc,
[2005] ILPr 11; Samengo-Turner v J&H Marsh & McLennan (Services) Ltd [2007] EWCA Civ
723; OT Africa Line Ltd v Hijazy & Anor, [2001] CLC 148; Donohue v Armco Inc, [2002] 1 All
ER 749; Bank of New York Mellon v GV Films Ltd, [2010] 1 Lloyd’s Rep. 365.
54 [2002] 1 All ER (Comm) 749.
152 Supporting party autonomy
reason that it was better to have a single action in New York. It is necessary
to know that higher test standard exists for a court to issue an anti-suit
injunction than to decline jurisdiction. The existence of concurrent pro-
ceedings in a non-chosen forum does not mean the foreign proceedings
are vexatious and oppressive for the injunction to be issued.55 But permit-
ting the foreign proceedings to run does not mean English courts would
stay its own jurisdiction granted by a jurisdiction clause to avoid lis pendens.

2.4 Lis pendens and arbitration agreements

No law has provided the lis pendens rule to tackle the parallel proceedings
between an arbitral tribunal and a court. Parallel proceedings on substan-
tive matters of disputes between arbitral tribunals and courts, however, are
rare. Most states adopt a compulsory rule to handle the relationship
between courts and arbitral tribunals. If there is no concern on the juris-
diction of an arbitral tribunal, a court is obliged to decline jurisdiction in
favour of arbitration. This rule exists in the New York Convention, which
all Contracting States of the Convention have the treaty obligation to
follow. Article II(3) of the New York Convention reads: ‘The court of a
Contracting State, when seized of an action in a matter in respect of which
the parties have made an agreement within the meaning of this article,
shall, at the request of one of the parties, refer the parties to arbitra-
tion . . .’. In other words, regardless of whether the court or an arbitral tri-
bunal is seized first, a court should use its own motion to decline
jurisdiction in favour of the chosen tribunal. In common law countries,
although courts usually will give effects to an exclusive jurisdiction clause,
discretion is reserved for courts to rule exceptionally. However, there is
usually a statutory requirement for a court to decline jurisdiction in face
of a valid arbitration agreement, giving effects to Article II(3) of the New
York Convention.56 As a result, there is not much need to adopt the lis
pendens rule to establish the way to manage the relationship of parallel
proceedings between courts and tribunals.57
However, parallel proceedings between arbitral tribunals and courts
may exist in deciding the validity and scope of an arbitration agreement.58
While one party questions the validity of an arbitration agreement in
courts and another in the designated tribunal, there will be parallel pro-
ceedings and there will not be the lis pendens rule to tackle the situation.
No country has granted an arbitral tribunal unfettered power to examine
its own jurisdiction; a court’s supervision on this issue is usually available
before, during or after the arbitral procedure. The difference exists in the

55 Deutsche Bank v Highland Crusader Offshore Partner, [2010] 1 WLR 1023.

56 See e.g. Section 9 of the Arbitration Act 1996 (UK).
57 McLachlan et al., 2010: 83.
58 Claxton Engineering Services Limited v Tam Olaj-Es Gazkutato [2011] EWHC 345.
 Supporting party autonomy 153
59
level and extent of review and intervention by courts. Compelling a court
to stay jurisdiction in favour of an arbitral tribunal simply because it is first
seized in time is fundamentally contrary to the basic arbitration principle
accepted worldwide. Second, an arbitral tribunal is granted the power to
decide its own jurisdiction based on the doctrine of kompetenz-kompetenz.
UNCITRAL Model Law has provided that, while the issue is pending in
court, an arbitral procedure does not need to be suspended.60 Further-
more, UNCITRAL Model Law also accepts the concurrent proceedings
between an arbitral tribunal and a court in substantive issues. Article 8 of
the Model Law provides that if a court is seized to hear disputes subject to
a valid arbitration agreement, the court should refer the parties to
arbitration,61 and before the court does so, an arbitration procedure can
be commenced or continued without the necessity to wait for the court’s
decision.62 If a non-supervisory court holds the arbitral agreement void
and takes jurisdiction, arbitral proceedings still can be commenced or
continued.63
It is possible that both the tribunal and the court are seized to decide
the validity of an arbitration agreement and arrive at different decisions.
Concurrent proceedings on the substance are likely to occur. An indi-
vidual state will use legislation to decide the priority of the conflicts deci-
sions. In China, for example, the Arbitration Law permits the questions on
the validity of an arbitration clause to be brought to either the tribunal or
the people’s court. However, if different decisions are reached, the court’s
ruling should prevail.64 If there is no dispute on the preliminary issues of
an arbitration agreement, the court is required to stay jurisdiction in
favour of the arbitral tribunal. In general, there are usually different prin-
ciples in dealing with parallel proceedings between tribunals and courts
than between two civil courts. The lis pendens rule has no place in the arbit-
ration scenario.
Lis pendens, however, can be used to deal with concurrent proceedings
between two courts in deciding issues relating to arbitration. Ordinary
rules applying to concurrent proceedings between different courts shall
equally apply here. In the European Union, where judicial cooperation
imposes the rule of lis pendens, it applies to two courts’ proceedings even if
they concern an arbitration agreement. Strict chronological order still
applies. Which court can continue to decide this matter depends on which

59 See in general, Moses, 2012: 91–95.

60 Art 16(3), Art 8.
61 Art 8(1).
62 Art 8(2).
63 Arts 8(1) and (2). SPP v Egypt, (1985) 3 ICSID Reports 129 (ICSID suspended proceed-
ings in favour of French litigation based on comity instead of lis pendens); e.g. Art 186 of
the Swiss Law of International Private Law.
64 PRC Arbitration Law 1994, Art 20.
154 Supporting party autonomy
court is seized first.65 The lis pendens claim may also arise where a court is
seized to decide the merit of the case, while another court is requested to
recognize and enforce arbitral awards on the same issue.66

3 Anti-suit injunctions and dispute resolution agreements

3.1 Anti-suit injunctions in concurrent proceedings

One powerful instrument used by common law countries to protect the
effectiveness of exclusive jurisdiction clauses and to prevent concurrent
proceedings is anti-suit injunctions. It is a court order restraining a party
from commencing or pursuing legal proceedings in a foreign country.67
Civil law countries usually consider anti-suit injunctions an improper inter-
vention of another country’s sovereignty, that every sovereign state should
have sufficient competence to decide its own jurisdiction independently.
Although common law countries believe an injunction is directed to the
litigating party instead of the foreign court,68 anti-suit junction is usually
used with particular caution69 and only when it could serve the ends of jus-
tice.70 In the USA, an anti-suit injunction can be granted if the foreign
proceedings: (1) frustrate a policy of the forum issuing the injunction;
(2) are vexatious or oppressive; (3) threaten the issuing court’s in rem
or quasi in rem jurisdiction; or (4) prejudice other equitable
considerations.71
The biggest concern of an anti-suit injunction is the potential violation
of international comity. The issue of comity is fully discussed by Lord Goff
in Airbus v Patel,72 which concerns an air crash that occurred in India. Two
of the deceased passengers were British and their families sued the manu-
facturer in Texas. At the time, Texas did not adopt the doctrine of forum
non conveniens and Airbus could not seek a stay of proceedings. Airbus
sought an injunction from the English court, restraining the appellants

65 Case C-185/07, Allianz SpA v West Tankers [2009] ECR I-663.

66 Sovarex SA v Romero Alvarez SA, [2011] EWHC 1661 (Comm).
67 For more information, see Fawcett and Carruthers, 2008: 455–457; Clarkson and Hill,
2011: 152f.
68 Hartley, 2009: 222. Bushby v Munday (1821) 5 Madd. 297, 307; Société Nationale Industrielle
Aerospatiale v Lee Kui Jak [1987] AC 871, 892.
69 Cohen v Rothfield [1919] 1 KB 410; Castanho v Brown & Root, [1981] AC 557, 573.
70 Bushby v Munday (1821) 5 Madd. 297, 307; Carron Iron Co. v Maclaren (1855) 5 H Cas 416,
453; Castanho v Brown & Root (U.K.) Ltd [1981] AC 557; British Airways Board v Laker
Airways Ltd [1985] AC 58, 81; Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987]
AC 871, 892.
71 Re Unterweser Reederei Gmbh, 428 F.2d 888, 896 (5th Cir. 1970), aff’d, 446 F.2d 907 (1971);
M/S Bremen v Zapata Off-Shore, 407 US.1 (1971); Triton Container International v Di Gregorio
Navegacao LTDA, 440 F.3d 1137, 1138 (9th Cir., 2006); Seattle Totems, 652 F.2d, 855; Gallo v
Andina, 446 F.3d 984, 990.
72 [1999] 1 AC 119.
 Supporting party autonomy 155
from continuing with their action in Texas on the grounds that pursuit of
that action by the appellants would be contrary to justice and/or vexatious
or oppressive. It was remarked by Lord Goff that:

before an anti-suit injunction can properly be granted by an English

court . . ., comity requires that the English forum should have a suffi-
cient interest in, or connection with, the matter in question to justify
the indirect interference with the foreign court which an anti-suit
injunction entails.73

However, exceptions can be made ‘where the conduct of the foreign state
exercising jurisdiction is such as to deprive it of the respect normally
required by comity’.74 US judges also follow the same line. In Seattle Totems
Hockey Club v National Hockey League,75 the court confirmed that:

A federal district court with jurisdiction over the parties has the power
to enjoin them from proceeding with an action in the courts of a
foreign country, although the power should be used sparingly. The
issue is not one of jurisdiction, but one of comity.

Under English case law, comity overrides the procedural benefit in

avoiding concurrent proceedings when a court decides whether to grant
an anti-suit injunction. Since ‘parallel proceedings in different jurisdic-
tions are not of themselves regarded as unacceptable’ in England,76 the
English court will not directly use the injunction to stop the foreign action
from processing alongside the English one. Even if the English court is
held to be the natural forum, an injunction cannot be issued on this
ground alone.77 Where concurrent proceedings are brought by the same
claimant both in England and abroad,78 English courts usually permit the
claimant to elect which proceedings to continue and will grant the injunc-
tion only if the foreign action is vexatious or oppressive.79 However, the
stage of each trial will be taken into account. If the English proceedings
are processing properly, bringing another suit in a foreign country will
be restrained.80 It is fair to say, although the mechanism of anti-suit

73 [1999] 1 AC 119, 138.

74 [1999] 1 AC 119, 140.
75 652 F.2d 852 (9th Cir. 1981), 855.
76 Airbus Case, 132–133, per Lord Goff; Gredit Suisse First Boston v MLC [1999] 1 All ER
(Comm) 237, 257; Royal Bank of Canada v Cooperative Centrale [2004] 2 All ER (Comm)
847.
77 Aerospatiale Case [1987] AC 871; Deutsche Bank, [2010] 1 WLR 1023, 1037.
78 Société Nationale Industrielle Aerospatiale, 893.
79 McHenry v Lewis (1882) 22 Ch.D 397; Peruvian Guano v Bockwoldt (1883) 23 Ch.D 225;
Société Nationale Industrielle Aerospatiale, 893.
80 Royal Bank of Canada, [2004] 2 All ER (Comm) 847, 860–861.
156 Supporting party autonomy
injunctions can be used to prevent concurrent proceedings, the existence
of parallel proceedings alone is not a weighty factor for English courts to
grant anti-suit injunctions.81

3.2 Anti-suit injunctions in support of jurisdiction and arbitration

clauses

General principle
Although lis pendens is not an important factor for a court to grant an anti-
suit injunction, the existence of a valid exclusive jurisdiction or arbitration
clause brings a prima facie case for the injunction to be granted. English
courts believe a person has the right to sue, or the obligation to be sued,
in any competent forum unless special factors restrain this right or the
obligation. An exclusive jurisdiction clause or an arbitration clause shows
that a person gives promise to be bound. Enforcing this clause will restrain
a person’s right and obligation that he might otherwise have.82 A dispute
resolution agreement with the derogation feature creates a prima facie
case that the chosen forum is more appropriate than any other fora and
gives the parties the obligation not to bring the disputes in a non-chosen
forum.
English courts are more ready to issue anti-suit injunctions where a party
brings proceedings abroad in breach of an exclusive jurisdiction clause or
arbitration clause.83 Where there is no such clause, the court may require
higher standards to be satisfied in order not to infringe international
comity. If there is an exclusive dispute resolution clause, it is a prima facie
case to restrain foreign actions and the court has an ‘inherent power’ to
do so without specifically considering the requirement of comity.84 This

81 In the USA, concurrent proceedings are relevant factors to use anti-suit injunctions. The
first step a US court will take is to consider whether the parties and issues in parallel pro-
ceedings are the same, and whether the first action is dispositive of the action to be
restrained. Sun World v Lizarazu Olivarria, 804 F. Supp. 1264, 1267 (E.D.Cal. 1992); Para-
medics Electromedicina Comercial, Ltd v GE Medical Sys. Info. Techs., Inc., 369 F.3d 645, 652
(2d Cir. 2004); Quaak v Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 18 (1st
Cir. 2004); Bermann, 1990: 626.
82 Turner v Grovit, [2002] CLC 463 (per Lord Hobhouse), para 25.
83 Fawcett and Carruthers, 2008: 470–475; Oceanconnect UK Ltd & Anor v Angara Maritime Ltd
[2010] 2 CLC 448.
84 Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s
Rep 87; Fawcett and Carruthers, 2008: 474.
 Supporting party autonomy 157
principle applies to both arbitration and exclusive jurisdiction agree-
ments.85 It was observed by Toulson LJ in Deutcsche Bank that:86

An injunction to enforce an exclusive jurisdiction clause governed by

English law is not regarded as a breach of comity, because it merely
requires a party to honour his contract. In other cases, the principle
of comity requires the court to recognise that, in deciding questions
of weight to be attached to different factors, different judges operat-
ing under different legal systems with different legal policies may legit-
imately arrive at different answers, without occasioning a breach of
customary international law or manifest injustice, and that in such cir-
cumstances it is not for an English court to arrogate to itself the deci-
sion how a foreign court should determine the matter. The stronger
the connection of the foreign court with the parties and the subject
matter of the dispute, the stronger the argument against intervention.

It implies that an exclusive jurisdiction clause choosing English courts

gives English courts inherent power to restrain foreign proceedings in
breach of the agreement.87 An injunction granted in such cases does not
bring any challenges to comity in the view of English courts. English courts
do not need to consider other connecting factors such as natural forum,
subject matter and the connections between a foreign country with the
dispute. An injunction is simply a tool to force a party to obey its promise.
From the perspective of other countries, however, this is not the case.
Although there are exclusive jurisdiction agreements or arbitration agree-
ments, a non-chosen court still considers it is completely within its sover-
eignty to decide its own jurisdiction. Although the English courts may
issue a restraining order in the name of requiring a party to honour his
contract, the order has the functioning of: (1) deciding the jurisdiction or
arbitration clause is valid and enforceable under English law, including its
private international law; and (2) stopping the foreign proceedings from

85 Mackender v Feldia AG [1967] 2 QB 590; Unterweser Reederei GmbH v Zapata Off-Shore Co (The
Chaparral) [1968] 2 Lloyd’s Rep 158; The Eleftheria [1970] P 94; DSV Silo- und Verwaltungs-
gesellschaft mbH v Owners of the Sennar and 13 Other Ships (The Sennar (No 2)) [1985] 1 WLR
490; British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368; Continental Bank NA v
Aeakos Compania Naviera SA and Others [1994] 1 WLR 588; Akai Pty Ltd v People’s Insurance
Co Ltd [1998] 1 Lloyd’s Rep 90; Donohue v Armco [2002] 1 All ER 749; Deutcsche Bank
[2010] 1 WLR 1023.
86 [2010] 1 WLR 1023, 1036–1037.
87 Mackender v Feldia AG [1967] 2 QB 590; Unterweser Reederei GmbH v Zapata Off-Shore Co (The
Chaparral) [1968] 2 Lloyd’s Rep 158; The Eleftheria [1970] P 94; DSV Silo- und Verwaltungs-
gesellschaft mbH v Owners of the Sennar and 13 Other Ships (The Sennar (No 2)) [1985] 1 WLR
490; British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368; Continental Bank NA v
Aeakos Compania Naviera SA and Others [1994] 1 WLR 588; Aggeliki Charis Compania Mar-
itima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd’s Rep 87; and Akai Pty Ltd v Peo-
ple’s Insurance Co Ltd [1998] 1 Lloyd’s Rep 90.
158 Supporting party autonomy
being commenced or continuing. By issuing the injunction, the English
court does not need to consider whether the non-chosen forum, accord-
ing to its domestic law, would honour the jurisdiction or arbitration clause.
It is hard to say how this is not an intervention.
Because of the comity controversy, many courts in practice will not rely
solely on the existence of jurisdiction or arbitration agreements, but would
prefer to find other grounds to support the decision of issuing an injunc-
tion. In Royal Bank of Scotland v Hicks,88 the English court restrained the
proceedings subject to an English exclusive jurisdiction clause from con-
tinuing in Texas. The court held that the applicant had the right to have
the claim heard in England pursuant to the jurisdiction clause and foreign
proceedings would be ‘extremely inconvenient’. However, the court went
on to consider the connections between the claim and the foreign court
and the intention to bring the foreign action. The court concluded that
the claim had no real connections with Texas, as assets were located in
England, duties concerned were governed by English law and disputes
were about English directors’ duty to English companies. The party that
brought the action in Texas aimed to seek punitive damages in a jurisdic-
tion without connections to the dispute, which was oppressive. The court
granted an injunction based not only on the party’s right to enforce a jur-
isdiction clause, but also on other factors that prove the foreign proceed-
ings oppressive.

Exceptional grounds
The existence of an English exclusive jurisdiction clause usually shows a
prima facie case to sue in England, unless the resisting party could demon-
strate to the contrary by showing strong, sometimes exceptional, reasons.89
Exceptional grounds might exist where: (1) the interests of third parties
are involved;90 or (2) part of the claims are not subject to the jurisdiction
clause.91 In order to avoid inconsistent decisions made in different juris-
dictions, it is accepted that claims against multi-defendants or multi-claims
would better be consolidated and decided in one trial.
It has been stated before that a third party is generally not bound by a
jurisdiction clause, with a few exceptions.92 However, complicated disputes

88 [2011] EWHC 287 (Ch).

89 The Eleftheria, [1970] P 94.
90 Evans Marshall and Co Ltd v Bertola SA and Another [1973] 1 WLR 349; Aratra Potato Co Ltd
v Egyptian Navigation Co (The El Amria) [1981] 2 Lloyd’s Rep 119; Halifax Overseas Freighters
Ltd v Rasno Export (The Pine Hill) [1958] 2 Lloyd’s Rep 146; Taunton-Collins v Cromie [1964]
1 WLR 633; Citi-March Ltd v Neptune Orient Lines Ltd [1996] 1 WLR 1367; Mahavir Minerals
Ltd v Cho Yang Shipping Co Ltd (The M C Pearl) [1997] 1 Lloyd’s Rep 566; Bouygues Offshore
SA v Caspian Shipping Co [1998] 2 Lloyd’s Rep 461; Donohue v Armco [2002] 1 All ER 749.
91 Crédit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd [1999] 1 All ER (Comm) 237.
92 See Ch 5, section 5.
 Supporting party autonomy 159
frequently arise in cross-border commercial transactions, where third
parties’ interests are involved in the dispute between the contractual
parties who are subject to the jurisdiction clause. An anti-suit injunction to
restrain foreign proceedings may be refused if the third parties could not
be sued in the chosen forum as joiners and granting an injunction is likely
to cause concurrent proceedings.
In Donohue v Armco,93 three New York companies transferred their assets
into a new company. The New York companies then sold the share of the
new company under a sale and purchase agreement to four companies as
the buyers. In all these agreements, there were exclusive jurisdiction
clauses choosing English courts. The three New York companies that
directly entered the transaction agreement and two other companies in
the same group later brought actions in New York against the purchasers
and their executives who took part in the negotiation as well as the com-
panies of two of them on fraud and the breach of fiduciary duty. One
defendant applied the anti-suit injunction from the English court to
restrain the New York proceedings and applied to join all other defend-
ants as claimants in the English action. The House of Lords held that the
jurisdiction clause only bound its direct parties, i.e. the buyers of the
company could be joined in English proceedings, but not others. Pursuant
to the jurisdiction agreements, the applicant and the buyers could sue the
three New York companies in England; the proceedings between the New
York companies and other defendants in the New York proceedings could
not be brought in English courts. The executives who negotiated the trans-
action and their respective companies were not parties to the jurisdiction
agreements and could not benefit from the agreements. If the three New
York companies are properly brought to English jurisdiction, English
courts are only entitled to hear the disputes between them and the buyers.
The court held that if the interests of third parties meant that other pro-
ceedings would continue anyway with the risk of irreconcilable judgments,
the court should balance the right of a contractual party to bring the
action in the chosen court and the right of another party to continue
actions against third parties in the other country. In this dispute, the
actions between all the defendants and two New York companies which
are not direct parties in the contracts could not be brought in England.
An injunction should be refused.
Donohue shows a scenario where A and B enter into an exclusive juris-
diction clause and A and C sue B and D in a non-chosen forum, which has
jurisdiction over all defendants. In such circumstances, B could not
acquire an injunction restraining proceedings between A and B in the
non-chosen forum. Although A was bound by the jurisdiction clause, such
obligations exist between neither A and D, nor between C and B/D. If the
chosen court has jurisdiction over the whole disputes in other grounds

93 [2002] 1 All ER 749.

160 Supporting party autonomy
and all parties could be properly joined in the jurisdiction, an injunction
could be considered. Otherwise, taking the dispute as a whole, consider-
ing all the parties’ interest and the likelihood of parallel proceedings, an
injunction should not be used to enforce an exclusive jurisdiction
agreement.94
Sometimes, two parties enter into a jurisdiction clause to submit certain
disputes to the chosen forum, but not others. If a party claims on matters
not subject to the jurisdiction clause, a court cannot use anti-suit injunc-
tions based on the reason to enforce the jurisdiction clause. An example is
Credit Suisse First Boston v MLC;95 the buyer purchased Russian bonds
through its US investment manager from the seller’s US agent. The con-
tract was concluded and transactions took place in New York. There was
an exclusive jurisdiction clause choosing English courts to cover claims
arising ‘out of or in connection with’ the agreement. After the Russian
government announced a moratorium on the repayment of foreign debt,
the buyer failed to pay the price under its contract. The seller sued for the
balance under the contract in England while the buyer sued in New York
alleging misrepresentation, non-disclosure and fraud on the part of the
seller. The seller applied for an anti-suit injunction from the English
court. The English court held that the claims in New York were not all
covered by the jurisdiction clause. The court only issued an injunction to
restrain claims covered by the jurisdiction clause.
Compared to Donahue, Credit Suisse clearly leads to parallel proceedings.
The buyer would continue actions in New York against the buyer on issues
outside the scope of the jurisdiction clause, while the buyer could bring
actions in England for those claims covered by the clause. More impor-
tantly, because those claims are related, it is undesirable in terms of both
economy and procedure efficiency to have two trials continued in to coun-
tries. The result of Credit Suisse is not pragmatic and it is hard to say it is
better for the ends of justice to require two proceedings going on in two
countries.

US practice
Although without consensus,96 some US courts have shown intention to
adopt the same approach to give effectiveness to an exclusive jurisdiction
or arbitration agreement. In the US, courts adopt a two-threshold test in
deciding whether to issue an anti-suit injunction: (1) the parties must be
the same in parallel proceedings and the resolution of the case in the
current court is dispositive of the other action; if satisfied, (2) the court

94 See comments, Tett, 2003: 7; Bramley, 2002: 3.

95 [1999] CLC 579.
96 It is argued that the permission to grant anti-suit injunctions is not clearly settled in the
US. Albemarle Corp. v AstraZeneca UK Ltd 2009 WL 902348, 6 (DSC 2009).
 Supporting party autonomy 161
could use discretion to consider whether the foreign action frustrates the
current court’s domestic policy, is vexatious or oppressive, treats its juris-
diction in rem, prejudices equitable considerations, or causes delay, incon-
venience, expense, inconsistency or race to judgment.97 US courts do not
adopt different criteria for cases with an exclusive jurisdiction or arbitra-
tion agreement. In Stolt Tankers,98 for example, the same criteria have been
provided in deciding whether an anti-suit injunction should be granted to
support a New York arbitration clause by restraining Brazilian proceed-
ings. The court considered the two thresholds in term. After being satis-
fied the first threshold was met, the court considered the five elements in
the second threshold to make discretion. It was held that permitting Bra-
zilian proceedings to continue frustrates the policy of the New York forum,
namely the policy to promote arbitration. The Brazilian court would apply
different laws, which causes different results if two proceedings continued,
and the potential divergence could provoke rush to the forum. Equitable
considerations include the prevention of forum shopping and rush to the
court. Parallel proceedings would cause inconvenience, cost, inconsistency
and race to the judgment.99 Since arbitration agreements aim to provide
the effective solution to disputes and to prevent extra costs and inconven-
ience, compelling the party that is bound by the agreement to arbitration
while permitting a foreign action to continue is contrary to parties’
purpose and expectation. An injunction is thus issued.
Gallo v Andina100 is a leading case where the US Court of Appeals issued
an anti-suit injunction to support an exclusive jurisdiction clause. Gallo, a
Californian company, entered into a distribution contract with the distribu-
tor, an Ecuadorian company. The contract contained an exclusive jurisdic-
tion clause choosing Californian courts. The distributor, however, sued in
Ecuador on their dispute, and the Californian manufacturer applied to the
court for an injunction to be issued. The court considered the criteria to
issue an anti-suit injunction, one of which is that the foreign litigation
would frustrate the policy of the local forum.101 The court accepted the
argument that jurisdiction clauses have gained widespread acceptance in
the US,102 and a strong policy in favour of the enforcement of jurisdiction
clauses has been established by the US Supreme Court.103 Jurisdiction

97 China Trade v MV Choong Yong, 837 F.2d 33, 35 (2d Cir. 1987); Paramedics Electromedicina
Comercial v GE Medical System Information 369 F.3d 645, 652 (C.A.2(NY) 2004); Stolt
Tankers BV v Allianz Seguros, S.A WL 2436662 (S.D.N.Y. 2011); Umbro Int’l Inc. v Japan Pro-
fessional Football League, 1997 WL 33378853 (D.S.C. 2 October 1997); In re Unterweser Reed-
errei Gmbh, 428 F.2d 888, 890 (5th Cir. 1970), rev’d on other grounds, 407 US 1, 92 S.Ct.
1907, 32 L.Ed.2d 513 (1972).
98 Ibid.
99 Ibid., 5.
100 446 F.3d 984 (C.A.9(Cal.) 2006.
101 Seattle Totems, 652 F.2d 855; Re Unterweser Reederei, 428 F.2d 896.
102 Gallo, 992.
103 Ibid.
162 Supporting party autonomy
clauses are increasingly used in cross-border business transactions, provid-
ing certainty and reducing transaction costs and risks.104 There has been a
strong claim in the US that a valid jurisdiction agreement should be
enforced in the absence of strong reasons against enforcement.105 Foreign
proceedings in breach of an exclusive jurisdiction clause thus frustrate Cali-
fornian policy to enforce validity jurisdiction agreements and an anti-suit
injunction should be issued as the only way to enforce this agreement.106
Although these courts do not adopt a specific approach to support
party autonomy by anti-suit injunctions, the thresholds, however, are relat-
ively easy to be achieved in cases where there is an arbitration or exclusive
jurisdiction agreement. First of all, it is US national policy to promote
arbitration and to enforce a choice of court agreement. Any actions
brought in foreign courts in breach of such an agreement frustrate this
national policy.107 Even a threat to bring such an action frustrates US poli-
cy.108 Second, if a party has signed an agreement to promise submitting all
disputes to a particular court or to arbitration and later brings claims to a
non-chosen court, this action is done in prima facie bad faith.109 Third, if
foreign proceedings are commenced, it usually will lead to cost and incon-
venience and will be more so if parallel proceedings exist because of the
breach of agreement.110 Fourth, it is always an equitable consideration to
deter forum shopping and the most serious form of forum shopping is
suing in an inappropriate forum in breach of agreement.111 It seems that
an anti-suit injunction will usually be granted in support of a dispute res-
olution agreement applying the ordinary thresholds.112
US courts, when issuing anti-suit injunctions in support of parties’
agreements, also consider the impact on international comity.113 Although
US courts accept that anti-suit injunctions may generate comity concerns,
they also believe that comity in international jurisdiction and judgments is
not an absolute obligation.114 Comity will not be negatively affected if

104 Ibid.
105 Ibid.
106 Gallo, 992. Force, 2011: 441ff.
107 Amaprop v Indiabulls Financial Services, WL 1050988, 5 (S.D.N.Y. 2010); Mitsubishi Motors
Corp. v Soler Chrysler–Plymouth, Inc., 473 US 614, 638–640, 105 S.Ct. 3346, 87 L.Ed.2d 444
(1985); Arciniaga v General Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006); Ibeto Petrochemi-
cal Industries, Ltd v M/T ‘Beffen’ 2010 WL 1050988 (S.D.N.Y. 2010); Applied Medical Distri-
bution Corp. v Surgical Co. BV 587 F.3d 909 (C.A.9 (Cal) 2009); Gallo v Andina; Seattle
Totems; Re Unterweser Reederei.
108 Amaprop v Indiabulls Financial Services, 5.
109 Amaprop, ibid., 6.
110 Amaprop, ibid., 6–7; Storm, 28; Stolt Tankers, 5.
111 Suchodolksi Assoc., Inc. v Cardell Fin. Corp, 2006 WL 3327625, 2.
112 LAIF X SPRL, 199.
113 Gallo, 446 F.3d at 994; Applied Medical v Surgical, 919.
114 Asvesta v Petroutsas, 580 F.3d 1000, 1010–1011 (9th Cir. 2009); Applied Medical v Surgical,
920.
 Supporting party autonomy 163
parties are private parties, parties enter into a dispute resolution agree-
ment to resolve private matters and the agreement is freely negotiated
after exhaustive, arm-length, fairly-conducted negotiation.115
However, although by applying the standard test an injunction in
support of a dispute resolution agreement usually can meet the required
criteria, a court may refuse to enjoin foreign proceedings but permit par-
allel proceedings to continue based on the reason of necessity. Some
courts believe injunctions should be issued in ‘the rarest of cases’116 and
they should consider ‘whether an injunction is necessary to protect the
jurisdiction of a federal court or if allowing the foreign litigation to con-
tinue would allow a party to evade the forum’s important policies’.117 In
Answers in Genesis of Kentucky v Greation Ministries Intern,118 the Federal
Court refused to issue an injunction against Australian proceedings but
compelled the parties to arbitrate in Kentucky. The court’s reason was that
an injunction was unnecessary. An injunction usually should be granted to
prevent a party from intentionally evading his dispute resolution agree-
ment and bringing vexatious and oppressive foreign proceedings to frus-
trate the other party.119 The court did not believe the Australian
proceedings were commenced in bad faith with the intention to evade the
arbitration agreement based on two reasons: first, Australia is a Contract-
ing State of the New York Convention and it is obliged to refer the parties
to arbitration;120 and second, when the US court was seized to compel
arbitration, the Australian proceedings were suspended.121 The US court
had confidence that, after the US decision was made, the parties would
have clearer knowledge as to how to proceed. It was not necessary to issue
an injunction at this stage and an application for injunction could be
renewed after the Australian proceedings restarted in breach of the
agreement.122
In the USA, the court has no discretion to issue an anti-suit injunction
if a foreign action involves the interest of a third party or a claim which is
not subject to the arbitration or jurisdiction agreement. An anti-suit
injunction can only be granted if the parties in the foreign action are the

115 Gallo, 446 F.3d at 994; Applied Medical v Surgical, 920.

116 Gau Shan Co., Ltd v Bankers Trust Co 956 F.2d 1349, 1351 (C.A.6(Tenn) 1992); Answers in
Genesis of Kentucky, Inc. v Creation Ministries Intern., Ltd 556 F.3d 459, 471 (C.A.6(Ky)
2009).
117 Answers in Genesis of Kentucky, 471; Gau Shan Co., Ltd, 1357.
118 556 F.3d 459 (C.A.6(Ky) 2009).
119 Int’l Equity Invs., Inc. v Opportunity Equity Partners Ltd, 441 F. Supp. 2d 552, 563 (S.D.N.Y.
2006); Quaak v Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 20 (1st Cir.
2004); Software AG, Inc. v Consist Software Solutions, Inc., 2008 WL 563449, 24 (S.D.N.Y. 21
February 2008); A.P. Moller-Maersk A/S v Ocean Express Miami, 590 F. Supp. 2d 526
(S.D.N.Y. 2008).
120 556 F.3d 471.
121 556 F.3d 471–472.
122 556 F.3d 472.
164 Supporting party autonomy
same and the cause of actions in the arbitration is dispositive of foreign
action.123 The result is usually the same with English tests where the
involvement of third parties and other causes of actions are issues for the
court to take discretion to make exception to the general principle
in favour of issuing an injunction to support exclusive jurisdiction
and arbitration agreements. The difficulty with the US approach, however,
is that the court cannot use discretion to rule exceptionally at all if a
third party interest is involved. In practice, there may be cases where it
is better for the end of justice to restrain the foreign action even if a
third party is involved in that action—for example, the third party is
brought in the action for the sole purpose to frustrate the anti-suit
injunction.

3.3 Anti-suit injunction: party autonomy versus statutory jurisdiction

What if there is a statutory requirement that grants exclusive jurisdiction
to a country and invalidates a jurisdiction clause? An anti-suit injunction in
this case could be used to restrain the party from suing in the chosen
court, though the domestic law of the chosen court does not have such a
restriction and the chosen court would assert jurisdiction under the agree-
ment. In Samengo-Turner v J&H Marsh & McLennan (Services) Ltd,124 an
English domiciliary was employed as the company’s reinsurance broker by
an English company which provided services to a group company in New
York. After the English broker decided to work for the English company’s
competitor, the New York group brought proceedings in New York to
require the broker to repay the incentive award received during employ-
ment under a bonus agreement. The bonus agreement included an exclu-
sive jurisdiction clause choosing New York courts. The English broker
sued in the English court, claiming that the New York action was brought
under an employment contract. According to Article 20 of the Brussels I
Regulation, the action against the employee domiciled in a Member State
should be brought in the courts of their domicile.125
The New York court asserted jurisdiction granted by the exclusive juris-
diction clause. The clause was invalid under Article 21 of the Brussels I
Regulation, which states that the protective jurisdiction can only be
departed from by a jurisdiction agreement which is entered into after the
dispute has arisen, or which provides the employee more options to sue.
However, the Brussels I Regulation could not bind New York courts. The
English court was thus required to consider a difficult question: whether

123 Abbott Laboratories v Qiagen Gaithersburg, Inc. 2010 WL 1539952, 4 (N.D.Ill, 2010); E. & J.
Gallo Winery v Andina Licores S.A., 446 F.3d 984, 991 (9th Cir. 2006); Lyman v Greater
Boston Radio, Inc., 2010 WL 2557831, 6 (E.D.Mich. 21 June 2010).
124 [2007] ILPr 52.
125 Art 20(1) An employer may bring proceedings only in the courts in the Member State in
which the employee is domiciled.
 Supporting party autonomy 165
the court should issue an anti-suit injunction restraining proceedings in
New York. The court recognized that the standard for such an injunction
to be granted is high, especially where the proceedings that the applicant
sought to restrain were brought in a highly reputed court in a friendly
foreign country.126 Furthermore, there was an exclusive jurisdiction clause
choosing New York courts. Although the clause was invalid under the
Brussels I Regulation, it is valid and enforceable under New York law, and
in English common law.
Turckey LJ refused to accept that protective jurisdiction mandated by
statute created the same strong ground as an exclusive jurisdiction clause
in terms of issuing an injunction restraining foreign proceedings.127 Where
there is an exclusive jurisdiction clause, granting an injunction is to
demand the parties to keep their contractual obligation; where protective
jurisdiction is granted by statute, there is no such reason and the court
shall simply consider the traditional criteria to decide the ends of justice.
However, the court eventually decided to grant an injunction based on
the reasonable expectation. The New York company should expect to be
subject to the jurisdiction of a Member State where its employee had his
domicile when entering into the contract; the employee also had expected
to be protected by the statute in terms of jurisdiction.128 This decision is
controversial, as expectation of both parties alone has never been used to
justify issuing an anti-suit injunction. Expectation means the likelihood of
knowledge of the parties, but it is different from their consent of being
subject to the particular jurisdiction only. Furthermore, there is nothing
to suggest that the New York proceedings were vexatious or oppressive and
it is doubtful whether the decision has properly taken comity into con-
sideration. The only possible justification is the ends of justice. The reason
to establish protective jurisdiction in employment contracts is to protect
an employee from being abused by his employer in terms of weaker litigat-
ing and bargaining power. The existence of an exclusive jurisdiction
clause in an employment contract cannot necessarily mean the employee
has any chance to consult on, negotiate or challenge this clause. The
inequality of litigating power between an individual and a multinational
company also suggests that justice could not be done if an employee is
required to enter an appearance in a foreign trial. However, if this is the
justification for issuing an anti-suit injunction against a country chosen in
an exclusive jurisdiction clause, the court should consider all the circum-
stances of a case to decide the real status of the employee and the back-
ground of the employment contract, as well as the cause of action. Only
the statutory compulsory jurisdiction with the purpose to protect the
weaker party should not be a weighty consideration.

126 Para 40.

127 Para 41.
128 Para 44.
166 Supporting party autonomy
Different decisions, however, are made where there is an exclusive juris-
diction clause choosing English courts, which is unenforceable under the
compulsory statute of a non-chosen country. In OT Africa Line v Magic
Sportswear Corp,129 a bill of lading included an exclusive jurisdiction clause
choosing England. Where disputes had arisen, one party sued in Canada
where the bill of lading was made, and according to Canadian Marine
Liability Act 2001, claims under the bill of lading could be brought in
Canada regardless of any jurisdiction clause. The English court applied
English choice of law to decide the effectiveness of the jurisdiction clause.
Since English law was the applicable law, the Canadian legislation was
irrelevant for the English courts to decide whether England was the con-
venient forum pursuant to the jurisdiction clause. As to Canadian jurisdic-
tion, the Canadian statute was not a sufficient exceptional ground to
justify waiving the parties of their agreement. The Court of Appeal finally
issued an anti-suit injunction to keep the parties to their bargain.130
It is necessary to distinguish Samengo-Turner and OT Africa Line, con-
cerning the interplay between an exclusive jurisdiction clause and a statute
that exempts the binding effect of the clause. In Samengo-Turner, the juris-
diction clause is ineffective in England because exclusive jurisdiction is
granted to English courts, while in OT Africa, the jurisdiction clause con-
tinues to be effective in terms of prorogation but not derogation. The
Canadian jurisdiction is not compulsory or exclusive, as the parties ‘could’
sue in Canada regardless of a foreign exclusive jurisdiction clause, instead
of ‘should’ sue in Canada. This is the reason why the exclusive jurisdiction
clause is disregarded in the former but not the latter case.
More weight will be given to statutory exclusive jurisdiction. For
example, the parties’ choice of court could not violate jurisdiction relating
to special subject matter that a country will assert under any circum-
stances. A court has strong public policy and control power in this case,
which is not departed from by party autonomy. For example, if the parties
have entered into a foreign exclusive jurisdiction clause in deciding the
right relating to immoveable property located in the local country, the
local court, if seized, certainly will issue an injunction restraining foreign
action relating to the jurisdiction clause. On the other hand, if the parties
entered into an exclusive jurisdiction clause choosing the English court to
decide disputes relating to land located in another country, which is
subject to the exclusive jurisdiction of that country, the English court
will stay jurisdiction instead of enforcing the exclusive jurisdiction
agreement.

129 [2005] 1 CLC 923.

130 For the effect of jurisdiction clauses in the Canadian statute, see Michell, 2002: 476.
 Supporting party autonomy 167
3.4 Enforcing an anti-suit injunction order
Civil law countries are usually not equipped with anti-suit injunctions to
restrain foreign proceedings. As a result, most civil law countries hold a
sceptical view against anti-suit injunctions restraining proceedings in the
local courts. However, it is not rare to find a civil law country enforcing an
injunction order against its own proceedings in order to enforce an exclu-
sive jurisdiction clause.
French courts traditionally refused to enforce anti-suit injunctions
against French proceedings, considering it as infringing the sovereignty of
France and contrary to French public policy.131 The position, however, is
relaxed in cases where an injunction is issued to enforce an exclusive juris-
diction clause. The French court enforced an injunction order issued by a
US court in In Zone Brands International v In Zone Brands Europe.132 The con-
tract concluded between a French company and a US company contained
an exclusive jurisdiction clause choosing Georgian courts. After disputes
had arisen, the French party sued in France in breach of the agreement.
The Georgian court issued an anti-suit injunction preventing the French
party from continuing the French proceedings. The US party applied for
the injunction order to be recognized and enforced in France, which was
upheld by the French court. The French court did not believe such an
injunction was an infringement of French sovereignty but agreed that the
parties should be bound by their agreement and the injunction only
aimed to enforce the agreement freely entered into between the parties.133
German courts, however, take a very different approach. In a German
case, the Oberlandesgericht (Regional Court of Appeal) of Dusseldorf
refused to serve the respondent the anti-suit injunction granted by the
English High Court,134 preventing the respondent from continuing pro-
ceedings in German courts in breach of an arbitration agreement choos-
ing the London Court of International Arbitration. The German court
believed the injunction infringed the German jurisdiction because the
German court, representing a state’s sovereignty, has the power to decide
if jurisdiction should be taken alone, and no instruction should be taken
from a foreign court.135 The German court refused the justification pro-
vided by English courts that the injunction was granted against the
respondent instead of a foreign court because no court proceedings can
be pursued without a claimant’s cooperation. In the German court’s view,

131 Stoltzenberg, Cass 1ere civ. 30 June 2004, Rev crit DIP (2004) 815. See also Perreau-Sauss-
ine, 2010: 524.
132 Cass Civ 1, 14 October 2009, n 08–16369.
133 Ibid. Michell, 2002: 476. French courts also used anti-suit injunctions restraining pro-
ceedings abroad. See Banque Worms v Brachot (Cass. 1re civ., 11 November 2002).
134 Re the Enforcement of an English Anti-suit Injunction (Case 3 VA 11/95) (Oberlandesgericht,
Dusseldorf) [1997] ILPr 320.
135 Para 14.
168 Supporting party autonomy
an injunction restraining the claimant from using the German court
directly influenced the court’s work and is equivalent to an injunction dir-
ected to the court.136 An instruction as to how a party should act in a
foreign court also amounts to an infringement to the procedural law of
that country. No exception is granted to support party autonomy.
It is true that the justification based on to whom the injunction is dir-
ected only has theoretic value. No matter to whom the injunction is
granted, it has the effect of restricting the exercise of jurisdiction of a
foreign country.137

3.5 Anti-arbitration injunction

It has been discussed in the previous chapter that a court can issue anti-
arbitration injunctions restraining the parties from continuing arbitration
procedures.138 This injunction is usually granted at the preliminary stage
to deny the jurisdiction of the arbitration tribunal,139 and English courts
usually only grant this injunction where there is a good arguable case that
the arbitration agreement does not exist between the parties at all.140
However, a court can also issue an anti-arbitration injunction enjoining
arbitral tribunals to rule on the merit of the case even though there is no
argument on the existence of a binding arbitration agreement between
the parties.
An anti-arbitration injunction may be sought where there are concur-
rent proceedings between an arbitral tribunal and a court in related issues.
In Intermet FZCO v Ansol,141 the applicant entered into a loan agreement
with a Swiss arbitration agreement. After the borrower defaulted on
payment, the lender alleged the borrower deceived it into the contract
and commenced arbitration proceedings, claiming damages for breach of
contract. The lender subsequently brought a court action against the bor-
rower and other responsible parties not subject to arbitration for fraud
and sought repayment of the loan. The applicant claimed that the
two actions involved similar factual basis, similar witnesses and evidence,
which led to substantial increase in cost, duplication of work and probably
inconsistent findings;142 it was desirable to have one forum to decide all
claims against all defendants together, which could not be achieved by

136 Para 16.

137 LAIF X SPARL v Axtel, 390 F.3d 194, 199 (2d Cir. 2004).
138 Ch 3, section 3.2.
139 Weissfisch v Julius [2006] 1 CLC 424; Excalibur [2011] EWHC 1624 (Comm); Albon v Naza
[2007] 2 C.L.C 782; Claxton Engineering Services v TXM Olaj-es Gazkutato Kft [2011] 2 All
ER (Comm) 128.
140 Excalibur [2011] EWHC 1624 (Comm); Albon v Naza [2007] 2 C.L.C 782; Claxton Engi-
neering Services [2011] 2 All ER (Comm) 128.
141 [2007] EWHC 26 (Comm).
142 Para 22.
 Supporting party autonomy 169
arbitration as some defendants are not party to the arbitration
agreement;143 the arbitration was brought in an oppressive and vexatious
manner with the intention of adding additional burden to the
borrower.144
A party may also apply for injunction in cases where there are parallel
arbitral proceedings in related actions. In Jarvis & Sons Ltd v Blue Circle
Dartford Estates,145 A and B entered into a contract for sale of goods and
agreed on arbitration in tribunal X. A then contracted for C to manufac-
ture the goods and agreed disputes to be arbitrated in tribunal Y. Upon
the alleged defective quality of the goods, B commenced proceedings
against A in tribunal X, while A brought proceedings against C in tribunal
Y. C then applied for a court to issue an injunction against arbitration
commenced in Y based on the grounds that parallel proceedings in
related issues existed in two tribunals. In Elektrim SA v Vivendi Universal SA
& Ors,146 A and B entered into a contract providing all disputes are sub-
mitted to arbitration in tribunal X. After the dispute had arisen, A and B
negotiated a settlement and in the settlement agreement there was
another arbitration clause pointing to tribunal Y. Where A refused to
enforce the settlement, B commenced two arbitral procedures against A,
one for the original contractual dispute in tribunal X and another for the
enforceability of the settlement agreement in tribunal Y.
In considering whether an anti-arbitration injunction should be
granted, the court should answer the following questions: (1) is the court
competent to issue an anti-arbitration injunction? (2) Could an anti-
arbitration injunction be issued even if the jurisdiction of the arbitral tri-
bunal is not in question? (3) What test should be adopted for a court to
exercise its discretion? As to the first question, although the Arbitration
Act 1996 does not provide express permission for a court to intervene by
injunctions before an arbitral award is made, the English courts have
power to issue an anti-arbitration injunction pursuant to s37 of the Senior
Courts Act 1981.147
The second and third questions are considered in Jarvis & Sons Ltd v
Blue Circle Dartford Estates,148 which introduced four principles in granting
anti-arbitration injunctions and which clearly recognized the possibility to
grant such injunctions preventing arbitral tribunals from hearing the case
as to its merit. The four principles are:149

143 Ibid.
144 Ibid.
145 Jarvis & Sons Ltd v Blue Circle Dartford Estates, [2008] Bus LR D25.
146 [2007] 1 CLC 227.
147 Elektrim SA v Vivendi Universal SA & Ors.
148 [2008] Bus LR D25.
149 Para 40.
170 Supporting party autonomy
(i) The court’s power under section 37 of the Senior Courts Act
1981 to grant injunctions includes a power to grant an injunc-
tion to restrain an arbitration from proceeding.
(ii) That power may be exercised if two conditions are satisfied,
namely: (a) the injunction does not cause injustice to the claim-
ant in the arbitration, and (b) the continuance of the arbitration
would be oppressive, vexatious, unconscionable or an abuse of
process.
(iii) The court’s discretion to grant such an injunction is now only
exercised very sparingly and with due regard to the principles
upon which the Arbitration Act 1996 is expressly based.
(iv) Delay by the party applying for an injunction is material to the
court’s exercise of discretion and may in some cases be fatal to
the application.

The factor of delay was also emphasized in an earlier case, Intermet FZCO v
Ansol, where the English court refused to grant an anti-arbitration injunc-
tion, because of the delay for the application and the manner in which the
arbitration procedure was commenced.150 The court held that an injunc-
tion was inappropriate if the application was brought too late and the
foreign proceedings were well-advanced.151 Furthermore, the lenders com-
menced arbitration procedures without oppressive intention based on
their contractual rights.152
However, issuing an anti-arbitration injunction is a controversial matter
and is never free from sceptical views of commentators. Although an anti-
arbitration injunction at the preliminary stage in deciding jurisdiction may
properly survive the question of the New York Convention, an injunction
granted where jurisdiction of an arbitral tribunal is properly established is
different. Such an injunction infringes the fundamental principle of the
New York Convention and is contrary to the international commercial
arbitration custom. Although in principle a court reserves the power to
issue an injunction to restrain foreign proceedings pursuant to a foreign
exclusive jurisdiction clause, the situation is very different in arbitration,
where there are treaty obligations and in many countries statutory restric-
tions preventing a court from intervening in this way.153

150 Paras 24–26.

151 Para 24.
152 Paras 27–30.
153 For more on anti-arbitration injunction, see Tang 2012c: 589ff.
 Supporting party autonomy 171
4 Stay of jurisdiction and dispute resolution agreements

4.1 Forum non conveniens and jurisdiction agreements

Forum non conveniens is an old common law doctrine. After a court is satis-
fied that it has jurisdiction to hear a cross-border dispute, the court may
not exercise jurisdiction because it is more appropriate for another forum
to hear the case in the interest of justice. When exercising discretion
under the doctrine of forum non conveniens, a court usually considers the
balance of private interest and public interest,154 the intention of the
parties,155 the convenience and cost of trial,156 the closest connection
between a dispute and a forum157 and the ends of justice.158
The relationship between forum non conveniens and jurisdiction agree-
ments is confusing. Although common law countries preserve their discre-
tion to enforce jurisdiction agreements, they usually hold the policy of
contract freedom and give effectiveness to such agreements in most cir-
cumstances. Different approaches are used by different countries, differ-
ent courts in one country and even different judges in the same court to
decide the effectiveness of a jurisdiction clause. Some treat jurisdiction
agreements as a factor considered in forum non conveniens and some believe
the normal forum non conveniens consideration should not apply to jurisdic-
tion agreements which can be directly enforced, while others believe that,
although jurisdiction clauses are prima facie enforceable, strong reasons
could still apply to refute their effectiveness.159 The relevance, weight and
status of jurisdiction clauses in forum non conveniens are never clear.

154 This approach is mainly used in the US, where the balance of public interest and private
interest should be considered. See US cases: Piper v Reynor, 454 US 235; Baumgart v Fair-
child Aircraft (1993) 981 F.2d 824 (US 5th Circuit of Appeals); Stangvik v Shiley Inc (1991)
54 Cal.3d 744. Cf. English cases: Spiliada v Cansulex [1987] AC 460; Lubbe v Cape Plc
[2000] 1 WLR 1545; Fawcett and Carruthers, 2008: 439–440; Peel, 2001: 187.
155 The Eleftheria, [1970] P 94; Donohue v Armco [2002] 1 All ER 749; Spiliada v Cansulex;
British Aerospace v Dee Howard [1993] 1 Lloyd’s Rep 368; Sabah Shipyard (Pakistan) Ltd v
Islamic Republic of Pakistan [2004] 1 CLC 149; National Westminster Bank v Utrecht-America
Finance Co [2001] CLC 1372; UBS AG & Anor v HSH Nordbank AG [2009] 1 CLC 934.
Fawcett and Carruthers, 2008: 443–454.
156 Arkwright Mutual Insurance Co. v Bryanstan Insurance Co. Ltd and Others [1990] 3 WLR 705;
Credit Chimique v James Scott Engineering Group Ltd 1979 S.C. 406; Ace Insurance SA-NV v
Zurich Insurance Co & Anor [2001] CLC 526; Innovia Films Ltd v Frito-Lay North America,
[2012] EWHC 790 (Pat), para 42; Amin Rasheed Shipping Corporation v Kuwait Insurance
Co. [1984] AC 50.
157 Connelly v RTZ Corporation Plc & Ors, [1997] CLC 1357; Eastern Power Ltd v Azienda Comu-
nale Energia e Ambiente, [2001] ILPr 6; Travelers Casualty & Surety Co of Canada v Sun Life
Assurance Co of Canada (UK) Ltd, [2007] Lloyd’s Rep IR 619; Barclays Bank Plc v Homan,
[1992] B 757; Deutsche Bank AG v Highland Crusader Offshore Partners LP, [2010] 1 WLR
1023.
158 Lubbe v Cape Plc [2000] 1 WLR 1545; Spiliada Maritime Corp v Cansulex, [1987] AC 460;
Lennon v Scottish Daily Record & Sunday Mail Ltd, [2004] EWHC 359 (QB); Connelly v RTZ.
159 For case examples, see footnotes 164–166 below.
172 Supporting party autonomy
In the US, for example, some courts take the approach that a jurisdic-
tion agreement will normally be enforced and forum non conveniens usually
does not apply unless the jurisdiction clause is held invalid by the court.160
That means once there is a valid foreign exclusive jurisdiction clause, a US
court should dismiss jurisdiction. In England and many commonwealth
countries, jurisdiction clauses are prima facie enforceable unless the
defendant can prove strong reasons to the contrary.161 In some early
English cases, an exclusive jurisdiction clause is only one factor to consider
in the decision to stay jurisdiction.162 This approach is not applied in
modern practice.
Although divergence exists, there are a few things in common. First,
more weight is given to choice of court agreements worldwide. Decisions
to treat an exclusive jurisdiction clause as one ordinary factor in forum non
conveniens/forum conveniens existed only in early decisions and are generally
abandoned by most courts in the world.163 It is remarked by Lewison J
that:164

the standard considerations that arise in arguments about forum non

conveniens should be given little weight in the face of an exclusive juris-
diction clause where the parties have chosen the courts of a neutral
territory in the context of an agreement with world-wide application.
Otherwise the exclusive jurisdiction clause would be deprived of its
intended effect. Indeed, the more ‘neutral’ the chosen forum was the
less the importance the parties must have placed on the convenience
of the forum for any particular dispute. If the standard considerations
that arise in arguments about forum non conveniens were to be given
full weight, they would almost always trump the parties’ deliberate
selection of a neutral forum.

Second, although many courts accept that, in theory, same effectiveness

should be given to a jurisdiction clause choosing the local forum and
foreign country, a court is more willing to give prorogation effect to a local
jurisdiction clause than giving derogation effect to a foreign jurisdiction
clause.165 In other words, if there is a jurisdiction clause choosing the local

160 AAR International v Nimeias Enterprises S.A., 250 F.3d 510, 524–525 (7th Cir.), cert. denied.
534 US 995 (2001).
161 The Eleftheria.
162 Cargo Lately Laden on Board The Fehmarn (Owners) v Fehmarn (Owners) (The Fehmarn) [1958]
1 WLR 159.
163 Animal Film, LLC v D.E.J. Productions; Stangvik, 54 Cal.3d at 751; Bechtel v Industrial Indem
(1978) 86 Cal.App.3d 45, 51–53.
164 Skype v Joltid, [2011] ILPr 8, para 33.
165 The English courts have struck down foreign exclusive jurisdiction clauses in a few cases;
see, e.g. The Hollandia [1983] 1 AC 565; Aratra Potato v Egyptian Navigation (The El Amria)
[1981] 2 Lloyd’s Rep 119; Citi-march Ltd and Another v Neptune Orient Lines Ltd [1996] 1
WLR 1367.
 Supporting party autonomy 173
court, it is very difficult for the court to stay jurisdiction in favour of a
more appropriate forum abroad; on the other hand, if there is an exclu-
sive jurisdiction clause choosing a foreign country, a court is more ready
to take jurisdiction instead and to refuse to use forum non conveniens to
enforce this jurisdiction clause.
A few words may be necessary on the development of forum non conven-
iens in China. China is a civil law country but it has adopted very basic dis-
cretion to decline jurisdiction based on ‘convenience’.166 Factors
considered in the Chinese version of forum non conveniens are based on the
factual connections between the dispute and the forum, the location of
the witnesses and evidence, the location of the disposable assets of the
defendant, the potential enforcement of the judgments, etc.167 The choice
of a foreign jurisdiction nonetheless is not a consideration in the Chinese
version of forum non conveniens.168 On the other hand, the choice of a
Chinese court is conclusive to exclude the exercise of discretion under
forum non conveniens.169 The discriminatory treatment of Chinese and
foreign jurisdiction clauses shows the tendency to guard Chinese jurisdic-
tion as part of judicial sovereignty continues to exist.170

4.2 Enforcing exclusive jurisdiction agreements

In most cases, a court will enforce jurisdiction agreements in the absence
of invalidity and injustice. Ordinary forum non conveniens/forum conveniens
usually does not apply in such circumstances.171 A large amount of cases
can be found where a common law court enforced the jurisdiction clause
and refused to exercise discretion to depart from it.172 In England and
other commonwealth countries, although in principle, strong reasons
could persuade a court to depart from a jurisdiction clause, these reasons

166 Supreme People’s Court, ‘Answers to Questions Arising out of Trial Practice of Com-
mercial and Maritime Cases with Foreign Elements 2004’. A Chinese version is available
at www.lawtime.cn/info/maoyi/myzc/20081217111.html, answer 7; Supreme People’s
Court, ‘Summary of the Second National Conference on the Adjudication of Commer-
cial and Maritime Cases with Foreign Elements 2005’, Fa Fa [2005] No 6, Art 11. Dong-
peng Trade v HK Bank of East Asia, Selected Cases of People’s Courts (People’s Court
Publisher, 1996), 143; Sumitomo Bank v Xinhua, Supreme Court, (1999) Jing Zhong Zi
No 194.
167 Supreme People’s Court, ‘Summary 2005’, Art 11.
168 Ibid., Art 11(3).
169 Ibid., Art 11(3).
170 For discussion on Chinese forum non conveniens, see Du, 2007: 152; Li and Liu, 2008: 68;
Tu, 2012: 341.
171 Yes To v Hur, 2011 WL 902297 (N.D.Cal., 2011).
172 National Westminster Bank Plc v Utrecht-America Finance Co [2001] CLC 1372; J.P. Morgan
Securities Asia Private Limited v Malaysian Newsprint Industries [2002] ILPr 17; Ultisol Trans-
port Contractors Ltd v Bouygues Offshore SA & Ors [1998] CLC 1526; Hamed El Chiaty & Co.
(T/A Travco Nile Cruise Lines) v The Thomas Cook Group [1994] ILPr 367; Middle Eastern Oil
v National Bank of Abu Dhabi [2008] All ER (D) 285.
174 Supporting party autonomy
should be something more than what are predictable at the time of con-
tracting. Legitimate reasons include circumstances that change after the
conclusion of the contract, that cannot be reasonably foreseeable by both
parties173 and that make the enforcement of the agreement impractical or
impossible. The court may also consider the necessity to avoid inconsistent
decisions and split of proceedings, public policy, and political, race,
gender or religious reasons that may prevent a party from acquiring a fair
hearing. The resisting party should prove these facts beyond simple pos-
sibility, suspicion or likelihood. Clear and cogent evidence is required to
support such allegations.174
In the USA, some courts use the terminology of ‘mandatory forum-
selection clauses’ to refer to exclusive jurisdiction clauses. An exclusive jur-
isdiction clause can only be challenged if it is the product of fraud or
overreaching, enforcement would effectively deprive defendants of their
day in court or enforcement would contravene a strong public policy of
the forum.175 The standard forum non conveniens consideration cannot be
used to dismiss an action where a valid jurisdiction clause exists.176

4.3 Stay of jurisdiction in breach of local exclusive jurisdiction clauses

It is hard to find a case where a court stay jurisdiction in breach of exclu-
sive jurisdiction clauses choosing the local court. In China, the Supreme
Court has provided judicial direction that jurisdiction cannot be stayed if
there is a valid jurisdiction clause, either exclusive or not, choosing
Chinese courts.177 In practice, many Chinese courts would not consider
staying jurisdiction until they were satisfied that there was no choice of
court agreement choosing Chinese courts.178
In England, although a court sometimes would stay jurisdiction desig-
nated in a non-exclusive jurisdiction clause to avoid concurrent
proceedings,179 staying jurisdiction where exclusive jurisdiction is con-
ferred to the local court is extremely unusual. Any objects foreseeable at
the time of contracting or any factors pointing to a natural forum are not

173 Import Export Metro Ltd v Compania Sud Americana De Vapores SA [2003] EWHC 11.
174 Middle Eastern Oil, [2008] EWHC 895 (Comm), para 24.
175 M/S Bremen v Zapata Off-Shore, 407 US 1 (1972); Richards v Lloyd’s of London 135 F.3d
1289, 12294 (9th Cir. 1998); Yes To v Hur.
176 Yes To v Hur; Piper Aircraft v Reyno (1981) 454 US 235, 219; Yavuz v 61 MM, 576 F.3d 1166
(10th Cir. 2009), 1171.
177 Supreme People’s Court, ‘Summary 2005’, Art 11(3). Forum non conveniens is adopted in
judicial practice at an experimental stage.
178 Baron Motorcycles Inc v Awell Logistics Group, Inc, Ningbo Maritime Court, (2008) Yong Hai
Fa Shang Chu Zi No 277, the court referred to the lack of a jurisdiction clause choosing
China as one of the factors supporting the use of forum non conveniens to decline jurisdic-
tion; Jaten Electronic v Smartech Electronic, Shanghai Municipality No 1 Intermediate Peo-
ple’s Court, (2009) Hu Yi Zhong Min Wu (Shang) Chu Zi No 51.
179 Bas Capital Funding Corporation & Ors v Medfinco Ltd [2003] EWHC 1798 (Ch).
 Supporting party autonomy 175
weighty factors to support departing from a jurisdiction clause. The resist-
ing party must provide reasons that suing in the local forum is not good to
reach the ends of justice. It is unlikely that a defendant could successfully
argue in an English court that the English judicial system is independent,
or he cannot receive fair trial for political or other reasons.
In Horn Linie Gmbh v Panamericana Formas e Impresos SA,180 the parties
chose English courts as the exclusive forum to hear their disputes arising
out of a contract for the carriage of cargo to and for delivery in Columbia.
The contract had no connections with England, which was a neutral
forum. The defendant claimed that, although England was chosen in the
clause, English courts should stay jurisdiction under forum non conveniens
because Columbia law prohibited the choice of forum in such a contract,
and any jurisdiction clauses would be contrary to the public policy of
Columbia. However, Morison J believed that party autonomy should not
be overridden by public policy of Columbia in this case. Since the defend-
ant had given his consent while knowing the Columbian law, the defend-
ant freely accepted the governance of English courts and was estoppeled
from claiming that honouring the agreement would cause him to offend
Columbian public policy.181
One reason that may be accepted to depart from a local exclusive juris-
diction clause is the necessity to avoid splitting proceedings and inconsist-
ent decisions. In Donahue, the House of Lords decided to apply the
exception by refusing to issue an anti-suit injunction to restrain US pro-
ceedings subject to a valid English exclusive jurisdiction clause because the
third parties not subject to the clause were parties in the US trial and part
of the proceedings involving the third parties could not be restrained.
Restraining US proceedings would cause parallel proceedings in related
matters. However, it is also necessary to recognize that staying forum pro-
ceedings is different from restraining a foreign action. More stringent
rules apply in anti-suit injunctions where the maintenance of international
comity is always an issue that a court needs to bear in mind. The court may
refuse to restrain foreign proceedings because of the concern of splitting
proceedings but this may not be a reason for a court to stay domestic juris-
diction, especially if there is an exclusive jurisdiction clause choosing the
local forum.

4.4 Staying jurisdiction in favour of arbitration agreements

Usually, a court has treaty or statutory obligation to decline jurisdiction in
favour of an arbitration agreement. Staying jurisdiction in favour of a valid
arbitration agreement is a statutory duty which is compulsory not discre-
tionary. Forum non conveniens is irrelevant in supporting arbitration

180 [2006] 2 All ER (Comm) 924.

181 Para 20.
176 Supporting party autonomy
agreements in judicial practice.182 In a multi-party litigation, where only
some parties are subject to an arbitration agreement, the court is not obli-
gated to stay jurisdiction over parties not subject to arbitration, unless by
exercising discretion, a stay of jurisdiction is in the interest of justice.183 In
Reichhold Norway ASA v Goldman Sachs International,184 a buyer of a subsidi-
ary company claimed that the financial adviser of the parent company
committed misrepresentation. The sales agreement was subject to Norwe-
gian arbitration. The buyer commenced arbitration proceedings in
Norway against the financial adviser and commenced proceedings in the
English court against the parent company for alleged responsibility for the
misrepresentation. The parent company applied for a stay of English juris-
diction. The English court recognized that staying English proceedings in
light of related arbitration proceedings between different parties in
another country would only be granted in exceptional cases if there were
compelling reasons to do so. In the current case, the arbitration results
would affect the court’s decision. The success in arbitration would prevent
the claimant from claiming further remedies against the parent company.
In Mabey & Johnson v Danos,185 an English manufacturer entered into a
representation agreement with a Jamaican company which acted as the
former’s agent in connection with the supply of products to a Jamaican
project. The representation agreement provided that all disputes arising
out of the agreement should be submitted to arbitration. Where the Jamai-
can company engaged in an alleged conspiracy and fraud with its director,
the English manufacturer sued both the agent and the director in the
English court. The agent invoked the arbitration clause and requested the
English court to stay jurisdiction under s9 of the Arbitration Act 1996. The
agent’s director applied for a stay of proceedings on the reason that he
would also be involved in the arbitration though he was not a direct party,
because he was the director of the defendant agent. If both court and
arbitral proceedings continued, the director would be involved in two pro-
ceedings in England.
The English court, however, refused the director’s application. It was
the agent, probably with the director’s instruction, who invocated the
arbitration clause preventing court proceedings from continuing. The
agent’s action fragmented the proceedings and caused parallel proceed-
ings between the court and the tribunal. The director was not entitled to
take advantage of the arbitration shield and could not base his argument
on the fact that fragment of proceedings was not good for the end of

182 Park, 1995: 201.

183 Joseph, 2005: para 11.46.
184 [2000] 1 WLR 173.
185 [2007] EWHC 1095 (Ch).
 Supporting party autonomy 177
justice because the agent, under the direction of the director, applied for
the proceedings to be fragmented.186

5 Conclusion
Party autonomy in deciding jurisdiction is a useful method to avoid uncer-
tainty brought about by conflicts of jurisdiction, but it may lose its effec-
tiveness without proper instruments to protect its enforceability. The civil
law approach of lis pendens is not an instrument to enforce a valid dispute
resolution clause. It is based on the chronological order, requiring the
second seized court to give priority to the first seized one without consid-
ering the effectiveness of party autonomy. In cases, it is even a tool easily
abused by the party that aims to escape from a freely entered contract to
the detriment of another party. Lis pendens also has no role to play in sup-
porting arbitration agreements.
The available procedural tools that could provide real and effective pro-
tection to dispute resolution agreements are anti-suit injunctions and
forum non conveniens. A country usually adopts either both of these tools or
neither of them. If a country only has the former but not the latter, it has
taken an ambitious approach to compete with other countries for jurisdic-
tion, which certainly violates international comity; a country adopting only
the latter restrains itself but cannot properly protect its citizens against
deliberate breach of dispute resolution clauses and the inappropriate
grasp of jurisdiction of other countries. If used properly and in an ideal
context, conflicts of jurisdictions usually can be managed within a reason-
able level and dispute resolution clauses can be enforced and acquire the
greatest effectiveness.
However, an ideal world does not exist. The exercise of forum non con-
veniens and anti-suit injunctions is inevitably affected by a lot of factors
other than strict conflict of laws consideration, such as comity with
another country and enforceability of judgments. Divergence exists for the
application of these approaches in different countries. Even within one
country, discretion and flexible criteria make the application uncertain.
Divergence, flexibility and inconsistent application of discretion inevitably
lead to different judgments. In an international context, it still means that
forum shopping and conflict of jurisdiction cannot be completely avoided
and the certainty brought about by jurisdiction and arbitration agree-
ments is diminished.

186 Para 37.

7 Autonomy and supporting
1
measures in Europe

1 Introduction
The previous chapter shows that there are various instruments to protect
party autonomy. This chapter examines the effect of these instruments in
the regime where judicial cooperation exists. Applying common law meas-
ures to support jurisdiction and arbitration agreements is challenged in
the European Union. EU jurisdiction rules are harmonized in the Brussels
I Regulation. Since the majority of the EU Member States are civil law
countries, the European jurisdiction rules follow the civil law tradition and
greatly restrict the discretionary power of a court.2 The Brussels I Regula-
tion does not provide any express terms to incorporate forum non conven-
iens and anti-suit injunctions in its regime. Instead, the civil law concept of
lis pendens has been adopted.3 The ECJ has demonstrated a clear attitude
in a number of cases that these common law instruments cannot be used
within the Brussels regime.4 This restriction not only applies to jurisdic-
tion agreements, but also extends to arbitration agreements.

2 Lis pendens and jurisdiction agreements

2.1 Conflict of two doctrines in the Brussels I Regulation

Under the Brussels I Regulation, the court of a Member State second
seized shall, by its own motion, stay proceedings in favour of the court of a
Member State first seized in deciding the same cause of action between

1 This chapter is a revised and extended version of the article entitled ‘Conflicts of Jurisdic-
tion and Party Autonomy in EU’ by the author, published first in (2012) 59 LIX Nether-
lands International Law Review 321.
2 When the original six Contracting States negotiated the Brussels Convention in 1968, none
of them were common law countries. The latter accession of the UK and Ireland could not
vary the civil-law basis on which the Convention was based. See von Mehren, 2002; Hartley,
2005.
3 Arts 27 and 28. Case C-116/02 Gasser v MISAT, [2003] ECR 14693.
4 Turner v Grovit, ibid.; Case C-185/07, Allianz SpA v West Tankers [2009] ECR I-663; Case
C-281/02, Owusu v Jackson [2005] ECR I-1383.
 Autonomy and supporting measures in Europe 179
5
the same parties, and should decline jurisdiction if the first seized court
has established jurisdiction.6 The court of the Member State second seized
may stay its proceedings in favour of the first seized Member State in
related actions,7 which are so closely connected that it is expedient to hear
and determine them together to avoid the risk of irreconcilable judgments
resulting from separate proceedings.8
This rule does not require the court to consider such issues as proced-
ural efficiency, natural forum, litigation cost and convenience to both
parties. Questions arise where there is an exclusive jurisdiction agreement
falling within the framework of the Brussels I Regulation choosing one of
the Member States.9 Conflicts arise where the claimant brings the dispute
to the first seized Member State in breach of an exclusive jurisdiction
clause and the other party subsequently brings the same action in another
Member State which is chosen in the agreement. The rule of lis pendens
requires the second seized court (chosen forum) to stay jurisdiction in
favour of the first seized one (non-chosen forum), while the doctrine of
party autonomy requires the non-chosen forum (the first seized court) to
decline jurisdiction in favour of the chosen forum (the second seized
court). Even if the second seized court stays jurisdiction in favour of the
first seized one, the first seized court usually should decline jurisdiction
after confirming the jurisdiction clause is valid and exclusive.10 However,
there is a risk that the first seized court may nevertheless decide the juris-
diction clause invalid according to a different interpretation of substantive
validity, which is not uniformly provided by the Brussels I Regulation.11

5 Art 27(1) Brussels I.

6 Art 27(2) Brussels I.
7 Art 28(1) Brussels I.
8 Art 28(3) Brussels I.
9 Art 23(1) Brussels I Regulation.
10 Art 23(1) Brussels I Regulation.
11 Art 23(1) Brussels I Regulation only provides uniform rules on formal validity of a juris-
diction clause. Some ECJ cases suggest that formal validity is sufficient to ensure authentic
consent of the parties, see Case C-159/97 Transporti Castelletti Spedizioni International SpA v
Hugo Trumpy SpA, [1997] ECR I-1587, paras 49 and 51; Case C-106/95 MSG v Les Gravieres
Rhenanes Sarl [1997] ECR I-911, para 15; Case C-378/98 Coreck Maritime GmbH v Handelsvee
BV [2000] ECR I-9337, para 13. However, this suggestion is clearly incorrect because
formal validity cannot cover issues where parties totally understand the existence of a jur-
isdiction clause but signed because of fraud, duress or undue influence. Others suggest
that national law, including choice of law of each Member State, can be used to decide
material validity. See Hess et al., 2007: para 377; Austrian case, 7 Ob 320/00k, ZfRV
2001/71 = RdW2001/678; 7 Ob 38/01s, RdW 2001/676 = ÖRZ-EÜ 2001/70 =ZfRV
2001/63 = ecolex 2002, 420 = ELF 2001, 431; 5 Ob 130/02g. ‘National Report Austria
(Oberhammer/Domej)’, Study JLS/C4/2005/03, http://ec.europa.eu/civiljustice/news/
docs/study_bxl1_austria.pdf, accessed 28 January 2012. Since inconsistency exists, it is
likely that inconsistent decisions may be made depending on which court is seized to
decide validity of a jurisdiction clause.
180 Autonomy and supporting measures in Europe
2.2 Contract priority versus procedure priority

Contract priority: English approach prior to Gasser

Before the ECJ provided an answer to the relationship between party auto-
nomy and lis pendens, the English court considered the same issue but
reached a decision completely different from the ECJ. In Continental Bank v
Aeakos,12 the bank, which was domiciled in Illinois, had its seat and centre
of administration in Chicago and had business in Greece, entered into a
loan agreement with some ship companies registered in Panama. The con-
tract contained an exclusive jurisdiction clause choosing English courts and
a choice of law clause choosing English law. After the disputes arose,
however, the companies sued the bank in Greece. The bank applied for
injunctions from the English court and subsequently brought the second
action in England claiming sums allegedly due from the debtors under the
loan agreement. The English court refused to stay jurisdiction in favour of
the first seized court. The reason was contractual freedom. The English
court did not consider there was necessity to strictly apply lis pendens where
there was a valid choice of court agreement. The only issue that mattered
was that both parties had entered into a valid exclusive jurisdiction agree-
ment and should be bound by it. The protection provided by the exclusive
jurisdiction clause to the bank was a consideration required by the bank in
exchange for the loan, and the bank did not give up and waive its right not
to be sued in any other countries granted by the jurisdiction clause. The
companies promised to be bound by the jurisdiction clause and there was
no reason for them to evade this promise. The English court then con-
tinued to hear the case pursuant to the jurisdiction clause and granted an
anti-suit injunction to restrain the Greek proceedings from continuing on
behalf of the bank.13 The ‘contract priority’ approach is adopted. This
approach focuses on enforcing parties’ agreement. It is, however, rather
unilateral. It does not require the Member State to consider the fact that
the same proceedings are pending in another Member State; neither does
it require the other Member State to give up jurisdiction. Adopting this
approach will cause parallel proceedings, unless the court issues an anti-
suit injunction to restrain another country’s proceedings at the same time.

Intermediate approach: AG opinion in Gasser

The ECJ was seized to answer the same question in Gasser v MISAT.14 In
this case, an Austrian company, Gasser, and an Italian company, MISAT,

12 Continental Bank NA v Aeakos Compania Naviera SA and Others, [1994] 1 WLR 588. Followed
by O.T. Africa Line Limited v Fayad Hijazy, [2002] ILPr 18.
13 The decision to issue anti-suit injunctions is also challenged by the ECJ in the Brussels I
scheme. See section 4 for anti-suit injunctions.
14 Case C-116/02 Gasser v MISAT, [2003] ECR 14693.
 Autonomy and supporting measures in Europe 181
entered into a contract for the sale of goods, without choice of court
agreements. Subsequent invoices sent by Gasser contained an exclusive
jurisdiction clause choosing Austria courts, which were duly paid by
MISAT. After disputes arose, MISAT brought an action in Italy for a decla-
ration of termination of contract; Gasser subsequently sued in Austria
based on the jurisdiction clause. MISAT claimed that the court first seized
was Italy and Austrian court’s proceedings were barred by lis pendens.
As it has been ruled in Benincasa v Dentalkit,15 a jurisdiction clause is sev-
erable and independent from the main contract. The dispute on the inva-
lidity or termination of the main contract does not prevent the chosen
court from taking jurisdiction to hear the dispute.16 The chosen court has
the prorogation jurisdiction to decide its own competence under the doc-
trine of kompetenz-kompetenz even if the dispute is about the invalidity of the
jurisdiction clause.17 However, the Brussels I Regulation does not prevent
a non-chosen Member State from taking jurisdiction to decide the validity
of a jurisdiction clause.18 The key question is whether the second seized
court must, with no exception, give priority to the first seized court, even
if such a stay is made in breach of an exclusive jurisdiction clause.
Advocate General P Leger believed that the purpose of the lis pendens
rule is to prevent parallel proceedings in different Member States and to
avoid irreconcilable judgments.19 This rule, however, can be derogated
from where the second seized court has exclusive jurisdiction to hear the
case under Article 22 of the Brussels I Regulation,20 which grants in rem
jurisdiction to a court based on the exclusive state control. AG Leger con-
sidered the principle might be extended to circumstances in which the
second seized court had exclusive jurisdiction under an exclusive jurisdic-
tion clause.21 The chosen court in an exclusive jurisdiction clause is

15 Case C-269/95 [1997] ECR I-3767. Case C-18/02 Danmarks Rederiforening v LO Landsorgan-
isationen i Sverige, [2004] ECR I-1417; Skype Technologies SA v Joltid Ltd, [2011] ILPr 8; Knorr-
Bremse Systems for Commercial Vehicles Ltd v Haldex Brake Products GmbH, [2008] 2 All ER
(Comm) 448.
16 For comments on the doctrine of separability, see Harris, 1998: 279; Force, 2011: 401;
Rosen, 1994: 599.
17 This is the doctrine of kompetenz-kompetenz, which means a forum has the competence to
decide its own competence. Rosen, 1994; Fraterman, 2011: 913–914; Inoue, 2006: 178;
McLachlan, 2008: 233–234; Walt, 1999: 375–376. Mackender v Feldia AG. [1967] 2QB 590
(the English court decided the validity of a Belgium jurisdiction clause); Dubai Electricity v
Islamic Republic of Iran Shipping Lines (The Iran Vojdan), [1984] 2 Lloyd’s Rep 380 (the
English court decided whether a German jurisdiction clause was valid under German
law); Trendtex Trading v Credit Suisse, [1980] QB 628 (the English court decided whether
to stay jurisdiction in favour of an exclusive Geneva jurisdiction clause and whether the
clause was valid).
18 Article 23(1) only provides that the chosen court has jurisdiction. It does not say which
court should decide the validity of the exclusive jurisdiction clause.
19 [2005] 1 All ER (Comm) 538, para 44.
20 Ibid., para 48.
21 Ibid., para 48.
182 Autonomy and supporting measures in Europe
designed by the parties to be exclusive.22 Although the exclusivity of a
chosen court in an exclusive jurisdiction clause is acquired from party
autonomy, while the exclusivity of a jurisdiction in rem stems from state
sovereignty, the practical nature of the exclusivity is comparable. Both
grant jurisdiction to one country to the exclusion of other states.
AG Leger also considered practical advantages to require priority to be
given to a court that has exclusive jurisdiction. On the one hand, requir-
ing the second seized chosen court to decline jurisdiction in favour of the
first seized one undermines the effectiveness and certainty of the proroga-
tion jurisdiction.23 On the other hand, requiring all non-chosen courts to
give priority to the chosen court could reduce inconsistent decisions.24
The answer to the validity of a jurisdiction clause largely depends on which
country makes decision. If any first seized courts could make this decision,
the result largely depends on in which court the claimant brings the
action.
AG Leger’s justification is not completely based on contractual
freedom. It is a combination of contractual freedom and procedure cer-
tainty. AG Leger recognizes the effect of an exclusive jurisdiction clause
granted by the parties and admitted that the parties have the power to
grant the chosen country ‘exclusive jurisdiction’ to the equivalent effect of
exclusive jurisdiction designated by Article 22 of the Brussels I Regulation.
At the same time, he also considered the legal certainty and uniform deci-
sion which is achievable by providing priority to party autonomy.

Procedure priority: ECJ decision in Gasser

The Advocate General’s opinion, however, was not accepted by the ECJ,
which adopted a ‘procedure priority’ approach. The ECJ emphasized the
fundamental object of the lis pendens rule to prevent parallel proceedings.
In order to tackle parallel proceedings promptly, the rule of lis pendens
should be interpreted broadly to cover all situations.25 Lis pendens applies
without distinction between different grounds on which jurisdiction is
based.26 Before the first seized court declines jurisdiction, the second
seized court could, under no circumstances, examine jurisdiction of either
the first seized court27 or the second seized one.28
Another practical justification of the ECJ approach is that, although the
parties entered into a jurisdiction clause, both of them may agree to
change it or not to invoke it at a later stage. Sometimes the intention to

22 Ibid., paras 57, 58–61.

23 Ibid., paras 57, 62–71.
24 Ibid., paras 57, 72–82.
25 Case C-116/02 Gasser v MISAT, [2003] ECR 14693, para 41.
26 Gasser v MISAT, ibid., para 43.
27 Ibid., para 44.
28 Ibid., para 48.
 Autonomy and supporting measures in Europe 183
repudiate the agreement is demonstrated impliedly by the fact that the
claimant sues in a non-chosen forum and the defendant submits to that
forum.29 The defendant always has the freedom to enter an appearance
before the non-chosen forum.30 As a result, the existence of a jurisdiction
clause is not conclusive and legal certainty cannot be served by requiring
any non-chosen courts to decline jurisdiction straightforwardly.
Furthermore, the ECJ distinguishes exclusive jurisdiction acquired
under mandatory European law31 and exclusivity acquired under exclusive
jurisdiction clauses.32 Exclusive jurisdiction under the mandatory Euro-
pean law is comprehensive and conclusive. In contrast, the Brussels I
Regulation grants exclusive jurisdiction to the chosen court in an exclu-
sive choice of court agreement to decide disputes subject to the agree-
ment, but it does not grant the same level of exclusivity for the chosen
court to decide the existence and validity of the jurisdiction clause.33 The
negative kompetenz-kompetenz is not accepted in the EU.34 Since the chosen
court has no exclusive jurisdiction in deciding its own jurisdiction, it
cannot preclude the application of the lis pendens rule between Member
States.
The procedure priority approach strictly follows the chronological
order to prevent concurrent proceedings. The approach does not give
much weight to party autonomy or the reasonable expectation of the
parties. The intention of the parties is held inconclusive because it was
variable and the right granted by it waiveable. Procedure certainty, thus,
overweighs contractual certainty.

Contract priority versus procedure priority: assessing the Gasser decision

The procedure priority approach is criticized by commentators, mostly in
England, as being an ‘absolute refusal to consider the requirements of
reasonableness’,35 while many European lawyers believe the Gasser
approach to be legitimate.36 It is because, under the civil law tradition, the
court’s duty is to apply the law according to how it is legislated. The
wording of Article 27 does not provide any leeway to exclusive jurisdiction

29 Ibid., para 49.

30 Ibid., para 49.
31 Art 22 Brussels I Regulation.
32 Art 23 Brussels I Regulation.
33 Gasser v MISAT, supra n. 41, para 49.
34 Kompetenz-kompetenz permits the chosen court to decide its own jurisdiction, while a
negative kompetenz-kompetenz doctrine precludes non-chosen courts in an exclusive juris-
diction clause from deciding the existence and validity of the jurisdiction clause. The
same position exists in the Hague Convention 2005, where any non-chosen court can also
decide the preliminary issue of an exclusive jurisdiction clause.
35 Fentiman, 2006: 304. For other criticisms, see Hartley, 2005: 827.
36 Steinle and Vasilliades, 2010: 570; Blobel and Spath, 2005: 532.
184 Autonomy and supporting measures in Europe
clauses. Furthermore, Article 23 does not state anywhere that it shall over-
ride the lis pendens rule of the Regulation.
However, it is doubtful whether the rigid literal interpretation could
achieve the ends of justice and serve the purposes of the Brussels I Regula-
tion in facilitating the sound administration of justice.37 First of all, requir-
ing the second seized court that has been designated by an exclusive
jurisdiction agreement to stay jurisdiction in favour of the first seized court
is not the only way to prevent concurrent proceedings or irreconcilable
judgments. In certain circumstances, it is more appropriate to require any
other courts to stay jurisdiction in favour of the court that might have
exclusive jurisdiction. The exclusive jurisdiction can be acquired by exclu-
sive jurisdiction rules38 or by party autonomy.39 Second, one object of the
Brussels I Regulation is certainty and predictability.40 Allowing any first
seized court the priority to decide the validity of a jurisdiction clause could
hamper certainty because the Member States use different national law,
including domestic private international law, to decide material validity of
a jurisdiction clause under the current scheme of Brussels I Regulation.41
It has been observed by Pfeiffer that:

As for now, the law of some Member States refers to the lex fori (since
choice-of-forum agreements constitute a procedural contract) whereas
others refer to the lex causae. Whilst divergence as such does not neces-
sarily cause harmful effects, the situation may be different here
because—due to different choice-of-law rules and, as a consequence,
differences in the applicable law—jurisdictional agreements may be
considered valid in one Member State whereas they are considered
invalid in another.42

The greatest concern, from commercial sectors and practitioners, is that

one of the contractual parties subject to a valid exclusive jurisdiction
clause could bring proceedings for a negative declaration in a non-chosen
Member State, which bars proceedings that would be duly brought in the
chosen Member State. This practice would cause delay to the legitimate
action. The delay lasts as long as the proceedings in the non-chosen court
would take.43 A party that is meant to lose in the substance of a claim could
abuse the system by bringing procedural harassment to the other party
and postponing the legitimate litigation. The ECJ, however, believes that
the tactics with the intention of delaying proceedings in the competent

37 Recital 12 Brussels I.
38 Such as jurisdiction in rem. See Art 22 Brussels I Regulation.
39 Art 23 Brussels I Regulation.
40 Recital 11: ‘The rules of jurisdiction must be highly predictable . . .’.
41 See supra n. 27.
42 ‘Heidelberg Report’, supra n. 27, para 377.
43 Mance, 2004: 357.
 Autonomy and supporting measures in Europe 185
court are not enough to question the broad application of lis pendens in
the Brussels I Regulation.44 This conclusion is unfortunate and clearly con-
trary to commercial soundness. A serious delay has the practical effect of
hampering a party’s right to access to justice. Legal proceedings in some
Member States are extremely slow. In Italy, for example, the court took
ten years to decide it had no jurisdiction in a notorious case, Trasporti Cas-
telletti v Hugo Trumpy,45 where a standard, normal choice of court clause
was concluded without anything unusual.46 Even if, under the Brussels I
Regulation, the Italian court must eventually decline jurisdiction in favour
of the chosen forum, the excessive delay is undesirable.47 The party that is
facing a losing litigation could abuse the process, by bringing a negative
declaration claim in Italy first. Even if he would lose eventually, he could
keep the proceedings going for years and block actions in other states.
The Gasser approach would also encourage parties to ‘rush to the
court’. Regardless of the merit of their claim, and regardless of the possib-
ility to negotiate and settle the dispute out of courts, one party needs to
commence the action as quickly as possible and before the action brought
by another party. This is, certainly, another side effect to the commercial
world.
Furthermore, the procedure priority approach adopted by Gasser has
inherent inconsistency. The Gasser decision permits any Member States,
chosen or not, to decide the effectiveness of a jurisdiction clause once
seized by the party if they are competent under default jurisdiction rules.48
Although the ECJ justifies the decision primarily based on the interest in
having clear and effective procedure, the approach to permit the non-
chosen forum to decide the validity of jurisdiction itself causes uncertainty
and creates procedural barriers to prevent legitimate proceedings. It is
hard to say how the Gasser approach as a whole could promote procedure
efficiency.

Narrowing the application of Gasser

The Gasser decision gives the long-debated issue a definitive answer.
Although it was harshly criticized, it was followed by Member States in

44 Case C-116/02 [2003] ECR 14693, para 53.

45 See the Corte di Cassazione (Italy) decision in [1998] ILPr 216 and the ECJ decision in
Case C-159/97 [1999] ECR I-1597.
46 See, in general, Hartley, 2009: 255.
47 Hartley, 2009: 255; Simons and Calabresi-Scholz, 2007; Sifakis, 2006: 307–312; Hueske,
2009: 433; Clarke, 2007: 105 and 124; Kulpers, 2009: 1510–1516.
48 Steinle and Vasilliades, 2010: 571; Brand, 2009b: 376; Rainer, 2009: 441.
186 Autonomy and supporting measures in Europe
later cases.49 However, English courts could try to provide a narrower inter-
pretation to what the ‘same’ and ‘related’ action is to avoid the rigid effect
of Gasser. In JP Morgan Europe Ltd v Primacom AG,50 for example, an English
bank and some German companies entered into a loan agreement provid-
ing English courts exclusive jurisdiction. The German companies, after
defaulting payment, brought an action in Germany in breach of the juris-
diction clause claiming the loan agreement was unenforceable. The bank
brought three proceedings in England seeking (1) injunction preventing
the German companies from disposing of assets, (2) disclosure of a finan-
cial report, and (3) declaration that the loan agreement was valid. The
German companies applied to stay English jurisdiction based on Gasser.
The English court held that, in principle, the German court should find
it had no jurisdiction to hear the dispute. However, if the actions in the
two countries were the ‘same’, the English court should stay jurisdiction
until the German court made decisions on its jurisdiction—it was expected
that the German court should decline jurisdiction eventually. Although
three proceedings were brought in England, only the declaration proceed-
ings were the same as the action in Germany. The English court should
stay jurisdiction on this issue. The other two proceedings on the disclosure
and injunction were not the ‘same’ or ‘related’ with the German proceed-
ings because they were not going to bring forward irreconcilable judg-
ments. The English court then continued jurisdiction on hearing these
two issues.
In Underwriting Members of Lloyd’s Syndicate v Sinco SA,51 three English
companies and a Greek company entered into contracts with an exclusive
jurisdiction clause choosing English courts. After disputes arose, the
English companies commenced the action against the Greek company in
England in breach of contract. After issuing the claim form but before
serving it on the defendant, the defendant brought proceedings in Greece

49 J v P, [2007] EWHC 704 (Fam); Irish Response Ltd v Direct Beauty Products, [2011] EWHC 37
(QB); Trademark Licensing Co Ltd v Leofelis SA, [2010] ILPr 16; Catalyst Investment Group Ltd
v Lewinsohn, [2010] 2 WLR 839; National Navigation Co v Endesa Generacion SA (The Wadi
Sudr), [2009] 1 Lloyd’s Rep 666; Underwriting Members of Lloyd’s Syndicate 980 for 1999,
2000, 2001, 2002, 2003, 2004 and 2005 v Sinco SA, [2009] 1 All ER (Comm) 272; Goshawk
Dedicated Ltd v Life Receivables Ireland Ltd, [2008] ILPr 50; Phillips v Symes (A Bankrupt),
[2008] 2 All ER 537; Czech Republic v European Media Ventures SA, [2008] 1 All ER (Comm)
531; Jurisdiction in the Case of a Sale Involving the Carriage of Goods, Re (5 U 99/07), [2010]
ILPr 29; Kolden Holdings Ltd v Rodette Commerce Ltd, [2007] 4 All ER 62; Jacobs & Turner Ltd
v Celsius Sarl, [2007] SLT 722; Lloyd’s Syndicate 457 v Shifco (Somali High Seas International
Fishing Co), [2009] ILPr 18; Orams v Apostolides, [2007] 1 WLR 241; Phillips v Symes (A Bank-
rupt), [2006] 1 WLR 2598; Advent Capital Plc v GN Ellinas Imports-Exports Ltd, [2006] 1 All
ER (Comm) 81; OT Africa Line Ltd v Magic Sportswear Corp., [2006] 1 All ER (Comm) 32;
Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd
(The Hari Bhum) (No 2), [2005] 2 Lloyd’s Rep 378; Speed Investments Ltd v Formula One Hold-
ings Ltd (No 2), [2005] 1 WLR 1936.
50 [2005] 1 CLC 493.
51 [2008] 2 CLC 187.
 Autonomy and supporting measures in Europe 187
against the English companies based on tort, arguing the jurisdiction
clause did not cover tort claim, and the jurisdiction clause was contrary to
mandatory rules of Greek law. The English companies then applied to add
a claim in English proceedings that the Greek company had breached the
exclusive English jurisdiction clause by suing in Greece. The Greek
company applied for a stay of action on the basis that the same cause of
action was brought in Greece first.
The proceedings in England were about the breach of contract and jur-
isdiction clause; the action in Greece was on tort and the challenge to the
English jurisdiction clause. The English court considered whether, in
deciding if there were concurrent proceedings existing in Article 27, the
court should look at the whole action, or individual claims in the action. It
was true that the contract claim and the tort claim arising out of the con-
tract were not the same or related actions.52 If the court considered two
proceedings as a whole and decided whether the ‘central or essential
issues’ in the two actions were the same or related,53 the English and
Greek proceedings concerned different matters.54 If the court looked at
each individual claim, the English claim on the breach of exclusive juris-
diction clause and the Greek claim on the non-application of the jurisdic-
tion clause were the same.55 The court second seized to decide this issue
should stay jurisdiction.
Both approaches were accepted in English precedents.56 However, the
judge in the current case adopted the whole proceedings approach and
refused to treat the jurisdiction clause as a separate claim. One reason
probably is that the challenge on the jurisdiction of the court is not a
claim on the substance. This challenge arises in most actions where the
parties have brought disputes in two different courts. The consideration of
whether parallel proceedings exist in the same action only requires the
court to consider the ‘substantive claim’. If there is more than one

52 Ibid., para 50.

53 Ibid., para 41, citing Evialis SA v SIAT [2003], 2 Lloyd’s Rep 377.
54 Underwriting Members of Lloyd’s Syndicate, supra n. 67, para 50.
55 Ibid., paras 31–52.
56 There are ECJ decisions supporting the splitting of actions and applying lis pendens to
each individual claim, see Case C-405/92 Owners of Cargo v Owners of the Maciej Ratij (The
Tarty), [1994] ECR I-5439 (the second seized court stayed proceedings between the same
parties in the first action, but continued with action between parties not involved in the
first action); Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi Pazarlama AS, [2004] 2
Lloyd’s Rep 395 (the English court stayed action on contractual claims because the pro-
ceedings for a negative declaration of contractual obligations were pending in Italy, but
the claim on tort continued). Others argued the splitting approach complicated the situ-
ation and was impractical. See Grupo Torras SA v Al-Sabah (No 1) [1995] 1 Lloyd’s Rep 374,
p. 419, per Mance J; Evialis SA v SIAT [2003] 2 Lloyd’s Rep 377, para 130, per Smith J
(the words ‘actions’ and ‘proceedings’ refer to the action as a whole, instead of separate
claims in one action); Continental Bank v Aeakos [1994] 1 WLR 588, per Gatehouse J (the
existence of one same claim on both actions was not enough to make the court stay juris-
diction in Art 21 Brussels Convention [now Art 27 Brussels I Regulation]).
188 Autonomy and supporting measures in Europe
substantive claim in each action, the court could split the case and decide
whether to stay proceedings on each claim separately. If the substantive
claims are completely different in two proceedings, and the only thing in
common is the courts are asked to examine the jurisdiction of itself and
the other, requiring the second court to stay jurisdiction is not justifiable.
The reason, however, is weak. Irreconcilable decisions can exist on validity
of a jurisdiction clause. This decision, nevertheless, may demonstrate the
reluctance of the English courts to apply the European rules to deny the
effect of an English jurisdiction clause. By providing a specific interpreta-
tion, the English court has limited the application of Gasser.

2.3 Jurisdiction clauses concluded by parties domiciled outside the

Member States
The current situation in Europe, pursuant to the ECJ case law, resolves
conflicts of jurisdiction between the Member States by granting priority to
the first seized court over the chosen court. The same order, however,
does not apply where both parties of a jurisdiction clause are domiciled
outside the Member States.57 Article 23(3) provides that if both parties
have their domiciles in third countries, and choose a court located within
a Member State, all other Member States must stay jurisdiction until the
chosen court makes its decision.58 Clearly, exclusive jurisdiction is given to
the chosen court in deciding the validity and effectiveness of a jurisdiction
clause. The negative kompetenz-kompetenz is adopted in the context where
neither parties have domicile within the Member States.
It is uncertain why the European law-maker adopts negative kompetenz-
kompetenz for jurisdiction clauses concluded by none EU domicidiaries, but
permits any competent court to take jurisdiction to decide the enforce-
ability of a jurisdiction clause concluded by at least one EU party. One
explanation is that the law-maker considers Article 23(1) provides full and
complete rules on deciding enforceability of a jurisdiction clause. This
provides a presumption that no matter which Member State is seized to
hear this issue, the decision might be the same.59 There is, thus, not much
harm to apply the strict rule of lis pendens to ensure proper judicial coop-
eration between Member States. When both parties are domiciled in a
third country, the harmonized formal validity rules included in Article
23(1) do not apply.60 As a result, the effectiveness of a jurisdiction clause

57 See Art 23(3) Brussels I.

58 Art 23(3): ‘Where such an agreement is concluded by parties, none of whom is domiciled
in a Member State, the courts of other Member States shall have no jurisdiction over their
disputes unless the court or courts chosen have declined jurisdiction.’
59 Although this is not true, see supra n. 27 and text accompanying n. 57–58.
60 Article 23(1) provides that it applies to the jurisdiction clause concluded by the parties,
‘one or more of whom is domiciled in a Member State’. Magnus and Mankowski, 2007:
391; Layton and Mercer, 2004: para 20.101.
 Autonomy and supporting measures in Europe 189
varies from country to country. A non-chosen Member State, if seized, is
competent to use its domestic law to decide the validity and enforceability
of this jurisdiction clause,61 and would likely give decisions different from
the chosen Member State and from other non-chosen Member States,
which lead to conflict between different Member States and undermine
the commercial purpose of the contractual parties.
This explanation, however, is not accepted by other commentators.
Many writers hold the view that if a jurisdiction clause wants to acquire the
derogation power as mentioned in Article 23(3), it must meet the uniform
formal requirements in Article 23(1).62 This is supported, first, by the
expression of Article 23(3) using ‘such an agreement’, which may refer to
an agreement defined in Article 23(1).63 Second, the agreement in Article
23(3) affects the jurisdictional power of non-chosen Member States. It is
not unreasonable to expect the harmonized Union requirements on
formal validity to be satisfied. If such an interpretation is accepted by the
ECJ, it is hard to justify the different treatment to jurisdiction clauses con-
cluded by parties domiciled outside the Member States and by parties at
least one of whom is domiciled within the Member States.
The negative kompetenz-kompetenz in deciding validity and enforceability
of jurisdiction clauses achieves the aim of certainty and predictability and
helps to provide good case management between Member States. Since
the negative kompetenz-kompetenz is already adopted by the Brussels I Regu-
lation to deal with the conflict of jurisdiction between Member States in
cases where both parties have their domiciles in the third countries, there
are sufficient reasons to extend the doctrine to cases involving jurisdiction
clauses within the scope of the Brussels I Regulation.64

3 Forum non conveniens in the Brussels I Regulation

3.1 Owusu v Jackson

Forum non conveniens is a traditional common law doctrine permitting a
court to take discretion not to exercise jurisdiction that it otherwise has on
the basis that there is another, more appropriate forum available and it is
in the interest of justice to let that forum hear the dispute.65 Forum non

61 Art 4(1) Brussels I.

62 ‘Schlosser Report’, 1979: para 177; Clarkson and Hill, 2011: 78.
63 Magnus and Mankowski, 2007: 391.
64 This option is accepted by the European Commission in the Proposal for the Brussels I
(Recast). See infra section 5.
65 Spiliada Maritime v Cansulex, [1987] AC 460; Cherney v Deripaska, [2008] EWHC 1530
(Comm); Dornoch Ltd v Mauritius Union Assurance Co Ltd, [2006] Lloyd’s Rep IR 127; Lubbe
v Cape Plc, [2000] 1 WLR 1545; Connelly v RTZ Corp Plc (No 1), [1996] QB 361; Collins et
al., 2006: Ch 12, Sections 1 and 2; Gray, 2009: 207; Slater, 1988: 554; Kennett, 1995: 552;
Blair, 1929: 1; Stein, 1985: 781.
190 Autonomy and supporting measures in Europe
conveniens has its particular functioning in cases involving a jurisdiction
clause.66 It is also a common law tradition that a court reserves discretion
to decide whether it will give effects to a valid jurisdiction clause.67 Accord-
ing to The Eleftheria,68 an exclusive jurisdiction clause is prima facie
enforceable, unless there are strong causes shown to the contrary. If there
is a local jurisdiction clause, common law countries are reluctant to use
forum non conveniens to stay its jurisdiction unless something unexpected at
the stage of contracting justifies evading the jurisdiction clause;69 if there
is a foreign exclusive jurisdiction clause, common law countries should
stay jurisdiction unless strong reasons show justice cannot be done in the
chosen forum.70
Applying forum non conveniens in the Brussels scheme is questioned by
Owusu v Jackson.71 Owusu v Jackson is not a case relating to jurisdiction
agreements, but it might have widespread effects which would influence
the enforcement of jurisdiction agreements within and even beyond the
Brussels I Regulation. Owusu, a British national domiciled in the UK,
entered into a contract with Jackson, another domiciliary in England, to
rent the latter’s holiday villa located in Jamaica, a non-EU country. Owusu
suffered injury during the holiday and sued Jackson for breach of contract
and several Jamaican companies managing the villa for tort. It is clear that
Jamaica, where the accident occurred and evidence was more easily access-
ible, should be the more appropriate forum to hear the case. In an English
precedent, Harrods (Ruenos Aires),72 the English Court of Appeal suggested
that the court of a Member State could stay jurisdiction under the Brussels
regime in favour of a third country. Applying this decision, an English
court could stay jurisdiction granted by Article 2(1) of the Brussels I Regu-
lation by using forum non conveniens in favour of Jamaica.

66 The Eleftheria, [1970] P 94; Skype v Joltid, [2011] ILPr 8, para 33; Yes To v Hur, 2011 WL
902297 (N.D.Cal., 2011).
67 Although common law countries preserve their discretion to enforce jurisdiction agree-
ments, they usually hold the policy of contract freedom and give effectiveness to such
agreements in most circumstances.
68 [1970] P 94; Anraj Fish Products Industries Ltd v Hyundai Merchant Marine Co Ltd, [2000]
ILPr 717; Aratra Potato Co Ltd v Egyptian Navigation Co (The El Amria), [1981] 2 Lloyd’s
Rep. 119.
69 National Westminster Bank Plc v Utrecht-America Finance Co, [2001] CLC 1372; J.P. Morgan
Securities Asia Private Limited v Malaysian Newsprint Industries, [2002] ILPr 17; Ultisol Trans-
port Contractors Ltd v Bouygues Offshore SA & Ors, [1998] CLC 1526; Hamed El Chiaty & Co.
(T/A Travco Nile Cruise Lines) v The Thomas Cook Group, [1994] ILPr 367; Middle Eastern Oil
v National Bank of Abu Dhabi, [2008] All ER (D) 285.
70 The Fehmarn, [1958] 1 WLR 159; Evans Marshall & Co. Ltd v Bertola S.A., [1973] 1 WLR
349; Citi-March v Neptune Orient Lines, [1996] 1 WLR 13367.
71 Case C-281/02, Owusu v Jackson [2005] ECR I-1383. For a full introduction of the case see,
Palser, 2006: 32.
72 [1992] Ch 72. Haji-Ioannou v Frangos, [1999] 2 Lloyd’s Rep 337, CA; Ace Insurance v Zurich
Insurance, [2001] 1 Lloyd’s Rep 618. Compare Lubb v Cape, [2000] 4 All ER 268.
 Autonomy and supporting measures in Europe 191
The ECJ decided that Article 2 of the Brussels Convention, which grants
jurisdiction to the domicile of the defendant, is mandatory in nature and
cannot be derogated from by any national law except derogation laid
down by the Convention.73 It is a common understanding that forum non
conveniens is not accepted either expressly or impliedly within the system
of the Brussels Convention.74 Furthermore, one major object of the Brus-
sels jurisdiction rules is to establish certainty in cross-border civil disputes,75
which could be undermined by forum non conveniens and the discretion-
based approach. Third, the ECJ strengthened the purpose of Article 2,
which follows the traditional doctrine of actor sequitur forum rei, to protect
defendants and by making it reasonably foreseeable in which potential
forum he may be sued.76 Furthermore, using forum non conveniens would
cause delay.77 Fifth, allowing forum non conveniens in the Brussels context
would affect the uniform application of the rules of jurisdiction within the
regime, especially when this doctrine is recognized only in a limited
number of Contracting States.78
It is uncertain whether the effect of Owusu v Jackson will be limited in
the particular case where a Member State’s jurisdiction is granted by
Article 2 of the Brussels I Regulation, or it extends to all other occasions
where the jurisdiction of a Member State is granted by any grounds of the
Brussels I Regulation. The ECJ is very careful not to give a definite answer
to the question. When being asked whether the application of forum non
conveniens is precluded in all cases or only in certain circumstances, the
court refused to give ‘advisory opinions on general or hypothetical ques-
tions’.79 This very important question is thus left unanswered. It leaves a
lot of uncertainty and confusion in later courts’ decisions.

3.2 Stay of jurisdiction in favour of a chosen third country in a

jurisdiction clause
In the Brussels I Regulation, courts in a Member State do not need to use
forum non conveniens to stay jurisdiction in favour of the chosen court in
another Member State. Article 23(1) of the Brussels I Regulation grants
jurisdiction to the chosen court of a valid exclusive jurisdiction clause and

73 Case C-281/02 Owusu v Jackson, [2005] ECR I-1383, para 37.

74 Ibid., para 37.
75 Ibid., paras 38–39; Case C-440/97 GIE Groupe Concorde and Others, [1999] ECR I-6307, para
23; Case C-256/00 Besix [2002] ECR I-1699, para 24.
76 Owusu v Jackson, para 42.
77 Owusu v Jackson, para 42.
78 Owusu v Jackson, para 43.
79 Owusu v Jackson, para 50. Case C-314/96 Djabali, [1998] ECR I-1149, para 19; Case
C-318/00 Bacardi-Martini and Cellier des Dauphins, [2003] ECR I-905, para 42; Joined Cases
C-480/00 to C-482/00, C-484/00, C-489/00 to C-491/00 and C-497/00 to C-499/00
Azienda Agricola Ettore Ribaldi and Others, [2004] ECR I-0000, para 72.
192 Autonomy and supporting measures in Europe
a non-chosen Member State has no jurisdiction. A court could simply
decide that it has no jurisdiction under the Regulation than staying juris-
diction under forum non conveniens.80
A different story exists if an exclusive jurisdiction clause chooses a non-
Member State. Article 23(1) does not apply to this jurisdiction clause and
an English court cannot claim that it has no jurisdiction under Article
23(1). If the English jurisdiction is based on common law (e.g. the defend-
ant has domicile abroad), the case is totally out of the reach of the Brus-
sels I Regulation and there is no European interest involved. The English
court is entitled to stay jurisdiction by using forum non conveniens. However,
if the English jurisdiction is based on the Brussels I Regulation—for
example, the defendant is domiciled in England—the Owusu restriction is
relevant. Could an English court stay jurisdiction in favour of the chosen
non-Member State if England has jurisdiction under the Brussels I
Regulation?
An answer is given in Konkola Copper Mines v Coromin,81 where England
had jurisdiction under Article 2 of the Brussels I Regulation and the
dispute was subject to a valid exclusive jurisdiction clause designating
Zambia, which was also the natural forum to hear the case. The Queen’s
Bench Division distinguished the Owusu case by holding that a different
approach should be adopted in a case with exclusive jurisdiction clauses.82
Colman J intended to keep the influence of Owusu v Jackson strictly within
its own context, where the defendant is domiciled in a Member State, a
non-Member State is a natural forum and there is no jurisdiction clause
involved. In the Owusu case, there is nothing in the Convention/Regula-
tion to support the English court to stay jurisdiction, but if there is an
exclusive jurisdiction clause choosing a third country, though it is not
subject to the Brussels I Regulation, Article 23 of the Regulation suggests a
general policy to give effectiveness to the valid jurisdiction clause.83
Support can also be found in the Schlosser Report, which provided
that:

In cases where parties agree to bring their disputes before the courts
of a State which is not a party to the 1968 Convention there is obvi-
ously nothing in the 1968 Convention to prevent such courts from
declaring themselves competent, if their law recognizes the validity of
such an agreement. The only question is whether and, if so, in what
form such agreements are capable of depriving Community courts of
jurisdiction which is stated by the 1968 Convention to be exclusive or

80 Rawlinson & Hunter Trustees SA v Kaupthing Bank HF and another, [2011] EWHC 566
(Comm).
81 [2005] 2 All ER, aff’m in [2006] 1 All ER (Comm) 437.
82 This point was not challenged in the appeal.
83 Konkola Copper Mines v Coromin, [2005] 2 All ER, para 89.
 Autonomy and supporting measures in Europe 193
concurrent. . . . If a court within the Community is applied to despite
such an agreement, its decision on the validity of the agreement
depriving it of jurisdiction must be taken in accordance with its own
lex fori. In so far as the local rules of conflict of laws support the
authority of provisions of foreign law, the latter will apply. If, when
these tests are applied, the agreement is found to be invalid, then the
jurisdictional provisions of the 1968 Convention become applicable.84

It means where there is a jurisdiction clause choosing a third country, a

Member State will not use the Brussels I Regulation uniform jurisdiction
rules, but shall use the lex fori to decide whether the jurisdiction clause is
valid. The European law is thus irrelevant.85

3.3 Stay of jurisdiction granted by Article 23(1)

Although the ECJ did not answer whether Owusu should extend to juris-
diction granted by provisions other than Article 2, exclusive jurisdiction
in Article 22 and jurisdiction granted by exclusive jurisdiction clauses in
Article 23(1) have higher hierarchy than Article 2. If a court based on
Article 2 cannot stay jurisdiction, the discretionary power is certainly lost
in Articles 22 and 23(1). If an exclusive jurisdiction clause exists under
Article 23(1), a court cannot use forum non conveniens to stay jurisdiction in
favour of a more appropriate third country, even if permitting the third
country to hear the dispute is better for the ends of justice.86 In Skype v
Joltid,87 the English High Court was asked to consider the parallel proceed-
ings between England and the US. A valid English exclusive jurisdiction
clause existed in the license agreement. Skype sued in the English court
claiming invalid termination of contract on the part of Joltid, while Joltid
brought an action against Skype, investors and other parties in the US,
which was the place of registration of the copyright in the source code
allegedly breached. Although there was an exclusive jurisdiction clause
choosing the English courts, the case involved interests of third parties,
and the US was the only place where all claims could be heard.88
The English court extended the decision in Owusu v Jackson to Article 23
and held that the English court could not stay jurisdiction under forum non
conveniens if it has jurisdiction pursuant to Article 23 of the Brussels I

84 ‘Schlosser Report’, supra n. 78, Art 176.

85 See also Winnetka Trading v Julius Baer International [2009] Bus.L.R. 1006.
86 An argument as to whether Owusu v Jackson extends to jurisdictional grounds other than
Art 2. Palser, 2006, supra n. 138, 37.
87 [2011] ILPr 8.
88 Donohue v Armco, [2001] UKHL 64; Tett, 2003: 7; Bramley, 2002: 3.
194 Autonomy and supporting measures in Europe
Regulation.89 On the other hand, the court could not restrain the defend-
ant from bringing proceedings against the third parties to the contract in
the US.90 The court had to give up the goal to keep a single forum for the
whole claim but decide whether to issue an injunction only for claims
between the parties subject to the exclusive jurisdiction clause.91 An
injunction was granted restraining proceedings against Skype from contin-
uing in the US, but left other claims unaffected.92 The result is a fragment
of proceedings, where part of the proceedings continued in England while
a related part in the US.

3.4 Stay jurisdiction under Article 23(3) of the Brussels I Regulation

What if both parties have their domiciles outside any Member States but
choose jurisdiction of England? Could the English court apply the tradi-
tional forum non conveniens approach to stay jurisdiction granted by the
clause?
The prorogation jurisdiction in Article 23(1) of Brussels I applies only
to situations where at least one party has its domicile within the EU and a
Member State is chosen in the jurisdiction clause.93 It shows that, where
both parties have domiciles outside the Member States, the Member State
chosen in the jurisdiction clause should use its national rule to decide the
validity and enforceability of the jurisdiction clause. Article 23(3) does not
provide a positive rule for a court to decide whether or not a jurisdiction
clause is valid or enforceable. Instead it only provides a conflicts rule to
handle the likelihood of competing jurisdiction between different
Member States in a case where two third-country parties choose a Member
State to hear their disputes. Article 23(3) requires all non-chosen Member
States to wait until the chosen forum makes decisions. It gives priority to
the chosen forum in order to avoid the possible concurrent proceedings

89 Skype, [2011] ILPr 8, para 22. Equitas v Allstate Insurance, [2009] 1 All ER (Comm) 1137,
para 64; Gomez v Gomez-Monch Vives, [2008] EWHC 259 (Ch), para 112; CAN Insurance v
Office Depot International, [2005] EWHC 456 (Comm), para 26; Collins et al., 2006: paras
12.124 and 12.127.
90 Skype v Joltid, paras 34–35; Donohue v Armco Inc., para 27; Rimpacific Navigation Inc v Daehan
Shipbuilding Co Ltd, [2010] 2 All ER (Comm) 814; Markel International Co Ltd v Craft (The
Norseman), [2007] Lloyd’s Rep IR 403; OT Africa Line Ltd v Magic Sportswear Corp, [2006] 1
All ER (Comm) 32; Society of Lloyd’s v White (No 2), [2002] ILPr 11.
91 Skype, para 35. Morgan Stanley v China Haisheng Juice [2009] EWHC 2409 (Comm); Credit
Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd [1999] 1 Lloyd’s Rep. 767.
92 Compare: Donohue v Armco; Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC, [2011]
EWHC 1019 (Comm); USB v HSH Nordbank AG, [2010] 1 All ER (Comm) 727; Deutsche
Bank AG v Highland Grusader Offshore Partners, [2009] 2 Lloyd’s Rep 61; Middle Eastern Oil v
National Bank of Abu Dhabi, [2009] 1 Lloyd’s Rep 251; Winnetka Trading Corp v Julius Baer
International Ltd, [2009] 2 All ER (Comm) 735; Konkola Copper Mines Plc v Coromin Ltd,
[2006] 2 All ER (Comm) 400; Cadre v Astra Asigurari, [2006] 1 Lloyd’s Rep 560.
93 Art 23(1). Supra section 2.3.
 Autonomy and supporting measures in Europe 195
and irreconcilable decisions. However, it does not say whether the chosen
Member State could take jurisdiction or not. Logically, since the chosen
Member State is entitled to use any domestic rules to decide its jurisdic-
tion in such a circumstance and to decide its jurisdiction without worrying
about the mutual trust, Union judicial cooperation and Union jurisdiction
rules, forum non conveniens, as part of the domestic law, should be legiti-
mate to use. English courts, thus, are entitled to use forum non conveniens
to stay jurisdiction conferred to it by two third-country parties.94

3.5 Enforcing anti-suit injunctions from a third country

What if a party that has commenced or is prepared to commence proceed-
ings in a Member State is enjoined from doing so by an anti-suit injunc-
tion from a third country, such as the US, and the other party applies to
the enjoined Member State to enforce the order? Would the EU Member
State recognize and enforce the injunction and stay forum proceedings?
To some Member States, which traditionally refuse to enforce anti-suit
injunctions from foreign countries, Owusu v Jackson does not introduce
anything new. An injunction, ordered from a third country, is unenforcea-
ble and certainly cannot influence jurisdiction based on the Brussels I
Regulation.95 For other countries, such as the UK and Ireland, an anti-suit
injunction traditionally can be enforced if it satisfies the normal recogni-
tion and enforcement criteria. A 2008 French decision also enforced a US
anti-suit injunction in support of an exclusive jurisdiction clause choosing
Georgia against French proceedings brought under French national law.96
The problem is whether an injunction that might be otherwise enforce-
able in a Member State cannot be enforced if the court of this Member
State has jurisdiction granted by one of the provisions in the Brussels I
Regulation. For example, an English company and a US company con-
cluded a contract conferring US courts exclusive jurisdiction. When the
US company sued the English company in breach of contract in England,
the English court had jurisdiction under Article 2(1) of the Brussels I Reg-
ulation.97 Suppose the US court issued an anti-suit injunction, would the
injunction be enforced in England? Could the English court stay jurisdic-
tion granted under Article 2 of the Brussels I Regulation?

94 Palser, 2006, supra n. 138, 37. However, compare Equitas Ltd v Allstate Insurance Co, [2007]
2 Lloyd’s Rep 138, para 64, where the court equalizes the effect of Arts 23(3) and 23(1)
and applied Owusu v Jackson to Art 23(3).
95 A German court even refused to serve an anti-suit injunction to the party. See Phillip Alex-
ander Securities Ltd v Bamberger & Ors, [1997] ILPr 73 at 104, C.A.; Wilson, 1997: 426.
96 In Zone Brands International v In Zone Brands Europe, Cass Civ 1e’re, 14 October 2009, nx
08–16369.
97 Art 2(1) of the Brussels I Regulation: ‘Subject to this Regulation, persons domiciled in a
Member State shall, whatever their nationality, be sued in the courts of that Member
State.’
196 Autonomy and supporting measures in Europe
Enforcing a third-country judgment is exclusively governed by national
law and is immune from the influence of the Union harmonization.98
Although domestic criteria vary largely between Member States, there is
one thing in common: a foreign judgment infringing public policy of the
forum cannot be enforced. If enforcing anti-suit injunctions from a third
country requires the stay of jurisdiction granted in the Brussels I Regula-
tion, the exercise which, according to Owusu, is compulsory, the con-
sequence could be considered as contrary to public policy as against
European law. A Member State, as a result, is not allowed to stay jurisdic-
tion under the Brussels I Regulation as a response to a third-country anti-
suit injunction.

4 Anti-suit injunctions and jurisdiction clauses in Europe

4.1 Introduction
Anti-suit injunction is a traditional common law instrument preventing a
party from commencing or continuing proceedings in another forum.99
The most difficult task in applying anti-suit injunctions is to balance the
need for the ends of justice and international comity.100 Since anti-suit
injunctions bring about the risk of infringement of another country’s
sovereignty, they are used with particular caution.101 A court may be more

98 The Brussels I Regulation only established rules facilitating free movement of judgments
between Member States. Art 34 (recognition of foreign judgments) and Art 38 (enforce-
ment of foreign judgments) both clarify that the rules only apply to judgments delivered
in a Member State.
99 Airbus Industrie GIE v Patel, [1999] 1 AC 119 (HL); British Airways Board v Laker Airways
Ltd, [1985] AC 58; General Star International Indemnity Ltd v Stirling Cooke Brown Reinsur-
ance Brokers Ltd, [2003] EWHC 3 (Comm); Shell International Petroleum Co Ltd v Coral Oil
Co Ltd (No 2), [1999] 2 Lloyd’s Rep. 606; Trendtex Trading Corp v Credit Suisse, [1982] 1
AC 565; South Carolina Insurance Co v Assurantie Maatshappij De Zeven Provincien NV,
[1987] AC 24; Wilson, 1997: 424; Bramley, 2002: 3; Asariotis, 1999: 447.
100 Barclays Bank Plc v Homan, [1992] BCC 757; Akai Pty Ltd v People’s Insurance Co Ltd,
[1998] 1 Lloyd’s Rep 90; Alfred C Toepfer International GmbH v Société Cargill France, [1998]
1 Lloyd’s Rep 379; Airbus Industrie GIE v Patel; National Westminster Bank Plc v Utrecht-
America Finance Co, [2001] 3 All ER 733; Glencore International AG v Metro Trading Inter-
national Inc. (No 3), [2002] 2 All ER (Comm) 1; Sabah Shipyard (Pakistan) Ltd v Pakistan,
[2003] 2 Lloyd’s Rep 571; American International Specialty Lines Insurance Co v Abbott Labo-
ratories, [2003] 1 Lloyd’s Rep 267; Noble Assurance Co v Gerling-Konzern General Insurance
Co, [2007] 1 CLC 85; Samengo-Turner v J&H Marsh & McLennan (Services) Ltd, [2007] 2
All ER (Comm) 813; Standard Bank Plc v Agrinvest International, [2008] 1 Lloyd’s Rep 532;
Deutsche Bank AG v Highland Crusader Offshore Partners, [2010] 1 WLR 1023; Oceanconnect
UK Ltd v Angara Maritime Ltd, [2011] 1 All ER (Comm) 193.
101 Oceanconnect UK Ltd & Anor v Angara Maritime Ltd, [2010] 2 CLC 448, para 42; Highland
Crusader Offshore Partners LP & Ors v Deutsche Bank AG, [2009] 2 CLC 45, para 61; Law
Debenture Trust Corp Plc v Concord Trust, [2007] EWHC 2255 (Ch), para 24; Société Nation-
ale Industrielle Aerospatiale v Lee Kui Jak, [1987] AC 871, 892; Donohue v Armco, [2001]
UKHL 64, para 19.
 Autonomy and supporting measures in Europe 197
willing to grant an anti-suit injunction in cases where there is a valid exclu-
sive jurisdiction clause and the foreign action is brought in breach of the
agreement. It is easier to satisfy the court that an action brought in breach
of the parties’ agreement has infringed the other party’s contractual and
equitable right, is brought with bad faith and is thus oppressive and
vexatious.102
The use of anti-suit injunctions within a regime where judicial coopera-
tion and mutual trust exist is more controversial. On the one hand, if
granting an injunction to enforce a valid jurisdiction clause has nothing to
do with international comity but is only a tool to keep the parties to their
promise,103 an injunction issued within the EU should not be a problem,
because the purpose of issuing an injunction is the same—enforcing con-
tractual obligations. On the other hand, where mutual trust exists, there is
an argument that no one should review another country’s jurisdiction.104
In Overseas Union Insurance v New Hampshire Insurance,105 it was held that a
Member State could not use anti-suit injunctions to restrain the jurisdic-
tion of the second seized Member State. It is questionable as to whether
injunctions can be used where a court does not review the other country’s
jurisdiction but only enforces an exclusive jurisdiction agreement.
Before the ECJ delivered the decision on Turner v Grovit, English courts
did not hesitate to issue anti-suit injunctions against proceedings in
another Member State in support of an exclusive jurisdiction clause.106 In
Continental Bank v Aeakos,107 the parties entered into a loan contract con-
taining a jurisdiction clause requiring the borrower to sue the lender
exclusively in England. After the dispute arose, the borrower sued the
lender in Greece and an anti-suit injunction was issued. The lender’s
lawyer submitted that the English court should trust the Greek courts on
deciding their jurisdiction by providing evidence proving the Greek court

102 Oceanconnect UK Ltd & Anor v Angara Maritime Ltd, [2010] 2 CLC 448; Barclays Bank v
Homan, [1993] BCLC 680, 686–688; Deutsche Bank, [2010] 1 WLR 1023, 1036–1037.
103 Mackender v Feldia AG, [1967] 2 QB 590; Unterweser Reederei GmbH v Zapata Off-Shore Co
(The Chaparral), [1968] 2 Lloyd’s Rep 158; The Eleftheria, [1970] P 94; DSV Silo- und Ver-
waltungsgesellschaft mbH v Owners of the Sennar and 13 Other Ships (The Sennar (No 2)),
[1985] 1 WLR 490; British Aerospace Plc v Dee Howard Co, [1993] 1 Lloyd’s Rep 368; Con-
tinental Bank NA v Aeakos Compania Naviera SA and Others, [1994] 1 WLR 588; Aggeliki
Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace), [1995] 1 Lloyd’s Rep 87;
Akai Pty Ltd v People’s Insurance Co Ltd, [1998] 1 Lloyd’s Rep 90.
104 Oceanfix International Limited v AGIP Kazakhstan North Caspian Operating Company, 2009
WL 908173, para 64; Turner v Grovit, paras 25–26; West Tankers, para 26.
105 Case 351/89 [1991] ECR I-3317.
106 E.g. Continental Bank v Aeakos, [1994] 1 WLR 588; OT Africa Line Ltd v Hijazy (The Kribi)
(No 1), [2001] 1 Lloyd’s Rep 76; Gilkes v Venizelos ANESA, [2000] ILPr 487; Glencore Inter-
national AG v Metro Trading International Inc (No 1), [1999] 2 All ER (Comm) 899; Naviga-
tion Maritime Bulgare v Rustal Trading Ltd (The Ivan Zagubanski), [2002] 1 Lloyd’s Rep
106; Ocarina Marine Ltd v Marcard Stein & Co, [1994] 2 Lloyd’s Rep 524.
107 [1994] 1 WLR 588.
198 Autonomy and supporting measures in Europe
might assume jurisdiction regardless of a valid jurisdiction clause.108 The
English court believed that, without an injunction, the lender would
persist in the breach of contract to infringe the right of the borrower and
the Greek proceedings were vexatious and oppressive.109
The English court considered the special circumstances of the case and
believed that the only effective remedy for the borrower was an injunction.
The court also gave reasons why it did not trust the Greek court to decide
on its own jurisdiction, because evidence proved the Greek court would
continue the proceedings that were vexatious to the borrower and that
might violate the ends of justice. The English court, however, did not con-
sider the fact that both courts took jurisdiction under the judgment con-
vention, which required the Contracting States to trust each other.110

4.2 Turner v Grovit

Turner v Grovit 111 is a milestone case, in which the ECJ gave guidance on
the compatibility of the anti-suit injunction in the European Community
for the first time. Turner was a British national domiciled in England who
was recruited by a Spanish group of companies and worked in Madrid. He
later returned to England and commenced proceedings against his ex-
employer for unfair dismissal. English courts had jurisdiction under
Section 5 of the Brussels I Regulation as England was the place where the
employee had his domicile. The employee commenced proceedings in
Spain against Turner for breach of contract and claimed losses resulting
from Turner’s professional conduct. Turner subsequently applied for an
injunction restraining the employers from continuing the action in Spain.
In the view of the English Court of Appeal, the Spanish proceedings were
commenced for ‘no purpose other than to harass and oppress a party who
is already a litigant here . . . and fall to be condemned as abusive as a
matter of elementary principle’.112 An injunction was granted. However,
following the referral by the House of Lords, the ECJ ruled that the Brus-
sels Convention (now the Brussels I Regulation) precludes a court of a
Contracting State from granting an anti-suit injunction to prohibit a party
from commencing or continuing proceedings in another Contracting

108 The Greek Court might interpret the clause differently from England or the court would
consider the borrower’s early cooperation as submission. In Greek civil procedure law, a
defendant could not challenge jurisdiction without filing a defence on the merits.
109 See comments in Hartley, 1994; Chatterjee, 1995: 334; Bell, 1994: 204; Briggs, 1994: 158;
Rogerson, 1994: 241; Hartley, 2002: 139; Berg, 2002: 117.
110 More comments in Merrett, 2006: 315; Hartley, 2005.
111 Case C-159/02 [2004] ECR I-3565. See Kruger, 2004: 1030; Williams, 2006: 4.
112 [2000] I QB 345.
 Autonomy and supporting measures in Europe 199
State, even if the restrained proceedings were commenced with bad faith
of this party.113
The decision is not surprising as it is in line with the common position
of the ECJ to uphold the community interest and stick to the basic prin-
ciple of mutual trust.114 It also shows the lack of understanding and the
general sceptical and negative attitude of the ECJ against the common law
instrument of anti-suit injunctions.115 It is commented that no sufficient
voices from the common law countries were heard because the Turner
decision was made with no British or Irish in the 11 judges.116 It is also
necessary to recognize that only two Member States out of 27 have
common law tradition and the Brussels regime is established by following
the civil law philosophy.117 The discretion-based common law approach
conflicts with the rule-based civil law tradition.118 Although some
discretion-based elements are adopted in some civil law countries,119 it
does not mean common law approaches can be easily accepted in a regime
dominated by civil law countries.
However, it is doubtful whether anti-suit injunctions certainly violate
mutual trust. Mutual trust exists more internally between different states
of one country than internationally between different sovereignties that
have concluded judicial cooperation treaties. Nevertheless, anti-suit
injunctions are frequently used between different legal regions of one
country.120 One wonders why one region should not wait and trust the
other of the same country to make decision. The answer lies in the prac-
tical needs. Waiting on the other legal district of the same country to make
decision causes delay and, sometimes, unreasonable cost to the party
whose right has been infringed. In certain circumstances, the law requires

113 Case C-159/02 [2004] ECR I-3565. See comments in Blanke, 2004: 261; Dickinson, 2004:
273; Mourre and Lahlou, 2004: 538; Hare, 2004: 570; Robert-Tissot, 2005: 1496;
Nurmela, 2005: 115; Blobel and Spath, 2005, supra n. 52; Hartley, 2005, supra n. 10.
114 Briggs, 2004: 530; Clarke, 2007: 101–129; Blobel and Spath, 2005: 1030–1040.
115 Briggs, 2004: 530.
116 Briggs, 2004: 530.
117 From 1 January 2007, the EU had 27 Member States, but only the UK and Ireland have
the common law tradition.
118 Lenaerts, 2010: 286–287; Clarke, 2007: 109; Hartley, 2005.
119 For example, France granted anti-suit injunctions in a 2002 case. See Briggs, 2004: 530.
120 For example, in In re Wanzer Ltd, [1891] 1 Ch 305, the English court granted an injunc-
tion restraining Scottish proceedings. In other cases, the courts accepted England had
power to restrain Scottish proceedings, though injunctions were not granted for other
reasons: Cohen v Rothfield, [1919] 1 KB 410; Walter Baine Grieve v Marion Jack Tasker,
[1906] AC 132; Bland v Low, [1894] 1 Ch 147; In re Dynamics Corporation of America,
[1973] 1 WLR 63, 68 (obiter). In the USA, anti-suit injunctions are issued between sister
states. E.g. John G. and Marie Stella Kenedy Memorial Foundation v Fernandez, 315 S.W.3d
512 (Tex., 2010); Davis Intern., LLC v New Start Group Corp. 367 Fed.Appx. 334 (C.A.3
(Del.), 2010); Freddie Records, Inc. v Ayala, Not Reported in S.W.3d, 2009 WL 3135790
(Tex.App.-Corpus Christi, 2009); Withem v Deison, Not Reported in S.W.3d, 2009 WL
2045322(Tex.App.-Beaumont, 2009).
200 Autonomy and supporting measures in Europe
speedy measures. An anti-suit injunction is speedy, effective and can be
granted with relatively low cost.121 An injunction is thus tolerated in coun-
tries with different legal regions and no one challenges the application of
this instrument on the basis that there should be mutual trust within a
country. The pure assertion of mutual trust is not enough to justify the
abandonment of anti-suit injunctions. A more realistic explanation for the
ECJ decision probably is that only two Member States have been equipped
of anti-suit injunctions, which creates imbalance between the Member
States. There is a concern that, once the injunction is permitted in the
European Union, British and Irish courts have more procedural advant-
ages than their neighbours, which could only rely on the Union rules to
protect their jurisdiction.122
It is also argued that anti-suit injunctions conflict with the aim to
achieve certainty and predictability within the Brussels regime.123 A party
may not bring an action under the established rules of the Brussels I Regu-
lation but have to worry whether an injunction based on flexible criteria
will be issued by another court.124 It is thus unpredictable as to which court
will eventually take jurisdiction. This argument may stand in cases without
party autonomy. Where an exclusive jurisdiction clause exists, enforcing
the agreement is the most certain and predictable result for both parties,
while allowing any of them to breach the agreement by relying on any
other jurisdictional grounds causes uncertainty.125
English courts try to justify that anti-suit injunctions are compatible with
the Brussels I Regulation. It is argued by Lord Hobhouse that anti-suit
injunction is a matter of procedure instead of a matter of jurisdiction
rules.126 The Brussels I Regulation harmonizes jurisdiction rules and pro-
vides uniform interpretation to it, and no Member State can rely on its
own jurisdiction rules or interpretation in issues that are covered by the
Brussels I Regulation.127 However, the Brussels I Regulation does not influ-
ence the domestic procedure of each Member State. After deciding juris-
diction by relying on jurisdiction rules of the Brussels I Regulation, a
Member State should be allowed to use its domestic procedural law for the

121 Chavier, 1990: 259; Wilson, 2004: 772–773; Nurmela, 2005: 141.
122 Ambrose, 2003: 412–413.
123 Ambrose, 2003: 412.
124 Ambrose, 2003: 409; Whincop, 2000: 70.
125 Clarke, 2007: 128; Tan, 2005: 643.
126 Overseas Union v New Hampshire, [1992] QB 434, para 30.
127 Case 9/77 Bavaria Fluggesellschaft Schwabe & Co. KG and Germanair Bedarfsluftfahrt GmbH
& Co. KG v Eurocontrol, [1977] ECR 1517, para 4; Case C-115/88 Reichert and others v
Dresdner Bank, [1990] ECR I-27; Case C-214/89 Powell Duffryn Plc v Wolfgang Petereit,
[1992] ECR I-1745, para 11; Case C-440/97 GIE Groupe Concorde and Others v The Master of
the Vessel ‘Suhadiwarno Panjan’ and Others, [1999] ECR I-6307, para 10; Case C150/77
Société Bertrand v Paul Ott KG, [1978] ECR 1431; Case C-26/91 Jakob Handte & Co GmbH v
Traitements Mecano-Chimiques des Surfaces SA (TMCS), [1992] ECR I-3967; Case C-269/95
Benincasa v Dentalkit, [1997] ECR I-3767, para 33.
 Autonomy and supporting measures in Europe 201
purpose of procedure. If an anti-suit injunction is classified as procedure,
it is outside the Brussels I Regulation and could be maintained. However,
the distinction between jurisdiction and procedure is not clear cut,128 and
it is even more so in the common law system. In England, there is no sepa-
rate statute on jurisdiction rules and civil procedure rules; civil jurisdiction
and procedural matters are all included in the Civil Procedure Rules.129
Furthermore, anti-suit injunction is hardly pure procedure which has
nothing to do with substantive jurisdiction. It, by its nature, restrains
foreign proceedings from being commenced or continuing.130 When con-
sidering whether to grant it, a court will review the jurisdiction of another
county where the enjoined proceedings occur.131 In most cases, a court
decides to take jurisdiction at the same time as granting an injunction.132
It is hard to classify anti-suit injunctions as pure procedural instruments
which are irrelevant to jurisdiction.

4.3 Impact of Turner v Grovit in jurisdiction agreements

Although Turner was not a case concerning jurisdiction agreements, the
language used in the ECJ decision is broad enough to prevent an injunc-
tion from being used in any circumstances where a case falls within the
scope of the Brussels I Regulation. It demonstrates that the existence of a
jurisdiction clause is no exception. This decision is commented as
‘ “system” prevails over practicality’133 and ‘(p)rotecting the interests of
States prevails over doing justice to individuals’.134 It would be worse where
a valid exclusive jurisdiction clause is involved.135
Combined with Gasser v MISAT, the current status of jurisdiction clauses
in the EU is very uncertain. The two decisions of ECJ demonstrate that
effectiveness will be given to a valid jurisdiction clause only if it does not
challenge the Union interest and mutual trust between the Member

128 For a general account of jurisdiction and procedure, see Haycraft and Polozola, 1998:
459; Makynen, 1981: 396; Snyckers, 1997: 657; Buchanan, 1974: 673.
129 Available at www.justice.gov.uk/guidance/courts-and-tribunals/courts/procedure-rules/
civil/index.htm, accessed on 28 July 2011.
130 Ambrose, 2003: 412.
131 Ambrose, 2003: 412.
132 Ambrose, 2003: 412.
133 Hartley, 2009: 822.
134 Ibid.
135 The Turner decision was confirmed and applied in cases where there was an arbitration
agreement. In Case C-185/07 West Tankers v Allianz SpA (the Front Comor) [2009] ECR
I-663, the existence of an arbitration agreement cannot permit an English court from
issuing an anti-suit injunction to prevent the Italian court from taking jurisdiction to
decide the validity of an arbitration agreement. The ECJ claims that the validity of an
arbitration agreement is within the scope of the Brussels I Regulation despite Article
1.2(d), which excludes arbitration from the Regulation.
202 Autonomy and supporting measures in Europe
States.136 Where a party brings proceedings in a Member State in breach of
a valid exclusive jurisdiction clause with the sole purpose of oppressing the
other party and to restrain the other party from bringing legitimate pro-
ceedings in the chosen forum, as far as the proceedings were brought first,
the chosen forum must stay jurisdiction and trust the first seized non-
chosen forum to make its decision.137 Furthermore, the chosen forum
could not use any injunction order to restrain the party with bad faith
from doing so.138 Finally, the judgments made in breach of the jurisdiction
clause should be enforced in all other Member States, including the
chosen forum.139
However, since Turner is based on mutual trust and no intervention in
the decision of the court of a Member State to decide its own jurisdiction,
an injunction might still be allowed prior to any courts being seized.140
This could happen if a party threatens to sue in another country in breach
of its agreement without actually commencing the proceedings.141 It is
right to consider that no country’s sovereignty is infringed since no court
is seized. However, granting an injunction before any courts are seized still
amounts to the review of other states’ jurisdiction.142 Finally, if a party
applied in English courts under an English jurisdiction clause for an
injunction restraining any potential actions that might be subsequently
brought in a non-chosen Member State, England is the forum first seized.
Any non-chosen Member States shall stay jurisdiction in favour of the
English court in deciding the enforceability of the jurisdiction clause.143
There is no need to grant any injunction in the circumstances. The best
option for the contractual party, in the context of the European Union, is
not to apply for an anti-suit injunction but to commence proceedings on
the substance of the case, or simply apply for a declaratory relief, as soon
as possible. The more effective lis pendens rule will prevent all other
Member States from attending the same action,144 and the judgment or
the declaration on the validity of the jurisdiction clause should be recog-
nized and enforced by all other Member States.145

136 Gasser v MISAT, supra n. 41; Turner v Grovit, supra n. 13; West Tankers v Allianz SpA, ibid.
137 Gasser v MISAT, ibid.
138 Turner v Grovit, supra n. 13; West Tankers v Allianz SpA, supra n. 141.
139 Arts 33, 38 Brussels I. The four grounds for the court of a Member State to refuse recog-
nition and enforcement of another Member State’s decision does not include the
improperly taking of jurisdiction. See Art 34. Hartley, 2009: 822.
140 Briggs, 2004: 531.
141 Ibid., 531.
142 Ibid., 531.
143 Gasser v MISAT, supra n. 41.
144 Art 27(1) Brussels I. Gasser v MISAT, supra n. 41.
145 Arts 33 and 38 Brussels I.
 Autonomy and supporting measures in Europe 203
4.4 What if jurisdiction of a Member State is granted by domestic law?
Could injunction be used where the proceedings of another Member State
were based on domestic law instead of the Brussels I Regulation? For
example, the defendant is a New York domiciliary and the exclusive juris-
diction chooses the English court. Where dispute has arisen, the claimant
sued in France instead, based on French Civil Procedure Law.146 Since the
French jurisdiction is not based on the Brussels I Regulation but national
law, could the English court issue an anti-suit injunction restraining the
claimant from continuing the French action?
The wording of Turner v Grovit is very broad and does not specify
whether the jurisdiction basis of the enjoined state is relevant. Taking a
broad view, anti-suit injunctions are prohibited completely between
Member States in order to protect mutual trust, regardless of the jurisdic-
tional ground of the court the action in which is restrained. However, it is
fair to claim that mutual trust and judicial cooperation in civil and com-
mercial matters is rooted in the Brussels regime. If a country receives juris-
diction from its national law, restraining this action is not a review of the
other country’s jurisdiction under the Brussels regime. Furthermore, the
Brussels I Regulation does not require a Member State to trust the other
in deciding jurisdiction under its domestic law. Since the jurisdiction basis
is outside the Brussels regime, granting injunctions in such a case does not
affect certainty and predictability of the regime nor the uniform applica-
tion of the Union jurisdiction rules. However, a likely counter-argument is
that Article 4 of the Brussels I Regulation permits a Member State to apply
the national law in certain circumstances. Applying the national law, as a
result, is also part of the Regulation. Furthermore, the mutual trust exists
beyond the jurisdiction rules of the Regulation and between Member
States in all areas where judicial cooperation is maintained.147 For
example, the Member States are required to mutually recognize and
enforce each other’s judgment regardless of jurisdictional grounds, which
shows the extension of mutual trust into national jurisdiction basis.

4.5 Anti-suit injunctions and a third country

Could the UK and Ireland continue to use anti-suit injunctions to restrain
proceedings in a third country? In Skype v Joltid,148 the English court
decided whether the English court could, after Turner v Grovit, issue an
anti-suit injunction restraining US proceedings. The court considered that
the effect of Turner v Grovit should be limited within the range of the
European Union, where Member States are all part of the internal market

146 Where the defendant is domiciled in a third country, jurisdiction of a Member State is
decided by national law under Art 4 of the Brussels I Regulation.
147 Ambrose, 2003, supra n. 104, at pp. 421–422.
148 Skype v Joltid, [2011] ILPr 8.
204 Autonomy and supporting measures in Europe
and where mutual trust exists. Turner v Grovit said nothing to prohibit an
injunction from being used to restrain proceedings in a third country,
where there is no Union interest or mutual trust.149

5 Anti-suit injunctions and arbitration agreements in the EU

Anti-suit injunctions are also used frequently by English courts to protect
arbitration proceedings taking place in London, which provide advantages
to London as a popular seat of international commercial arbitration.150
After Turner v Grovit, the status of anti-suit injunctions in enforcing arbit-
ration agreements is unclear. On the one hand, the ECJ has announced
that anti-suit injunctions are incompatible with the Brussels I Regulation.
On the other hand, Article 1(2)(d) of the Brussels I Regulation excludes
arbitration from its scope. It is arguable that, when an anti-suit injunction
is granted to enforce arbitration agreements, such an injunction is out of
the scope of the Brussels I Regulation and escapes the effect of Turner v
Grovit. This question is answered in the ECJ decision in West Tankers v
Allianz SpA (‘The Front Comor’).151

5.1 Situations before Front Comor

Article 71 of the Brussels I Regulation provides that this Regulation will
not prejudice the treaty obligations of Member States under other inter-
national conventions in matters relating to jurisdiction, recognition and
enforcement of judgments. In the EU, all Member States are Contracting
States of the New York Convention, and the Council of Europe was pre-
paring a European Convention on uniform law of arbitration. In order to
avoid conflicts between the Brussels regime and the New York Convention
and the future European Convention on arbitration, the European law-
makers decided to exclude arbitration from the Brussels regime.152
However, in practice, the request for clearer interpretation of Article
1(2)(d) has never faded away. This provision refers to ‘arbitration’, which
is a very broad term, including arbitration proceedings, the validity of arbit-
ration agreements, and courts supervision and intervention of arbitration.
The Schlosser Report takes a broad view by stating that: ‘A judgment deter-
mining whether an arbitration agreement is valid or not, or, because it is
invalid, ordering the parties not to continue the arbitration proceedings, is
not covered by the 1968 Convention.’153 According to this interpretation, if
a court approves the validity of an arbitration agreement and restrains

149 Turner v Grovit, supra n. 41, paras 26–28.

150 Steinbruck, 2007: 358.
151 Case C-185/07 West Tankers Inc v Allianz SpA (The Front Comor) [2009] ECR I-663.
152 Jenard, 1979: 13.
153 Schlosser, 1979: 93.
 Autonomy and supporting measures in Europe 205
court proceedings, this order is not covered in the scope of the Brussels I
Regulation and should be free from the effect of the Turner decision.
This issue was first considered in Marc Rich v Societa Italiano Impianti.154
Marc Rich, a Swiss company, and Impianti, an Italian company, entered into
an agreement for the sale of crude oil. Their contract included an agree-
ment providing any disputes should be resolved by three arbitrators in
London, one to be appointed by each party and the third to be appointed
by the two chosen arbitrators. After disputes arose, Impianti commenced lit-
igation in Italy denying liability. Marc Rich then commenced arbitration
proceedings in London. Upon the refusal to participate and appoint an
arbitrator by Impianti, Marc Rich applied to the English High Court to
appoint an arbitrator pursuant to s10(3) of the Arbitration Act 1950 and
served a summon on Impianti. Impianti argued that the English jurisdiction
should be stayed because the dispute was on the existence of an arbitration
agreement, which fell within the Brussels Convention. Since the Italian
court was seized to decide this issue, the English court should stay jurisdic-
tion pursuant to the lis pendens rule of the Brussels Convention.
There are a few issues that the ECJ needs to consider. First, whether the
exclusion of ‘arbitration’ in the Brussels Convention refers to the arbitra-
tion procedure, or it covers court proceedings in which the ‘subject matter’
is arbitration. The ECJ stated that, since the New York Convention covered
not only the recognition and enforcement of foreign arbitral awards, but
also rules relating to arbitration agreements, the Brussels Convention
intended to ‘exclude arbitration in its entirety, including proceedings
brought before national courts’.155 The ECJ held that the procedure to
appoint an arbitrator by the English court is part of arbitration proceedings
and should be excluded from the Brussels Convention. An English court,
thus, has jurisdiction to appoint an arbitrator pursuant to its domestic
law.156 The ECJ clearly took a broad view to exclude not only arbitration
proceedings but arbitration-related court proceedings, or proceedings
ancillary to arbitration, such as the appointment or dismissal of arbitrators,
the fixing of the place of arbitration or the extension of the time limit for
making awards,157 from the scope of the Brussels Convention.
Second, even if the procedure to appoint an arbitrator is part of arbit-
ration procedure, before an English court can appoint an arbitrator, the
court must be satisfied that the arbitration agreement exists and is valid.
Impianti further argued that the existence and validity of an arbitration
agreement were not part of arbitration procedure and should be included
in the Brussels I Regulation. Impianti argued that the Brussels Convention

154 Case C-190/89, Marc Rich v Societa Italiano Impianti [1991] ECR I-3855. For more on this
case, see Munro, 1992: 116; Hartley, 1991: 529; Illmer and Naumann, 2007: 147; Kaye,
1993: 359.
155 Para 18.
156 Para 19.
157 Case C-391/95, Van Uden Maritime BV v Deco-Line [1998] ECR I-7091, para 32.
206 Autonomy and supporting measures in Europe
only excluded proceedings where arbitration was the principal issue. If
arbitration was raised as an incidental question, the whole proceedings
should still be covered by the Brussels Convention. Otherwise, a party
could easily escape the Brussels Convention by arguing the existence of
arbitration agreements in any cases.158 This argument was rejected by the
ECJ. By looking at the ‘subject matter’ of the court proceedings, if the pro-
ceedings were out of the scope of the Brussels Convention, even though
the existence of an arbitration agreement should be determined as the
preliminary issue, it could not be distinguished from the whole proceed-
ings and should be excluded from the Convention.159 Determining the
nature of the procedure by the existence of a preliminary issue would
cause uncertainty.160 The ECJ finally decided that ‘the exclusion provided
for therein extends to litigation pending before a national court concern-
ing the appointment of an arbitrator, even if the existence or validity of an
arbitration agreement is a preliminary issue in that litigation’.161
Marc Rich demonstrates that arbitration itself and court proceedings
relating to arbitration are both excluded from the Brussels Convention. If
a court is seized to exercise its supervision power over arbitration, such as
appointing an arbitrator, extending time for beginning arbitral proceed-
ings, removing arbitrators, etc., even if the court has to decide the validity
and existence of an arbitration agreement as the preliminary issue, this
cannot bring the court proceedings within the scope of the Brussels Con-
vention. The whole proceedings fall out of the Brussels regime all
together. Marc Rich, however, does not reverse the Schlosser Report. It
does not say whether the existence and validity of arbitration agreements,
standing alone, is a matter for the Brussels Convention. It also does not
expressly decide whether certain interim or protective measures, such as
an anti-suit injunction in support of arbitration, are also excluded from
the scope of the Brussels Convention and thus allowed.
The relationship between arbitration and the Brussels Convention was
addressed in Van Uden Maritime BV v Deco-Line162 years later. Van Uden, a
Dutch company, and Deco-Line, a German company, entered into a charter
hire agreement, including an arbitration clause. Upon the failure to pay,
Van Uden commenced the arbitration proceedings in the Netherlands pur-
suant to the arbitration clause, and applied to the Dutch court for interim
relief. The ECJ states that interim proceedings are not ancillary to arbitra-
tion proceedings. They are ordered in parallel to arbitration proceedings as
measures of support. The status of interim proceedings should be con-
sidered ‘not by their own nature but by the nature of the right which they

158 Paras 22–23.

159 Para 26.
160 Para 27.
161 Para 29.
162 Case C-391/95, Van Uden Maritime BV v Deco-Line [1998] ECR I-7091. Rodger, 1999: 199;
Hartley, 1999: 674.
 Autonomy and supporting measures in Europe 207
163
serve to protect’. If an application is made to restrain court proceedings
in another Member State in support of a valid arbitration agreement, the
right that the interim proceedings serve to protect is the right to determine
the dispute by arbitration. In other words, arbitration is the subject matter
of anti-suit injunctions in support of arbitration. Reading the decision
together with Marc Rich, anti-suit injunctions issued in support of arbitration
should be excluded from the scope of the Brussels regime.

5.2 West Tankers v Allianz SpA (Front Comor)

Front Comor is a cornerstone case that has finally answered the question of
whether anti-suit injunctions can be used in support of arbitration agree-
ments within the EU. In this case, a vessel, ‘Front Comor’, owned by the
West Tankers, collided with a jetty in Italy. The Charter Party contained an
arbitration clause submitting disputes to the arbitration body in London.
The insurance company of the jetty sued West Tankers in Italy. West
Tankers applied an interim injunction from the English court to restrain
the insurer from continuing the Italian proceedings.
The English High Court held that Turner applied to anti-suit injunc-
tions against a Member State from taking jurisdiction under the Brussels I
Regulation. Since arbitration is excluded from the Brussels I Regulation,
jurisdiction in deciding the validity of an arbitration agreement is
excluded from the scope of Brussels I. Where a Member State has taken
jurisdiction to decide the validity of an arbitration agreement, it can issue
anti-suit injunctions in support of the agreement based on its finding
where the Turner decision is irrelevant. The New York Convention
required a court seized in breach of an arbitration agreement to refer
parties back to arbitration, which granted this court jurisdiction in deter-
mining its jurisdiction. Furthermore, the New York Convention does not
preclude any court from reviewing jurisdiction of any other Contracting
State. The English court, as a result, could decide the validity of an arbitra-
tion agreement as the supervisory court and could issue an anti-suit injunc-
tion after ascertaining the validity of the arbitration agreement.
The House of Lords also supported granting anti-suit injunctions.
Three reasons were provided. First, the exclusion in Article 1(2)(d) was
interpreted broadly by the ECJ in Marc Rich & Co AG v Società Italiana Impi-
anti, which suggests that the exclusion applies not only to arbitral proceed-
ings, but also to court proceedings where the subject matter is
arbitration.164 The subject matter is arbitration if the proceedings serve
to protect the right to have the dispute determined by arbitration.165

163 Van Uden, para 33; Case C-261/90 Reichert and Kockler v Dresdner Bank [1992] ECR I-2149,
para 32.
164 [2007] UKHL 4, para 13.
165 Van Uden Maritime BV v Deco-Line, para 33.
208 Autonomy and supporting measures in Europe
Furthermore, the basic principle of the Brussels I Regulation, i.e. maxim
actor sequitur forum rei, is fundamentally unsuitable to arbitration, where
party autonomy plays the substantive and fundamental role.166 The House
of Lords supported the argument that all issues relating to arbitration,
including validity of arbitration agreements, standing alone, are excluded
from the scope of the Brussels I Regulation. Second, the House of Lords
believes the importance of arbitration in commercial practice requires
effective tools to protect party autonomy and arbitration agreements.167
Anti-suit injunctions are important and valuable in promoting legal cer-
tainty and reducing the conflicts of jurisdiction between courts and arbit-
ration tribunals. They also protect certainty and expectation of the
parties.168 Third, the House of Lords also considers that anti-suit injunc-
tions bring the advantage to London arbitral tribunals as an attraction to
parties in the commercial world.169 If the EU prevents EU Member States
from adopting anti-suit injunctions to protect arbitration as an industry, it
will make London arbitration worse off and lose the competitiveness com-
pared to those non-EU states which are also famous arbitration centres
and which are equipped with anti-suit injunctions.170
Regardless of the argument supporting using anti-suit injunctions in
protecting arbitration agreements, the ECJ made a decision not surprising
to most, which followed the line of Turner by prohibiting anti-suit injunc-
tions from being used between Member States. The ECJ provided that,
even if arbitration and related court proceedings are excluded from the
scope of the Brussels I Regulation, those proceedings may undermine the
effectiveness of the Brussels I Regulation and should not be allowed.171
The objective of the Regulation is to unify rules of jurisdictions and to
facilitate the free movement of decisions. Although an anti-suit injunction
in support of arbitration is out of the scope of Brussels I, it prevents
another Member State from exercising jurisdiction conferred on it by
Brussels I.172 It also permits a Member State to review another Member
State’s jurisdiction held pursuant to the Brussels I Regulation. Further-
more, an anti-suit injunction between Member States is against the prin-
ciple of mutual trust on which the Brussels I Regulation is based. Anti-suit

166 [2007] UKHL 4, para 12.

167 [2007] UKHL 4, para 17.
168 [2007] UKHL 4, para 19.
169 [2007] UKHL 4, para 20. ‘Whether the parties should submit themselves to such a juris-
diction by choosing this country as the seat of their arbitration is . . . entirely a matter for
them. The courts are there to serve the business community rather than the other way
round. No one is obliged to choose London. The existence of the jurisdiction to restrain
proceedings in breach of an arbitration agreement clearly does not deter parties to com-
mercial agreements. On the contrary, it may be regarded as one of the advantages which
the chosen seat of arbitration has to offer.’
170 [2007] UKHL 4, paras 20–21.
171 [2009] ECR I-663, para 24.
172 [2009] ECR I-663, para 24.
 Autonomy and supporting measures in Europe 209
injunction, in such circumstances, is still against the purpose and principle
of Brussels I and should not be allowed.173
The ECJ decision is based primarily on the policy of mutual trust and
the philosophy of the European judicial cooperation. The ECJ does not
consider in detail the question of whether a court’s jurisdiction to grant
anti-suit injunctions to support arbitration, by its nature, is within or
outside the scope of the Brussels I. Instead, the ECJ is concerned much
more with the effect such injunctions may have on the Member States and
the European jurisdiction regime as a whole. If jurisdiction of the pro-
ceedings against which the anti-suit injunction is issued is granted under
the Brussels I Regulation, the anti-suit injunction affects jurisdiction in
Brussels I and is contrary to the purpose of the Brussels I Regulation.

5.3 Criticism of the Front Comor decision

The Front Comor decision raises rigorous criticisms and debates. Many criti-
cize the reasoning itself, which is said to be over-simplified.174 Although
the ECJ accepts that, following the past ECJ case law, Marc Rich and Van
Uden, a logical conclusion is that anti-suit injunctions in support of arbitra-
tion are excluded from the scope of Brussels I, it quickly concludes that
such proceedings should nonetheless be covered by Brussels I because of
its effects on the functioning of Brussels I.175 There is insufficient justifica-
tion for this conclusion and there is no explanation as to why the ECJ
adopts the ‘effect’ test over the ‘subject matter’ test adopted in the
previous judgments.
Further, there is still no official answer as to whether proceedings decid-
ing the existence and validity of arbitration agreements are excluded from
the scope of the Brussels I Regulation. If they are, anti-suit injunctions
against the court proceedings of a Member State for a declaration on the
preliminary issue should be allowed, because the latter is also out of the
scope of the Brussels I Regulation. The ‘effect’ argument cannot stand in
such a circumstance. However, the other line of the decision concerns the
mutual trust between Member States and such ‘mutual trust’ shall exist
within the EU regime irrespective of the Brussels I Regulation. Whether
anti-suit injunctions would be completed banned between EU Member
States is a question for the future.
In addition, the decision may well affect an arbitral tribunal’s jurisdic-
tion to issue anti-suit injunctions. Arbitrators can issue anti-suit injunctions
and they do not acquire jurisdiction to do so from the Brussels I Regula-
tion. The injunction, however, has the effect of influencing jurisdiction of
the court of a Member State under the Brussels I Regulation. In Eco

173 [2009] ECR I-663, paras 28–31.

174 See, for example, Layton, 2009.
175 Front Comor, [2009] ECR I-663, paras 22–26.
210 Autonomy and supporting measures in Europe
176
Swiss, the ECJ decided that arbitrators sitting in a Member State are
bound to apply EU law. Following the lines of reasoning in Front Comor
and Eco Swiss, there is the risk that the EU arbitrators’ power may also be
restrained.
Most concerns arise from the arbitration business. London is one of the
most popular arbitration seats in the world, given its location, language
advantages, advanced commercial law and the great support of arbitration
by English courts.177 Among these advantages, anti-suit injunction in pro-
tecting English arbitration is a strong instrument to give confidence to
businessmen choosing the English seat, because they have the assurance
that no one can easily ignore the arbitration agreement.178 The considera-
tion to protect London arbitration as an industry is one of the reasons that
the House of Lords adopted in its support of anti-suit injunctions.179
However, some commentators believe most negative comments from
English lawyers are ‘overreactions’.180 Although anti-suit injunctions play
an important and effective role, it is hard to argue that the ban of anti-suit
injunctions would directly bring great adverse impact on London’s stand-
ing as a popular arbitration seat, which acquires its international recogni-
tion based on many other reasons.181 There are other equally popular seats
for international commercial arbitration, such as Paris, Vienna, Zurich,
Stockholm, Geneva, etc., where there is no common practice to issue anti-
suit injunctions in protecting arbitration.182 Furthermore, anti-suit injunc-
tions can still be used against torpedo proceedings outside of the EU.183
Arbitration between EU parties constitutes a small proportion of London
arbitration. It is suggested that the strong negative effects in London as an
arbitration centre are exaggerated.184
English practitioners are also concerned with the encouragement of
‘Italian Torpedo’ in arbitration. Torpedo action in a strong sense means
that, if a contracting party deliberately commences court proceedings in
breach of an arbitration agreement, the court of other Member States or
an arbitral tribunal cannot decide the same or related issued between the
parties until the first seized court declines jurisdiction. This type of
torpedo action will cause considerable delays to the other party.185
This type of torpedo action, however, can hardly be an effective bar in

176 Case C-126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I-3055.
177 Materna, 2011: 576.
178 Materna, 2011: 576.
179 West Tankers v RAS [2007] UKHL 4 (HOL), paras 21 (per Lord Steyn) and 28 (per Lord
Mance).
180 Materna, 2011: 575.
181 Dutson and Howarth, 2009: 337–338; Qureshi, 2009: 24; Materna, 2011: 583; Illmer and
Naumann, 2007: 147; Peel, 2009: 365; Steinbruck, 2007: 372.
182 Dutson and Howarth, 2009: 337–338; Materna, 2011: 584.
183 Shashoua v Sharma [2009] EWHC 957 (Comm).
184 Dutson and Howarth, 2009: 338.
185 Materna, 2011: 577–578.
 Autonomy and supporting measures in Europe 211
arbitration because the rule of lis pendens does not apply to arbitration pro-
ceedings. Even if the court of a Member State is seized to decide a dispute
subject to an alleged arbitration agreement, it cannot prevent the arbitral
tribunal seated in another Member State from commencing arbitral pro-
ceedings. In CMA v Hyundai,186 the arbitral tribunal and the English court
both held that they were not bound by the French court judgment which
was made on the substance of the dispute in breach of an arbitration
agreement.187 The only possible barrier is that the supervisory court of the
arbitral tribunal cannot take jurisdiction to declare the arbitration agree-
ment is valid, which might be included in the Brussels I Regulation.
However, the Front Comor decision does not necessary lead to the conclu-
sion that the decision on validity of an arbitration agreement is within the
Brussels I Regulation. This issue remains open. Further, pursuant to the
Marc Rich decision, if the supervisory court makes any order to support
arbitration, such as appointing an arbitrator or summoning the other
party, the lis pendens rule of the Brussels I Regulation is irrelevant as the
court proceedings in arbitration are excluded from the Regulation.
Torpedo actions in a weak sense, however, may exist in arbitration,
which will not effectively bar the legitimate proceedings, but may cause
unnecessary burden, cost, inconvenience and oppression. Where the
parties have entered into an arbitration agreement choosing a European
tribunal, a party may select another EU Member State for a declaration
that the arbitration agreement is invalid or does not exist, in order to
disturb the arbitration proceedings or to have the arbitral awards set
aside.188 Although an arbitral tribunal is not bound to stay jurisdiction
until the foreign court declines jurisdiction, the judicial proceedings may
interrupt arbitral proceedings.189 Parallel proceedings may exist.190 It is
admitted that the parallel proceedings between arbitration and litigation
are not ideal.191 It increases dispute resolution costs and causes potential
irreconcilable decisions. There is the worry that the ban of anti-suit injunc-
tions may make arbitration more expensive than litigation in the EU,
caused by parallel proceedings.192 The parties may lose faith in choosing
not only London tribunals, but also arbitral tribunals in Europe, fearing
that another party may bring action in the court of other Member States.193

186 [2008] EWHC (Comm) 2791.

187 Materna, 2011: 580.
188 Kim, 2011: 590.
189 Dutson and Howarth, 2009: 337; Tang, 2012c: 589.
190 Dutson and Howarth, 2009: 337; James and Lambert, 2006: 40; Cremades and Madalena,
2008: 507.
191 Harris, 2009.
192 In particular, the Front Comor decision may also ban anti-suit injunctions issued by
arbitral tribunals sitting in the EU. Parallel proceedings cannot exist in litigation in the
EU because of the lis pendens rule.
193 Dutson and Howarth, 2009: 337.
212 Autonomy and supporting measures in Europe
In particular, the decision may give psychological impact to encourage
parties to use tactics to avoid normal proceedings. More difficulties exist if
irreconcilable decisions are made by courts and arbitral tribunals. Pursu-
ant to the Brussels I Regulation, Member States have the duty to recognize
and enforce each other’s judgments. Pursuant to the New York Conven-
tion, on the other hand, Member States also have treaty obligations to
recognize and enforce arbitral awards falling in the scope of the New York
Convention. Member States may also endorse arbitral awards in judg-
ments, and recognition and enforcement of judgments fall within the
scope of the Brussels I Regulation. A court may refuse to enforce any judg-
ment if it is irreconcilable with domestic judgments in the related matter
or judgments of another country which have already been recognized and
enforced.

5.4 Manoeuvre around Front Comor

Based on Front Comor, commentators suggest alternative strategies to
minimize the negative commercial impact of this case. First, the parties
could apply to a court to obtain a decision on jurisdiction as soon as they
can. If one party brought the action in a court of another Member State,
the other party can still commence an action for such declaration and,
hopefully, can receive judgments earlier than any judgments in foreign
proceedings. The early judgment on this issue can be used as a guard to
prevent recognition and enforcement.194 Second, the other party can
apply for a stay of jurisdiction of court proceedings in breach of the arbit-
ration agreement pursuant to Article II(3) of the New York Convention.195
Third, the other party can commence the arbitration process irrespective
of the on-going foreign court proceedings.196 In principle, an arbitral
award may be obtained more quickly than court judgments and can be
enforced under the New York Convention.197 Fourth, the other party may
apply for declaratory relief and claim damages for breach of the arbitra-
tion agreement.198
After the ECJ decision in Front Comor, the Italian court has taken juris-
diction, free of any restraint and injunction, to decide the parties’ rights
and obligations of the dispute subject to the London arbitration agree-
ment. The next episode of the case is West Tankers 2012,199 which concerns
whether a declaratory award made by the London arbitral tribunal that
the claimant is not liable may be entered as a judgment under s66 of the
Arbitration Act 1996. Declaratory awards are arbitral awards declaring the

194 Arts 34(3) and 43(3). Dutson and Howarth, 2009: 343–344.
195 Dutson and Howarth, 2009: 344.
196 Ibid., 344.
197 Ibid., 344.
198 Ibid., 344.
199 West Tankers v Allianz SpA (The Front Comor) [2012] EWCA Civ 27.
 Autonomy and supporting measures in Europe 213
respective rights of the parties without requiring performance from either
party.200 S66(2) of the Arbitration Act 1996 provides that: ‘Where leave is
so given, judgment may be entered in terms of the award.’
The English court recognized that the court normally would not grant
such a leave to turn a declaratory order into judgment.201 However, the
court understood the reason why the claimant made such an application.
The claimant hoped that, after the negative declaration was made con-
cerning English judgments, it could prevent the enforcement of future
judgments delivered by the Italian courts holding them liable.202 Regard-
less of the argument that a declaratory award cannot be ‘enforced’ as
such, the English court took a liberal approach and concluded that
‘enforcement’ should be interpreted broadly and the declaratory award
could be enforced.203
Could the arbitral awards be directly recognized in Italy pursuant to the
New York Convention? In the context of Front Comor, the possibility is that
the Italian court might refuse recognition of the awards pursuant to
Article V of the New York Convention.204 If the award was entered as judg-
ment, pursuant to the Brussels I Regulation, Italian courts should recog-
nize this judgment unless it is ‘manifestly’ contrary to public policy or it is
irreconcilable with a judgment made in Italy.
It is remarked by some commentators that this case ‘affirmed an
important practical way around the non-availability of anti-suit injunctions
where courts elsewhere within the European Union have already been
seized’.205 Since a declaratory award could be entered as a judgment, such
a declaration can be acquired at a relatively early stage, before any poten-
tial judgment made in the EU court in breach of the arbitration agree-
ment.206 This consequence can undermine the benefit of torpedo
actions.207
The negative declaration is also used in National Navigation v Endesa
(The Wadi Sudr).208 The parties entered into an arbitration clause for
London. After disputes arose, one party commenced proceedings in Spain
and another subsequently brought arbitration proceedings in London
seeking a negative declaration. The latter also commenced proceedings in
the English court to apply for a declaration that the dispute should be

200 Zadkovich and Roberts, 2012: 52.

201 West Tankers 2012, [2012] EWCA Civ 27, para 6.
202 Ibid., para 12.
203 Ibid., para 36.
204 Art V of the New York Convention provides that a Contracting State may refuse recogni-
tion and enforcement of an arbitral award within the Convention if the agreement is
invalid, or recognition and enforcement would be contrary to the public policy of the
recognition country.
205 Zadkovich and Roberts, 2012: 55.
206 Ibid., 55.
207 Ibid., 55.
208 The Wadi Sudr [2010] 1 Lloyd’s Rep 193.
214 Autonomy and supporting measures in Europe
referred to a London tribunal and that the English court was not going to
recognize Spanish judgment. Before the English court had made the deci-
sion, the Spanish court, applying Spanish law, ruled that the arbitration
clause was not concluded and the parties should not bring the dispute to
London arbitration.
The English Court of Appeal held that the Spanish judgment on the
non-existence of an arbitration agreement fell within the scope of the
Brussels I Regulation. This judgment should be recognized by the English
court under Article 33 of the Brussels I Regulation. The English court
could not rely on public policy to refuse the enforcement of the Spanish
court decision because the application of different applicable laws was not
a ground to generate public policy.

6 Brussels I Recast
The European jurisprudence demonstrates a clear departure from the
common law tradition in tackling conflicts of jurisdiction and parallel pro-
ceedings. Arguably, the civil law tradition provides certainty and is easier
to apply in practice. However, the certainty is achieved with a cost of
justice in individual cases. Pursuant to Article 73 of the Brussels I Regula-
tion, the Commission conducted a review of the functioning of the Brus-
sels I Regulation since 2007. In 2007, a general study commissioned by the
Commission on the application and functioning of the Brussels I Regula-
tion in Member States was published by the University of Heidelberg.209
Based on the general study, a Report and a Green Paper were published
by the European Commission in 2009.210 After considering 130 responses
to the Green Paper, empirical data on the impact,211 conferences and
expert meetings, a Recast Proposal was published at the end of 2010.212

209 Hess et al., 2007.

210 In 2009, the European Commission published a report entitled ‘Report on the Review of
Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforce-
ment of Judgments in Civil and Commercial Matters’, Brussels, 21 April 2009,
COM(2009) 174 final and a consultation paper entitled ‘Green Paper on the Review of
Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforce-
ment of Judgments in Civil and Commercial Matters’, Brussels, 21 April 2009,
COM(2009) 175 final.
211 Study on Data Collection and Impact Analysis Certain Aspects of a Possible Revision of
Council Regulation No 44/2001 on Jurisdiction and the Recognition and Enforcement
of Judgments in civil and Commercial matters, conducted by the Centre for Strategy and
Evaluation Services (CSES), 2010, available at http://ec.europa.eu/justice/doc_centre/
civil/studies/doc_civil_studies_en.htm; Study to Evaluate the Impact of a Possible Ratifi-
cation by the European Community of the 2005 Hague Convention on Choice of Court
Agreements conducted by GHK, 2007, available at http://ec.europa.eu/dgs/justice_
home/evaluation/dg_coordination_evaluation_annexe_en.htm.
212 European Commission, ‘Proposal for a Regulation of the European Parliament and of
the Council on Jurisdiction and the Recognition and Enforcement of Judgments in Civil
and Commercial Matters (Recast)’, COM(2010) 748 final.
 Autonomy and supporting measures in Europe 215
213
Subject to a few substantive amendments, the Recast Brussels I, based
on the Recast Proposal, was approved by the Council of the European
Union. The Recast Brussels I is expected to enter into force on 10 January
2015,214 and applies in all Member States, including UK and Denmark.215

6.1 Jurisdiction agreements

The European Commission recognized that the Gasser decision opens the
door for the abuse of process by one party who wants to escape from the
agreement, which is entered into freely, by seizing the court of a non-
chosen Member State for the sole purpose of jeopardizing the proceed-
ings in the chosen court.216 In its consultation paper, the European
Commission considered three approaches. The first is not to apply the lis
pendens rule to the court chosen in an exclusive jurisdiction clause.217
However, without any rule to decide the priority of two competing courts
in the concurrent proceedings, this approach will only lead to uncertainty,
parallel proceedings and irreconcilable judgments.218 The second
approach gives the chosen court in an exclusive jurisdiction clause the pri-
ority to decide its jurisdiction in all cases and to abolish the strict lis
pendens rule in these cases.219 The weakness is that it might prejudice the
party resisting the jurisdiction clause if such a clause is invalid or does not
exist.220 The third option is to maintain the current rule on lis pendens, but
to require the concerned courts to conduct direct dialogue and impose a
deadline for the first seized court to decide jurisdiction in a reasonable
time.221 Besides, the Commission also considered supplementary
approaches, such as granting damages to penalize the breach of jurisdic-
tion clauses as contract terms,222 abolishing the lis pendens rule in cases
where parallel proceedings exist between actions on the substance and

213 Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil
and Commercial Matters (Recast), [2012] OJ L 351/1.
214 Art 81 of the Brussels I Recast.
215 Agreement between the European Community and the Kingdom of Denmark on juris-
diction and the recognition and enforcement of judgments in civil and commercial
matters, OJ 2013 L 79/4; the Council of the European Union, ‘Recast of the Brussels I
Regulation: towards Easier and faster circulation of judgments in civil and commercial
matters within the EU’, 6 December 2012, 16599/12, PRESSE 483, www.consilium.
europa.eu/uedocs/cms_data/docs/pressdata/en/jha/134071.pdf, accessed on 4
January 2013. Recital 40 and 41 of the Brussels I Recast.
216 Commission Report, 6.
217 Green Paper, 5.
218 Ibid., 6.
219 Ibid., 6.
220 Ibid., 6.
221 Ibid., 6.
222 Ibid., 6.
216 Autonomy and supporting measures in Europe
actions seeking negative declaratory relief,223 and prescribing standard jur-
isdiction clauses to expedite decisions.224
Based on consultation and responses from stakeholders, the European
Commission published a Recast Proposal on the Brussels I Regulation.225
The Commission stated in the proposal that one of the main objects for
the reform is to enhance the effectiveness of choice of court agreements.
The proposal provides two amendments: (1) providing harmonized choice
of law to decide material validity of jurisdiction clauses, and (2) adopting
the negative kompetenz-kompetenz rule granting the chosen court exclusive
jurisdiction to decide the validity of an exclusive choice of court clause.226
The final Recast Regulation is very similar to the Recast Proposal in terms
of jurisdiction agreements.
The Recast Regulation first of all provides a uniform choice of law rule
to decide the material validity of jurisdiction clauses. Article 25(1) pro-
vides that the chosen court of a jurisdiction clause shall have jurisdiction
‘unless the agreement is null and void as to its substance under the law of
that Member State’.227 It means that domestic law of the chosen court will
be systematically applied to decide the material validity of the jurisdiction
clause regardless of which court is seized by the claimant to decide this
issue. With completely uniformed law in deciding validity of jurisdiction
clauses,228 uniform decisions are expected from all Member States. Even if
a non-chosen forum is allowed to decide the validity of a jurisdiction
clause, it is likely to decline jurisdiction as far as the jurisdiction clause is
valid pursuant to the law of the chosen forum.229
It seems that uniform results can be reached after the harmonization of
the applicable law in deciding validity of jurisdiction clauses, i.e. the non-
chosen court is expected to decline jurisdiction anyway. Does it mean no
further reform is necessary to vary the Gasser decision, provided that har-
monized rules apply to decide the validity of a jurisdiction clause? The
answer is negative. The purpose of an exclusive jurisdiction clause is to
grant jurisdiction to only one court with the parties’ voluntary and free
consent. This ultimate certainty will be undermined by the fact that the
party could freely go to a non-chosen court to challenge the validity of
this clause. There is a presumption that the parties, as commercially

223 Ibid., 6.
224 Ibid., 6.
225 European Commission, ‘Proposal for a Regulation of the European Parliament and of
the Council on Jurisdiction and the Recognition and Enforcement of Judgments in Civil
and Commercial Matters (Recast)’, December 2010, COM(2010) 748 final.
226 ‘Recast Proposal’, para 3.1.3.
227 See also, Recast Brussels I, recital 20.
228 This includes uniform substantive law on formal validity and uniform choice of law rules
in substantive validity. See Recast Brussels I, Art 25(1).
229 Art 23(1) of the Brussels I Regulation; Steinle and Vasilliades, 2010: 570.
 Autonomy and supporting measures in Europe 217
230
experienced persons, should have the intention to submit ‘all’ disputes,
including the challenges on the validity of an exclusive jurisdiction clause,
to the chosen forum. Certainty provided by an exclusive jurisdiction clause
means the parties, when dealing with each other, would have no worry
about the possibility that one day they are brought to a different forum.
The certainty is prejudiced where any non-chosen court is permitted to
hear the challenge on the validity of an exclusive jurisdiction clause. The
introduction of a uniform applicable law to material validity of jurisdiction
clauses is welcome, but it cannot replace the necessity to establish a sound
system to deal with the conflict of jurisdiction between different Member
States.
As a result, special revisions have been made to the interrelationship
between lis pendens and jurisdiction clauses, which are particularly neces-
sary and important. The new recital 22 states that:

in order to enhance the effectiveness of exclusive choice-of-court

agreements and to avoid abusive litigation tactics, it is necessary to
provide for an exception to the general lis pendens rule in order to
deal satisfactorily with a particular situation in which concurrent pro-
ceedings may arise. This is the situation where a court not designated
in an exclusive choice-of-court agreement has been seised of proceed-
ings and the designated court is seised subsequently of proceedings
involving the same cause of action and between the same parties. In
such a case, the court first seised should be required to stay its pro-
ceedings as soon as the designated court has been seised and until
such time as the latter court declares that it has no jurisdiction under
the exclusive choice-of-court agreement. This is to ensure that, in such
a situation, the designated court has priority to decide on the validity
of the agreement and on the extent to which the agreement applies to
the dispute pending before it. The designated court should be able to
proceed irrespective of whether the non-designated court has already
decided on the stay of proceedings.

Pursuant to the recital, Article 31(2) of the Recast Regulation provides

that:

where a court of a Member State on which an agreement as referred

to in Article 25 confers exclusive jurisdiction is seised, any court of
another Member State shall stay the proceedings until such time as
the court seised on the basis of the agreement declares that it has no
jurisdiction under the agreement.

230 Exclusive jurisdiction agreements in contracts with inequality bargaining power, such as
consumer contracts, are generally not allowed in the Brussels I Regulation. See section
4, Brussels I.
218 Autonomy and supporting measures in Europe
This revision is laudable because it could effectively prevent concurrent
proceedings and provide an easy way for a court to make prompt deci-
sions. It provides certainty to the parties and can properly protect party
autonomy and parties’ reasonable expectation.
It is true that the suggested approach is not perfect in that it may cause
unfairness to the resisting party in an invalid choice of court agreement. If
the other party inserted the jurisdiction clause without the authentic
consent from the resisting party and the domestic law of the chosen court
does not invalidate such a jurisdiction clause, the resisting party would
have no other defence but to conduct proceedings in the chosen forum.
It is necessary to note that the Commission’s Recast Proposal has pro-
vided a guideline for communication and coordination between Member
States to achieve procedural efficiency and administration of justice. Pro-
posed Article 29 provides the lis pendens rules. Article 29(2) provides that,
if the second seized court stays jurisdiction under lis pendens, the first
seized court shall establish jurisdiction within six months except where
exceptional circumstances make this impossible.231 Other seized courts
should require the first seized court to provide information as to when the
jurisdiction of the first seized court can be established.232 This provision,
however, is deleted in the final version of the Recast Regulation. It is prob-
ably because the communication and the six-month requirement impose
unwanted pressure on the courts of Member States and affect the domestic
legal system which should be in tact from the Regulation.
The Recast Regulation also clarifies the situation where the third coun-
try’s interest is involved. It deletes the distinguished treatments to jurisdic-
tion clauses concluded by both parties domiciled outside the Member
States and jurisdiction clauses concluded by parties at least one of which is
domiciled within the Member States. It provides the harmonized rules for
any jurisdiction clauses choosing the court of one of the Member States,
regardless of the parties’ domicile. It improves the functioning of the
Regulation in the international context and removes the uncertainty
caused by the different interpretation to the current Article 23(3). Second,
the Recast Regulation suggests the extension of lis pendens to concurrent
proceedings between a Member State and a third country. This, however,
requires closer scrutiny. Article 33(1) provides that a Member State may
stay proceedings if a third country is the first seized and a stay is necessary
in the interest of justice. The interest of justice can be established if the
third country which is first seized is also a chosen court in a jurisdiction
clause. However, the negative kompetenz-kompetenz rule applies only between
EU Member States.233 If a third country is chosen in an exclusive jurisdic-
tion clause, a Member State does not need to stay proceedings. A third

231 Art 29(2), ‘Recast Proposal’.

232 Ibid.
233 ‘Recast Proposal’, Art 23(1).
 Autonomy and supporting measures in Europe 219
country does not need to stay jurisdiction in favour of a chosen Member
State either.234 Finally, if a Member State has exclusive jurisdiction under a
jurisdiction clause, while a third country is seized first in time, the new
rule seems to suggest that the Member State is allowed to stay jurisdiction
in favour of the non-chosen third state in exceptional cases for the
purpose of sound administration of justice,235 while the chosen state has
no discretion to stay jurisdiction in favour of another Member State. Dif-
ferent treatment, again, has been provided to handle the conflict of juris-
diction within and outside the EU. It is thus concluded that the Recast
Regulation in general could help to enhance the effectiveness of choice of
court agreements and improve the function of the Regulation in the inter-
national context. However, there is still room for further improvement.

6.2 Arbitration
The interrelationship between arbitration and jurisdiction has been
brought to the attention of the EU law-maker. It is one of the topics within
the review of the Brussels I Regulation. The European Commission has rec-
ognized (correctly) that, although arbitration is excluded from the scope
of the Brussels I Regulation in order to keep the system compatible with
the New York Convention, it enables the parties to bring actions subject to
arbitration to the court which ‘may effectively undermine the arbitration
agreement and create a situation of inefficient parallel court proceedings
which may lead to irreconcilable resolutions of the dispute’.236
In the Green Paper on the Brussels I Regulation, the European Commis-
sion suggests that full effect and respect should be given to arbitration agree-
ments and the Brussels I Regulation should leave the operation of the New
York Convention unaffected. The Brussels I Regulation should prevent paral-
lel proceedings between court actions and arbitration proceedings, subject
to some issues relating to arbitration being addressed in the Regulation.237
The Green Paper suggests a partial deletion of the exclusion of arbitration
from the Regulation and inserting a special jurisdiction rule regulating juris-
diction of courts in taking jurisdiction to support arbitration proceedings.238
The Regulation will also apply in courts’ proceedings to issue provisional
measures to protect arbitration, such as freezing orders. The court judg-
ments in the validity and existence of arbitral awards, merging or setting
aside arbitral awards, can be recognized and enforced in other Member
States under the Regulation.239 In particular, the Green Paper proposes
methods to deal with the relationship between arbitral tribunals and courts

234 Because the Brussels I regime would not bind any third country.
235 Recast Brussels I, Art 33(1).
236 ‘Recast Proposal’.
237 Green Paper, 8.
238 Ibid., 9.
239 Ibid., 9.
220 Autonomy and supporting measures in Europe
in deciding the validity of an arbitration clause. The approach is to give pri-
ority to the supervisory court of arbitration.240 The Green Paper also pro-
poses a rule to refuse recognition and enforcement of judgments from a
Member State if it is irreconcilable with an arbitral award enforceable under
the New York Convention. Alternatively, the arbitral awards can be enforced
freely within the EU after it is certified by the supervisory court.241
The Recast Proposal continues to exclude arbitration from its scope.
Such exclusion is broad in that it excludes not only arbitral procedure but
all issues in relation to arbitration from the proposed scheme, including
‘the form, existence, validity or effects of arbitration agreements, the
powers of the arbitrators, the procedure before arbitral tribunals, and the
validity, annulment, and recognition and enforcement of arbitral
awards’.242 The Recast Proposal also includes a rule dealing with the rela-
tionship between arbitration and court proceedings. It does not provide a
complete negative kompetenz-kompetenz rule to exclude all courts the power
to decide the preliminary issues of an arbitration agreement. It, however,
grants priority to the supervisory court of arbitration in case of conflicts. If
the seat of the arbitration is in a Member State, once the supervisory court
or the arbitral tribunal is seized to decide, either as a primary or an incid-
ental question, the validity and effect of the arbitration agreement, the
court in any other Member State where jurisdiction is contested on the
basis of the existence of arbitration agreements should stay jurisdiction.
The proposal, however, does not completely prevent a non-supervisory
court from deciding the validity of an arbitration agreement. If the
defendant contests jurisdiction based on the existence of a valid arbitra-
tion agreement without commencing proceedings in the supervisory court
or arbitral tribunal, the non-seated court can continue proceedings to
decide the preliminary issues relating to arbitration.
The seat priority, however, is deleted in the final version of the Recast
Brussels I. The text of the Recast Regulation only includes the same exclu-
sion provision as the old Article 1(2)(d), which excludes arbitration from
its scope. Only Recital 12 provides some useful guidance in relation to
arbitration, which reads:

This Regulation should not apply to arbitration. Nothing in this Regu-

lation should prevent the courts of a Member State, when seized of an
action in a matter in respect of which the parties have entered into an
arbitration agreement, from referring the parties to arbitration, from
staying or dismissing the proceedings, or from examining whether the
arbitration agreement is null and void, inoperative or incapable of
being performed, in accordance with their national law.

240 Ibid., 9.
241 Ibid., 9.
242 Recital 11.
 Autonomy and supporting measures in Europe 221
A ruling given by a court of a Member State as to whether or not an
arbitration agreement is null and void, inoperative or incapable of
being performed should not be subject to the rules of recognition and
enforcement laid down in this Regulation, regardless of whether the
court decided on this as a principal issue or as an incidental question.
On the other hand, where a court of a Member State, exercising
jurisdiction under this Regulation or under national law, has deter-
mined that an arbitration agreement is null and void, inoperative or
incapable of being performed, this should not preclude that court’s
judgment on the substance of the matter from being recognised or, as
the case may be, enforced in accordance with this Regulation. This
should be without prejudice to the competence of the courts of the
Member States to decide on the recognition and enforcement of
arbitral awards in accordance with the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, done at New York on 10
June 1958 (‘the 1958 New York Convention’), which takes precedence
over this Regulation.
This Regulation should not apply to any action or ancillary pro-
ceedings relating to, in particular, the establishment of an arbitral tri-
bunal, the powers of arbitrators, the conduct of an arbitration
procedure or any other aspects of such a procedure, nor to any action
or judgment concerning the annulment, review, appeal, recognition
or enforcement of an arbitral award.

This recital provides three important rules: first, the courts of any Member
States have the competence to decide the validity of arbitration agree-
ments according to their national law.243 In other words, the Regulation
does not resolve the conflict of jurisdiction in terms of arbitration agree-
ments. There is no lis pendens rule in favour of the first seized court, or
seat priority rule in favour of the supervisory court. There is even no rule
giving priority to arbitral tribunals. The Regulation simply leaves this issue
to be decided by the national law or international conventions.
Second, the ruling on the validity of an arbitration agreement is not
subject to the recognition and enforcement of the Regulation. It means
that even if a non-seated court rules the arbitration agreement invalid, it
cannot bar a seated court from making a different ruling on the same
issue. Further, other Member States are not obliged to recognize and
enforce any court’s ruling on the validity of arbitration agreements. This
issue is completely excluded from the scope of the Regulation.
Third, if the court determines that an arbitration agreement is null and
void, this should not preclude that court’s judgment on the substance of
the matter from being recognized and enforced within the Regulation.244

243 Recital 12.

244 Ibid.
222 Autonomy and supporting measures in Europe
The other Member State, at the same time, can also decide the recogni-
tion and enforcement to arbitral awards pursuant to the New York
Convention, which takes precedence over the Recast Brussels I.245 This
works to deal with irreconcilable decisions resulting from the conflicts of
jurisdiction. While a non-seated court can decide the validity of an arbitra-
tion agreement and does not need to give precedence to the supervisory
court or tribunal, and no lis pendens rule applies while a court is asked to
decide the validity of an arbitration agreement, the possibility is that more
than one court or tribunal may proceed to decide the validity of an arbit-
ration agreement. While the non-seated court rules the arbitration clause
invalid, it will move on to give judgment to the merit. This judgment is
enforceable under the Recast Regulation. However, if an arbitral tribunal
also makes an award on the same matter, the enforcement court could
enforce the award pursuant to the New York Convention. Although the
recital does not clearly state whether the judgment or the award takes pri-
ority, the term ‘without prejudice to’ shows that the New York Convention
shall take priority. In other words, if awards are made which are enforce-
able pursuant to the New York Convention, the court should enforce the
awards instead of an irreconcilable judgment under the Brussels I Regula-
tion. The problem here is: what if a non-seated court decides the merit
earlier and the application has been made in the enforcement court? Shall
the enforcement court enforce the judgment pursuant to the Regulation
or shall the court wait while knowing the arbitral proceedings on the same
merit is on-going? If the court has already recognized the judgment, and
another party applies for the recognition and enforcement of an irrecon-
cilable award, would recognition be refused based on public policy of the
forum, i.e. it is against public policy to recognize an award which is con-
trary to the irreconcilable judgment that has already been recognized in
this country? Fortunately, this situation may not exist very often in practice
because arbitration usually is quicker than litigation.
All these rules are understood as means to maintain a sound relation-
ship between the Regulation and other international conventions in the
field of arbitration. If there is international law establishing judicial coop-
eration in the field of arbitration, the Regulation is reluctant to influence
the Member States in these regards. However, can the Regulation keep
clear of arbitration at all? The answer probably is negative. Although Regu-
lation jurisdiction rules are not applicable to the validity of arbitration
agreements,246 they continue to apply if the courts of a Member State are
seized to decide substance of a dispute allegedly submitted to arbitration.

245 Recital 12.

246 The second paragraph of the recital says that the decision on the validity of an arbitra-
tion agreement is not subject to the recognition and enforcement in the Regulation. It
shows that validity of an arbitration agreement is completely excluded from the Regula-
tion. The Regulation jurisdiction rules shall not apply either.
 Autonomy and supporting measures in Europe 223
Arbitration, raised as a preliminary and incidental question, would not
affect a court from taking jurisdiction under the Regulation over the merit
of a dispute. The court then will consider the validity of arbitration agree-
ments under the remit of this jurisdiction. Although it would not preclude
parallel proceedings, at least the lis pendens rule would not apply to arbit-
ration agreements, i.e. if the supervisory court is seized second to decide
the validity of the arbitration agreement, the court does not need to stay
jurisdiction in favour of the non-seat court.
8 Recognition and enforcement of
judgments and awards

1 Introduction
Party autonomy should also be respected at the recognition and enforce-
ment stage. The final outcome of any dispute resolution methods is to
have the decision enforced. Otherwise, the whole procedure has no prac-
tical value to the parties and constitutes a complete waste of time and
money. Unfortunately, effective recognition and enforcement require the
cooperation of other jurisdictions. If a country fully respects party auto-
nomy and enforces all valid jurisdiction or arbitration agreements, while
the enforcement country does not have the same policy to give effects to
party autonomy, judgments made by the country of origin will not be
enforced. This will, in return, cause the country of origin to doubt its
policy supporting a valid dispute resolution clause and may make this
country refuse to give effects to party autonomy in cases where judgments
may hardly be enforced in the place of enforcement. On the other hand,
if the enforcement country adopts a strong policy to refuse enforcement
of judgments made in breach of a valid jurisdiction or arbitration clause, it
may not affect the law and practice in another country but may make
parties reluctant to breach a freely agreed dispute resolution clause. In the
current law, recognition and enforcement of arbitral awards are relatively
straightforward and certain given the successful enforcement of the New
York Convention. Comparatively, recognition and enforcement of judg-
ments are more problematic.

2 Recognition and enforcement of arbitral awards

The New York Convention harmonized the rule in recognition and enforce-
ment of arbitral awards made by the tribunal seated in a foreign country.
Pursuant to Article III, each Contracting State ‘shall’ recognize and enforce
foreign arbitral awards granted in another contracting country. The pro-
cedure of recognition and enforcement should follow the domestic law of
the requested country, and the state cannot impose higher fees or more
onerous conditions to enforce foreign awards than domestic awards. The
 Recognition and enforcement of judgments 225
policy is well received in many Contracting States. For example, US courts
consider it an often stated federal policy in favour of the enforcement of
arbitral awards.1 In order to improve efficient enforcement of Convention
awards, China promulgated the Fee Regulation, requiring decisions on
recognition and enforcement to be made within two months and enforce-
ment to be completed within six months after decision.2
The New York Convention also provides exceptions upon which recog-
nition and enforcement can be refused. In total, seven refusal grounds are
provided, five of which must be pleaded by the opposing party, while two
of which can be relied on by the court using its own motion.3 The enforce-
ment of arbitral awards will be rejected if the opposing party could estab-
lish a party is incapable or the arbitration agreement is invalid, the
defendant is not informed properly or the arbitral proceedings are not
conducted fairly, the arbitrators exceed authority, the arbitral tribunal or
the procedure is not composed according to the parties agreement, and
the awards are not yet binding.4 Enforcement may be refused if the court
finds the arbitral awards are contrary to public policy or the subject matter
is non-arbitrable.5 The New York Convention is implemented in most
countries in the world, and the rules on the recognition and enforcement
apply in all the Contracting States of the Convention.
National practice, however, differs in the interpretation of these refusal
grounds, especially the most controversial ground of public policy.6 The
concept of public policy is vague and varies widely between different coun-
tries. Some countries tend to use public policy more often than others to
refuse recognition and enforcement of foreign arbitral awards, which
makes the enforcement of arbitral awards more difficult in some countries
than in others.

2.1 Public policy

English approach
In England, enforcement of arbitral awards cannot be refused simply
because it infringes English law.7 There is a high threshold to plea the

1 Moses H. Cone Mem’l Hospital v Mercury Construction., 460 US 1, 24 (1983); Whirlpool v Philips,
848 F. Supp. 474, 478 (S.D.N.Y. 1994); Shearson v McMahon, 482 US 220 (1987).
2 Regulations of the Supreme People’s Court Regarding the Issue of Fees and Investigation
Periods for the Recognition and Enforcement of Foreign Arbitral Awards (promulgated by
the Supreme People’s Court, 14 November 1998, effective 21November 1998). Souza,
2006: 1333.
3 Art V.
4 Art V.1.
5 Art V.2.
6 Art V.2(b).
7 Fawcett and Carruthers, 2008: 658.
226 Recognition and enforcement of judgments
defence of public policy in order to deny the enforceability of arbitral
awards.8 Public policy should be used with ‘extreme caution’,9 and cannot
‘furnish an open-ended escape route for refusing enforcement of New
York Convention awards’.10 It can only be used to maintain the ‘fair and
orderly administration of justice’.11
Public policy will be upheld if the awards enforce an illicit contract in
the place of performance. In Soleimany v Soleimany,12 the English Court of
Appeal held that arbitral awards will not be enforced in England if the
arbitrators, by applying the law of another country, uphold the illicit trans-
actions performed in a friendly neighbour country. In R v V,13 however,
the arbitral award was enforced, even if the purchase of personal influence
was contrary to English law. The reason is that the contract was performed
in Libya and valid under the law of performance.
While a contract is obtained by, or aims to facilitate, an illicit act, such
as corruption and bribery, enforcing this contract is against public policy
of English law. However, public policy used to rebut an arbitral award
should be ‘international public policy’. English courts then must balance
two competing policies, namely the policy to fight against corruption and
the policy to keep finality of arbitral awards. In Westacre Investments v
Jugoimport-SDPR Holdings,14 it was held that, although commercial bribery
was contrary to public policy, it was not strong enough to override the
finality of arbitral awards. Although the English court would invalidate the
contract if it is the trial court, the English court had to enforce the arbitral
award. The same decision was also made in Omnium de Traitement et de Val-
orisation SA v Hilmarton Ltd,15 where the English court enforced another
arbitral award which allegedly facilitated payment of bribes. The English
court, again, stated that the concern was not whether the underlying con-
tract could be enforced, but whether the arbitral award could be enforced.
A different standard as to public policy, thus, applies.
Public policy defence can also be triggered if the awards are acquired
by fraud, such as perjury. However, fresh evidence, which is not available
at the time of arbitration with reasonable diligence, is required.16 Public
policy defence cannot be used if it may reopen an argument that was
raised and considered in arbitration.17 Furthermore, the alleged fraud
should contribute ‘in a substantive way’ for the claimant to obtain the

8 Nomihold Securities v Mobile Telesystems Finance SA, [2011] EWHC 2143 (Comm), para 55.
9 IPCO (Nigeria) Ltd v Nigerian National Petroleum Co [2005] 2 Lloyd’s Rep 326, para 13
10 IPCO (Nigeria) Ltd, ibid., para 13.
11 Ibid., para 13.
12 [1998] 3 WLR 811.
13 [2008] EWHC 1531 (Comm), [2009] 1 Lloyd’s Rep 97.
14 [1999] 3 W.L.R 811.
15 [1999] 2 Lloyd’s Rep. 222.
16 Nomihold Securities, para 77; Ladd v Marshall, [1954] 1 WLR 1489.
17 Nomihold Securities, para 55.
 Recognition and enforcement of judgments 227
18
awards. Because of the high threshold, although public policy defence
was raised occasionally in English courts, it was rarely upheld.
Under the influence of the EU, recognition and enforcement of an
arbitral award will be refused in England if the award is inconsistent with
EU public policy. For example, the EU Treaty provided that an arbitral
award shall not be recognized and enforced in a Member State if the
award enforces a contract facilitating anti-competition activities, including
fixed prices, market control, share markets or sources of supply, cartel,
discriminatory pricing and tying.19 Protecting competition is EU public
policy and a uniform EU definition has been provided as to what activities
are against EU policy. English courts, as a result, should enforce the EU
law and refuse recognizing and enforcing arbitral awards on these
grounds.

US approach
The US also considers that broad construction of public policy ‘would
vitiate the Convention’s basic effort to remove pre-existing obstacles to
enforcement’20 and interprets public policy as the ‘most basic notions of
morality and justice’.21 The narrow definition makes public policy defence
hardly succeed in practice. In Changzhou AMEC Eastern Tools and Equip-
ments v Eastern Tools & Equipment,22 the California District Court said it ‘has
not found any case in which a district court has declined to confirm a
foreign arbitral award under Article V(2)(b) based on a defense of
duress’.23 Arbitrators’ errors in applying law, legal reasoning or manifest
disregard of law,24 inconsistent testimony,25 economic sanctions and
diplomat relations,26 and existence of restrictive trade clause27 are not
enough to reach the level of public policy to refuse recognition and

18 Nomihold Securities, para 64.

19 Arts 101 and 102 TFEU.
20 Parsons & Whittemore Overseas Co. v Société General de L’industrie du Papier, 508 F.2d 969, 974
(2d Cir. 1974).
21 Parsons & Whittemore Overseas Co, ibid.; Ameropa AG v Havi Ocean Co. LLC, 2011 WL
570130, 2 (S.D.N.Y. 16 February 2011); Ministry of Def. and Support for the Armed Forces of the
Islamic Republic of Iran v Cubic Def. Sys., 665 F.3d 1091, 1097 (9th Cir. 2011).
22 Not reported in F. Supp. 2d, (C.D.Cal., 2012).
23 Ibid., 11.
24 SEI Societa Esplosivi Industriali SpA v L-3 Fuzing and Ordnance Systems, Inc., 843 F. Supp. 2d
509 (D.Del.,2012); Karaha Bodas Co., LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 364 F.3d 274, 306 (5th Cir. 2004); Banco de Seguros del Estado v Mutual Marine
Office, Inc., 344 F.3d 255, 264 (2d Cir. 2003); M & C Corp. v Erwin Behr GmbH & Co., KG,
87 F.3d 844, 851 n. 2 (6th Cir. 1996).
25 Waterside Ocean Navigation Co. v International Navigation Ltd, 737 F.2d 150 (2d Cir. 1984).
McLaughlin and Genevro, 1986: 261–262.
26 Parsons v Whittemore, (1974) 508 F.2D 2nd Cir. 969.
27 La Société Nationale v Shaheen Natural Resources Co., 585 F. Supp. 57 (S.D.N.Y. 1983), aff’d,
733 F.2d 260 (2d Cir.), cert. denied, 469 US 883 (1984).
228 Recognition and enforcement of judgments
enforcement of arbitral awards. For example, in Waterside Ocean Navigation
Co, the disputed arbitral award was made based on inconsistent testimony
but the court ruled that since the arbitral tribunal was aware of the incon-
sistent testimony and no perjury was made, the award was not against
public policy.28
Public policy defence, however, will be upheld if the procedural irregu-
larity exists. For example, arbitrators fail to disclose connections with one
party.29 Escalated interest rate was a good reason to support public policy
defence in at least one US case.30 Duress or unconscionableness, if estab-
lished, could form a basis to refuse enforcement of foreign awards under
the New York Convention.31 Some US courts extend duress and uncon-
scionableness to all requirements to conclude a valid arbitration agree-
ment, including fraud, mistake and duress.32 This probably overlaps with
the validity requirement for arbitration agreements. If an arbitration
agreement was concluded under duress or was unconscionable under the
US law as the law of the enforcement forum, enforcement could be denied
under V(1)(a).

Chinese approach
Public policy defence is rephrased as ‘public interest’ (gong gong li yi) in
Chinese legislation.33 It is argued by some commentators that the meaning
of public interest can be significantly broader than what intends to be
public policy in the New York Convention.34 It may include ‘not only
adopted rules, expressed state commitments and social morality, but also
less transparent state interests and unstable short-term policies’.35 The
Chinese version of ‘public policy’ indeed shows the emphasis of govern-
ment policies and political means, which is contrary to the original
purpose or intention of the New York Convention. There is the worry that
Chinese courts may refuse recognition and enforcement of foreign awards
made against an important employer in China, a state company or an
essential economic body.36 Examples can be found in Dongfeng Garments

28 McLaughlin and Genevro, 1986: 262.

29 Fertilizer Co of India v IDI Management, Inc., 517 Supp. 948, 955 (S.D. Ohio, 1981), reh’g
denied, 530 F. Supp 542 (S.D. Ohio 1982); McLaughlin and Genevro: 1986: 262.
30 Laminoirs-Trefileries-Cableries de Lens v Southwire Co., 484 F. Supp. 1063 (N.D. Ga. 1980).
McLaughlin and Genevro: 1986: 262.
31 Transmarine Seaways Corp. v Marc Rich & Co. A. G., 480 F. Supp. 352, 358 (S.D.N.Y. 1979).
McLaughlin and Genevro: 1986: 262.
32 Chloe Z Fishing Co. v Odyssey Re (London) Ltd, 109 F. Supp. 2d 1236, 1259 (S.D.Cal. 2000);
DiMercurio v Sphere Drake Ins. PLC, 202 F.3d 71, 79 (1st Cir. 2000).
33 Art 71, PRC Arbitration Act 1994; PRC Civil Procedure Law (2012 amendment), Art 274.
34 Pien, 2007: 594.
35 Zhang, 1999: 476; Souza, 2006: 1329.
36 Pien, 2007: 595.
 Recognition and enforcement of judgments 229
37
Factory of Kaifeng City v Henan Garments Import and Export, where the local
court refused to enforce an award against a company which was a major
player in the local economy because of the worry that the awards might
‘seriously harm the economic influence of the State . . . and adversely
affect the foreign trade order of the State’.38
The broad and ambiguous interpretation of public policy in Chinese
law has been widely criticized. It is suggested that the Chinese judge
should have a better understanding of the nature of international arbitra-
tion and the need of international commerce. The reason that foreign
arbitral awards may put a major company in financial difficulty or lead to
the loss of employment cannot be a valid defence.39 Fortunately, com-
mentators have observed that the recent practice in China shows signs of
improvement.40 For example, the Stockholm Chamber of Commerce
ordered a Chinese state-owned company to repay a debt to the Japanese
company. The Chinese company raised the public policy defence based
on the ground that the repayment had not been approved by the State
Administration on Foreign Exchange (SAFE). The Supreme People’s
Court held that, although approval of the SAFE was compulsory for
sending foreign currency out of China, the alleged breach of the adminis-
trative regulation did not naturally mean infringement of public policy.41
Furthermore, according to an unverified statement of the deputy Chief
Justice in a public speech, Chinese courts did not invoke public policy
defence during 2000–2008.42 Ironically, two months after the speech, the
Supreme People’s Court refused enforcement of an arbitral award on the
public policy ground.43 In this case, a Chinese company and three foreign
companies entered into a joint venture contract, including an arbitration
agreement. Later, a leasing dispute arose between the Chinese company
and the joint venture and the dispute was brought to and decided by the
ICC Paris in favour of the joint venture. The Chinese court, however, held
that the arbitration agreement only bound the contractual parties, i.e. the
Chinese company and the three foreign companies, but not the Chinese
company and the joint venture, which was a separate new entity in law.
The Chinese court, thus, has jurisdiction over the dispute. By taking juris-
diction, the arbitral tribunal has violated Chinese sovereignty and, thus,

37 Zhengzhou Intermediate People’s Ct., 28 September 1992. Cited in Pien, 2007: 595. This
award is not a foreign award but foreign-related award, which was made by a CIETAC with
foreign parties involved.
38 Pien, 2007: 595. The decision was overruled by the Supreme Court.
39 Inoue, 2006: 189.
40 Greenberg et al., 2011: 465.
41 Chen and Howes, 2009.
42 Wan, 2008.
43 www.chinanews.com.cn/cj/cyzh/news/2008/07-16/1314096.shtml (accessed on 30 July
2013).
230 Recognition and enforcement of judgments
infringed Chinese public policy.44 This case is clear evidence that ‘public
policy’ was lightly invoked in the Chinese court. Even if the arbitral tri-
bunal had no jurisdiction in deciding the dispute, this might only fall
under the grounds of Article V(c), i.e. the award deals with a different
issue and does not fall within the arbitration agreement. The lack of juris-
diction of a tribunal may not be considered strong enough to breach
‘international public policy’. It is thus argued that, although Chinese
judges realize the importance of supporting international arbitration and
only apply public policy with great precaution,45 there is still a long way
to go.

3 Recognition and enforcement of judgments—national

law

3.1 English law

Recognition and enforcement of foreign judgments in England fall into
three categories. The first type of judgment falls within the scope of the
Brussels I Regulation and enforcement should follow the rule of Brussels
I. The Brussels I Regulation establishes clear rules facilitating easy recogni-
tion and enforcement of foreign judgments with limited exceptions, which
will be discussed later.46 The second refers to judgments obtained in Com-
monwealth countries of states with bilateral recognition and enforcement
treaties in the UK.47 These treaties establish grounds similar to the Brus-
sels I Regulation, in order to help effective recognition and enforcement
of judgments in the UK. Recognition and enforcement, however, may be
refused if the country of origin has no jurisdiction under English law, the
defendant was not properly noticed or served and did not appear, the
judgment was obtained by fraud, the enforcement would be contrary to
English public policy or the party making application has no standing.48
The third type of judgment is obtained in the country without any judg-
ment treaty with the UK. Enforcement of judgments shall be decided pur-
suant to common law. English common law does not require reciprocity
between states, nor does it depend on comity.49 English common law con-
siders that the foreign judgments create a debt and the judgment debtor
has the obligation to perform.50 In order to enforce the foreign judg-
ments, the English court should be satisfied the judgment is conclusive

44 Chen and Howes, 2009.

45 Wan, 2008.
46 See s4.1.
47 Administration of Justice Act 1920; Foreign Judgments (Reciprocal Enforcement) Act
1933.
48 Section 4 of the 1933 Foreign Judgments (Reciprocal Enforcement) Act.
49 Hartley, 2009: 344.
50 Hartley, 2009: 344, citing Williams v Jones, (1845) 13 M & W 628.
 Recognition and enforcement of judgments 231
and final, it is monetary and does not involve penalty payment to a state
organ, and the court of origin has jurisdiction pursuant to English private
international law.51 However, foreign courts’ jurisdiction is determined by
narrower grounds than deciding English courts’ jurisdiction at the trial
stage. The foreign court should either take jurisdiction upon the defend-
ant’s submission or have sufficient connection with the judgment debtor.52
The ground is narrow because the connection between the cause of action
and the foreign court is not a ground to recognize and enforce foreign
judgments.53 However, the ground of submission is interpreted broadly to
include the conclusion of a valid choice of court clause.54 Furthermore, if
the foreign court takes jurisdiction in breach of a valid jurisdiction or
arbitration agreement, the judgment may not be enforced in England.55
Finally, even if all the above requirements are satisfied, enforcement of
foreign judgments can be refused. The defendant could raise a few valid
grounds to prevent the enforcement of foreign judgments, including the
denial of a fair trial,56 the existence of procedural fraud57 and the contrary
to public policy of England.
Foreign judgments obtained pursuant to a valid jurisdiction agreement
may be enforced in England in accordance with the common law. The
explicit provision preventing enforcement of foreign judgments made in
breach of a valid jurisdiction clause may be helpful to urge the claimant to
sue in the chosen court, if the judgment is likely to be enforced in
England. In general, the conditions to recognize and enforce foreign
judgments are not stringent. Foreign monetary judgments may be
enforced in England as a matter of principle. The common law approach,
however, requires discretion to be taken in individual cases, and uncer-
tainty, thus, continues to exist.

3.2 US law
The US is not party to any bilateral or multilateral treaties facilitating
reciprocal recognition and enforcement of foreign judgments. There is
also no federal law on recognizing and enforcing foreign judgments in the
US either. In an ancient case, Hilton v Guyot,58 the Supreme Court
expressed the view that a foreign judgment only has effect in its own ter-
ritory, but the US court may give effect to foreign judgments based on

51 Fentiman, 2010: para 18.10; Clarkson and Hill, 2011: 174.

52 Clarkson and Hill, 2011: 164–165.
53 Hartley, 2009: 354.
54 Hartley, 2009: 354.
55 Section 32, the Jurisdiction and Judgments Act 1982. See Briggs, 2008: 355–357.
56 Fentiman, 2010: paras 18.25–18.29.
57 E.g. the claimant withheld evidence or the witness committed perjury. See Fentiman,
2010: para 18.30.
58 159 US 113 (1895).
232 Recognition and enforcement of judgments
comity and due process. If the foreign proceedings are fair and regular,
the foreign courts are competent, the foreign judicial system can provide
‘impartial administration to justice’ and there is nothing to show preju-
dice or fraud, the US court may enforce the foreign judgment under the
doctrine of comity.59 Although the Supreme Court further imposed the
requirement of reciprocity,60 the reciprocal requirement is no longer good
law in Federal courts.61
Hilton, however, did not provide guidance as to the standard to enforce
foreign judgments. Since there is no uniform legislation on recognition
and enforcement of judgments, the issue is largely left to each state to
decide.62 Some states have adopted the Uniform Foreign Money-
Judgments Recognition Act 1962 or 2005, and others continue to use the
common law in deciding recognition and enforcement of foreign judg-
ments.63 Although these state laws share certain similarities, they are far
from identical.64 State law allows courts to recognize and enforce foreign
judgments pursuant to comity. Most states exclude the requirement of
reciprocity as a condition; some states still make it a discretion of the
court. Georgia and Massachusetts make reciprocity a mandatory ground to
recognize and enforce foreign judgments.65 The doctrine of reciprocity,
however, is not applied as stringently as in Chinese law.66 If the opposing
party proves that the country of origin has no way to enforce US judg-
ments, recognition and enforcement may be refused. It does not require a
case precedence in the country of origin, under which the US judgment
has been enforced.67 The purpose of introducing the reciprocity require-
ment is not to make recognition and enforcement difficult in the USA,
but to encourage or urge foreign countries to recognize and enforce US
judgments.68
US courts generally take a liberal approach to recognizing and enforc-
ing foreign judgments. Although as a matter of principle, most foreign
monetary judgments can then be recognized and enforced in US courts,
recognition and enforcement may be refused if the foreign proceedings
lack due process69—for instance, the court of origin does not provide

59 159 US 202–203.
60 Brand, 1991: 258–262.
61 Erie Railroad v Tompkins, 304 US 64 (1938); Brand, 2012: 3; Brand, 1991: 263–265.
62 Luthin, 2008: 117; Brand, 2012: 2; Restatement (Second) of Conflict of Laws, s98.
63 Brand, 2012: 7.
64 Ibid., 6–9.
65 Ibid., 11.
66 See subsection 3.3 below.
67 Brand, 2012: 12; Luthin, 2008: 117–118; Direction Der Disconto-Gesellschaft v United States
Steel Corp., 300 F. 741, 747 (D.N.Y. 1924).
68 Luthin, 2008: 117–118.
69 British Midland Airways Ltd (BMA) v Int’l Travel, Inc., 497 F.2d 869 (9th Cir. 1974).
 Recognition and enforcement of judgments 233
70 71
impartial tribunals, the court of origin has no jurisdiction, the defend-
ant is not properly served and has no chance to defend himself,72 the
foreign judgment is obtained by fraud73 and enforcement will infringe US
public policy.74
Foreign judgments made pursuant to a valid jurisdiction clause, as a
result, should be able to be enforced in most US states, unless one of the
refusal grounds exists. The difficulty is that US practice differs between
each state, and the common law procedure in some states provides uncer-
tainty. Applying for a judgment recognized in the USA is not straight-
forward and convenient in the view of many litigants. Furthermore, it is
argued by Brand that breaching a valid jurisdiction agreement may make
foreign judgments hard to enforce in the US.75 Breaching a valid jurisdic-
tion agreement questions the jurisdiction of the country of origin, and
contradicts the principle established by Berman. If this is the case, it may
encourage the parties to perform their jurisdiction agreements, especially
where judgments are likely to be enforced in the US. However, there is
uncertainty on this. First, the country of origin may not lack jurisdiction
under its domestic law, though jurisdiction is taken in breach of the juris-
diction agreement, e.g. taking jurisdiction probably is better for the end of
justice. Second, taking jurisdiction in breach of a jurisdiction agreement
may not equalize to the lack of due process. It is thus submitted that suing
in the court of origin in breach of a valid jurisdiction clause may not
amount to a reason for the US court to refuse recognizing and enforcing
the judgments.

3.3 Chinese law

China is one of the countries where very restrictive grounds have been
provided to recognize and enforce foreign judgments. Foreign judgments
can only be recognized and enforced in China if the judgment-rendering
country and China have entered into bilateral/multilateral treaties, or if
the reciprocal relationships exist. Article 282 of the PRC Civil Procedure
Law (Amended) 2012 provides:

70 Bank Melli Iran v Pahlavi, 58 F.3d 1406 (9th Cir. 1995); Bridgeway v Citibank, 201 F. 3d 134
(2d Cir. 2000); Brand, 2012: 14.
71 Brand, 2012: 18–19; Society of Lloyd’s v Byrens, 2003 US Dist. LEXIS 26719 (S.D. Cal. 29
May 2003); Luthin, 2008: 133.
72 Corporacion Salvadorena de Calzado v Injection Footwear Corp., 533 F. Supp. 290 (S.D. Fla.
1982); Brand, 2012: 20.
73 Laufer v Westminster Brokers, Ltd, 532 A.2d 130 (D.C. App. 1987); De La Mata v Am. Life. Ins.
Co., 771 F. Supp. 1375, 1377–1390 (D. Del. 1991); Brand, 2012: 20–21.
74 Somportex Ltd v Phila. Chewing Gum Corp., 453 F.2d 435, 443 (3d Cir. 1971), cert. denied,
405 US 1017 (1972); Bachchan v India Abroad Publications, 585 N.Y.S.2d 661 (Sup. Ct.
1992); Brand, 2012: 21–23.
75 Brand, 2012: 23; 2005 Recognition Act § 4(c)(5); 1962 Recognition Act § 4(b)(5).
234 Recognition and enforcement of judgments
In the case of an application or request for recognition and enforce-
ment of a legally effective judgment or written order of a foreign
court, the people’s court shall, after examining it in accordance with
the international treaties concluded or acceded to by the People’s
Republic of China or with the principle of reciprocity and arriving at
the conclusion that it does not contradict the primary principles of
the law of the People’s Republic of China nor violates State sover-
eignty, security and social and public interest of the country, recog-
nize the validity of the judgment or written order.

It is clear that the existence of a jurisdiction clause is not one of the

grounds for a Chinese court to recognize and enforce foreign judgments.
Since the condition for a Chinese court to enforce foreign judgments is
very restrictive, most foreign judgments could not be recognized and
enforced in China. According to the information published by the PRC
Ministry of Foreign Affairs in 2010, China had entered into judicial coop-
eration treaties to recognize and enforce civil judgments with around 30
countries,76 four of which have not yet entered into force.77 China has not
entered into treaties with most of its important trade partners, such as
Germany, the USA and Japan. Furthermore, the principle of reciprocity is
defined very strictly in China. China would not recognize a foreign judg-
ment if the foreign court might in principle recognize the Chinese judg-
ment but has not done so yet in practice. There must be existing authority
in the foreign country that has recognized Chinese judgments in prece-
dence.78 Furthermore, even if the foreign court had recognized Chinese
judgments before, the judgment creditor must prove to the Chinese court
that the judgment in application is the same type, and if it is made in
China it would be equally recognized and enforced in the foreign country
according to the precedent.79 As a result, although the USA and Germany
have recognized Chinese judgments before, it is not a guarantee that their
judgments can certainly be recognized in China.80 If the parties have
chosen one of those courts the judgments of which could not be recog-
nized and enforced in China, and the judgment creditor has all its assets
located in China, enforcing the jurisdiction clause undoubtedly creates

76 See the website of the PRC Ministry of Foreign Affairs, www.mfa.gov.cn/chn/gxh/zlb/

tyfg/, accessed on 1 May 2012.
77 Belgium, Argentina, Kuwait and Peru.
78 Supreme People’s Court, ‘Re whether the People’s Courts should recognize and enforce
the Judgment given by the Japanese Court in Payment of Debts’, [1995] No 17; NKK
(Japan) v Beijing Zhuangsheng, Beijing Municipality High Court, (2008) No 919; RNO v
Beijing International Music Festival Society, Beijing Intermediate Court (2004) No 928.
79 Zhang et al., 2010.
80 US courts recognized the judgment made by the Hubei Province High People’s Court in
Hubei Gezhouba Sanlian Industrial & Hubei Pinghu Cruise v Robinson Helicopter Co, Inc,
06–01798 (C.D. 2009).
 Recognition and enforcement of judgments 235
difficulties for the judgment creditor and it is hard to say it is in the
interest of justice for the Chinese court to decline jurisdiction in favour of
the chosen court.
Furthermore, while the foreign judgment cannot be recognized and
enforced in China, the judgment creditor could bring the same cause of
action in China. This is provided in the ‘1992 Opinion’ of the Supreme
People’s Court, Article 318 of which provides:

If the party applied to the competent intermediate court of the Peo-

ple’s Republic of China for recognition and enforcement of foreign
judgments or rulings, if the country where the foreign court is located
and the People’s Republic of China have not concluded or acceded to
international treaties, or formed the relation of reciprocity, the appli-
cant could sue in the People’s Court for the competent People’s Court
to make judgment for enforcement.

It means that if the Chinese court, when facing a valid foreign jurisdiction
clause, declines jurisdiction and directs the parties to the chosen forum,
after the chosen forum makes judgment in favour of the claimant, the
claimant must sue in the Chinese court to make judgment for enforce-
ment. The difficulty for a Chinese court to recognize and enforce foreign
judgments causes tremendous disadvantages for the business of inter-
national commerce. It hampers not only international comity but also
party autonomy. Even if the parties freely enter into a valid agreement to
submit all their disputes to another country, the judgment cannot be
enforced in China. If the defendant has assets located exclusively in China,
it is irrational for the claimant to bring the action in the chosen court. If
the claimant follows the choice of court agreement, the claimant will bring
the same action in China in order to enforce the judgment at the enforce-
ment state. It will lead to duplicate litigation, which increases litigation
costs for both parties, wastes public resources and causes delay.81 The most
rational choice, as a result, is for the claimant to breach the choice of
court agreement and to sue the defendant in China.

4 Recognition and enforcement of judgments—Brussels I

Regulation

4.1 Current scheme

The Brussels I Regulation provides a straightforward and simple scheme
to recognize and enforce judgments between Member States. A judgment
within the scope of the Brussels I Regulation ‘shall be recognised in the

81 NKK (Japan) v Beijing Zhuangsheng, Beijing Municipality High Court, (2008) No 919; RNO
v Beijing International Music Festival Society, Beijing Intermediate Court (2004) No 928.
236 Recognition and enforcement of judgments
other Member States without any special procedure being required’.82 All
judgments that can be recognized should be enforced, regardless of
whether the judgment is final or monetary.83 Limited defences to recogni-
tion and enforcement exist though. These include public policy, irregular
proceedings and irreconcilable judgments.84 Public policy is ambiguous
and shall be interpreted by the national court of each Member State
according to its own concept and culture. However, within the framework
of Brussels I, the interpretation of public policy is more restrictive than
national law. The requirement of mutual trust and reciprocity requires the
public policy defence to be used in exceptional circumstances.85 Public
policy defence can be invoked if the judgment is rendered by fraud, or the
enforcement could contradict an important rule of law in the enforce-
ment state.86
The generous recognition and enforcement conditions impose no
problem in enforcing judgments made pursuant to jurisdiction agree-
ments. At least, the parties will not be reluctant to enter into jurisdiction
agreements worrying about the potential enforcement. The problem lies
in the fact that whether the original court is competent is not a ground to
refuse recognition and enforcement of judgments, unless the dispute falls
within the scope of the protective jurisdiction for consumers, insureds and
employees.87 As a result, the requested country must enforce judgments of
the original court, even if the original court takes jurisdiction in breach of
a jurisdiction clause.88 Public policy defence, however, cannot be used if
the trial court fails to enforce a dispute resolution agreement, which is
valid in the view of the enforcement country.89 A potentially relevant
ground is that the judgment cannot be enforced if it is irreconcilable with
an earlier judgment in the enforcement state or other Member State.90 If
the chosen court made decision pursuant to the jurisdiction agreement,
or the chosen court or other Member State ruled on the validity of the jur-
isdiction agreement, the judgment made in breach of the jurisdiction
clause may be irreconcilable with earlier judgments.91 However, the lis
pendens rule and the Gasser v MISAT decision may prevent this situation
from happening.92 Since the current Brussels I Regulation does not fully
harmonize validity requirements for a jurisdiction clause, it is likely that

82 Art 33.
83 Clarkson and Hill, 2011: 193.
84 Art 34, Brussels I Regulation.
85 Fawcett and Carruthers, 2008: 612.
86 Fawcett and Carruthers, 2008: 612–613.
87 Art 35, Brussels I; Case C-7/98, Krombach v Bamberski [2000] ECR I-1935.
88 Hartley, 2009: 337.
89 The Wadi Sudr [2010] 1 Lloyd’s Rep 193; Clarkson and Hill, 2011: 196; Fawcett and Carru-
thers, 2008: 628–630.
90 Art 34(3) and (4), Brussels I.
91 Hartley, 2009: 337.
92 Ibid.
 Recognition and enforcement of judgments 237
the trial court and the enforcement court would reach different conclu-
sions. This enforcement ground provides opportunities for the party to
breach its agreement and to have the judgments enforced. The status will
be improved in the Brussels I Recast, where the non-chosen court cannot
take jurisdiction until the chosen court proceeds to decline the enforce-
ment of the jurisdiction clause.

4.2 Brussels I Recast—abolition of exequatur

The Brussels I Recast adopts important reforms to the recognition and
enforcement of judgments by abolishing exequatur. Exequatur is the pro-
cedure to make declaration of enforceability before judgments can be
enforced. Any party could appeal against the declaration at this stage. This
is the current procedure in the Brussels I Regulation.93 Exequatur pro-
cedure has two functions: declaration of enforceability and marginal
inspection of the foreign judgment.94 In the Commission’s Brussels I
Recast Proposal, it is argued that the mutual trust and judicial cooperation
between Member States ‘has reached a degree of maturity which permits
the move towards a simpler, less costly, and more automatic system of cir-
culation of judgments, removing the existing formalities among Member
States’.95 It is also argued that the enforcement of foreign judgments
falling in the regime of the Brussels I Regulation is ‘almost always’ success-
ful.96 A survey shows the success rate of exequatur application is over 90 per
cent.97 According to the Brussels I Recast, a judgment given in a Member
State can be enforced in another Member State without the need for a
declaration of enforceability.98 The defendant’s right is protected by the
requirement of fair trial and the public policy exemption.99 Abolishing exe-
quatur procedure could simplify the procedure for recognition and
enforcement of judgments and reduce costs and time for EU businesses to
assert rights abroad.100

93 Arts 38–43, Brussels I.

94 Kramer, 2011: 635.
95 European Commission, ‘Proposal for a Regulation on Jurisdiction and the Recognition
and Enforcement of Judgments in Civil and Commercial Matters (Recast)’ (Commis-
sion’s Recast Proposal), COM(2010) 748 final, para 3.11.
96 Green Paper on Brussels I, 2009: 2.
97 Centre for Strategy and Evaluation Services, 2010.
98 Art 39 of the Brussels I Recast.
99 Brussels I Recast, Art 45(1). Public policy and fair trial also includes the requirement of
Art 47 of the EU Charter on Fundamental Rights; see Recast Proposal, para 3.11.
100 European Commission, ‘Green Paper on the Review of Council Regulation (EC) No
44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil
and Commercial Matters’ COM(2009) 175 final, para 1.
238 Recognition and enforcement of judgments
5 Recognition and enforcement of judgments—
international scheme
The Hague Choice of Court Convention 2005 establishes an international
framework to facilitate the effective recognition and enforcement of judg-
ments made pursuant to an exclusive jurisdiction agreement. Denial of
recognition and enforcement can only be based on the grounds listed in
the Convention. In other words, state parties cannot use domestic law or
discretion to refuse enforcing a judgment that falls within the scope of the
Convention.
Upon the application for recognition and enforcement, the requested
court should be bound by the fact found by the court of origin and should
not review the merit of the judgment.101 Recognition or enforcement may
be refused in case of invalidity of judgment agreements, incapacity of a
party, lack of natural justice, fraud, public policy infringement and irre-
concilability with other judgments.102 Recognition and enforcement can
also be refused if the judgment is on a matter excluded from the scope of
the Convention, the judgment is based on a finding on the excluded
matter103 or the judgment grants exemplary or punitive damages which
are not available in the requested country.104 Furthermore, judicial settle-
ment proved by the court chosen in the exclusive jurisdiction clause can
be recognized and enforced in the same manner.105 The Convention
permits the requested court to use domestic procedure to recognize and
enforce judgments. The only requirement is that the court should act
‘expeditiously’.106
The Convention further permits the state to make a declaration that its
court will not recognize or enforce judgments made by the chosen court
which has no objective connections with the dispute.107 The state can also
declare that its court will not recognize and enforce judgments made by
the chosen court while all relevant elements are located in the requested
state.108 These are two further limitations to the recognition and enforce-
ment of judgments. The Hague Convention does not make it a prelimi-
nary requirement for the chosen court to have connections with the
dispute. It also allows the parties to choose a court to decide a purely
domestic matter. This is consistent with the lax tendency in applying party
autonomy in international commerce. Parties are allowed to choose a
neutral third country to adjudicate their disputes. However, if some states

101 Art 8(2).

102 Art 9.
103 Art 10.
104 Art 11.
105 Art 12.
106 Art 14.
107 Art 19.
108 Art 20.
 Recognition and enforcement of judgments 239
have made such declarations, these can clearly prevent the parties from
choosing a neutral court or from subjecting a purely domestic claim to the
court of another country. Although such choices may be ruled valid by the
chosen state, judgments may not be enforced.

6 Conclusion
Jurisdiction and arbitration agreements only have actual benefits if judg-
ments and awards made in pursuant to the dispute resolution agreements
can be eventually recognized and enforced. The above study demon-
strated that recognition and enforcement are relatively certain in the
region with proper judicial cooperation. Examples are the New York Con-
vention and the Brussels I Regulation. The difficulty of recognition and
enforcement of foreign judgments in the scenario without judicial cooper-
ation is obvious. The difficulty of recognizing and enforcing judgments
made pursuant to a valid foreign jurisdiction clause would lead to the dif-
ficulty in granting full effectiveness to a valid foreign jurisdiction clause. A
typical example is China, where recognizing foreign judgments is particu-
larly difficult even if the foreign court takes jurisdiction in accordance to a
valid jurisdiction clause. Judicial cooperation in terms of enforcement of
party autonomy agreements is necessary; cooperation in the enforcement
of judgments and awards is no less important.
Although the New York Convention has provided straightforward rules
in enforcing foreign arbitral awards, which greatly contribute to the
success of international commercial arbitration, diversity still exists
between Contracting States when interpreting and applying refusal
grounds in practice. Uncertainty largely exists in the public policy defence,
which is a vague concept. In general, there is common understanding that
public policy defence should be used with caution and should be inter-
preted very narrowly to cover only ‘international public policy’. The diffi-
culty is that there is still no consensus on what international public policy
is. Although not completely identical, the UK and USA have adopted a
restrictive rule to prevent public policy defence from being used too
lightly. This includes both a narrow definition to what ‘international
public policy’ is and procedural restriction to allow a court to reopen a
substantive issue considered in arbitration. Compared to the UK and USA,
public policy defence is used relevantly easily in China. It is submitted that
reasonable discretion should be left to each Contracting State of the New
York Convention. The flexibility is one reason for the success of the New
York Convention. However, some guidance may be necessary to avoid too
easy an application of the refusal ground in order to protect the purpose
of the New York Convention.
9 International convention in
jurisdiction and arbitration
agreements
A comparative study

1 Introduction
In order to improve certainty and predictability, commercial efficiency
and procedural effectiveness, international organizations and govern-
ments work together to build international conventions to establish judi-
cial cooperation in jurisdiction and arbitration agreements. Global
cooperation and harmonization in the field of arbitration is more success-
ful than in jurisdiction. Cooperation in arbitration agreement has existed
since 1959, with the enforcement of the New York Convention 1958. The
UNCITRAL also published model laws and uniform rules on international
arbitration, to establish further harmonization and certainty. Compara-
tively, there is no international instrument on jurisdiction agreements in
force. The Brussels I Regulation only applies within the EU Member States
and has limited effects at the international level. The Hague Choice of
Court Convention 2005 has only been signed by the EU, USA and Mexico
and ratified by Mexico. It is hoped that once the Convention is entered
into force and ratified by a large number of countries, it can become the
litigation equivalent of the New York Convention. This chapter provides
an overview of basic international frameworks on judicial cooperation and
harmonization in jurisdiction and arbitration agreements. It then com-
pares the New York Convention and international harmonization in arbit-
ration agreements and the Hague Choice of Court Convention to predict
whether the original purpose of the Hague Convention 2005 is achievable
in the future.

2 International framework on arbitration agreements

2.1 New York Convention

The New York Convention on the Recognition and Enforcement of
Foreign Arbitration Awards was adopted by the United Nations Con-
ference on International Commercial Arbitration in 1958. The New
York Convention has two features: (1) to improve enforceability of a valid
 International convention in agreements 241
arbitration agreement by urging a court to refer disputes to arbitration
unless the arbitration clause is found invalid or inoperative; (2) to facil-
itate effective enforcement of arbitral awards between Contracting States.
The detailed provisions of the New York Convention have been discussed
in previous chapters and will be compared with the Hague Choice of
Court Convention in section 4 below.
Since the New York Convention was established more than 50 years ago,
many of its provisions may be considered too simple or dated from today’s
perspective. The New York Convention 1958 does not provide much
fundamental harmonization of preliminary rules on arbitration agree-
ments, including their existence, formal and substantive validity. It does
not provide any judicial cooperation between the courts and arbitral tribu-
nals of Contracting States to prevent concurrent proceedings and irrecon-
cilable judgments either. All of these issues are left to the domestic law of
each Contracting State. It only provides the basic requirements and rules
for the recognition and enforcement of arbitral awards that fall in the
scope of the Convention. Regardless of these gaps, the Convention works
rather successfully in commercial practice. Since 144 countries are party
to the New York Convention, resolving disputes in arbitration can almost
guarantee the global movement of arbitral awards.

2.2 UNCITRAL Model Law

Further to the New York Convention, the UNCITRAL has published
model law and arbitration rules, which aim to reduce uncertainty caused
by the inadequacy and disparity of domestic law on the validity and
enforceability of arbitration agreements, arbitral procedure and the rela-
tionship between courts and tribunals.1 The inadequacy and disparity
cause uncertainty to the parties and may frustrate the functioning of arbit-
ration as an effective dispute resolution method in international com-
merce.2 The Model Law is specifically tailored to suit the requirement of
international commercial arbitration. It provides a fairly flexible unified
law in deciding formal validity of an arbitration agreement,3 and emphas-
izes the enforceability of arbitration agreements by requiring a court to
refer the parties to arbitration when finding a valid arbitration agreement,4
adopting kompetenz-kompetenz doctrine to allow an arbitral tribunal to rule
its own jurisdiction,5 and permitting an arbitral tribunal to continue juris-
diction where the court is seized to make decision.6 The Model Law basi-

1 Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on International
Commercial Arbitration as amended in 2006, paras 6 and 7.
2 Ibid.
3 Art 7.
4 Art 8(1).
5 Art 16.
6 Art 8(2).
242 International convention in agreements
cally copies the New York Convention in rules relating to recognition and
enforcement of arbitral awards7 and provides the same refusal grounds for
a court to set aside arbitral awards.8 Furthermore, the Model Law also pro-
vides uniform rules on the choice of law for the substance of the dispute,9
the composition of arbitral tribunals,10 the conduct of arbitral
proceedings,11 interim measures and preliminary measures.12 Although
without mandatory requirements, many countries have incorporated the
Model Law or the arbitration rules in their domestic law, or have revised
their domestic law to reflect the international trend in arbitration.13 The
Model Law, however, still leaves the most controversial issue untouched,
which is the law applicable to substantive validity of an arbitration
agreement.

2.3 UNCITRAL arbitration rules

The UNCITRAL also published the Arbitration Rules (revised in 2010).
The rules further harmonize the composition of the arbitral tribunal, the
conduct of arbitral proceedings and giving awards. Parties could agree to
opt in to the Arbitration Rules and to have the rules apply to their arbitral
proceedings. Further consistency and certainty is provided. The Arbitra-
tion Rules, however, do not provide conflicts rules concerning validity and
enforcement of arbitration agreements.

3 Judicial cooperation on jurisdiction agreements—

regional and international scheme

3.1 Brussels I Regulation

If any cross-border regional cooperation is included in international coop-
eration, the cooperation in jurisdiction agreements is very successful in
the region of the European Union. The Brussels I Regulation has harmo-
nized all jurisdiction rules, not only choice of court agreements, in civil
and commercial matters between Member States, and facilitated the free
movement of judgments falling within the scope of the Regulation
between Member States. Uniform formal validity rules are provided, and
the Regulation requires effectiveness to be given to a jurisdiction

7 Ch VIII.
8 Ch VII.
9 Art 28.
10 Ch III.
11 Ch V.
12 Ch IV.
13 The UNCITRAL Model Law has been implemented in domestic legislation of 66 coun-
tries; see status at www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_
arbitration_status.html (accessed on 18 April 2013).
 International convention in agreements 243
agreement. The Regulation has a few fall-backs though. First, it says
nothing about how to decide substantive validity of a jurisdiction clause,
which causes inconsistent practices in Member States. Second, it does not
expressly state whether the same formal validity rules should apply to juris-
diction agreements concluded by the parties, both domiciled out of the
EU. Third, the existing ECJ case law suggests that where a non-chosen
Member State is seized first in time to hear a dispute subject to an alleged
jurisdiction agreement, the chosen Member State must stay jurisdiction
until the first seized court declines jurisdiction.
The status of the enforceability of jurisdiction clauses is strengthened by
the improved rules in the Brussels I Recast, which will enter into force from
10 January 2015. The Brussels I Recast primarily follows the rules in the
Brussels I Regulation, with three important improvements. First, it provides
uniform choice of law rules to decide substantive validity of a jurisdiction
clause. Second, it explicitly provides the doctrine of separability applying to
jurisdiction clauses. Third, it removes the previous narrow scope of applica-
tion and applies to all jurisdiction agreements choosing one of the Member
States. Fourth, it provides party autonomy a superior status over lis pendens,
and requires a non-chosen state to stay jurisdiction in deciding the exist-
ence and validity of a jurisdiction clause if a chosen state is also seized to
decide this matter, irrespective of which court is seized first.
The regional harmonization proves successful and has helped the pro-
posed objective of facilitating the free movement of judgments, improving
certainty and predictability and facilitating sound administration of justice
within the EU regime. The rules applying to jurisdiction clauses have been
borrowed and used in the Hague Choice of Court Convention. The fact
that the Brussels rule is regional in nature may prevent broader benefits in
the international context. Different treatments exist in enforcement of jur-
isdiction clauses between Member States, and enforcing them between
Member States and third countries. The status quo can only be improved if
worldwide harmonization is adopted.

3.2 Hague Choice of Court Convention

Compared to the regional cooperation, there is no international conven-
tion on jurisdiction clauses in force. The Hague Choice of Court Conven-
tion was adopted on 30 June 2005 by the Hague Conference on Private
International Law in the Twentieth Session. It will enter into force after
three months of the deposition of the second instrument of ratification of
the Convention.14 It is a double convention, which means that it provides
both jurisdiction rules and rules for the recognition and enforcement of
judgments.15 The first part of the Convention concerns the validity and

14 Art 31(1).
15 Brand, 2009a: 23–24.
244 International convention in agreements
enforceability of choice of court agreements. If a choice of court agree-
ment is valid, its prorogation and derogation power must be recognized by
the chosen court and non-chosen court. The second part concerns recog-
nition and enforcement of judgments made pursuant to a choice of court
agreement. The Convention requires that all Contracting States should
recognize and enforce the judgment made by the chosen Contracting
State, unless one of the seven refusal grounds exists. The general structure
of the Convention is the same as the New York Convention.16
The jurisdiction rule concerning validity is similar to that in the Brus-
sels I Regulation. It provides three basic rules, i.e. presumed exclusivity,
flexible formal validity and separability. A jurisdiction agreement choosing
one of the Contracting States is deemed exclusive, unless the parties state
otherwise.17 A jurisdiction clause is formally valid if it is ‘in writing’ or con-
cluded or documented ‘by any other means of communication’, as far as
subsequent reference is possible.18 Furthermore, the invalidity of the
underlying contract would not directly lead to the invalidity of the choice
of court agreement.19 It means that the dispute on the validity of the main
contract can be brought to the chosen court. Furthermore, the Hague
Convention uniform choice of law rules are provided for substantive valid-
ity in general and for capacity of a party in particular.20
In terms of enforceability of jurisdiction clauses, the Hague Convention
provides straightforward rules which require the chosen court to take jur-
isdiction and the non-chosen court to decline jurisdiction. In this per-
spective, the Hague Convention is clearer than the Brussels I Regulation,
which does not expressly require a non-chosen Member State to decline
jurisdiction in favour of a chosen Member State.21 It also clearly excludes
the application of forum non conveniens and lis pendens in the context of the
Hague Convention.22 The Hague Convention, however, does not exclude
the use of anti-suit injunctions.23
In terms of recognition and enforcement of judgments, the Hague Con-
vention requires a Contracting State to recognize and enforce judgments
made by the court of another Contracting State, which is chosen in an
exclusive jurisdiction clause, unless the clause is held invalid or a party is
incapable pursuant to the law of the requested court, procedural irregular-
ity exists, the judgment is manifestly contrary to the public policy of the
request court and enforcement is irreconcilable with an earlier judgment.24

16 Nanda and Pansuis, 2012: s20.26.

17 Art 3(b).
18 Art 3(c).
19 Art 3(d).
20 Arts 5(1) and 6(a)(b).
21 Art 23(1).
22 Art 5(2).
23 Art 7.
24 Art 9.
 International convention in agreements 245
4 Comparative study of the Hague Convention and New
York Convention
The Hague Convention is similar to the New York Convention in two basic
principles. First, party autonomy is respected. Both conventions recognize
the enforceability of jurisdiction and arbitration agreements and recog-
nize their derogation and prorogation power. Second, the judgments or
awards made pursuant to the Conventions should be recognized and
enforced in other Contracting States. Third, recognition and enforcement
can be refused based on limited exceptions. However, it does not mean
the Hague Convention is a complete mirror image of the New York Con-
vention. Important differences exist that may affect the parties’ expecta-
tion and may determine the parties’ choice of different dispute resolution
methods.

4.1 Chosen and non-chosen fora

The New York Convention addresses the power to take jurisdiction and to
recognize and enforce arbitral awards by the courts of each Member State.
In other words, it only ‘targets’ courts which are non-chosen by the parties.
The New York Convention does not concern the functioning and compet-
ence of arbitral tribunals. It does not require a tribunal to take jurisdiction
and does not establish conditions when jurisdiction can or should be
declined by an arbitral tribunal. If a court, pursuant to the New York Con-
vention, refers the parties to arbitration,25 this Convention does not guar-
antee the chosen tribunal definitely would take jurisdiction;26 if a court,
pursuant to its own private international law, declares an arbitration agree-
ment invalid,27 the Convention does not prevent the chosen tribunal from
taking jurisdiction.
The Hague Convention, on the other hand, tries to regulate both the
chosen and non-chosen Contracting State. Both chosen and non-chosen
states have treaty obligations to take and decline jurisdiction. This is a
means to prevent potential concurrent proceedings or negative conflicts
of jurisdiction, where no country takes jurisdiction. Concurrent proceed-
ings, however, are still likely to exist in the Hague Convention, especially
at the preliminary stage, where both chosen and non-chosen states are
seized to decide the validity of a jurisdiction clause. A non-chosen state is
not required to stay the proceedings until the chosen state has made the
decision, and there is no lis pendens rule to give priority to the first seized
court to make this decision. It is, thus, possible that both courts have
proceeded to give rulings on the preliminary issue. If the decisions are

25 New York Convention, Art II.3.

26 Although in practice declining jurisdiction in such circumstances would be extremely
rare.
27 New York Convention, Art II.3; see section 4.3 below.
246 International convention in agreements
different, parallel proceedings may continue to exist as to the substance of
the claim.

4.2 Scope of application

The New York Convention does not define its scope. It applies to disputes
‘in respect of a defined legal relationship, whether contractual or not,
concerning a subject matter capable of settlement by arbitration’.28 It does
not provide a list, exhaustive or not, of the ‘defined legal relationship’;
nor does it provide guidance as to what subject matters are arbitrable. This
is, again, left to the law of each forum.
The Hague Convention has clearly established its scope of application.
The Convention does not apply to consumer contracts,29 employment
contracts,30 disputes on the status and capacity of a natural person,31 family
law matters,32 some company law issues,33 some matters relating to ship-
ping and transport,34 competition matters,35 some tort claims,36 some IP
claims37 and validity of entries in public registers.38 Besides, Article 21 of
the Convention permits a Contracting State to make declaration to
exclude specific subject matters from the scope of the Convention. This
declaration must be made with caution and should not be broader than
necessary or be ambiguous. This exception is inserted in order to attract
support from more states, which may traditionally intend to extend exclu-
sive jurisdiction to more subject matters. Examples can be found in the
exclusive jurisdiction in China covering Chinese–foreign joint venture
contracts.39 The Convention also requires the declaration to be reciprocal,
i.e. other Contracting States do not need to enforce judgments falling
within the scope of declaration of the state.40
It is likely that the scope of the New York Convention is broader, espe-
cially in light of the current liberal trend on arbitrality. Many issues that
are excluded from the Hague Convention, such as competition matters, IP

28 New York Convention, Art II.1.

29 Hague Choice of Court Convention, Art 2(1)(a).
30 Art 2(1)(b).
31 Art 2(2)(a).
32 Maintenance (Art 2(2)(b)), matrimonial property (Art 2(2)(c)), wills and succession (Art
2(2)(d)).
33 Insolvency (Art 2(2)(e)), validity nullity or dissolution of legal persons (Art 2(2)(m)).
34 Carriage of passengers and goods (Art 2(2)(f)), marine pollution, limitation of liability
for marine claims, general average and emergency towage and salvage (Art 2(2)(g)).
35 Art 2(2)(h).
36 Nuclear damage (Art 2(2)(i)), personal injury of a natural person (Art 2(2)(j)), damage
to tangible property (art 2(2)(k)).
37 Validity and infringement of IP rights (Art 2(2)(n)).
38 Art 2(2)(p).
39 Tu, 2007: 347.
40 Art 21(2).
 International convention in agreements 247
claims, carriage contracts and consumer contracts, are considered arbitra-
ble under the law of many countries. However, the absence of clarification
also causes uncertainty. Since the concept of arbitrality differs between
country to country, and the standard may be applied differently between
tribunals and courts, the parties cannot simply rely on the New York Con-
vention to predict the consequence of their arbitration agreements, espe-
cially when they submit unconventional disputes or controversial matters
to arbitration. A dispute that has been held arbitrable by the supervisory
court or the tribunal may be considered unarbitrable by the enforcement
court, where recognition and enforcement might be refused.

4.3 Grounds to refuse enforceability of a dispute resolution clause

Validity of forum selection clauses

Under the New York Convention, an arbitration agreement can be disre-
garded by a court at the trial stage if the clause is found to be ‘null and
void’.41 The determination of the validity of an arbitration agreement,
however, is left to the private international law of each court.42 The result
will become unpredictable because it depends on in which court or tri-
bunal the party submits this issue.
The Hague Convention, on the other hand, provides clear rules deter-
mining the validity of a choice of court agreement. First, a simple rule is
established in terms of formal validity, to validate all agreements ‘in
writing’ or concluded or documented ‘by other means of communication
which renders information accessible so as to be usable for subsequent
reference’.43 The court should use its own law, including choice of law, to
decide the substantive validity of a jurisdiction clause.44 Although it does
not mean the substantive law of the chosen court must apply, it makes the
result reasonably predictable even if the law of the chosen court may refer
to the substantive law of another country.45 Greater certainty exists in the
Hague Convention on the issue of validity.

Incapacity
The New York Convention does not list incapacity as one ground under
which the court can refuse enforcing an arbitration agreement. However,
it is hard to imagine a court may require the parties to bring the dispute
to arbitration if it finds one of the parties is incapable of concluding an

41 Art II.3.
42 Brand, 2009a: 31.
43 Hague Convention, Art 3(c).
44 Hague Convention, Arts 5(1), 6(a) and 9(a); Hartley and Dogauchi, 2007: para 125.
45 Hartley and Dogauchi, 2007: para 125.
248 International convention in agreements
arbitration agreement under its law. It is possible that arbitration agree-
ments are held invalid if incapacity is found. It is uncertain, however,
which law applies to determine incapacity.
In the Hague Convention, on the other hand, incapacity is an explicit
ground used by a non-chosen court to refuse enforcing a jurisdiction
clause. Incapacity is determined under the law of the chosen court, as it
falls within the scope of invalidity.46 The non-chosen court, however, can
also use its own law to invalidate an agreement if a party is capable under
the law of the chosen court, but incapable under the law of this seized,
non-chosen court.47 In other words, a jurisdiction clause will not be
enforced by a non-chosen court if a party is incapable under either the law
of the chosen court or the law of this seized court.

Impossibility to perform
The New York Convention does not allow a court to refuse enforcing arbit-
ration agreements at the jurisdictional stage not only based on invalidity,
but also because the arbitration agreement is ‘inoperative or incapable of
being performed’.48 Again, there is no explanation as to when a clause is
considered ‘inoperative or incapable of being performed’ and whether
the inoperativeness is due to the reasons other than the parties. It is pos-
sible that, if the tribunal refuses jurisdiction, the chosen tribunal no
longer exists or the parties have made an ambiguous choice which cannot
be properly construed or understood, a court can take jurisdiction irre-
spective of an arbitration agreement. In Paczy v Haendler & Natermann
GmbH,49 the claimant argued that the arbitration agreement was incapable
of performing because the claimant had financial difficulty and could not
bring the disputes to arbitration. The court rejected this argument saying
that the mere difficulty of one party does not exempt the parties from
their legal obligations. The Hague Convention provides similar exceptions
which allow a non-chosen court to take jurisdiction if the agreement
cannot reasonably be performed for exceptional reasons by the parties’
chosen court, or the chosen court decides not to hear the case.50

Additional grounds in the Hague Convention—public policy

The Hague Convention also provides an additional ground under which
enforceability of a validity jurisdiction clause may be refused.51 A non-
chosen court can continue jurisdiction irrespective of a valid jurisdiction

46 Ibid., para 150.

47 Art 6(b); Hartley and Dogauchi, 2007: para 150.
48 New York Convention, Art II.1.
49 [1981] RSR 250.
50 Hague Convention, Art 6(3).
51 Brand, 2009a: 32.
 International convention in agreements 249
clause, if enforcing the clause may lead to manifest injustice or would be
manifestly contrary to the public policy of the seized court.52 This excep-
tion is strong and could override the applicable law governing the validity
of a jurisdiction clause. In other words, even if the law of the chosen court
considers a jurisdiction clause valid and takes jurisdiction, a non-chosen
court can still take jurisdiction by holding the jurisdiction clause unen-
forceable because, for example, it is concluded under duress, undue influ-
ence, or it is the result of bribery or corruption, in accordance to the law
and policy of this non-chosen court.
The public policy exception causes uncertainty to the enforcement of
jurisdiction agreements. Public policy or injustice in relation to jurisdic-
tion clauses usually concerns substantive validity of a jurisdiction clause.
Although uniform choice of law is provided to decide the substantive valid-
ity of a jurisdiction clause, the exceptional ground provides non-chosen
courts a leeway to apply its own law. It may lead to parallel proceedings
where two countries have different laws determining substantive validity of
a jurisdiction clause. However, concerning the difficulty in reaching a
compromise in the question of substantive validity, this ground at least
permits every country to avoid the strict application of the Convention
based on its own public policy. The protection of the national interest is
one reason that compromise can finally be reached and the Convention
might have a greater chance to be ratified by more states in the future.

4.4 Refusal of recognition and enforcement

Both the New York Convention and the Hague Convention permit the
enforcement court to refuse recognition and enforcement of arbitral
awards or judgments. The refusal grounds in both Conventions share
some similarity, but more diversity exists.

Invalidity of forum selection clauses

The invalidity of a forum selection clause is a valid ground of refusal in
both Conventions. Both Conventions also provide uniform choice of law
rules to decide validity at this stage. The New York Convention provides
that the invalidity can be decided under the law chosen by the parties. In
the absence of the chosen law, it shall be governed by the law of the seat
where the arbitral award is made.53 The Hague Convention subjects the
validity to the law of the chosen court.54
The Hague Convention clearly excludes the possibility that the parties
might have chosen a law to govern the substance of a jurisdiction clause.

52 Hague Convention, Art 6(3).

53 New York Convention, Art V.1(a).
54 Art 9(a).
250 International convention in agreements
There is no reason why such a choice is not allowed. This seems to be a
limitation to party autonomy. The New York Convention, on the other
hand, grants more weight to party autonomy. It is also unclear why the
New York Convention does not provide the same choice of law rules to
decide the validity of an arbitration clause at the jurisdictional stage.
However, in practice many courts or tribunals have adopted the same rule
to decide validity of an arbitration clause when it is seized to hear the
dispute, for the purpose of consistent decisions55 or issuing an enforceable
award.56

Incapacity of a party
Both Conventions allow the refusal to be based on the incapacity of a
party. The New York Convention applies the law applying to the person
concerned.57 The Hague Convention applies the law of the requested
state.58 Since capacity also falls within the scope of validity, the law apply-
ing to validity shall also apply. In other words, the requested state shall
check capacity of the party under both the law of the chosen state and the
law of the requested state and may reject enforcement if the party is found
incapable under either law.59
Reading the provision of the Hague Convention on capacity in the jur-
isdictional stage, one may argue that the law applying to capacity is too
complicated. In total, the law of three countries might be relevant. If a
chosen court uses its law to hold a jurisdiction clause valid and continues
jurisdiction, a non-chosen court might, upon the request of a rejecting
party, continue jurisdiction by holding a party incapable at the time of
contracting. The enforcing court might refuse to enforce the judgment
made by the chosen court if the party is also held incapable pursuant to
the law of the enforcing court. The complexity is caused by the difficulty
to unify choice of law in relation to capacity.60

Procedure irregularity
Both Conventions allow refusal if the requested award or judgment is
made under procedure irregularity—for example, the defendant has not
been notified in sufficient time.61 The Hague Convention also includes

55 A court may not want concurrent jurisdictions between itself and an arbitral tribunal.
Many countries have taken this into account and add the same choice of law rules in their
domestic arbitration law to guide their courts.
56 An arbitral tribunal would wish its awards to be enforced.
57 Art V.1(a).
58 Art 9(b).
59 Hartley and Dogauchi, 2007: para 184.
60 Ibid., para 184.
61 Hague Convention, Art 9(c); New York Convention, Art V.1(b).
 International convention in agreements 251
62
‘fraud’. Examples include bribing judges or witnesses, concealing evid-
ence or providing wrong information.63 Furthermore, the Hague Conven-
tion also put procedural fairness as part of public policy and permits
recognition being refused on this ground.

Public policy
Recognition and enforcement can also be refused if a judgment or award
is manifestly contrary to public policy of the requested court.64 The word
‘manifestly’ implies that public policy can only be relied on in exceptional
grounds and only ‘fundamental’ or ‘international’ public policy can
trigger this ground. It aims to prevent a contracting court from easily
relying on public policy, which is a rather ambiguous concept, to avoid its
treaty obligations.

Final and enforceable judgment

A judgment or an award can only be recognized and enforced if it is final
and enforceable in the state where it is made. This request is the same in
both Conventions. The Hague Convention provides that a ‘judgment can
only be enforced if it has effect in the State of origin, and shall be
enforced only if it is enforceable in the State of origin’.65 The New York
Convention says an award may not be enforced if it is not binding or has
been set aside or suspended by the supervisory court.66

Inconsistent decisions
Under the Hague Convention, a judgment may not be enforced if it is
inconsistent with a judgment given in the requested state between the
same parties,67 or it is inconsistent with an earlier judgment given in
another state between the same parties on the same cause of action which
can be enforced in the requested state.68 The second situation may exist if
a non-Contracting State gives judgments earlier and there is a bilateral
treaty between this state and the requested state, or if a non-chosen Con-
tracting State takes jurisdiction based on the incapacity of a party, and this
judgment meets the criteria for recognition and enforcement of the
requested country.

62 Art 9(d).
63 Hartley and Dogauchi, 2007: para 188.
64 Hague Convention, Art 9(e); New York Convention, Art V.2(b).
65 Art 8(3).
66 Art V.1(d).
67 Art 9(f).
68 Art 9(g).
252 International convention in agreements
The New York Convention, however, does not include this ground.
Usually, there will not be parallel arbitral proceedings deciding the same
issues between the same parties. However, concurrent proceedings
between arbitration and litigation are not rare. A non-supervisory court
and an arbitral tribunal may decide arbitrability, validity and capacity dif-
ferently, and both continue jurisdiction. Enforcement of arbitral awards
should be refused if the court decision is given first and has been recog-
nized in the requested court. However, refusal under such a circumstance
may be based on the public policy ground, i.e. enforcing irreconcilable
decisions is contrary to public policy.

The scope of party autonomy

The New York Convention provides more refusal grounds strictly based on
party autonomy. Arbitral tribunals receive their authority from the parties’
agreement. Arbitrators should only act within the mandate and follow the
parties’ instruction. An arbitral award may not be enforced if the award
deals with a matter beyond the scope of the arbitration clause, or the com-
position of the tribunal or the procedure is not in accordance with the
agreement of the parties (or, in the absence of which, the law of the
seat).69

Neutral forum
The Hague Convention permits the state to make declaration that its court
will not recognize and enforce judgments of a chosen court which has no
objective connections with the dispute,70 or the dispute is a purely
domestic matter.71 This requirement cannot be imposed to arbitration
which is boasted for its neutrality. The choice of neutral forum is clearly
favoured in international commerce, while the parties may not feel com-
fortable to subject the dispute to the forum that has connections with
either of them. However, it is recognized that some courts may not permit
the parties to prorogate to a non-related court, or to derogate from their
jurisdictions for purely domestic affairs. The additional ground aims to
receive support from those countries that have adopted the relatively
restrictive view towards choice of court agreements.

4.5 Conclusion
Although the Hague Convention and the New York Convention share the
same principles and the main concepts, they have more differences than

69 Art V.1(c) and (d).

70 Art 19.
71 Art 20.
 International convention in agreements 253
similarities in detailed rules. In general, the Hague Convention is bigger
in volume, more detailed and more complicated, with more carefully
unified rules. The New York Convention is succinct and simple, leaving
more flexibility to the Contracting States and the parties. Furthermore,
the Hague Convention provides more limitations to party autonomy,
which is demonstrated by the stricter scope, the grounds to question the
enforceability of the jurisdiction clause and the grounds to refuse recogni-
tion and enforcement. Party autonomy and contractual freedom are
respected more in the New York Convention.
This difference is not surprising. In terms of the detailed rules, the
Hague Convention was established in 2005, about 50 years after the adop-
tion of the New York Convention. The four decades of enforcement of the
New York Convention exposes the weakness of the Convention, including
the uncertainty and inconsistent decision in deciding an arbitration agree-
ment. This weakness is addressed in the Hague Convention. In terms of
party autonomy, it plays a much heavier role in arbitration than litigation.
Courts are state organs, acquire authority from the sovereign state and
serve as a state or public agent. Arbitral tribunals are private bodies,
acquire power from parties’ consent and serve the parties’ commercial
needs. Without party autonomy, a court can still assume jurisdiction and
authority from a state, but an arbitral tribunal will lose its foundation to
perform. There is no doubt that party autonomy has been given more pro-
tection in arbitration.

5 The future of the Hague Convention

If, in the past and at the moment, the popularity of arbitration over litiga-
tion in international commercial disputes is largely caused by the easy
enforcement of arbitration agreements and arbitral awards, the possible
future enforcement of the Hague Convention 2005 will reduce such differ-
ence and make the parties select their dispute resolution methods more
cautiously, based primarily on the different nature of the dispute resolu-
tion methods.72
However, would countries be enthusiastic in signing and ratifying the
Hague Convention? It is eight years since the completion of the Hague
Convention. It has only been signed by Mexico, the USA and the EU, and
only ratified by Mexico. This is not an impressive figure, compared to the
New York Convention which received 24 signatures in the same year of
its conclusion.73 Other successful conventions also receive a relatively
large amount of support fairly quickly, such as the UN Convention of

72 Brand, 2009a: 24.

73 Argentina, Belarus, Belgium, Bulgaria, Costa Rica, Ecuador, El Salvador, Finland, France,
Germany, India, Israel, Jordan, Luxembourg, Monaco, Netherlands, Pakistan, Philip-
pines, Poland, Russian Federation, Sri Lanka, Sweden, Switzerland, Ukraine.
254 International convention in agreements
International Sale of Goods 1980 (18 signatures in the first year) and the
Warsaw Convention (21 signatures in the first year). There is the worry
that the Hague Convention is ‘in danger of dying a slow death for lack of
interest’.74 However, the fact that the USA and EU, two of the biggest eco-
nomic bodies, have signed the Convention and are willing to be bound by
it in the future may be encouraging. It is obvious that the two economic
units consider it is in the domestic interest to have their judgments recog-
nized and enforced in other countries and vice versa. The possible future
ratification by the EU also means the application of the Convention in all
EU Member States. From this perspective, there is the reasonable per-
spective for the Convention to have a greater influence than it appears to
have had.75 In many countries, the attitude of governments is ambiguous
though. In China, the Mainland and Hong Kong have entered into an
Arrangement on Reciprocal Recognition and Enforcement of Judgments
in Civil and Commercial Matters, signed on 14 July 2006. The content of
the arrangement primarily mirrors the content of the Hague Choice of
Court Convention. This can be interpreted as a ‘test application’ of the
Hague Convention between two regions within China. The successful
application of the arrangement may encourage China to ratify or access
the Convention in the future. However, in 2012, Chinese legislative body
the Standing Committee of the Eleventh National People’s Congress
(NPC) approved the amendment to the Chinese Civil Procedure Law in
the twenty-eighth meeting on 31 August 2012. The amended law entered
into force on 1 January 2013. This amendment does not take into account
the rules on choice of court agreements and recognition and enforcement
of judgments made pursuant to such agreements in the Hague Conven-
tion.76 It certainly does not mean the Chinese government does not
attempt to become a Contracting State of the Hague Convention at all.
Article 282 states that the people’s court will decide recognition and
enforcement of foreign judgment according to its treaty obligations or the
principle of reciprocity. Although the rule is narrow, it can be properly
complied with alongside the Hague Convention. There is no legal barrier
for China to implement the Hague Convention.
Compared with governments, the attitude of many academic writers,
professional bodies and commercial organizations is much clearer. Most
advocate and support the implementation of the Hague Convention,
believing it will promote national interest, improve cross-border transac-
tions and relationships, increase commercial confidence, strengthen rela-
tionships with other countries and improve comity. The response from
most US practitioners and academics is supportive—in a survey carried out
by the ABA, over 98 per cent of respondents believed the Convention

74 Woodward, 2008: 657.

75 Lipe and Tyler, 2010: 38.
76 See, e.g., Art 281.
 International convention in agreements 255
77
would help their practice. A similar positive view is also shared by Euro-
pean legislators and commentators.78 There are criticisms, of course, on
some features of the Convention.79 However, this does not prevent them
from believing that joining the Convention would bring more benefits to
their countries as a whole.80
The Hague Choice of Court Convention is not perfect, but it is a stable
instrument, aiming to reach compromise and smooth disagreements
between different countries and receiving the widest ratification and
support. Academic writers also realize that small imperfectness in terms of
theory will not hamper a state from ratifying the Convention, which is
finally down to a political decision. Whether a government is willing to
ratify this Convention depends on the follows: (1) would the Convention
differ fundamentally or tremendously from the current national law? (2)
Would the ratification cause great uncertainty and difficulty in the coun-
try’s domestic legal culture and tradition? (3) Are other countries ratifying
this Convention the close trade partners of this country? (4) Would
national interests be protected if judgments in other countries are recog-
nized and enforced pursuant to the Convention?
Among all these questions, the fourth one is the most fundamental.
Although most academic writers have analysed this issue and explained
that there would not be any real harm in theory, most authorities prefer to
take a safe position. The advantage of ratifying the Hague Convention is
not obvious by far and there is no empirical evidence showing it works
effectively for other countries. Most countries would wish to wait until the
practical effectiveness is proven by the enforcement of the Convention
between other countries. In general, this situation may bring one to a
vicious circle. The effective enforcement depends on the popularity, while
the popularity also depends on the effective enforcement.81
Even if the Hague Convention is ratified by many countries in the
world, it does not guarantee that jurisdiction agreements will acquire the
same popularity as arbitration agreements in international commerce.
Compared to adjudication, arbitration as a dispute resolution procedure
has unique advantages, such as neutrality, confidentiality, higher level of
autonomy, procedural efficiency and appropriateness to resolve disputes

77 American Bar Association, ‘Recommendation, adopted by the House of Delegates’, 7–8

August 2006, http://apps.americanbar.org/intlaw/policy/investment/hcca0806.pdf,
accessed on 21 January 2013, 2.
78 See European Commission, ‘Proposal for a Council Decision on the Signing by the Euro-
pean Community of the Convention on Choice of Court Agreements’, Brussels 5
September 2008 COM (2008), 538; Hartley, 2006: 414; Schulz, 2005: 1, cited in Garnett,
2009: fn 62.
79 Garnett, 2009: fn 64–67 and accompanied text and p. 180.
80 Australia: Garnett, 2009: 180; China: Tu, 2007: 347; Canada: Black, 2007: para 95; India:
Rashid, 2005.
81 Adler, 2012: 40A.
256 International convention in agreements
with states or state-owned entities as a party. The most the Hague Conven-
tion can do is lead the parties to make a sound choice between adjudica-
tion and arbitration based on the nature and procedural advantages of
these two types of dispute resolution methods in the absence of the worry
that favourable decisions cannot be enforced in other countries in the
world.82

82 Brand, 2009a: 23–24.

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Index

actor sequitur forum rei, doctrine of 191, decided by arbitral tribunals 95–7;
208 decided by courts 95; intellectual
American National Conference of property (IP) disputes 100–1; notion
Commissioners on Uniform State of 93–4; stages of 94
Laws 27 arbitral awards, recognition and
anti-arbitration injunctions 87–90, 140, enforcement of 224–5; Chinese
168–70; effect of 89; principles in approach for 228–30; English
granting 169–70; see also anti-suit approach for 225–7; Fee Regulation,
injunctions China 225; public policy for 225–30;
anti-dumping dispute 106 US approach for 227–8
anti-suit injunctions 4, 80, 121, 151; and arbitration agreements: anti-suit
arbitration agreements in the EU injunctions and 204–14; arbitration
204–14; ban of 210; in concurrent tribunal 31–2; Brussels I Recast
proceedings 154–6; enforcing an 219–23; capacity to challenge 32–3;
167–8; in England 155–6; exceptional challenge to the validity of 85;
grounds for 158–60; Front Comor case Chinese law on 30–1; cooperation in
204–14; general principle 156–8; 240; definition of 12; enforcement of
issue of comity 154; and jurisdiction dispute resolution agreements
clauses in Europe 196–204; 111–15, 127; English common law
jurisdiction granted by domestic law 29–30; forum selection clauses,
203; jurisdiction under the Brussels I validity of 247; impossibility to
Regulation for 195–6; party perform 248; incapacity in making
autonomy versus statutory jurisdiction 247–8, 250; incorporation of 41–2;
164–6; restraining proceedings in the international framework on see
local courts 167; risk of infringement international framework, on
of another country’s sovereignty 196; arbitration agreements; international
in support of jurisdiction and harmonization on 28–9; versus
arbitration clauses 156–64; from a jurisdiction agreements 3–5;
third country 195–6, 203–4; Turner v kompetenz-kompetenz, application of
Grovit case 198–202, 205; in USA 154, 83–4; law governing 28; lis pendens,
160–4; see also anti-arbitration doctrine of 152–4; other national
injunctions approaches on 31; procedure
antitrust dispute 99–100, 106 irregularity 250–1; public policy to
arbitrability: bribery and corruption invalidate 59, 248–9, 251; relaxation
97–8; choice of law 94–7; of formal requirements in 47–9;
competition and antitrust 99–100; subject matter scope of 108–9; US
concept of 247; contracts with law on 30; validity of 208
inequality of bargaining power 101; arbitration tribunal 4, 31–2, 43, 83;
controversial matters 97–101; anti-arbitration injunctions 87;
 Index 269
arbitrability decided by 95–7; companies and legal persons, disputes
autonomy to adjunct court in relation to 104–5
jurisdiction 88; competence of 84–5; competition and antitrust 99–100
composition of 242 competition disputes: antitrust and
Arrangement on Reciprocal anti-dumping 106; types of 106;
Recognition and Enforcement of ‘unfair competition’ 106
Judgments in Civil and Commercial conflict of laws 4–5, 22, 25, 28–9, 177,
Matters (2006) 119n31, 254 193
conflicts agreements: acceptance of
bargaining power 11, 123, 165; abuse of 44–5; applicable law on 36; Brussels I
58; in contracts 58; contracts with Regulation 34; Chinese law on 33;
inequality of 8, 101, 107–8, 217n230 common practices between the
bill of lading 125, 132–6, 166 parties 36–9; English law on 34; EU
breach of contract 63, 90, 101, 106, law on 34; implied choice 33–41;
123, 168, 186–7, 190, 195, 197–8 incorporation 41–2; repudiation,
bribery and corruption 97–8, 108, 226, intention of 43–4; trade custom and
249 usage 39–41; US law on 34; variation
Brussels I Recast 23, 52, 71, 126–7, of 43–5
214–23, 243; abolition of exequatur conscionableness, concept of 21, 59,
237; arbitration 219–23; jurisdiction 228
agreements 215–19 contract priority: and assessment of
Brussels I Regulation 9, 11–12, 17, Gasser decision 183–5; for enforcing
22–3, 40–1, 46–7, 61, 78, 109, 203–6, parties’ agreement 180; versus
222, 239; anti-suit injunctions under procedure priority 180, 183–5
178, 200–1; Article 1(2)(d) of 204; contractual agreements, existence and
Article 2 of 191–2; Article 21 of 164; validity of: applicable law for 22;
Article 22 of 181; Article 23 of 21, arbitration agreement 19–20, 28–32;
133, 192; Article 23(1) of 19, 25, 37, capacity to challenge 32–3;
42, 193–4; Article 23(3) of 194–5; classification between 18–21; conflict
Article 71 of 204; Article 73 of 214; of laws 22; in European Union 19;
basic principle of 208; on conflicts formal validity versus substantive
agreements 34; enforcing jurisdiction validity 21; jurisdiction clause 19,
agreements within 126; EU 22–7; laws deciding 22–33; under
jurisdiction rules 178; for facilitating UNCITRAL Model Law 19; in USA
administration of justice 184; forum 19
non conveniens in 178, 189–96; issue Convention on Choice of Court
of a jurisdiction clause under 81; Agreements (2005) see Hague
judicial cooperation, on jurisdiction Convention (2005)
agreements 242–3; lis pendens and cooperative enterprise, contracts for
jurisdiction agreements, conflict of 104–5
178–9; protective jurisdiction rules copyrights 100, 105–6, 109; difference
under 107; recognition and with IP rights 106; infringement of
enforcement of judgments 235–7; 63–4; place of registration of 193;
requirement of signature under 50; validity of 106
rule of lis pendens under 145, 178, Council of Europe 204
185; scope of 205, 209; stay of cross-border disputes 67, 74, 171; civil
jurisdiction granted by Article 23(1) law countries in 143; lis pendens,
193–4; stay of jurisdiction granted by doctrine of 143
Article 23(3) 194–5; uniform
jurisdiction rules 193 dispute resolution agreements: breach
of 177; chosen court and the
choice-of-law rules 184 dispute/defendant, connection
Civil Code of Quebec 143–4 between 57–8; construction of 61–4;
commerce, definition of 7–8 electronic communication 45–6;
270 Index
dispute resolution agreements continued 37, 39, 50, 54–6, 78, 132, 178, 191,
enforcement of see enforcement, of 209, 243; attitude against anti-suit
dispute resolution agreements; injunctions 199, 204; conflicts of
formal requirements in arbitration, jurisdiction between the Member
relaxation of 47–9; formal validity States 188–9; contract priority 180;
45–56; format 52–5; genuine decision in Front Comor see Front Comor
consent, lack of 56–7; grounds to case (West Tankers v Allianz SpA);
refuse enforceability of 247–9; doctrine of separability 71; exclusive
harmonization and cooperation in jurisdiction 183; Gasser v MISAT case
64–6; interpretation and scope of 180–2, 185, 201; insurance contract
60–4; kompetenz-kompetenz, doctrine of 134; intermediate approach 180–2;
see kompetenz-kompetenz, doctrine of; narrowing the application of Gasser
material validity 56–60; oral 185–8; for parties domiciled outside
agreements evidenced in writing the Member States 188–9; ‘procedure
55–6; public interest and 58–60; priority’ approach 182–3; stay of
public policy infringement 65; jurisdiction granted by Article 23(1)
separability, doctrine of see 193–4; stay of jurisdiction granted by
separability, doctrine of; signature Article 23(3) 194–5
49–52; stay of jurisdiction and 171–7; exclusive jurisdiction: concept of 102–3;
validity of 45–60; written form, derogation effect of 122–6;
relaxation of 45–7 enforcement of 122–6, 133;
duress 20, 24, 26, 56–7, 59, 65, 70, 249; prorogation effect of 122
defense of 227–8 exequatur, abolition of 237

enforcement jurisdiction, law of 96 Fee Regulation, China 225

enforcement, of dispute resolution format, for writing dispute resolution
agreements: arbitration agreements clause 52–5
111–15, 127; assessment of 119–20, forum non conveniens, doctrine of 86,
127, 131; within the Brussels I 122, 124, 126, 129–30, 138, 140, 173,
Regulation 126; by and against the 177; application of 191; in Brussels I
third party 131–8; challenging of Regulation 178, 189–96; for
court’s jurisdiction and 112–13; in enforcing anti-suit injunctions from a
China 111–20; of choice of court third country 195–6; exclusive
agreements 129; close relationship jurisdiction clause 190; and
with the third party for 136–8; jurisdiction agreements 171–3, 175;
common law discretion in 122–6; in Owusu v Jackson case 189–91; stay
consent and knowledge of the third of jurisdiction in favour of third
party for 135–6; in England 120–7; country 191–5
for expressly granting the benefits to forum selection clauses: invalidity of
a third party 134–5; general rule for 249–50; validity of 247
131–2; Internal Report-and-Review fraud 174; arbitral awards obtained by
procedure for 113–15; jurisdiction 226; contract by 70
agreements 115–19, 129–31; French Civil Procedure Law 203
legislation for 111–12; statutory Front Comor case (West Tankers v Allianz
obligation for 120–1; ‘subject matter’ SpA): anti-suit injunctions 207–9;
test 209; and taking over the rights criticism of decision in 209–12;
and obligations of the other party manoeuvre around judgments in
132–4; in USA 127–31 212–14; situations before 204–7
European Commission 91n131,
214n212, 215–16, 219 Gasser v MISAT case 78, 180–2, 185,
European Convention on International 201, 236
Commercial Arbitration (1961) 16,
29, 204 Hague Choice of Court Convention 6,
European Court of Justice (ECJ) 23–4, 22, 46, 77, 241, 254; distinction
 Index 271
between copyrights and IP rights 106; international scheme 238–9;
format of writing 54; insolvency recognition and enforcement of 81,
proceedings, exclusion of 105; 230–9; US legislation 231–3
judicial cooperation, on jurisdiction judicial cooperation, on jurisdiction
agreements 243–4 agreements: Brussels I Regulation
Hague Conference on Private 242–3; Hague Choice of Court
International Law 17, 108, 243 Convention 243–4
Hague Convention (2005) 9, 17, 46, 61, jurisdiction: conflict of 80; of a Member
77, 81, 146, 238, 240; on choice of State is granted by domestic law 203;
court agreements 25–6; chosen and in personan 103; stay of 171–7
non-chosen fora 245–6; dispute jurisdiction agreements: alternative
resolution clause, grounds to refuse choice of court agreements 10; anti-
enforceability of 247–9; format of suit injunctions in Europe 196–204;
writing 54; future of 253–6; neutral versus arbitration agreements 3–5;
forum 252; versus New York asymmetric choice 10–12; capacity to
Convention 245–53; power of review challenge 32–3; Chinese law on
under 82; refusal of recognition and 15–16, 27; choice of more than one
enforcement 249–52; requirement of 9–10; civil and common law 66; Civil
signature under 50; scope of 246–7 Code of Quebec 143–4; concluded by
High Court of England 8 parties domiciled outside the
Member States 188–9; in cross-border
immoveable property: disposal of 103; contracts 33; derogation effect of
disputes in relation to 103–4; rights 117–19; enforcement, of dispute
relating to 166; transaction of 58 resolution agreements 115–19,
infringement 101, 167–8, 196; of 129–31; enforcing exclusive 173–4;
copyright 63–4; of IP rights 105–6; of English law on 14, 26–7; EU
property rights 64; of public policy approach 23–5; exclusive 8; forum non
65, 102, 229, 238 conveniens and 171–3; Hague
insolvency 98–9, 103, 105, 108 Convention on choice of 25–6;
Insolvency Regulation 2000 (EU) 105 harmonization in 22; impact of
intellectual property (IP) rights: Turner v Grovit in 201–2;
disputes related to 100–1, 105–6; incorporation of 41–2; international
distinction with copyrights 106; instruments on 16–17; judicial
infringement of 105–6; registration cooperation on see judicial
of 103 cooperation, on jurisdiction
Inter-American Convention on agreements; kompetenz-kompetenz in
International Commercial 76–83; lis pendens, doctrine of 142–52,
Arbitration see Panama Convention 178–9; matters subject to 102–8; non-
international, definition of 5–7 exclusive 8–9; ‘null and void’ clause
international dispute resolution 25–6; prorogation effect of 115–17;
agreements 5–7 public policy to invalidate 59; subject
international framework, on arbitration matter scope of 108–9; types of 8–13;
agreements: New York Convention US law on 14–15, 26–7
240–1; UNCITRAL arbitration rules
242; UNCITRAL Model Law 241–2 kompetenz-kompetenz, doctrine of 67, 74–6,
97, 145–6, 153, 183, 188–9, 241;
joint ventures, contracts for 103–4, 246 application of 75; arbitral tribunals,
judgments: under Brussels I Recast 237; competence of 84–5; in arbitration
under Brussels I Regulation 235–7; agreements 83–4; in Chinese law 85;
Chinese legislation 233–5; current chosen and non-chosen forum,
scheme 235–7; English legislation conflict between 79–82; chosen court,
230–1; final and enforceable 251; competence of 76; civil procedure
grounds to refuse recognizing 82–3; and 75; in dispute resolution clauses
inconsistent decisions 251–2; 91; enforcement stage, review at 90–1;
272 Index
kompetenz-kompetenz continued 85–6; supervisory courts, conflict of
establishment and adoption of 92; jurisdiction with 89–90; tribunal,
infringement of 87; in jurisdiction conflict of jurisdiction with 87–9
agreements 76–83; non-chosen ‘null and void’ jurisdiction clause 25,
forum, competence of 76–9; non- 28, 82, 112, 121, 216, 220–1, 247
supervisory court and a tribunal,
conflict between 87–9; non- oral agreements, evidenced in writing
supervisory courts, competence of 46, 55–6
85–6; recognition stage, review at Owusu v Jackson case 189–91, 193, 195
82–3; supervisory and non-supervisory
courts, conflict between 89–90; Panama Convention 17
supervisory courts, competence of party autonomy: arbitral awards,
84–5 recognition and enforcement of
224–30; dispute resolution methods
lex arbitri, doctrine of 29–30 224; scope of 252
lex causae, doctrine of 24, 26–7, 29, 40, patent 100, 105–6
71, 73, 184 perjury 226, 228
lex fori, doctrine of 21–2, 24–30, 73, prorogation jurisdiction, principles of
94–5, 103, 110, 131, 184, 193 122, 133, 181–2, 194
lex mercatoria, doctrine of 4, 96 protective jurisdiction 164, 236;
lis pendens, doctrine of 10, 80–1, 140, concept of 107; in employment
177, 184, 211, 222–3, 245; in contracts 165
arbitration agreements 152–4; in civil public interest: definition of 58; dispute
law countries 142–7; in common law resolution agreements, validity of
countries 147–52; conflict with 58–60; and infringement of public
jurisdiction agreements 178–9; and policy 229
conflicts agreements 141–2; in
countries with judicial cooperation Recast Brussels I see Brussels I Recast
145–7; in countries without judicial repudiation, intention of 43–4
cooperation 142–5; for grant of anti- Rome I Regulation: arbitration and
suit injunction 156; for preventing choice of court agreements 23;
parallel proceedings 182; Article 1 of 23; Article 10 of 23
relationship between party autonomy
and 180 sale of goods, contract for 133
loan agreements, cross-border 10–12, Schlosser Report 192, 204, 206
168, 180, 186 separability, doctrine of 67; in Chinese
law 73–4; consent test 72; and
mandatory forum-selection clauses 174 contract by fraud 70; in English law
68–70; establishment and adoption
New York Convention 6, 16–17, 22, 28, of 92; European Court of Justice
54, 66, 89, 170, 219, 221–2, 228, 239, (ECJ) 71; in European law 71;
240–1; arbitral tribunal, competence grounds for justification of 74;
of 84; arbitration agreement, jurisdiction clause 68; ‘presumed
standard for 49; arbitration intention’ approach 70; in USA 72–3
agreements, for enforcement of 128; signatures, for proving identity 49–52
Article II(3) of 152, 212; Article V of stay of jurisdiction: in breach of local
213; chosen and non-chosen fora exclusive jurisdiction clauses 174–5;
245–6; Contracting States of 204; for enforcing exclusive jurisdiction
dispute resolution clause, grounds to agreements 173–4; in favour of
refuse enforceability of 247–9; versus arbitration agreements 175–7; in
Hague Convention 245–53; refusal of favour of third country in jurisdiction
recognition and enforcement clause 191–3; forum non conveniens,
249–52; scope of 246–7 doctrine of 171–3; granted by Article
non-supervisory courts: competence of 23(1) of Brussels I Regulation 193–4;
 Index 273
granted by Article 23(3) of Brussels I UN Convention of International Sale of
Regulation 194–5 Goods (1980) 253–4
subject matter of arbitration 94; UNCITRAL Model Law on
companies and legal persons, International Commercial
disputes in relation to 104–5; Arbitration 6, 12, 19, 22, 28, 41, 46–8,
competition disputes 106; exclusive 51, 55, 88, 153, 240; on arbitration
jurisdiction 102–3; immoveable agreement 241–2; kompetenz-
property, disputes in relation to kompetenz, doctrine of 84
103–4; insolvency proceedings 105; ‘unfair competition’ 106
intellectual property rights disputes United Nation Convention on the
105–6; for protecting weaker parties Recognition and Enforcement of
107–8; scope of 108–9 Foreign Arbitral Awards (1958) see
supervisory courts: competence of New York Convention
84–5; conflict with non-supervisory
courts 89–90 Warsaw Convention 254
written form, relaxation of 45–7
third party beneficiary 134–5
tort 60–1, 63, 106, 187, 190, 246
Turner v Grovit case 197; anti-suit
injunction, guidance on 198–201,
204; impact in jurisdiction
agreements 201–2