Lloyd's Maritime and Commercial Law Quarterly
EXCLUSIVE JURISDICTION AGREEMENTS: PURITY AND PRAGMATISM IN THE CONFLICT OF LAWS
Edwin Peel *
One of the most eminent jurists in private international law, Sir Otto Kahn-Freund, noted that academic writers in England have paid comparatively little attention to foreign jurisdiction clauses,1
particularly given their prevalence and great significance in international commercial practice.2
The principal aim of this article is to assess the current practice of the English courts when faced with an application to stay their own proceedings on the basis of a foreign jurisdiction clause. It will also assess, by way of comparison, other aspects of foreign jurisdiction clauses in the practice of the English courts. The practice of the courts in other jurisdictions will also be considered. It is against this background that the approach of the English courts to the regulation of their own proceedings will be analysed. By far the most interesting dimension to foreign jurisdiction clauses is the need to balance the purity of contract theory, under which the parties should be held to their agreement, with the pragmatism of international litigation, which acknowledges that the exercise of the civil courts’ jurisdiction does not represent a purely private interest to be left to the redistributive will of the parties. It remains to be seen how well the English courts have achieved the necessary balance.
A. PRELIMINARY ISSUES
1. Exclusive or non-exclusive?
In English law a distinction is maintained between “exclusive” and “non-exclusive” jurisdiction agreements. The former oblige the parties, or one of them, to sue in a particular court and no other, while the latter confer jurisdiction on a court, which may not otherwise have had it, without seeking to prevent proceedings in other courts of competent jurisdiction. Two questions arise. First, how do the courts decide which type of agreement the parties have entered into? Secondly, what difference does it make, if any, to the approach of the courts whether the agreement falls into one category or the other?3 The
* Fellow of Keble College, Oxford. I should like to thank Adrian Briggs for his extremely helpful comments on earlier drafts of this article. Any errors are, of course, entirely my responsibility.
1. Terminology tends to vary considerably in this area but “foreign jurisdiction clause” or “foreign jurisdiction agreement” will be used in this article and should be taken to refer to an agreement between the parties (whether separate or as part of the main contract) to sue in a foreign court.
2. “Jurisdiction Agreements: Some Reflections” (1977) 26 ICLQ 825.
3. Logically, the second question should be taken first since, if it makes no difference, the question of how the courts differentiate between the two types of agreement is irrelevant. Suffice it to say, it does make a difference and the questions are, therefore, taken in the order in which they would be by the courts.
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