Jurisdiction in International Disputes

Introduction

In private international law, the most crucial agreements between parties are those on jurisdiction and choice of law. The control of private international law is in the hands of the parties concerned and using this control, the parties can come to an agreement as to the jurisdiction and choice of law in case of a future dispute between the parties.

In international litigation, establishment of jurisdiction relates to the court’s prima facie ability to admit, hear and determine a dispute between two parties. Choice of law refers to the applicability of law of one jurisdiction as opposed to the other. Jurisdiction and Choice of law clauses are separate stages of conflicts process. Jurisdiction traditionally has been considered to be a preliminary procedural issue in international legal disputes whereas choice of law is treated to be the real business of international litigation. However, in contemporary practice, jurisdiction is an important issue in international litigation.

In the present scenario, the jurisdiction and choice of law terms are to be drafted for two parties, an Australian company (BS Fine Stemware Pty Ltd) and a Vietnamese company (Vietnam Glass Corp), who are in the process of negotiating on the purchase of glass products from the Vietnamese company. Vietnam Glass Corp has assets in Vietnam and in Singapore. The Australian company has some concerns about whether the glass will conform to Australian standards and the brief is to draft a dispute resolution term which should include both a jurisdiction and a choice of law term. The parties wish to use litigation rather than arbitration in the event of a dispute, therefore, the terms will be drafted so as to provide jurisdiction to the court rather than arbitral tribunal in the event of dispute.

Draft Resolution Terms

Governing Law and Jurisdiction

a. Governing law

This Agreement, and the whole of the relationship between the parties to this Agreement, is governed by the laws of Singapore. The parties also agree that any dispute that may arise out of or in a matter related to this negotiation, or any matter related to this Agreement, shall be exclusively governed and determined in accordance with laws of Singapore. The parties further agree that any dispute that may arise out of the relationship between the parties, irrespective of whether these arise out of what may be regarded as contractual claims, shall be exclusively governed and determined in accordance with laws of Singapore.

b. Exclusive jurisdiction of Singapore Courts

1. The parties agree that all or any disputes arising out of this Agreement, or relationship between the parties, regardless of whether or not these may be regarded as contractual claims, shall be subject to the exclusive jurisdiction of the Courts of Singapore, and that no other courts in any other country are to have jurisdiction to hear or decide such disputes;

2. The parties agree that they irrevocably submit to the exclusive jurisdiction of the Courts in Singapore, any dispute, controversy or claim arising in any way out of or in connection with the Agreement between them;

3. Each party irrevocably waives any objection which it may have at any time to the laying of the physical venue of any suit, action or proceedings relating to the Dispute; waives the right to object to jurisdiction of Courts in Singapore on the ground that the said Courts lack jurisdiction over the relevant party; and waives any objection to the Courts in Singapore assuming jurisdiction on the ground that it is connected to a jurisdiction other than Singapore.

c. Compliance with Orders

With respect to Proceedings brought in the Courts in Singapore, each party irrevocably:-

(i) agrees to carry out and to take any steps necessary to carry out any judgment or order of the Court without undue delay;

(ii) waives any recourse to any court or tribunal outside Singapore to challenge or appeal against the aforesaid order or judgment; and

(iii) agrees that any judgment or order of the Court may be recognised and/or enforced in all of the following jurisdictions outside Singapore:

a. Australia; Vietnam; any other where either party may have offices or business.

Conclusion

The draft clauses on jurisdiction and choice of law have been drafted after due consideration to private international law and the issues in jurisdiction that may arise out of disputes between parties in different jurisdictions. The underlying principle is to ensure that in times of disputes there must not be any ambiguity as to the forum which will be used for deciding the dispute or the choice of law as per which the dispute will be decided. Considering this, the two clauses above have been drafted. The jurisdiction clause has been drafted to provide exclusive jurisdiction to the courts in Singapore. The clause is drafted to ensure that the submission to jurisdiction of Singapore’s courts is irrevocable. The Choice of law clause also provides that the laws of Singapore will be exclusively applicable to all or any disputes that may arise out of the agreement. In order to ensure that disputes that may arise out of any relationship between the parties and not just the Agreement or contractual claims, the governing law clause clarifies that all such disputes shall be governed by the laws of Singapore. Furthermore, the clauses ensure that there will be no ambiguity on the issue of appeals from the judgment by the courts of Singapore. This is necessary for the purpose of providing enforcement of decisions.

Bibliography

Briggs A, Agreements on jurisdiction and choice of law (Oxford: Oxford University Press 2008)

Keyes M, Jurisdiction in International Litigation (Federation Press 2005)