China Signs The Hague Convention on Choice of Court Agreements
On 12 September 2017, the People’s Republic of China (China) signed The Hague Convention of 30 June 2005 on Choice of Court Agreements (the Convention).
This Convention aims at encouraging international judicial cooperation by requiring courts of member States (i) to respect exclusive forum clauses agreed upon by parties in their commercial agreements (Chapter II of the Convention); and (ii) to recognise and enforce judgments and court decisions rendered abroad (Chapter III of the Convention).
In essence, the Convention aims to replicate, for court judgments, what the 1958 New York Convention achieved for international arbitral awards.
The Convention – which entered into force on 1 October 2015 – has been elaborated by The Hague Conference on Private International Law. As of September 2017, parties to the Convention were: Mexico, the European Union (without Denmark), and Singapore. The United States and Ukraine have signed the Convention without ratifying it so far. In addition, the United Kingdom has indicated its intention to join the Convention in its own right post-Brexit.
The Convention applies in international cases in civil and commercial matters (Article 1). Certain matters (such as family law, wills and succession, antitrust, etc…), however, are excluded from the scope of application of the Convention (Article 2).
Overall, the fact that China has made a concrete step in joining the Convention marks a landmark move towards the global acceptance of the Convention. It is also a way for China to foster trust in its legal system and provide stability and greater certainty to investors.
Despite China’s signature, the Country must now ratify the Convention in order to become an effective party and be bound by it.