Jurisdiction
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Boilerplate Anatomy™
{{{1}}}JC clause suggestion
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Generally speaking, the flavour of courts who have the power to resolve any litigation concerning your agreement. In a cross-border agreement, it is usual to state the governing law and whose courts have jurisdiction; in a purely domestic agreement they will not, it's assumed that local law and local courts will always prevail.
There is always fun[1] to be had arguing over whether jurisdiction should be exclusive or non-exclusive, and what counts as a convenient forum.
Exclusive jurisdiction
Mostly[2] pretty tedious, but the litigation department will get excited about it. Draw what conclusions about them, therefore, as you wish. The fun[3] questions will be such as these:
- Should the courts of (say) England and Wales have exclusive or non-exclusive jurisdiction to hear disputes. Even though the contract is governed by English law, might an Italian court — or a chamber of the Luxembourgouisie — have a stab at arbitrating it? Now I know what you are thinking. In what messed up, purblind existence would one be seriously entertaining a foreign court being asked to apply English law? Just go to an English court! It is a fair question, but you might have a Malaysian broker contracting with a Venezuelan asset manager under English law, in which case it might be a pain in the posterior for both to schlep up to the courts of chancery in Fleet Street to sort out the inevitable dispute.
Non-exclusive jurisdiction
When you are fairly keen for English courts to hear disputes about your contract — and (cough) any non-contractual obligations arising out of it, but you won’t die in a ditch about it. Compare with exclusive jurisdiction.
Rome II
If you’ve ever despaired at the pernicketiness of governing law clauses such as this:—
This agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
Then you have the Rome II EU Regulation[4] to blame. Enacted in 2007, it applies to all EU Member States, except Denmark but still including the UK, and is designed to harmonise the “conflict of laws” rules across Member States, except Denmark but still including the UK, dealing with non-contractual disputes.
“But still including the UK”? Didn’t the UK take back control?
Brexit does not necessarily mean Brexit. The UK still is a party to Rome I and II as they form part of the “EU retained law” which the UK continues to apply post Brexit.
“Non-contractual obligations”
Breach of “non-contractual obligations” includes actions based on tort (e.g. negligence), competition law and statutory duty. But, fabulously, not those arising out of the negotiable nature of bills of exchange, cheques and promissory notes and other negotiable instruments, or company law or defamation — though it’s hard to see how you could have a non-contractual obligation to defame someone.
But the main thing is to ensure any concurrent claims in contract and tort can be — must be — decided in the same forum. This is mostly interesting where the parties to a contract are in different jurisdictions, and each will prefer their own jurisdiction to hear a non-contractual dispute. But even there, frankly, a concurrent claim in tort would only be relevant in most cases to builders.
Of course, the sensible thing would be to expressly exclude tort claims under the contract. But for those not prescient enough to do that, there’s always this magic incantation. Parties can agree to submit non-contractual obligations to the law of their choice. Previously, English courts haven’t been sure as to whether this is cricket. Rome II confirms that it is, where the agreement was made after the event giving rise to the damage; or where all parties are pursuing a commercial activity, if freely negotiated before the event giving rise to the damage occurred.