In a series of posts published at the Kluwer Arbitration Blog, Gary Born argues that States Should Not Ratify, and Should Instead Denounce, the Hague Choice-Of-Court Agreements Convention.
At the invitation of the Editors of the EAPIL Blog, Trevor Hartley, Professor emeritus at the London School of Economics, replies.
Gary Born starts by saying that the 2005 Hague Choice-of-Court Convention gives choice-of-court agreements the same enforceability and effect as arbitration agreements. This, he argues, is wrong because, while the parties to an arbitration agreement can choose the individual arbitrators, the parties to a choice-of-court agreement can only choose the country, or the court, from which the judges will be drawn: they cannot choose the individual judges. The reason he finds this objectionable is that the judges in many countries are corrupt or incompetent. He cites various statistics to show this. He names a number of countries which he says are especially bad: Russia, China, Venezuela, Iran, the Congo and Nicaragua. However, none of these countries is a Party to the Hague Convention; so choice-of-court agreements designating their courts would not be covered.
There can be no doubt that corrupt, biased or incompetent judges do exist, as do corrupt, biased or incompetent arbitrators. However, even though the parties to a choice-of-court agreement cannot choose the individual judges who will hear their case, they can choose the country the courts of which will hear it. They can even choose the particular court: Article 3(a) of the Convention. And since there are many countries where the judges are not corrupt, biased or incompetent—several EU countries, as well as the United Kingdom, spring to mind—the parties can, if they choose, ensure that the judges hearing their case are unbiased, competent and impartial. If the parties insist on choosing the courts of a country where judicial corruption is a problem, they have only themselves to blame.
Moreover, it cannot be said that the Convention does not deal with this problem. Article 6(c) provides that the obligation of a court of a Contracting State other than that of the chosen court to suspend or dismiss proceedings covered by an exclusive choice-of-court agreement does not apply if giving effect to the agreement ‘would lead to a manifest injustice or would be manifestly contrary to the public policy of the State of the court seised.’ While Article 9(e) provides that recognition and enforcement of a judgment given by a court of a Contracting State designated in an exclusive choice-of-court agreement may be refused if it would be ‘manifestly incompatible with the public policy of the requested State, including situations where the specific proceedings leading to the judgment were incompatible with fundamental principles of procedural fairness of that State.’
Born tries to argue that the grounds for refusing to recognize a judgment under the Hague Convention are insufficient compared with those applicable to arbitration awards under the New York Convention. Little would be gained by a detailed analysis of the two sets of provisions. However, it can be said that the grounds in the Hague Convention are wide ranging—Article 9 has seven paragraphs, each setting out a different ground—and they provide ample opportunities for any court willing to use them to refuse recognition. The same courts will decide on recognition of judgments under the Hague Convention as on the recognition of arbitration awards under the New York Convention. There is no reason to believe that they will be less willing to refuse recognition in the former case than in the latter. In any event, if parties think that their rights will be better protected under an arbitration agreement than under a choice-of-court agreement, there is nothing to stop them from opting for the former. To deprive them of that choice by denouncing the Hague Convention would not enhance party autonomy: it would seriously limit it.
It should finally be said that the provisions on recognition and enforcement in the Hague Convention are very similar to those of the Brussels Regulation and the common law. The Brussels Regulation, rather than the New York Convention, was in fact the model for the Hague Convention. The most important difference between the two is that the grounds for non-recognition are considerably more extensive under the Hague Convention than under the Brussels Regulation. Both the Brussels Regulation and the common law seem to have operated satisfactorily for many years now.
Mr Born’s contribution is one of the poorest I have ever seen from an international lawyer. He writes that the Hague Convention “seeks to transpose the New York Convention’s legal regime” (Part I). This is of course wrong. The Convention’s drafters were simply inspired by the New York Convention and wanted to find a legal regime also efficient in respect of choice of court agreements. It is said that the Convention “ignores the realities of endemic courruption” (I). Equally wrong: there are many safeguards in Article 9 and in particular the public police protection. (I). It is completely wrong to assert that the New York Convention prevents anything like corruption occurring in arbitration proceedings (II). And even if this would be the case, there is no reason not to undertake an effort to ensure the enforcement of foreign judgments based on choice of court agreements considered as valid in a Hague Conference Member State. Precisely, choice of court allows the parties to avoid jurisdictions where corruption may occur. In many respects, the enforcement of arbitral awards under the New York Convention faces the same difficulties, which Mr Born tends to ignore. It is said that “the Convention would replace existing private international rules”: equally wrong, the Convention does not promote an exclusively applicable regime. The validity of any choice of court agreement may be verifies in the enforcement State, the same way as the validity of an arbitration agreement may be checked under the New York Convention. For Mr Born, the Convention dilutes the protections that are available under national law (III). He ignores the large spectrum of protections under Article 9 and the fact that the New York Convention does not do it better. In sum: All of Mr Born’s assertions are FAKE NEWS.
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