In Telemedia, the clause in issue stated as follows: " This agreement shall be governed by and construed in accordance with English law and both [Telemedia] and [Hamelin] hereby submit to the non-exclusive jurisdiction of English courts. In answer to Telemedia's claim under RICO, Hamelin argued that the agreement, by virtue of the governing law clause, should " be governed by and construed in accordance with English Law " so that the RICO claim was precluded.
The New York Court did not agree. It stated "[t]he plain language of the clause reveals an intent for English law to apply only to issues relating to the construction and enforcement of the agreement ". Thus the RICO claim was valid as it was based on allegations of fraud preceding the existence of the contract.
The general rule will be superseded or may be limited in its application where the non-contractual obligation arises out of, among other things, unfair competition, product liability and IP infringement claims. Special provisions apply in these circumstances and are set out in Articles 5, 6 and 8. There are certain subject matters in respect of which Rome II does not apply. These include in respect of obligations arising out of the relations between the settlors, trustees and beneficiaries of a voluntary trust.
So, for example, if a bank was sued in the courts of an EU Member State by a bondholder in respect of its work as a trustee, those courts would have to apply their existing choice of law rules, rather than Rome II, to answer any relevant questions as to the governing law of non-contractual claims.
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My Documents. Material personally selected by your relationship manager for your interest. Access all of the content that you have previously selected to bookmark. Romanian ro. Slovak sk. Slovenian sl. Finnish fi. Swedish sv. Publication details Related publications Published: Corporate author s : Directorate-General for Justice and Consumers European Commission Themes: Justice and home affairs , Labour market — Free movement of workers Subject: civil law , commercial law , employer , international dispute , international law - national law , jurisdiction , user guide , wage earner PDF.
ISBN DOI View more View less. Order X. A5: Pages: Weight: Size:. Print on demand. The PDF version is free of charge. The print on demand version incurs printing and shipping charges even for free publications. These charges could be higher than the cover price of the publication. Some contracts involving secured transactions and the Uniform Commercial Code UCC may also conflict with choice of law rules.
Also, contracts governing corporate behavior usually must be decided by the law of the state of incorporation. Generally, however, the differences in state law are not great enough to make this a major negotiating issue for most parties. Jurisdiction refers to where a dispute will be resolved; governing law indicates which state's law will be used to decide the dispute. It's possible, for example, for a contract to require lawsuits to be filed in California but decided under New York law.
The selection of which state is used for governing law is not often a crucial negotiating issue. But the selection of the state for jurisdiction can be more important: If there's a dispute, that's where everyone will have to go to resolve it. Sometimes these two provisions are grouped into one paragraph.
After all this discussion, you may be surprised to know that within the body of a contract, a choice of law provision is usually very brief and to the point. Here's an example of a provision regarding governing law in a contract something like this is probably all you need :.
Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Massachusetts. Consider also the rules of evidence, whether the system is inquisitorial many continental European countries or adversarial most common law countries , whether there are specialist courts and judges, the speed of the litigation process and cost generally, the availability of appeals and the quality of the judges and lawyers.
The English judiciary has a reputation for quality, independence, impartiality and integrity. How easy is enforcement? Claimants should consider litigating in the place where the assets are located to avoid having to transport a judgment from elsewhere: the rules on enforcing foreign judgments can be complex. Should the jurisdiction clause be exclusive i.
This is a question of certainty exclusive against flexibility non-exclusive. In some cases an asymmetric jurisdiction clause may be agreed, so that party A can sue party B in any jurisdiction, but party B can sue party A only in the specified jurisdiction.
This clause typically occurs where there is an imbalance of bargaining power, for example between a lender and borrower. However, this is not universally accepted - the law of some countries does not recognise these as valid jurisdiction clauses making enforcement difficult or potentially impossible.
Is a jurisdiction clause appropriate at all? Consider the following drafting tips Include express governing law and jurisdiction clauses in the contract; seeking to imply them by reference to other contracts or documents can prove difficult. Draft the clause so that it is wide enough to cover both contractual and non-contractual disputes which may arise, for example for misrepresentation claims.
Specify whether it is exclusive or non-exclusive. Unless there is good reason not to do so, ensure the governing law and jurisdiction clauses are compatible with each other. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice.
You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.
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