Member States are exclusively responsible for certain types of disputes, regardless of their place of residence (e.g. B real estate rights, certain company law issues, etc.). Where Member States have such exclusive jurisdiction, this shall prevail over anything otherwise agreed by the parties in a contractual clause, and the designated court shall declare that it has no jurisdiction where claims are invoked before them in breach. A jurisdiction clause may provide for jurisdiction in a country related to one or more of the parties or may provide for jurisdiction in a neutral forum. There are three main reasons for indicating which forum is competent: any provision or agreement contrary to the rules established here is considered unwritten. 5 The inclusion of clear provisions on applicable law and jurisdiction in a treaty, as noted above, must ultimately contribute to the decision of disputes in accordance with the law and the courts chosen by the parties. Jurisdiction clauses should always be explicitly included in the contract7. 7 It is important that a contract clearly documents the agreement of the parties to a given jurisdiction. Do not leave invoices sent after the conclusion of the contract or fall into the trap of exchanging the standard terms of the parties, which practically guarantees a “fight of forms” over the conditions – and the exclusive jurisdiction clause – that apply. The application of these clauses has given rise to numerous disputes, and the decision commented on here3 illustrates this.
In its decision of 5 September 2018, however, the Court of Cassation annulled the appeal decision on this point, stating that “the provisions of Article 48 of the French Code of Civil Procedure on jurisdiction clauses do not apply to arbitration clauses”. In previous e-bulletins, we have looked at a number of clauses that are often found in trade agreements, but are often misformed and misunderstood. This month, we will discuss two others: “Law in force” and “jurisdiction”. Again, a number of factors must be taken into account when drafting such a clause: normally, a jurisdiction clause provides for either an “exclusive” jurisdiction or a “non-exclusive” jurisdiction. The interpretation of these terms may vary from one legal order to another, but overall, “exclusive jurisdiction” means that only the courts indicated have jurisdiction over disputes; and “non-exclusive jurisdiction” means that those courts may deal with disputes, but the parties are not prevented from suing in other jurisdictions or, if they deem it appropriate, from doing so. This guide focuses on the main considerations that should be taken into account when developing a jurisdiction clause. Ideally, professional advice should be obtained on the form and content of the legislation in force and the jurisdiction clauses for a given contract. However, if this is not feasible, the principles described above can help avoid some of the problems that arise. “If a dispute referred to an arbitral tribunal under an arbitration agreement is brought before a national court, the latter shall declare that it has no jurisdiction, unless the case has not yet been brought before the arbitral tribunal and the arbitration agreement is manifestly null and void or manifestly unenforceable. Exclusive jurisdiction clauses choose a jurisdiction and only one jurisdiction whose courts decide all disputes arising from the contract….
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