Agreement of Exclusive Jurisdiction

In Forbes Energy Group Inc v Parsian Energy Red Gas, 2019 ONCA 372 (Forbes), the Court of Appeal considered the following jurisdiction clause: “This condition sheet is governed by the laws of England and the parties agree to apply to the courts of England” (the clause). The legality of an “exclusive jurisdiction” clause has been held in several cases such as Hakam Singh v. Gammon (India) Ltd.2, where the Supreme Court has held that whenever it is specified in the contract that a particular court should have jurisdiction, other courts that otherwise have valid jurisdiction would not conduct such a dispute settlement procedure and only the court agreed to by the parties would conduct the proceedings. However, these agreements are not considered exclusive under the Hague Convention on Jurisdiction Agreements. As this may be the mechanism by which the UK maintains mutual applicability within the EU, it may not be desirable to designate two courts as having exclusive jurisdiction over EU-related transactions. Also keep in mind that there is a risk of parallel proceedings, especially if there is a counterclaim to a claim, with the claim being heard by one court and the counterclaim by another court. When drafting dispute resolution clauses in commercial contracts, the parties must take into account, among other things, the most practical and affordable forums for resolving their disputes. However, one of the problems they face is the degree of autonomy they can exercise in choosing a suitable forum. To avoid the hassle of litigation in a forum that is inconvenient or time-consuming, the parties often agree among themselves to hear their disputes in a particular court.

These clauses shall be drawn up taking into account the common economic and geographical opportunity of the parties. This article deals with some of the most important issues regarding exclusive jurisdiction clauses. You can, if you wish, formulate your jurisdiction clause in such a way as to limit yourself to a specific court in a jurisdiction. Under English law, it is perfectly legitimate to provide that a court of competent jurisdiction in London has exclusive jurisdiction, thereby preventing proceedings from being brought in another part of England and Wales.10 However, such an agreement carries the risk that a foreign court will find that London is not considered a country and that, therefore, the clause is invalid. If you enter into contracts with parties in jurisdictions outside the United Kingdom, it is recommended that the courts of England or the courts of England and Wales be designated as having jurisdiction. Exclusive jurisdiction clauses are often used in commercial contracts to limit disputes that arise in the jurisdiction of a particular court or country. Exclusive jurisdiction clauses can be distinguished from non-exclusive jurisdiction clauses: while an exclusive jurisdiction clause provides more certainty by clearly defining the place where the contract is to be negotiated, a non-exclusive clause may allow the parties to initiate proceedings in another jurisdiction. Whatever you choose, make sure that the jurisdiction clause clearly reflects your choice. For example, if you submit your disputes to the exclusive jurisdiction of the English courts, use the word “exclusive”.11 Caution should also be exercised when drafting a non-exclusive jurisdiction clause, as it can be formulated in several ways. For example, if you opt for a non-exclusive clause and want to be able to conduct simultaneous proceedings in a number of jurisdictions, make sure that the wording reflects this (see the hybrid clause template below). If you wish to be able to bring an action in another anonymous jurisdiction, even after the other party has brought an action in that jurisdiction, this must also be indicated in the drafting.

`(i) any agreement which restricts a party by the exercise of its rights under or in respect of a contract, by the usual legal proceedings before the ordinary courts, or which limits the period within which it may assert its rights; or a clause on applicable law and choice of jurisdiction addresses two different issues: (1) choice of law for all disputes arising out of the Agreement; and (2) the choice of the place of jurisdiction in which disputes are heard. These issues are often dealt with in a single provision, but can also be dealt with separately. In accordance with article 9 of the Code of Civil Procedure of 1908, all courts are competent to hear all civil actions, unless jurisdiction is expressly or implicitly excluded. Article 20 of the Code of Civil Procedure also provides that an action may be brought either at the place where the defendant has his habitual residence or carries on a commercial activity, or if part of the plea arises. Article 20 specifies that several courts may have jurisdiction to hear an action (e.g. B if part of the plea arises in a place other than the place where the defendant has or is engaged in his normal domicile). There may also be situations where the plea arises in several places for which different courts have jurisdiction. Applicability of exclusive jurisdiction clauses when subject to judicial review Exclusive jurisdiction clauses limit disputes to the courts of a court. An exclusive jurisdiction clause creates relative certainty: you know where to sue and be sued. They also offer greater protection, as another court is less likely to accept jurisdiction if faced with an exclusive jurisdiction clause. A well-formulated dispute settlement clause is essential and provides certainty in terms of procedures and procedures for parties wishing to resolve a dispute. This is even more common in an international environment where the parties are based in different jurisdictions.

In A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem [1989 SCR (2) 1], the contract between the parties provided that the courts of Kaira had jurisdiction over disputes arising out of the contract. The plaintiff filed an action for recovery of money in the Court of Salem. The Madras Supreme Court upheld the concurrent jurisdiction of the Salem Court, as the contract was partially performed in Salem. The Supreme Court Chamber held in the Special Leave to Appeal case that, with respect to the interpretation of the termination clause, where words such as “alone”, “only”, “exclusively” and similar were used, there should be no difficulty in interpreting the dismissal, unless it is established that there is no consensus ad idem. However, an implied exclusion from other jurisdictions in the absence of such clauses should be inferred from the facts and circumstances of the case and would not be automatic. The Court further held that courts other than Kaira relating to the contract were not excluded by the use of specific terms and that the general terms and conditions of the contract did not provide for the exclusion of other courts.

Although it concluded that the clause was valid and enforceable, the court broke through the clause and concluded that the Salem court had jurisdiction. Therefore, abc laminart asked the courts to conduct a factual inquiry into the implied exclusion of a court`s jurisdiction. It granted considerable leeway to the party wishing to derogate from an exclusive jurisdiction clause. Despite the identified practical advantages of jurisdiction clauses, they cannot be applied in all circumstances. Although a court gives weight to a clause, poor wording, significant inconvenience to the parties, and unforeseen circumstances may cause a court to use its discretion to order that another forum be better placed to hear the case than the jurisdiction set out in the clause (the forum non conveniens principle). However, the courts have taken into account the importance of binding the parties to their agreement in cases where jurisdiction clauses have been applied, and the mere fact that one jurisdiction may be more practical or that there is significant evidence in another jurisdiction alone is unlikely to prevail over a well-worded clause. [1] “A dispute arising between the parties in connection with [DEFINE DISPUTE] hereby agrees that the dispute shall be subject to the exclusive jurisdiction of the courts [INSERT JURISDICTION].” Important advice and considerations in drafting a robust exclusive jurisdiction clause In Shridhar Vyapar v. Gammon India GA 44 of 2018, the Calcutta High Court dealt with a lawsuit for the realization of the costs related to the invoices collected.

The invoices contained a provision that disputes would be decided by the courts of Raipur and Nagpur respectively. The Supreme Court of Calcutta ruled that “the parties may be bound by an agreement containing a clause conferring exclusive jurisdiction on certain courts if, after such selection, their conduct can prove that the parties intended to perform the contract. The exception is that, despite such a clause and a consensus to act on it, the plea has been raised completely and massively in another jurisdiction and, second, it would be oppressive to drag the parties into the forum they have chosen, taking into account other factors. “On the basis of these observations, the Supreme Court of Calcutta concluded that the party challenging the exclusive jurisdiction clause did not explain how the contractually chosen jurisdiction would be inconvenient or oppressive. The court applied the exclusive jurisdiction clause. The Supreme Court, in a recent case of EXL Careers Ors v. . . .