Issue: Hague Convention on Choice of Courts
Implementation of the treaty presents an unprecedented possibility for cooperative federalism whereby states that wish to participate would adopt a uniform act while the Congress adopts an almost identical federal implementing act.
CCJ Resolution 10 A-02 urges the federal government to take all reasonable steps to accommodate principles of federalism when drafting implementing legislation.
The Convention on Choice of Court Agreements was negotiated as part of the ongoing Hague Conference on Private International Law. The Convention applies only to provisions in written contracts between businesses that expressly choose a court to hear any disputes arising under that agreement. After the United States signed the Convention in 2005, disagreement persisted among representatives of the federal government, the uniform law advocates, and international commercial law practitioners about how the implementation should be accomplished. Discussions spanned these options: (1) a complete federal preemption approach which would centrally establish the procedures and legal principles to be followed by chosen courts (including state courts), and (2) a “cooperative federalism” approach by which, to avoid monolithic preemption by federal statute, each state could choose to enact a uniform act that conforms to the terms of the Convention while preserving the application of relevant state common law doctrines and procedures.
In considering what type of implementation legislation to submit to Congress, the State Department, asked the Uniform Law Commission (ULC) to draft a uniform act that states could enact to accept the Convention and adopt its provisions as state law. After years of effort, the ULC adopted a uniform act in 2012.
At the request of the Department of State, the American Society of International Law [“ASIL”] convened a Working Group on Implementation of the Convention on Choice of Court Agreements. By bringing together representatives from the U.S. Department of State, the ULC, the U.S. Department of Justice, the American Law Institute, NCSC, the Administrative Conference of the United States, and the legal academy, there appeared to be a consensus that cooperative federalism will be the preferred way in which the Convention will be implemented at the federal and state levels. Indeed, a small drafting committee was formed to create harmonious, if not identical, bills for introduction at both the federal and state legislative levels.
After many months of meetings among state, federal, and private bar groups to create state/federal implementation system for the Convention, the State Department Legal Advisor recommended that the “cooperative federalism” approach to implementation be replaced by a “one track” federal method as contained in a draft bill intended for Congressional consideration.
Efforts to implement this Convention have been stalled for many years. NCSC staff is staying alert to State Department initiatives to revive implementation.
The State Department is participating in a collaborative “Judgment Project” with Europe based organizations to draft a Convention on the Recognition and Enforcement of Foreign Judgments. This project may revive interest in the Convention.