Hague Convention on Choice of Courts

Issue: Hague Convention on Choice of Courts

Impact:

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.

Position:

CCJ Resolution 10 A-02 urges the federal government to take all reasonable steps to respect and accommodate principles of federalism in the course of drafting federal implementing legislation.

Summary:

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. 

Status:

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. 

On 8/3/11 Harold Koh, Legal Advisor to the State Department addressed the business meeting of CCJ.  He reiterated State Department support for a cooperative federalism approach to implementation of the Convention and described policy issues yet to be resolved by the ASIL Working Group and executive branch officials.  His address was followed by a ‘thank-you’ letter from CCJ President Eric Washington, which also described several policy concerns of CCJ.

On 4/16/12 Mr. Koh sent a letter to Chief Justice Myron Steele which included a State Department white paper describing the Department’s probable “final” draft of a federal bill to implement the Convention consistent with prior positions expressed by CCJ.  Mr. Koh asked for CCJ “concurrence” with the proposed bill by 5/1/12 so that the legislation could be transmitted to Congress in the context of stakeholder support.

After consulting with CCJ leadership, Chief Justice Steele, as chair of the CCJ Civil Justice Committee, communicated with Mr. Koh in June and July stating that the new State Department draft bill departs from the substance of the 2010 CCJ resolution and, thus, cannot be supported by CCJ. 

On 1/4/13 the State Department Legal Advisor disclosed that a “cooperative federalism” approach to implementation would be replaced by a “one track” federal method as contained in a draft bill (dated 12/10/12) intended for Congressional consideration.