A draft of the Hague Convention on Exclusive Choice of Court Provisions is due to be discussed in June. But the US Internet Service Providers Association has joined AT&T, MCI, SBC, Verizon and others in asking the State Department to argue for the exclusion of non-negotiable contracts from the remit of the measure.
The draft Convention, previously known as the draft Hague Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters, is designed to help business overcome widespread uncertainty surrounding cross-border disputes.
Negotiations for the Convention began in 1992, and June's diplomatic conference could see delegates finally approve the draft wording. However, the scope of the Convention has been narrowed considerably from the original proposals, and now covers only certain business-to-business (B2B) contracts in which the parties have chosen which court will have jurisdiction.
The new proposals would require signatory states to enforce rulings from this exclusively chosen court, subject to an exception for judgments that are "manifestly incompatible with public policy," or to specific treaty exceptions, such as one for certain antitrust claims.
With the diplomatic conference approaching, the ISPs and telcos have written an open letter to the US State Department saying that, unless non-negotiated contracts are excluded, US companies could find themselves bound to follow a foreign court's ruling in connection with contracts that they have not had a reasonable opportunity to negotiate or assent to.
According to the letter, this means that "the liability for a US company would hinge entirely on the court whose jurisdiction you 'agreed to' in a non-negotiated contract".
The authors raise the spectre of a US company having its assets seized as evidence and its bank accounts frozen because of "the overly broad remedies" of Europe's Directive on the Enforcement of Intellectual Property Rights, remedies from which they say an ISP is protected under US law.
In the authors' opinion, the best approach, on grounds of "predictability, certainty and ease of enforcement," is to narrow the scope of the Convention to only negotiable contracts.
