CompassRose International Publications
There
are a number of international treaties that fall under the Hague Convention on
International Private Law, originating from the 1893 Hague Conference. This
particular treaty (The Hague Convention on Jurisdiction and Enforcement of Judgements in Civil and
Commercial Matters) initially was proposed by the United States in 1992 as a
way to establish international rules for enforcement of foreign judgements. Preliminary negotiations began in 1996 with 52
countries participating. The first draft of the proposed treaty was produced in
the fall of 1999, but was overwhelmingly rejected by business communities in
the U.S. and Europe.
A
new round of dialog began in early 2000, leading to a revised draft in July 2001, which provides a range of optional
language for a number of key points of contention. Informal bilateral meetings
have occurred since July 2001, and a new round of formal talks is planned for
March 2002. Initial work at the upcoming talks is expected to be concerned with
refocusing the treaty and plotting a new timetable for completion.
This issue is the chief interest of the U.S., as
its domestic courts have a fairly open approach to foreign judgements against
U.S. defendants. However, openness is not necessarily reciprocated overseas,
such that U.S. judgements are frequently not enforced by foreign courts.
This is the chief interest of European negotiators,
reflecting their focus on protecting consumers and making the international
legal system more accessible to individuals.
The majority of issues of contention arise in the context of
Internet-based sales, or "e-commerce." Traditional legal theory
ascribes jurisdiction and fault based on geographic connections between the
parties and the place where the "harm" occurred, neither of which are
clear in electronic transactions. The following issues have been identified by
the U.S. State Department as major stumbling blocks:
In the case of business-to-consumer transactions (Article
7), European negotiators want jurisdiction and choice of forum to be based on the
location of the customer, or "destination" of the data flow in the
context of electronic commerce. Thus, if a consumer in Belgium has a dispute
over a purchase from an online company based in England, the consumer can sue
in Belgian court. This provision, however, does not cover which nation's laws
would be applied in the case. The U.S. wants jurisdiction based on the laws
under which the company in question has been incorporated. Both approaches
would apply when a transaction is not governed by a contract that stipulates a
court of jurisdiction.
The U.S. wants a "common carrier" approach applied
to ISPs, similar to that adopted in the WIPO Treaty implementing legislation,
the Digital Millenium Copyright Act, which exempts ISPs from liability for
information not in their control that is carried over their networks. The
Europeans, on the other hand, want to enlist ISPs as guardians of rules and
regulations covering online content and other issues. The best example to date
is the French court ruling against Yahoo for allowing the sale of Nazi war
memorabilia on its U.S.-based web site.
(Article 12) There are a number of approaches proposed for
situations in which intellectual property, such as infringement of a copyright,
is at issue. U.S. industry wants better protections and recognition of patents
and trademarks in foreign jurisdictions by granting exclusive jurisdiction to
the court of the state where the patent or trademark was granted.
These three points are not exhaustive and encompass a number
of proposed approaches to many parts and sections of the treaty text. Aside
from the actual subject matter at issue, several procedural matters also have
yet to be resolved. For example, there is no consensus on the number of states
needed to ratify before the treaty can enter into force.
The U.S. State Department believes this option
would result in a treaty that would not be ratified in the U.S. In addition,
the treaty also would require implementing legislation in the U.S.
Neither the U.S. State Department nor the U.S.
business community believes this is a good option.
This is the most likely outcome. The U.S. has
proposed that the next round of discussions narrow the treaty to areas where
there is relative international consensus and move forward with a more limited
treaty. The U.S. State Department believes that two general areas can
successfully be pursued:
· Enforcement of contractual choice of
forum clauses.
· Provisions applying to liability lawsuits
in which electronic communication is not a factor.
The issues covered by the proposed Hague Treaty also are
included in several existing treaties, or are affected by closely related
subject matter in the following instruments:
· New York
Convention, governs international arbitration options for 120 signatory
countries, including the U.S. and members of the European Union.
· Brussels
Convention, the European convention on jurisdiction and enforcement of
judgements, which applies to members of the European Union. It establishes the
framework for the European negotiators' positions on the Hague Convention. The
following is an excerpt from the Europa web site summary of the Brussels
Convention:
"The basic principle is that jurisdiction is exercised
by the Member State in which the defendant is domiciled, regardless of his or
her nationality. Domicile is determined in accordance with the domestic law of
the Member State where the court has been seised. In the case of legal persons
or firms, their domicile is determined by the country where they have their
statutory seat, central administration or principal place of business. In the
case of trusts, domicile is defined by the judge of the Member State whose
court has been seized; the court applies its rules of private international
law."
o Lugano
Convention, extended the Brussels Convention to include members of the
European Free Trade Area.
o Rome Convention, internal
European treaty covering the application of a particular national law to an
international transaction, as differentiated from choice of forum. The current
convention covers only business-to-business transactions, but negotiations are
underway to extend the convention to business-to-consumer transactions (so
called "Rome II").
· Jeffery D. Kovar, assistant legal adviser for international
private law, U.S. Dept. of State:
Presentation to Center for Strategic and International
Studies, Nov. 8, 2001
Testimony before the U.S. House of Representatives Committee
on Energy and Commerce, May 22, 2001 "Impediments to Digital Trade."
<http://energycommerce.house.gov/107/hearings/05222001Hearing231/hearing.htm>
· Online text of the draft Hague Convention, and additional
material: <http://www.hcch.net/e/workprog/jdgm.html>
· Online text of the Brussels Convention and additional material:
<http://europa.eu.int/scadplus/leg/en/lvb/l33054.htm>
· Center for Privacy and Technology
<http://www.cptech.org/ecom/jurisdiction>