There has recently been a great deal of press coverage in relation to FIFA pursuing former Executives through courts in the US.
There remains skepticism as to whether this is a genuine attempt by the organisation to recover funds and/or hold accountable those who may have committed wrongdoings, or merely an attempt to garner some positive PR. Notwithstanding the motives, it raises, from a legal perspective, the issue of which Courts parties can commit their commercial disputes to.
In recent years London has seen a growth in cases from Russia (as well as other former Soviet states) in its Commercial Courts which are widely seen as a safer haven for Commercial Litigation due to the public nature, integrity and ability of the judiciary, as well as the disclosure obligations available to the Parties.
From a commercial perspective it is interesting to consider how and when parties are able to submit to a specific jurisdiction, or even a particular law.
Choice of jurisdiction for disputes
There are various rules and frameworks laid down by the Brussels Regulations, as reformed, covering EU states. However, it is possible for the parties to a commercial arrangement to agree from the outset how they would like to deal with any dispute that could arise at a later date. That could include specifying the state with jurisdiction, as well as the law that would be applied.
It is standard practice for contracts within the UK to include a jurisdiction clause submitting the parties to the laws of England and Wales with exclusive jurisdiction of the UK Courts. If an exclusive jurisdiction clause is included within the contract, then the Court will only depart from that if there are exceptional reasons for doing so. An example would be where there are connected proceedings being undertaken in another state, in which case the Court would consider whether it was in the interests of all parties to allow proceedings to continue concurrently, or whether it is in the public interest to have the dispute resolved in one Court.
It is also possible to state a non-exclusive jurisdiction clause within a contract, thus enabling the parties to bring proceedings in a Court of their chosen country or in the Courts of another jurisdiction with its own rules. It is not unusual to have a non-exclusive jurisdiction clause within a commercial contract. It is more common when the parties wish to preserve some flexibility should a dispute arise. In addition to a jurisdiction clause, commercial contracts often include arbitration clauses. They would then, subject to any invalidity, be an obligation to arbitrate the dispute before issuing proceedings.
There are more complex issues which arise in relation to Intellectual Property disputes, the nature of which could stretch across a number of different states. There are also various guidelines as to when a Defendant has submitted to the jurisdiction of the English Courts.
There are a number of issues for commercial parties to consider when deciding how a dispute should be resolved. Forewarned is forearmed. A clearly drafted agreement will provide certainty should an issue arise at a later date and avoid unnecessary wrangling over the appropriate forum. It will also enable the Parties to understand their legal obligations during the course of the contract, which could of course differ if the contract was construed in a different State.
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