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E-Commerce Jurisdiction
By GAPM Research
In case of a dispute, which court will have jurisdiction over a cross-border contract agreed upon electronically?
Jurisdiction raises the question of which national court or arbitral tribunal will hear the dispute. In the absence of a term in your contract conferring jurisdiction on a specific court or arbitration panel, (note: the validity of such a clause depends on national law; for example, in France such a clause is not valid between non-business parties unless the contract has an international dimension) a national court will decide if it has jurisdiction over the case in accordance with its own national rules of law. Therefore it is strongly recommended, for the sake of security and foreseeability, that you and the other party stipulate in your contract which court or arbitration panel will have jurisdiction over a dispute arising from your contract. The same recommendation is made regarding the applicable law for your contract; business parties are advised to stipulate clearly which law will apply to their contract in case of a dispute. In international business dealings, arbitration clauses are the usual practice, since they avoid submitting disputes to a state court or national rules of procedure that at least one of the two parties will not be acquainted with. Furthermore, arbitral awards can be recognized internationally: the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, ratified by some 120 States, facilitates the recognition of arbitral awards as if they were national court decisions. Arbitration may not always be necessary where countries are linked by treaties that define which courts have jurisdiction and facilitate the recognition of state court decisions. For example, in Europe, the Brussels Convention of 27 September 1968 and the Lugano Convention of 16 September 1988 provide that, in principle, the court which has jurisdiction is the court of the defendant's residence, the court of the country where the contract is performed, or the court of the country where the harmful event which is the subject of the dispute occurred; the Conventions also facilitate the recognition, in European Union countries, of court decisions. In most countries, however, such rules do not exist. Moreover, most countries still accord privileges to their own nationals to submit disputes to their national courts (in the absence of a clause in a contract referring to a state court or to arbitration). It should be noted that draft Convention on Jurisdiction and Foreign Judgments in civil and commercial matters is being studied by the Hague Conference of International Private Law (October 1999), and a European draft Regulation of 14 July 1999 concerning jurisdiction is being submitted to the European Council.
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