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Foreign Judgments in Civil and Commercial Matters

Preliminary Statement for the Ottawa Meeting
on the
Preliminary Draft Convention on Jurisdiction and Foreign Judgments
In Civil and Commercial Matters

HAGUE CONVENTION ON PRIVATE INTERNATIONAL LAW
Adopted by the Special Commission on 30 October 1999
Amended version (new numbering of Articles)

Electronic Commerce and International Jurisdiction

The Internet Law & Policy Forum respectfully submits the following observations to the Ottawa Meeting on the Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters of the Hague Convention on Private International Law as adopted by the Special Commission on 30 October 1999, using the amended version with new numbering of Articles (the "Draft Convention"):

  • Rules for e commerce should not be carved out for separate consideration. International trade, both traditional and electronic, presently operates under an existing set of national and international rules for jurisdictional determinations and enforcement of judgments. Proceeding with one set of Convention changes marked "for traditional international trade only" while carving out electronic commerce will leave the rules for e commerce in legal limbo and only increase legal uncertainty for e commerce. Such legal uncertainty may itself become a barrier and contribute to distortions in the marketplace.

  • The Expert Group will be an excellent venue in which to examine the implications of electronic networks as a medium for transborder trade. Understanding the implications of the new medium and, in turn, the impact of traditional and proposed jurisdictional rules on the growth of e commerce is an extremely important inquiry but the answers are not yet clear cut. Transborder electronic commerce and commercial communications are only beginning (although that growth may be quite rapid once it begins.). Business models, marketplaces, and technologies are in initial stages of development. How the traditional rules of cross border trade will work for the electronic medium is just beginning to emerge. The factors of those business models and technologies - what part of a commercial transaction or communication or any alleged harm can be attributed to or considered "within" a national jurisdiction - facts most relevant to jurisdictional determinations and rules - are neither settled nor commonly understood. Finding workable, effective and harmonized jurisdictional rules for transborder electronic commerce and communications is an extremely important task. Given the importance of the end result, the task should not be undertaken in haste or absent a common understanding of the implications.

    An international legal and policy community has begun to consider a range of e commerce jurisdictional issues.1 This Expert Group would provide an outstanding resource to synthesize and analyze the results of a number of ongoing efforts.

    An informed expert analysis will create a useful resource for the developing Governmental negotiations necessary to embrace a convention. The need for harmonized rules about the enforcement of foreign judgments arises, in part, because laws differ from country to country. A sovereign government is reluctant to use its powers to enforce the rules of another sovereign government against its own citizens if the foreign rules are very different from its own. Decisions on the degree to which national governments or regional authorities will move towards each other to harmonize either jurisdiction rules or substantive or procedural provisions in order to open markets and foster increased e commerce are, of course, ultimately political decisions. As this Expert Group moves forward to include electronic commerce in its analysis, the ILPF wishes to emphasize the usefulness of an objective, expert analysis and the distinction between expert analysis and what are ultimately decisions to be made by governments themselves.

Respectfully offered on behalf of the ILPF membership,

Masanobu Katoh
ILPF Chair
1776 Eye Street N.W., Suite 880
Washington, DC 20006
USA
mkatoh@wdc.fujitsu.com

Ruth Day
Executive Director
Internet Law & Policy Forum
235 East 22nd Street, Suite 11C
New York, NY 10010 USA
rday@ilpf.org


1. A list of relevant ongoing efforts is being independently circulated at the Ottawa meeting. For the ILPF's work on transborder jurisdictional issues, please see ILPForum 1999, Jurisdiction: Building Confidence in a Borderless Medium, an international conference held in Montreal, Canada. Presentations and a complete transcript of the proceedings are available at www.ilpf.org.

In particular, the ineffectiveness of traditional choice of law and choice of forum rules in transborder business to consumer transactions has already been recognized internationally. A search for effective alternative dispute resolution mechanisms is in progress. For the ILPF's proposal for a comprehensive approach to jurisdictional disputes concerning consumer protection please see its Statement for the Public Hearing of the European Commission, Electronic Commerce: Jurisdiction and Applicable Law, 4-5 November 1999, Brussels. A copy of the Statement is attached as Appendix 1.

Finally, the ILPF's third annual international conference, ILPForum 2000, presently being planned for early fall, will continue to address transborder jurisdiction questions.



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