WEBINAR ON ASYMMETRICAL JURISDICTION AND ARBITRATION AGREEMENTS

29 June 2021

Our Managing Partner, Richard Schmidt LL.M, held a webinar on asymmetrical jurisdiction and arbitration agreements in international dispute resolution, co-organised by the Hungarian Arbitration Association, the Essec Business School and the Hungarian Bar Association.

Due to globalization and more and more complex commercial transactions, asymmetric arbitration and jurisdiction agreements have become frequent means of dispute resolution in the last years. Nevertheless, some fear and legal incertitude surrounds these forum selection agreements, that seemingly contradict to basic legal principles and institutions of substantive and procedural civil law.

How courts in leading common law and civil law jurisdictions, like England and France approach these forum selection clauses? What lesson can be learnt from the Russian example? Can the case law of Hungarian courts provide any reference points to legal practitioners in this matter?

Richard addressed the above key-issues in the framework of the webinar, moderated by Ms Veronika Korom, President of the Hungarian Arbitration Association, and Professor of ESSEC Business School.

After having given a snapshot of the international legal framework, which surrounds arbitration and jurisdiction agreements, without regulating such an important issues as substantive validity, Richard turned to leading jurisdictions in the field of international dispute resolution, to detect key-trends regarding the handling of asymmetrical forum selection agreements.

England

The first jurisdiction analysed was the United Kingdom, the courts of which in the 1960s were reluctant to accept unilateral forum selection agreements, but later this approach has been changed, and nowadays English courts give maximum effect to the parties’ private autonomy in the field of choice of forum agreements, and they usually enforce asymmetrical clauses too. Thereby the English judicature sends a clear signal to business actors, that their choice of forum agreement will be respected.

France

Richard continued the legal analysis with France, which in the last half-century made the same “journey”, but in the opposite direction. While French courts traditionally respected party autonomy when it comes to asymmetrical jurisdiction and arbitration agreements throughout the 20^th century, the infamous Rotschild judgment of the Cour de Cassation has basically changed the situation from 2012. The case law afterwards shows diverging decisions, which has a negative message for business actors, who are interested in foreseeability and legal certainty.

Russia

The third jurisdiction examined during the webinar was Russia, where despite some promising court decisions in the early 2010s, the case law took a 180-degree turn, and arrived to the negation of asymmetrical choice of forum agreement in 2018, in the name of such principles, borrowed from the European Court of Human Rights like the equality of arms and the right to court, even if the application of these principles in this context is highly doubtful.

After the overview of international trends, Richard shortly presented the development of the Hungarian law in the pre-World War II era, where the Hungarian Supreme Court finally arrived to the “de facto” acceptance of asymmetrical choice of forum agreements in domestic context.

Summary

At the closing part of the webinar, Richard summarised the main arguments pro and against asymmetrical choice of forum agreements, concluding that these agreements are conciliable with both substantive and procedural principles, so in case the parties’ agreement does not breach any specific legal provision there is no general legal reason for not respecting the parties’ private autonomy, if they decided to give more right or possibility to one of them, when it comes to the choosing of the forum which is competent to resolve their legal dispute.

After the presentation more participants have shared their views on the matter, and the dominant opinion of practicing lawyers was that jurisdictions should follow the approach of English courts, who respect party autonomy at the largest possible extent.

Learning material for Hungarian Bas Association Training Program

The webinar has been video-recorded and it became official learning material of the training program of the Hungarian Bar Association.

Those colleagues, who are interested in this topic, but have not had the chance to participate this event, can listen the presentation in English by clicking on this link, and after answering some question, they can collect credit points.