Declining jurisdiction in the Hague's proposed judgments convention: amalgamating the 'more appropriate forum' and the 'clearly inappropriate forum' tests to provide the optimal forum non conveniens clause.

Author:Cook, Justin Paul


Judicial cooperative efforts which focus on harmonising jurisdictional rules and the mutual recognition and enforcement of foreign judgments should advance certainty and predictability in international commercial litigation. Critically, the civilian and common law traditions adopt fundamentally different approaches to resolving conflicts of jurisdiction. The civil law system of lis pendens promotes procedural efficiency by applying the first-in-time rule whilst the common law technique for declining jurisdiction is governed by the doctrine of forum non conveniens. Moreover, different forms of this doctrine are applied throughout the common law world. Whilst the majority of common law courts apply the 'most appropriate forum' test, in Australia, a highly criticised variant of that analysis developed--the 'clearly inappropriate forum' test. In recent times, the Hague Conference on Private International Law has rekindled interest in producing a global judgments treaty. This article examines whether inter alia the forum non conveniens provision for declining jurisdiction in the proposed convention stands to benefit from an amalgam of the more appropriate forum and the clearly inappropriate forum tests. It is argued that, on the world stage, the narrow focus of the Australian test could be advantageous in bridging the ideological divide between the concepts of lis pendens and forum non conveniens.

I Introduction

'Jurisdiction' refers to the power of a court to hear an action and to adjudicate an issue 'upon which its decision is sought'. (1) Significantly, in international litigation, each individual State determines adjudicatory authority in accordance with its own rules of jurisdiction. (2) Within this 'jungle' (3) of different national jurisdictional rules, (4) either several courts could assert jurisdiction over a dispute with a foreign element or a 'jurisdictional vacuum' could arise where no court claims jurisdiction. (5) Such conflicts of jurisdiction reduce certainty and predictability in international commercial litigation which, in turn, can adversely affect international trade. (6) In this context, judicial cooperative efforts that provide for the 'proper allocation of jurisdiction' and the mutual recognition and enforcement of foreign judgments should promote economic growth. (7)

The 'grim reality' of globalisation, however, is that a comprehensive judgments convention has yet to be developed. (8) At a global level, the most important institution for unifying private international law is the Hague Conference on Private International Law. (9) During the 1990s, this intergovernmental organisation embarked on an ambitious attempt to establish an international regime for recognising and enforcing foreign judgments. (10) Ultimately, though, negotiations on this treaty broke down due to the fundamentally different 'political, economic and cultural objectives' of the participating countries. (11) Notwithstanding these differences, one aspect on which the negotiating parties were able to reach an acceptable compromise was the inter-relationship between the civil law doctrine of lis pendens and the common law principles oi forum non conveniens in resolving conflicts of jurisdiction. (12)

In line with the civil law's focus on procedural efficiency, the lis pendens system for allocating jurisdiction is designed to prevent concurrent proceedings by adopting a 'simple test of chronological priority' in favour of the first court seised. (13) In contrast, the common law approach to declining jurisdiction is governed by the doctrine of forum non conveniens which proposes that a court may decline to exercise jurisdiction on the grounds that 'the appropriate forum for trial is abroad or that the local forum is inappropriate'. (14) Moreover, the 'general discretionary power' to decline jurisdiction within the common law world is complicated by the fact that there is not a single doctrine of forum non conveniens. (15) In England and Scotland, for instance, a modern doctrine has evolved based on identifying the natural forum for the trial of the dispute. (16) This is the forum with which the action has 'the most real and substantial connection'. (17) That inquiry, the 'more appropriate forum' test, has been largely followed by the courts in most Commonwealth countries.

A different enquiry is undertaken by Australian courts to staying proceedings on forum non conveniens grounds. Here, the basis for declining jurisdiction is the clearly inappropriate forum' test enunciated by the High Court of Australia in Voth v Manildra Flour Mills Pty Ltd, (18) The self-centred nature of the Voth test and its bias towards local jurisdiction has been widely criticised by the judiciary (19) and academics. (20) Despite this criticism, the Hague's Draff Conventions indirectly supported the Australian approach to forum non conveniens by including provisions governing the suspension of proceedings that were, in part, modelled on the Voth test and which leant distinctly towards the rigor demanded by Australia's 'clearly inappropriate forum' standard. (21) On the other hand, in intra-Australian matters and in the recently concluded Trans-Tasman Treaty between Australia and New Zealand, (22) the legislatures have authorised that conflicts of jurisdiction should be decided pursuant to the 'more appropriate forum' test.

This paper will initially discuss the principles underlying both the modern doctrine of forum non conveniens as practiced throughout most of the common law world and the version that developed in Australia. Following that discussion, the paper contrasts the different approaches to declining jurisdiction in two regional instruments, namely, the Brussels I Regulation (23) and the Trans-Tasman Treaty, before examining the lis pendens!forum non conveniens interaction and the mechanism for suspending proceedings in the Draff Conventions. In recent times, the Judgments Project has returned to the Hague's agenda. (24) In light of this rekindled interest in a global treaty to promote the enforcement of judgments, the purpose of the paper is to ascertain whether the forum non conveniens provision for declining jurisdiction in the proposed convention should simply be based on the 'more appropriate forum' test or an amalgam of that test and the 'clearly inappropriate forum' analysis.

Bell advocates that the 'more appropriate forum' assessment is an 'effective cornerstone of the common law's response to the complex problem of venue in modern transnational litigation'. (25) Nevertheless, it is arguable that, on the world stage, the narrow focus of the 'clearly inappropriate forum' test could assist in harmonising the concepts of lis pendens and forum non conveniens, (26) First, however, it is necessary to address in more detail the diverse approaches favoured by the civil and common law traditions in dealing with conflicts of jurisdiction.

II Concurrent jurisdiction and the civil law/common law divide

In an ever-expanding global economy, the open-ended rules of exorbitant jurisdiction adopted by many States present opportunities for litigants to resolve transnational disputes in multiple fora. (27) The combination of concurrent jurisdiction and the various advantages offered by one competent forum over another advances two private international law concerns. (28) The first is forum-shopping which occurs in a pejorative sense when a party seeks a particular court either to obtain a favourable judgment or to impose upon the defendant the 'greatest procedural disadvantage'. (29) The second issue is the prospect of parallel litigation, (30) which should be discouraged on the basis that it engenders 'injustice, delay and increased expense' (31) for the parties and raises the 'unattractive possibility' of irreconcilable judicial decisions. (32)

Civil law and common law countries have developed vastly different approaches towards declining regularly invoked jurisdiction to avoid parallel litigation and restrict forum shopping. (33) The civil law tradition applies the doctrine of lis pendens, which requires a court to stay its proceedings if the same action between the parties is already pending before the courts of another jurisdiction. (34) The appropriate forum is identified objectively on the basis of 'temporal priority'. (35) The most obvious weakness attributed to the first-in-time rule is that it promotes forum shopping by encouraging a race to the courthouse to effect control of the preferred forum. (36) Furthermore, whilst the rigidity of the system accords with the continental notion of legal certainty, (37) this approach can lead to 'injustice' (38) as the decision on jurisdiction is made without considering procedural fairness. (39)

The mechanistic lis pendens rule for resolving clashes of jurisdiction contrasts starkly with the common law doctrine of forum non conveniens. The exercise of judicial discretion in ascertaining the forum with which the action is most closely connected provides this doctrine with two significant attributes in resolving conflicts of litigation: the flexibility to adapt to the circumstances of each case (40) and the capacity to combat forum-shopping as the plaintiff is required to contest the dispute in the forum which is more appropriate for adjudicating the case. (41)

Nonetheless, civil law jurists regularly question the propriety of the forum non conveniens doctrine. (42) It is argued that the large discretion afforded trial courts does not promote predictability in jurisdictional issues and that preliminary litigation over the venue is costly for both the parties and the court. (43) The most compelling argument, however, is that it does not necessarily seek to discontinue parallel proceedings. (44) Consequently, the risk of inconsistent decisions is not eliminated and a 'race to judgment' is created in which one forum is effectively obliged to recognise and enforce the first judgment...

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