Latest Update on the Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters

1. Two Consultation Papers and an update on the draft Convention were published by the Department of Justice in January 1999, October 2000 and December 2001. The following is intended to give the latest update on the state of negotiation up to May 2003.

2. In April 2002, the Hague Conference on Private International Law decided to form a small working party to focus on matters that were least controversial and to come up with what, in its view, is a workable draft of the Convention. China was represented in the small working party by a lawyer from the Ministry of Foreign Affairs.

3. After three meetings, the working party presented thedraft text on Choice of Court Agreements (the "draft text") to a meeting of the Hague Conference.

4. In its current form, the scope of the draft text is very limited. If concluded and ratified, it would apply to legal relationships in which the parties have made a valid choice of court agreement, either before or after a dispute has arisen. It would not apply to consumer and employment contracts (see Article 1.2 of the draft text).

5. The draft text caters mainly for business-to-business (B2B) contracts. It is unlikely that contracts between private individuals on non-commercial matters would contain choice of court agreement. Whilst the draft text may be seen as complementary to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"), it would not be useful to the average man in the street, particularly if he or she wishes to pursue a claim against a foreign litigant in tort or in a civil or commercial matter where no choice of court agreement has been agreed.

6. From Hong Kong's perspective, the scope of the draft text with respect to enforcement is much narrower than the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) which covers nearly all money judgments in civil and commercial matter.

7. The negotiation of the captioned Convention has now reached a crossroad. Member States of the Hague Conference have been given until the end of July to decide whether or not they wish to proceed with the negotiation on the basis of the draft text. If they agree to so proceed, a meeting would be convened in December 2003 to discuss substantive issues relating to the draft text.

8. If Member States decide not to proceed on the basis of the draft text, no further meeting on the draft text would be held and the future of the captioned Convention would be discussed in another meeting of the Hague Conference dealing with general affairs and policy of the Hague Conference. If this happened, our assessment is that it is more than probable that the meeting on general affairs and policy may decide to abandon the project altogether due to insurmountable differences amongst Member States of the Hague Conference.

9. At this stage, views on the drafting and the substantive issues of the draft text are not required. However, your views on whether Hong Kong should aim for a comprehensive Convention or a Convention based on the draft text.
   
   In the former case, would you agree that Hong Kong should nonetheless proceed with the negotiation of the draft text if the majority of Member States decide that there was no prospect of concluding a comprehensive Convention.
   
   In the latter case, would you agree that Hong Kong should advocate the broadening of the scope of the Convention at the negotiation of the draft text.
   
   Please do not hesitate to call Mr Frank Poon at 2810 2754 if clarification is required. Views and comments on the issues raised in paragraphs 9 to 11 are most welcome and they can be sent by e-mail to Mr Frank Poon, Treaties and Law Unit, International Law Division at frankpoon@doj.gov.hk or by fax at 2877 2130.

International Law Division
Department of Justice
Hong Kong Special Administrative Region
May 2003