Announcement

1. Two Consultation Papers on the draft Convention were published by the Department of Justice in January 1999 and October 2000 .The following is intended to give an update of the state of negotiation up to the first part of the diplomatic conference held in June 2001.

First Part of the Diplomatic Conference June 2001

2. In accordance with an earlier decision of the Hague Conference, proceedings in the first part of the diplomatic conference were conducted on the basis of consensus. This method of working led to the re-opening of many issues that were thought to have been settled in earlier meetings. As a result, a great number of square brackets have been added to the preliminary draft text (now known as the"Interim Text"). The Interim Text summarises the outcome of the discussion at the first part of the diplomatic conference. It contains detail commentaries on the various issues and proposals raised in the June 2001 meeting.

The Unresolved Issues

3. The issues on which no general consensus has yet emerged include the following:

• jurisdiction in relation to the Internet and e-commerce (contracts - Article 6, torts - Article 10 and intellectual property - Article 12)

• employment contracts (Article 8 and Annex II)

• intellectual property rights (jurisdiction rules governing validity and infringement of intellectual property rights - Article 12(5)-(7))

• jurisdiction on torts, including a rule based on activities of the defendant in the forum (Article 10(2))

• enforcement of non-money judgments including provisional measures (Articles 13 and 23A)

• the scope of prohibition in relation to the parties' ability to exercise jurisdiction (the so-called black list - Article 18).

4. These issues are important and substantive issues that need to be resolved if the aim of the negotiations is to produce a comprehensive Convention.

A Simplified Convention?

5. A convention that incorporates rules on these issues but which is not concluded on the basis of consensus or near consensus is unlikely to command wide support. The failure to reach consensus on these outstanding and important issues has led to calls from some quarters for a simplified version of the Convention which would contain only jurisdictional and other rules on which there is consensus as well as a chapter on recognition and enforcement.
   

6. One possible option is to confine the convention to one that would merely provide for recognition and enforcement of civil and commercial judgments given by courts chosen by the parties in valid choice-of-forum agreements. Such a simplified convention would be similar to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which is applicable in Hong Kong and implemented by the Arbitration Ordinance (Chapter 341).

Future Meetings

7. It is likely that a further meeting will be held in Spring 2002 which will decide, inter alia, the next stage of the work, including the working method to be adopted in future meetings. The second part of the diplomatic conference will not be held, in any event, before the end of 2002.

Views and Comments

8. If you have any views or comments on the issues outlined in this update, the Interim Text of the draft Convention or the proposals to simplify the draft Convention, you may forward them to Frank Poon, International Law Division, Department of Justice (e-mail: frankpoon@doj.gov.hk; fax: 852 2877 2130).