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Many thanks to my learned colleague Sander Van Loock for drawing our attention to Culturel-Ludique-Divertissement Distribution v Hori Limited at the Belgian Supreme Court (French-speaking chamber).
This being Belgian case-law, it is exceedingly difficult if not impossible to get hold of the lower courts’ judgments. This is a continuing absolute disgrace. Any insight into the lower courts’ reasoning must be gained from the usually incomplete summary given in the grounds for appeal, which accompany the judgment.
On 10 February 2020 an English and a Belgian company entered into an exclusive distribution agreement with choice of court in favour of the English courts (in fact the clause seemingly read ‘the British courts’; if it really did, I am not sure its validity can so easily be assumed). Following disagreement, the Belgian company sued before a Belgian court, claiming jurisdiction under Article X.39 of the Belgian Unfair Trading Act. The attraction is obvious: alongside the usual advantages of a ‘home’ forum, AX.39 instructs the Belgian courts to apply Belgian law (traditionally generous to the agent) as lois de police aka overriding mandatory law.
The Court of Appeal at Liege had rejected jurisdiction for the Belgian courts on the basis of the 2005 Hague Convention. The SC now agrees.
Article 16 of the Hague Convention reads
Article 16
Transitional provisions
(1) This Convention shall apply to exclusive choice of court agreements concluded after its entry into force for the State of the chosen court.
(2) This Convention shall not apply to proceedings instituted before its entry into force for the State of the court seised.
In accordance with Article 30(1),
At the time of signature, acceptance, approval or accession, a Regional Economic Integration Organisation may declare that it exercises competence over all the matters governed by this Convention and that its Member States will not be Parties to this Convention but shall be bound by virtue of the signature, acceptance, approval or accession of the Organisation.
The EU joined in 2015– see details of that process here. Its instrument of accession states ia
The European Community declares, in accordance with Article 30 of the Convention on Choice of Court Agreements, that it exercises competence over all the matters governed by this Convention. Its Member States will not sign, ratify, accept or approve the Convention, but shall be bound by the Convention by virtue of its conclusion by the European Community.
The UK joined in 2020 – Motacus is one of earlier cases in which it has been applied.
Brexit turned the UK’s accession process into a bit of a jojo, with accession made and then withdrawn and /or suspended following final accession starting 1 January 2021 (after deposit of the instrument of accession on 28 September 2020), seeing as the UK were waiting to see what kind of judicial co-operation would follow from Brexit (in the end: none or very little). The transition period of the UK-EU Withdrawal Agreement (WA), extending the application of most EU law and the EU’s international agreements to the UK, ran between 1 February 2020 to 31 December 2020, included. The UK were not an EU Member State during that period.
The window through which CLD were attempting to drive a jurisdictional cart, was therefore the argument that in the period between the end of the WA transition period on 1 February 2020, and the UK’s final accession to the 2005 Convention on 1 January 2021, the Convention did not apply to the UK and that per A16 of the Convention, a choice of court agreement concluded on 10 February 2020 was therefore not so concluded “after [the Convention’s] entry into force for the State of the chosen court.”
The Supreme Court simply notes that in accordance with A129(1) WA which reads
Without prejudice to Article 127(2), during the transition period, the United Kingdom shall be bound by the obligations stemming from the international agreements concluded by the Union, by Member States acting on its behalf, or by the Union and its Member States acting jointly, as referred to in point (a)(iv) of Article 2.
the UK was bound by the EU’s external agreements in the transition period and that therefore
It follows, without any reasonable doubt, that the 2005 Hague Convention applies to the United Kingdom as a bound State by virtue of
the approval of the Convention by the European Union, from 1 October 2015 until 31 December 2020, and as a Contracting Party, from 1 January 2021. (my translation)
Sander adds
In the words of professor A. Briggs, discussing this issue in his 2021 Civil Jurisdiction and Judgments, this decision in favour of continuity makes life “𝘴𝘪𝘮𝘱𝘭𝘦𝘳 𝘢𝘯𝘥 𝘦𝘢𝘴𝘪𝘦𝘳” (para. 25.11).
As Sander notes, the Liege Court of Appeal suggested obiter that that conclusion is different for relations between the UK and non-EU Member States, taking Japan as an example
La situation serait différente s’il s’agissait d’appliquer la Convention entre le Royaume-Uni et un pays tiers à l’Union européenne ayant adhéré à celle-ci, comme le Japon.
a scenario which, if it were to occur, would raise interesting questions on the third State effect of the UK-EU Withdrawal Agreement.
Geert.