Enforcement of international jurisdiction agreements: What to do in the event of an action from abroad despite an exclusive jurisdiction agreement to the contrary?

LEGAL+ NEWS

Problem description

In order to avoid costly and unpleasant legal disputes abroad, it is advisable to conclude exclusive jurisdiction agreements with foreign business partners which stipulate that only German courts have jurisdiction. However, it is not uncommon for the business partner to file a lawsuit in their own country in the event of a dispute, contrary to the jurisdiction agreement. In such cases, the question arises: What can be done to enforce international choice of court agreements?

Procedure for the enforcement of international jurisdiction agreements: Article 31(2) Brussels I Regulation

A little-known regulation applicable in Europe to solve this problem is contained in the European Regulation (EU) No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, in short: EUGVVO. Article 31(2) of the EU Regulation states:

‘Without prejudice to Article 26, where a court of a Member State which has exclusive jurisdiction under an agreement referred to in Article 25 is seised, the court of the other Member State shall stay its proceedings until such time as the court seised on the basis of the agreement has declared that it has no jurisdiction under the agreement.

This regulation, which was created in 2015 to protect exclusive jurisdictions, proves to be extremely helpful in the situation described. The contractual partner who is confronted with a foreign lawsuit can have it established before its home court that only this court has jurisdiction. At the same time, he can use this action to have the dispute resolved before the competent German court, especially in the case of payment claims, if necessary by means of a negative declaratory action (you can find more information on this in my separate article).

The foreign court, which must be informed of this action in accordance with Article 31 (2) of the EU Regulation, must then immediately stay its own proceedings ex officio. This would stop the troublesome foreign action for the time being.

As soon as the German court has established its exclusive jurisdiction, the foreign court must subsequently declare that it has no jurisdiction. This would settle the unpleasant foreign legal dispute.

Conclusion

In detail, there are still many questions to be clarified regarding the procedure described for enforcing international jurisdiction agreements, particularly as the provision is relatively new and there are only a few court decisions on it. Anyone wishing to follow the path set out in Article 31(2) Brussels I Regulation is therefore entering uncharted territory in many respects. It could prove to be worthwhile. Please also read my article“Action from abroad” on the options for action in the event of a foreign claim

By the way:

Did you know that the Federal Court of Justice (BGH) regards breaches of jurisdiction agreements as a breach of duty? This means that the injured party is entitled to valuable compensation! You can find more information on this in my article which will be published soon.

Do you have any questions?

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