International Contract Law: Jurisdiction and Applicable Law

Extract

[...] A clause attributes jurisdiction to English courts to resolve any dispute between the parties. As agreed, the sewing machines are delivered to the Egyptian warehouse of JayVee. However, JayVee now refuses to pay the agreed price according to the terms of the contract. Their refusal to pay is based on the fact that, under an Egyptian law, the sale of foreign sewing machines in Egypt has become illegal. This was done to protect the Egyptian sewing machine industry. Alicia wants to sue JayVee for breach of contract. [...]

[...] Rules of law : Pursuant to Article 4 of Regulation Brussels I bis No. 1215/2012, jurisdictional competence is generally that of the defendant's domicile, here in China. However, exceptions exist in the case of international contracts, as illustrated by American case law. The Bremen v. Zapata Off-Shore Co. (1972). In this case, the Supreme Court of the United States recognized the validity of jurisdiction clauses in international contracts, unless they are deemed 'unreasonable, unjust or unjustified'. This jurisprudence supports the idea that the parties can agree on a specific jurisdiction. [...]

[...] Eaton Leonard Technologies, previously cited, highlights the need to respect mandatory local laws as elements influencing contractual obligations. Application to the case at hand : In this case, the seller resides in Mexico. Pursuant to the Rome I Regulation No 593/2008, Mexican law applies. However, it is to be considered that the Egyptian ban could impose an adaptation of contractual obligations in order to respect local imperative laws of conformity. Conclusion : Therefore, the applicable law is Mexican law. Egyptian law applies to the conformity aspects of goods. [...]

[...] indicate that, even internationally, a jurisdiction clause is often respected as long as it is not 'unreasonable'. Finally, the decision Ingmar GB Ltd v. Eaton Leonard Technologies expose the need to respect local laws and jurisdiction clauses when public order principles are at play. Application to the case in question : In this case, the contract includes an exclusive jurisdiction clause designating the English courts as competent in the event of a dispute. Conclusion : Therefore, the competent courts are the English courts. [...]

[...] A clause indicates English law as the applicable law to the contract. The buyer does not pay the amount due within the agreed-upon deadline, and the seller brings the case to a Swedish court. In a second case, the director of a Mexican company signs a contract with an English company having an office in California, for the sale of sewing machines to be delivered in Egypt. A clause designates English courts as competent in case of dispute. The English company refuses to pay, justifying this refusal by an Egyptian ban on the importation of foreign machines. [...]