It is common in commercial contracts for parties to include clauses which specify the court or courts that will have jurisdiction to hear disputes arising out of the agreement.
Under the "Recast Brussels Regulation" (Regulation (EU) 1215/2012), the Irish courts are required to give effect to a clause in an agreement which confers jurisdiction on the courts of a Member State of the EU, whether or not the parties to the agreement are domiciled in an EU Member State.
Ireland is also a party to The Hague Convention on Choice of Court Agreements, which gives effect to an exclusive choice of jurisdiction in favour of a country which is a party to the Convention. The parties to The Hague Convention are the EU Member States (except Denmark), Singapore, Mexico and Montenegro. The USA has signed The Hague Convention, but has not formally ratified it and so is not yet bound by it.
If neither the Recast Brussels Regulation nor The Hague Convention is applicable, the common law rules on jurisdiction apply. An Irish court can claim jurisdiction over a dispute where it is established that the Irish courts are the most suitable forum to hear that dispute. In considering whether Ireland is the most suitable forum, the court would take into account factors such as the nature of the dispute, the legal and practical issues involved, local knowledge, availability of witnesses and expense to the parties.
Impact of Brexit on English Choice of Jurisdiction Clauses
The UK's withdrawal from the EU will have implications for the validity and enforceability of choice of jurisdiction clauses in favour of UK courts.
The UK has taken steps to ensure that in the event of a no deal Brexit, the UK would become a party to The Hague Convention in its own right so that the Convention would still apply to the UK. This would mean that countries which are parties to The Hague Convention would still be required to give effect to choice of jurisdiction clauses conferring exclusive jurisdiction on UK courts.
If the draft Withdrawal Agreement is ratified by the UK, then the Recast Brussels Regulation will continue to apply to UK proceedings during the transition period and which are on-going at the end of the transition period.
In the event that the Withdrawal Agreement is not ratified, and the UK leaves the EU without a deal, the Recast Brussels Regulation would cease to apply in the UK on exit day. Unlike The Hague Convention, the Recast Brussels Regulation could not be unilaterally adopted by the UK in a no-deal scenario. While EU Member State courts would still be required to give effect to exclusive jurisdiction clauses in favour of UK courts under The Hague Convention, they would no longer be required under the Brussels regime to give effect to non-exclusive jurisdiction clauses in favour of UK courts.
