On 4 April 2016, Singapore tabled the Choice of Court Agreements Bill (the Bill) paving the way for ratification of the Hague Convention on Choice of Court Agreements (the Convention).
In our previous article, we discussed Singapore's signing of the Convention on 25 March 2015 and the likely effect this would have on the Singapore International Commercial Court (SICC) and Singapore's profile as a regional and global centre for dispute resolution. Last week, Singapore took the first step towards joining the European Union and Mexico as the third signatory to ratify the Convention.
The Choice of Court Agreements Bill
The Bill, which seeks to implement Singapore's obligations under the Convention, will provide increased certainty for parties to cross-border agreements involving entities from States which are parties to the Convention (the Contracting States). This is primarily achieved in two ways:
- By respecting and enforcing parties' exclusive jurisdiction clauses. Where parties determine from the outset of a commercial agreement which Contracting State's court will deal with potential disputes, this will be respected by the courts of each Contracting State. Part 2, paragraph 11(1) of the Bill states that a Singapore court, including the SICC, will have "jurisdiction to decide the dispute" if named by the parties in their "exclusive choice of courts agreement". Assuming that the agreement is documented in writing and valid, courts of other Contracting States must "stay or dismiss" the case. Where the court of a Contracting State other than Singapore is designated by the parties, the Singaporean courts will have to do likewise (Part 2, paragraph 12(1)).
- By increasing the recognition and enforcement of judgments of the courts of Contracting States. The Convention obliges Contracting States to adopt procedures for the reciprocal recognition and enforcement of judgments. Part 3, paragraph 13(1) of the Bill states that, on receiving an application for recognition and enforcement of a judgment which has effect and is enforceable in a Contracting State, the Singaporean courts are bound by, and must enforce, the original decision of that court. The Bill also gives effect to the Convention's restrictions on the circumstances in which enforcement of a judgment from a Contracting State court can be refused, (see Part 3, paragraphs 14 and 15).
From a practical perspective, it is important to note that judgments concerning interim protective measures are not governed by the Convention and, as such, are also carved out of the Bill (Part 1, paragraph 10 (1)). The courts of each Contracting State may still grant, refuse or terminate interim measures of protection, regardless of the "exclusive choice of court agreement".
Ratification of the Convention will reinforce Singapore's reputation as a progressive leader in international commercial dispute resolution and renew its commitment to the efficient and expeditious conclusion of disputes so that Singapore continues to be seen by commercial parties as a prime destination for international commercial dispute resolution.
The date of the second reading is yet to be formalized but will occur after the 2016/2017 Budget Proceedings are concluded.
For more information, please contact Alastair Henderson (Partner) or Daniel Waldek (Senior Associate) or any of your usual Herbert Smith Freehills contacts.