Gary Born has published a series of posts not just critiquing the HCCH 2005 Choice of Court Convention, but urging states not to ratify it, or to denounce it if they have already joined. Born’s first three posts were published in June on the Kluwer Arbitration Blog, where he also published two follow-up posts. Born’s view has been criticized by many, including Trevor Hartley and João Ribeiro-Bidaoui.
One of Born’s critiques is that some judiciaries are corrupt or of low quality:
Put concretely, why should American, Canadian, Australian, Singaporean, Swiss, Ghanaian, Uruguayan or other courts commit to recognize all foreign judgments – including judgments of courts in Russia, China, Venezuela, Iran, the Congo, and Nicaragua – in the same basic way that they recognize international arbitral awards?
That’s certainly fair, but it also has an easy answer. Perhaps courts should commit to recognize the judgments of a questionable judiciary because that is what the parties, by entering into an exclusive choice of court agreement governed by the Convention, have asked them to do. Born’s criticism here would have more teeth if it were directed at the Judgments Convention; but the Choice of Court Agreements Convention is purely optional. It’s particularly striking to see Born’s criticism from a leading member of the international arbitration bar, given that the foundation of the law of international arbitration is the importance of giving binding effect to the agreement of the parties.
Another of Born’s critiques is weightier. He suggests that under the Article 9(a) of the Convention, the courts of the chosen state have an unreviewable power to rule on the validity of the choice of court agreement. As Ribeiro-Bidaoui notes in his rejoinder, this argument is surprising insofar as we think courts should not generally second-guess arbitrators’ decisions about their own jurisdiction when the parties have committed the decision about jurisdiction to the arbitrators. But there is a more direct answer, too. The Convention provides a more-or-less standard list of grounds on which courts can refuse recognition and enforcement, including public policy. So it seems unlikely to me that “good” courts would feel to recognize the judgments of “bad” courts if the “bad” courts make a determination about their own jurisdiction that is so far out in left field as to raise questions about the fundamental propriety of the proceedings in the “bad” court.
One of the main advantages of arbitration over judicial litigation has always been ease of enforcement in light of the New York Convention. The Choice of Court Agreements Convention sets out to remedy this, and I think we ought to let the market decide. If Born is right and the risks of corruption, bad judging, etc., are too high, then parties simply will not make use of the Convention and will continue to turn to arbitration. But I suspect there are many parties that will favor litigation for all kinds of reasons, once they can be reasonably assured that a judgment from their chosen court will be enforced. And competition between courts and arbitration tribunals for litigants’ business can only be healthy. I hope we see widespread ratification, so that we can see how the natural experiment the HCCH has invited states and parties to undertake plays out.