13 Hague Convention (Choice of Court
Agreements)
| Committee's assessment
| Legally important |
| Committee's decision | Cleared from scrutiny
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| Document details | Draft Council Decision on EU approval of the Hague Convention on Choice of Court Agreements
|
| Legal base | Article 81(2) in conjunction with the first subparagraph of Article 218(6) TFEU; consent; QMV
|
| Department | Ministry of Justice
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| Document numbers | (35776), 5445/14 + ADD 1, COM(14) 46
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Summary and Committee's conclusions
13.1 The 2005 Hague Convention on Choice of Court
Agreements was signed by the EU on 1 April 2009 on the basis of
the Council Decision 2009/397/EC.[69]
Its main purpose is to increase legal certainty for parties involved
in international "business-to-business" contracts (and
thereby promote international trade) by providing uniform rules
which ensure that exclusive "choice of court" agreements
are respected and that judgments issued by designated courts can
be recognised and enforced in the courts of other Contracting
Parties. The Convention takes precedence over the jurisdiction
rules of Brussels I[70]
(which govern choice of court agreements and recognition and enforcement
of judgments within the EU) except if both parties are EU residents
or come from third states, not Contracting Parties to the Convention.
The Commission considers that the reduced scope of Brussels I
is an acceptable trade-off for the increased legal certainty and
autonomy that will benefit EU companies engaged in trade with
third country parties.
13.2 The current document provides for EU approval
of the Convention which would then bind all EU Member States.
Given the benefits of increased legal certainty to UK business,
the Government was minded to participate in the Council Decision
and it notified the EU of its opt-in decision (notwithstanding
EU external competence) on 30 April. Accordingly, we asked the
Government to seek to ensure the transparency of UK opt-in rights
by means of appropriate wording in recitals. We also sought clarification
over the position of insurance contracts and consistency of that
position with Brussels I rules; the Government has been seeking
the inclusion in the Decision of all insurance contracts (and
not just reinsurance contracts) in line with UK insurance industry
preference.
13.3 In our Thirteenth Report of 2014-15, we reported
the Government's account of progress on the text prior to the
JHA Council of 9-10 October and its response to the previous questions
we had raised. It told us that the applicability of the opt-in
had not been made transparent by a recital in the text but that
instead it was intending to enter a minute statement on the Council
record concerning its participation in the measure. It also reported
that some insurance contracts remain excluded from the Decision
(to ensure consistency with Brussels I rules and the exclusion
of consumer contracts under the Hague Convention itself). However,
the scope of the original exclusion proposed had been narrowed
through UK efforts and an annex had been added to the effect that
the EU might reassess the need for an exclusion in the future.
Despite these outstanding points, the Government maintained that
adopting the text and Convention would still be in the UK's best
interests. The next step was for Member States to agree at the
JHA Council to send the text to the European Parliament for its
consent, as provided under the Article 218(6) TFEU procedure.
13.4 As the Government now explains, that agreement
at the 9-10 JHA Council resulted in a scrutiny override, because
of a misunderstanding at officials' level, realised prior to the
Council meeting, of how the scrutiny reserve resolution applied
to the Article 218(6) process. Mindful of that, the Government
tried "to protect the integrity of the UK parliamentary scrutiny
process" by sending a formal note to other EU delegations
to the effect that although the scrutiny reserve still applied,
the Government was minded to agree to send the text to the European
Parliament. The Government now asks the Committee to reconsider
its decision to continue holding the document under scrutiny "once
the European Parliament has made its decision".
13.5 We thank the Minister for the prompt and
full explanation he provides in his letter of the circumstances
of the scrutiny override. On this occasion, we recognise that
the override resulted from a genuine misunderstanding. Given this
and the overall diligence of his department in handling scrutiny
of this document, we do not propose to take the issue any further.
That said, we cannot accept that notifying other delegations at
the Council meeting of the continuing application of the scrutiny
reserve had the effect of preserving the integrity of our scrutiny
reserve; in the circumstances, only abstaining would have so done.
13.6 Given that the European Parliament has no
power other than to give (or refuse) its consent to the text,
we see no point in deferring a decision on whether to clear this
document from scrutiny until its decision is known. We are therefore
content to now clear this document from scrutiny.
Full details of the document:
Proposal for a Council Decision on the approval on behalf of the
European Union of the Hague Convention of 30 June 2005 on Choice
of Court Agreements: (35776), 5445/14 + ADD 1, COM(14) 46.
Background and previous scrutiny
13.7 Our previous scrutiny of the current document
is set out in Forty-fourth Report of 2013-14 and our First and
Thirteenth Reports of 2014-15.
Minister's letter of 25 October 2014
13.8 The Parliamentary Under-Secretary of State for
Justice (Mr Shailesh Vara) first addresses the question of the
opt-in:
"I am pleased to note the Committee's comments
in respect of the efforts the Government has made to reflect the
interests of the UK in the final text. I share the Committee's
disappointment that further progress has not been able to be made
to assert the UK's opt-in in the wording of the recitals. As I
said in my letter of 18 September, we will make a minutes statement
on adoption of the Proposal to reflect our belief that the UK's
opt-in applies, notwithstanding exclusive competence."
13.9 He then provides an explanation of the Government's
position at the October JHA Council. He starts with an apology
for "mistakes" that were made "in relation to the
scrutiny process".
"My officials had understood, on the basis
of what we now accept was a mistaken reading of the scrutiny reserve
resolution, that the process of agreement of the text and referral
was simply a procedural step, and that political agreement, as
set out in the terms of the scrutiny reserve resolution, would
take place only after the European Parliament had given its consent.
"With that in mind, the Government indicated
in advance of the Council, by means of a formal note to other
EU delegations, that the Parliamentary scrutiny reserve continued
to apply, but that we were minded to agree to send the text to
the European Parliament for its consent. My officials had understood
that would protect the integrity of the UK Parliamentary scrutiny
process.
"I accept that, since the European Parliament
can only accept or reject the text referred to it, agreement by
the Council to refer the text to the Parliament meant that the
text itself takes on a form that was not capable of revision by
the Parliament. I recognise that triggers the scrutiny reserve
resolution.
"I hope the Committee will accept that this
was an honest misunderstanding on the part of my officials, in
the context of an unusual European legislative procedure, and
that there was no deliberate intention on the part of the Government
to override UK Parliamentary scrutiny. Having taken advice from
your Committee's Clerk and Legal Adviser, as well as the Cabinet
Office, my officials are now clear about the course to be adopted
in such cases.
"An 'A' Point was submitted in advance of
the meeting, and, in Council, the item was taken en bloc with
a number of other 'A' points, which went through with no active
discussion, as is the usual process."
13.10 He next considers the question of ongoing scrutiny:
"The Committee has said that it may be prepared
to reconsider the scrutiny reserve following a Government report
back after first reading. The position is that the European Parliament
is being asked to give its consent to the text as it stands, so
there will be no trilogue and hence no first reading procedure.
"In the circumstances I would be grateful
if the Committee would consider the question of the scrutiny reserve
afresh, once the European Parliament has made its decision. I
will, of course, keep the Committee informed about progress and
about the likely timescale for final adoption of the Proposal."
Previous Committee Reports
First Report HC 219-i (2014-15), chapter 18 (4 June
2014); Forty-fourth Report HC 83-xxxix (2013-14), chapter 8 (26
March 2014).
69 OJ No. L 133, 29.5.09, p.1, also available from:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:133:0001:0013:EN:PDF. Back
70
Council Regulation No. 44/2001 of 22 December 2000 on jurisdiction
and the recognition and enforcement of judgments in civil and
commercial matters. This was recast by Regulation No. 1215/2012
of 12 December 2012 on jurisdiction and the recognition and enforcement
of judgments in civil and commercial matters. Back
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