Marina Hadjisoteriou

Patrikios Legal, Limassol

mhadjisoteriou@pavlaw.com

Report on IBA Litigation Committee session at the 2024 IBA Annual Conference in Mexico City

Wednesday 18 September 2024

Chair

Sara Chisholm-Batten Michelmores, London; Secretary, Litigation Committee

Panellists

Victor Corzo Consulate General of Mexico, Los Angeles

Caline Mouawad Chaffetz Lindsey, New York; Vice Chair, Arbitration Committee

Professor Fausto Pocar Università degli Studi di Milano, Milan

Ben Roe Baker McKenzie, London; Hague Conference Liaison Officer, Litigation Committee

Introduction

This insightful session at the IBA Annual Conference in Mexico City was a panel discussion providing an overview on the work of the Hague Conference’s jurisdiction project. Following the success of the Choice of Courts Convention and the Judgments Convention, this project is now working on a new instrument on parallel proceedings. The panellists examined the potential impact of any new convention in the context of growing jurisdictional protectionism.

The session

The session was opened and chaired by Sara Chisholm-Batten, who outlined the agenda: to examine the scope, potential benefits and practical viability of the proposed convention.

Ben Roe began with a comprehensive introduction, framing the project as the potential third pillar in the Hague Conference’s work on jurisdiction, following the 2005 Choice of Court Convention and the 2019 Judgments Convention. He explained that this new initiative specifically targets the problem of parallel proceedings – live cases involving the same parties and subject matter in courts of different states – where there is no exclusive choice of court agreement and no final judgment yet.

Roe presented a flow chart illustrating the proposed mechanism, which synthesises civil law (first-in-time rule) and common law (forum non conveniens) traditions. The process involves:

1. Assessing ‘connecting factors’ (eg, defendant’s residence or location of property).
2. If multiple courts have connecting factors, they must enter into a dialogue to determine the most appropriate forum.
3. If the courts cannot agree, the court first seised retains jurisdiction. He noted the draft is a work in progress, with significant issues yet to be resolved.

Chisholm-Batten then posed the central question to Professor Fausto Pocar: ‘Is this convention necessary, given the existence of the 2019 Judgments Convention?’

Pocar replied ‘yes and no’. He confirmed the usefulness of a convention to resolve parallel proceedings before conflicting judgments are issued – a problem not fully solved by Article 7(2) of the 2019 Judgments Convention that deals with parallel judgments, not parallel proceedings. However, he questioned whether a full convention was necessary, suggesting that a protocol to the Judgments Convention might be sufficient. He expressed significant concern that the proposed ‘judicial dialogue’ mechanism could be slow and complex, potentially requiring courts to examine the merits of the case twice. He contrasted this with the simplicity and speed of a pure ‘first-in-time’ rule. He also suggested the compromise might be theoretically elegant but pragmatically flawed, favouring one legal tradition over the other in practice.

The chair then turned to other panellists for practical and national insights.

Victor Corzo provided a concrete example from Mexico, where national laws are used defensively to create ‘mirror judgments’ against parallel proceedings initiated under United States statutes. He highlighted major practical challenges, stating that many judges in civil law jurisdictions are unfamiliar with concepts like forum non conveniens. Additionally, the mechanism for direct court-to-court dialogue is unprecedented and faces obstacles like language barriers, procedural differences and concerns over judicial independence. He also emphasised that the final text will be a product of compromise (‘the middle ground where everybody can live’), which may result in a ‘relaxed text’ that lacks strong, specific language.

Caline Mouawad explained that US federal courts have a ‘virtually unflagging obligation’ to exercise their jurisdiction, and deferring to foreign proceedings is done only in exceptional circumstances under doctrines like Colorado River.

She compared the flexible, multi-factor US approach with the more precise and narrow factors in the draft convention’s Article 10. She noted that the convention introduces new considerations (eg, likelihood of judgment recognition) not expressly found in US case law.

Her analysis suggested that adopting the convention would limit the flexibility currently enjoyed by US courts and could potentially lead to different outcomes in parallel proceeding disputes.

The debate

A dynamic discussion ensued, highlighting several critical themes:

1. The panel agreed that Article 7 of the 2019 Judgments Convention (which allows refusal of recognition if a related action is pending) is insufficient because it acts too late – after judgments are rendered – and lacks certainty.
2. A major concern, echoed by Roe and Chisholm-Batten, was that the current draft requires parties to plead both civil law-style connecting factors and common law-style forum non conveniens arguments. He stressed that this could lead to costly, duplicative and lengthy hearings, undermining the convention’s goal of efficiency.
3. The panel shared a concern that the quest for a perfect compromise might yield an instrument that is too complex to be practical or widely adopted.

Questions

Bettina Knoetzl (Past Co-Chair of the IBA Litigation Committee and a member of its Advisory Board, and partner at Knoetzl in Vienna) raised two questions about the draft:

1. At what procedural stage should the mandated court-to-court discussion occur?
2. What happens if two courts are seised on the exact same day, and both find they lack a ‘connecting factor’?

Corzo indicated that the timing and initiation of the dialogue are still unresolved points of negotiation. Pocar suggested that the ‘same day’ problem, while tricky, is solvable through clear rules. However, he reiterated that the more profound difficulty is defining the point at which a jurisdiction decision is final, given varying national procedures.

Concluding remarks

Chisholm-Batten concluded the session by reiterating that the project is ongoing and far from final. She also noted that the next session of the Hague Conference’s working group is scheduled for 28 October to 1 November 2024. The IBA will conduct inter-sessional work, potentially developing case studies on ‘related actions’ to assist the delegations. She invited practitioners to engage with the IBA’s observer group to provide practical input.