UNIFORM RULES FOR CONTRACT DISPUTES: PUTTING ACTIVITY-RELATED JURISDICTION ON THE AGENDA

Abstract

This article addresses the need for uniform jurisdiction rules in cross-border contractual disputes and attempts to put it back on the diplomatic agenda. It seeks to explain why the traditional approach to international jurisdiction in contract disputes should change its focus from the outdated general jurisdiction approach to a more pragmatic step-by-step approach taking into account the commercial nature of contractual relations. Among the many aspects of and explanations for the different approaches to international jurisdiction, this article will concentrate on the idea that the principal foundation of jurisdiction in international contract disputes should be based on the economic allegiance of the defendant. In an attempt to bridge the gap between the different approaches to jurisdiction, the article argues that the way forward for uniform jurisdiction rules in contract disputes should be activity-related jurisdiction and proposes a set of rules principally establishing jurisdiction on the basis of the defendant's fixed place of business or the defendant's substantial business activities in relation to the contract. The proposed set of rules is also put in the light of a series of recent ECJ decisions dealing with the forum contractus rule of Article 5(1) of the Brussels I Regulation and two major US Supreme Court decisions on ‘doing business’ and ‘transacting business’ jurisdiction rendered in 2011.