It is always good for contracting parties to make clear agreements about what to do in case of disputes. This can be done, for example, in general terms and conditions. Not infrequently, general terms and conditions contain a forum selection clause. But what is a forum selection and what is its purpose? After these questions have been answered, a ruling by the Court of Justice will be discussed.
With a forum selection, parties choose a judicial authority that will rule on a possible dispute. If parties do not agree anything, the principle applies that the court in the place of residence of the defendant is competent to take cognizance of the dispute. This applies both in national and international disputes.
The Brussels I Regulation regulates, among other things, which court is competent to take cognizance of international disputes in civil and commercial matters. The Regulation applies if one of the parties is domiciled in the territory of a Member State of the European Union. The Regulation gives parties (under certain conditions) the possibility to designate a court or courts of a Member State that may rule on a possible dispute.
Especially with international agreements, it can be important to make agreements in advance about which court is competent. This can prevent having to litigate before a foreign court, with all associated costs and uncertainties.
A forum selection clause can be included in an agreement, but also in general terms and conditions. When a forum selection clause is included in general terms and conditions, the question arises whether this clause has been validly agreed upon. The Brussels I Regulation imposes certain formal requirements on a forum selection clause.
Including a forum selection clause in general terms and conditions can offer advantages, but it is important that the formal requirements are met. If in doubt, seek advice from a lawyer.
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