International contracts – Choice of jurisdiction in the event of a dispute
Contract negotiations always end with the dispute clause, and each party seeks to apply its applicable law and retain the jurisdiction of its country.
Each party has its own general terms and conditions of purchase or sale, which set out the conditions in this regard.
In the absence of agreement, and if the general terms and conditions are contradictory and not accepted by the parties, reference is made to international texts, in particular European law.
Regulation 1215/2012 provides, in principle, for the jurisdiction of the court of the defendant’s domicile.
However, there are special jurisdictions in contractual matters:
– For sales of goods: the place of delivery;
– For the provision of services: the place of provision;
– In tort matters: the place where the harmful event occurred.
However, pursuant to Article 25 of the Rules, the parties are free to choose the jurisdiction by agreement between them.
There are other special jurisdictions in insurance matters and in matters relating to contracts concluded by consumers.
There are also exclusive jurisdictions:
– In real estate matters: the location of the property;
– In matters relating to the nullity of corporate acts: the location of the registered office;
– In matters relating to patents, trademarks, designs, and models: the place of filing.
There are other solutions in matters of provisional or protective measures, which fall within the jurisdiction of the place where such measures are to be ordered.
It is advisable for the parties to provide for an amicable dispute resolution method before going to the competent court, such as conciliation or mediation.
If such a clause is provided for, it is mandatory and, until conciliation or mediation has been attempted, the action is inadmissible.
Which jurisdiction should you choose?
Depending on the subject matter, it may be a civil court or a commercial court.
Commercial courts, now known as economic activity courts in France, are unique in that they are composed of judges who are business leaders and therefore familiar with the business world.
Internationally, it is advantageous to use the Paris Economic Activities Court, which has an International Chamber offering two advantages: firstly, its judges have international experience and, secondly, compared to provincial courts, it has the merit of being considered impartial by foreign co-contractors.
This International Chamber has been operating since 2018 under protocols signed between the Ministry of Justice, the President of the Paris Commercial Court, and the Paris Bar Association.
There is also a Chamber at the Paris Court of Appeal composed of judges specializing in appeals relating to international cases.
Documents may be submitted in English.
The cross-examination procedure used in Anglo-Saxon proceedings may be used.
It is possible to request the compulsory production of certain documents.
All these procedures are governed by practical guides in French and English, which facilitate the conduct of proceedings.
Outside Europe, internationally
If the parties are located outside Europe, the provisions of the Lugano Convention of October 30, 2007 , to which the United Kingdom has just acceded, will apply.
These include:
– In contractual matters, the place where the obligation on which the claim is based has been or must be performed;
– In tort matters, the place where the harmful event occurred.
These provisions are similar to those found in European texts.
Another solution: Arbitration
There are a number of arbitration institutions such as the International Chamber of Commerce (ICC), the LCIA (London Court of International Arbitration) in the United Kingdom, the SIAC (Singapore International Arbitration Court), and the DIFC Courts (Dubai Financial International Centre Courts), which have pre-established rules.
There are standard arbitration clauses that can be referred to, which provide a fixed framework and allow the amount of costs and fees to be known in advance.
Arbitration has the advantage of being confidential and the disadvantage of being considered more expensive than state jurisdiction.
It is also possible to use ad hoc arbitration, i.e., arbitration that is defined by the parties, who can decide on the category of arbitrator, the name of the arbitrator, and the procedure they will follow, which may or may not be subject to appeal and the provisions of national codes of procedure.
In France, international arbitration is defined by Articles 1504 et seq. of the Code of Civil Procedure:
– Article 1504: “Arbitration involving international trade interests is international arbitration.”
For all disputes relating to the establishment and procedure of international arbitration, there is a supporting judge, which is the Paris Judicial Court, for example.
Reference is made to a number of texts concerning national arbitration, in particular for the arbitration agreement, the constitution of the tribunal, the arbitral proceedings, the arbitral award, the appeal, and the application for annulment.
The arbitration agreement is not subject to any rules of form.
It sets out the applicable rules of law and the possibility of reaching an amicable settlement.
Arbitral awards are subject to enforcement by the court before they can be executed.
It is possible to provide for appeals for annulment before the Court of Appeal.
Other dispute resolution solutions
For example, the Franco-German Chamber of Commerce and Industry has a Franco-German mediation regulation from 2013, which was amended in 2021 and came into force on June 24, 2021.
Conclusion
All these considerations make it possible to find a solution for the jurisdiction clause, but also to meet before a dispute arises, which is necessary. And with the assistance of their counsel, it is often possible to reach an agreement.
06/08/2025
Thierry Clerc