Exclusive Jurisdiction Clauses – Bringing Certainty to Multinational Business

Contract disputes are very common in the world of commercial law. When a dispute arises, it is important that you are in a strong position contractually whether you are suing someone or being sued.

Companies involved in international trade or even cross border business should always consider including an exclusive jurisdiction clause in their contract. The inclusion of an exclusive jurisdiction clause is a vital element which should be addressed early in the contract drafting stage, this provides certainty as to which courts will have jurisdiction in the event of a dispute arising. Businesses in Northern Ireland and the Republic of Ireland should certainly take steps to include a clear exclusive jurisdiction clause in contracts governing cross border dealings which clearly stipulates where the contract should be litigated.

When drafting your contract you should carefully consider the benefits of exclusive jurisdiction clauses and which jurisdiction would be the most suitable venue for litigating any contractual disputes.

Your choice of jurisdiction may be influenced by convenience, for example you may want to litigate any disputes in Northern Ireland as it is where you reside. However, you should also consider which judicial system would be most beneficial to your needs and which forum would offer the best possibility of achieving an agreeable remedy to contract disputes. An exclusive jurisdiction clause should always be expressly written into a contract.

The need for absolute clarity is very important in determining your desired jurisdiction. For example, a simple mistake many UK based companies make is that they state in a contract that they wish for courts in the ‘United Kingdom’ or ‘Great Britain’ to deal with all disputes. This type of exclusive jurisdiction clause is defective as it failed to state precisely which legal system within the UK is intended.

The legal systems in England and Wales, Scotland and Northern Ireland are broadly similar, however, there are some key differences in each jurisdiction which should be considered when drafting a contract. If the exclusive jurisdiction clause is not certain from the outset then significant time and cost can be amassed before a jurisdiction to resolve a dispute can even be decided upon.

At PA Duffy and Company our expert commercial solicitors will explain all the legal jargon and draft an exclusive jurisdiction clause which protects your companies’ interests.

We offer cross border services and our solicitors’ knowledge of the legal systems in both Northern Ireland and the Republic of Ireland is key to helping our client’s engage in effective cross border and international trade. Whether you need advice on drafting a contract or challenging an Exclusive Jurisdiction Clause in an existing contract our Commercial Law team are here to help.