DAMAGES FOR BREACH OF A CHOICE-OFCOURT AGREEMENT: REMAINING ISSUES
Koji TAKAHASHI∗

I.
II.

V.
VI.
VII.

Introduction
Legal Bases of the ClaimA.
ContractB.
TortC.
Restitution
Governing Law
A.
Contract
B.
Tort
1.
Classification
2.
Connecting Factors
C.
Restitution
1.
Classification
2.
Connecting Factors
Jurisdiction
A.
Consent Jurisdiction
B.
Home-court Jurisdiction
C.
Submission Jurisdiction
D.
Derived Jurisdiction
E.
Claim-based Jurisdiction
1.
Contract2.
Tort
3.
Restitution
Enforceability of the Judgment in Other Countries
Damages for Breach of a Choice-of-Law Agreement?
Final Remarks

I.

Introduction

III.

IV.

The present article is a supplement to my earlier article on the same theme (hereafter referred to as ‘the previous article’), which was published in the previous∗

Professor of Law at the Doshisha University Law School (Japan).
Yearbook of Private International Law, Volume 11 (2009), pp. 73-105© sellier. european law publishers & Swiss Institute of Comparative Law

Printed in Germany

Koji Takahashi
volume of this Yearbook.1 The analysis throughout the previous and present articles rests on some basic concepts. It will be convenient to set out their definitions
below.
A ‘breach of a choice-of-court agreement’ is deemed to take place when an
action has been brought in a non-chosen forum if the agreement is valid and exclusive in the eyes of the court before which a claim for damages is made. The forum
in which the action has been brought in breach of the agreement is referred to as‘the forum first seised’ (and its court as ‘the court first seised’). The fact that the
court first seised may find the same agreement invalid or non-exclusive is irrelevant to the concept of the ‘breach of a choice-of-court agreement.’
The cases in which a damages claim may be made for breach of a choice-ofcourt agreement may be divided into two categories, depending on how the court
first seised will respond to the defendant’s allegation that the action has beenbrought in breach of a choice-of-court agreement. In the first category of cases, thecourt first seised finds that it has been brought in breach of a choice-of-court
agreement and accordingly refuses to hear the case by either dismissing or staying
its proceedings. The defendant may then make a claim for damages for the breachin order to recover from the plaintiff the costs he has incurred in disputing thejurisdiction. In the second category of cases, the court first seised, notwithstanding
the defendant’s allegation, decides to hear the case on the merits by refusing todismiss or stay its proceedings. The defendant may then make a claim for damages
for breach of the choice-of-court agreement in order to recover from the plaintiff
the costs which he has incurred in disputing the jurisdiction and merits. In addition,
if he has been ordered by a judgment on the merits to pay a sum of money, he may
seek to claw back the sum as well as the costs of the plaintiff he has been ordered
to bear.
The present article will make a number of references to the pertinent partsof the previous article.2 In Section VI of the previous article, it has been noted that
where an action has been brought in breach of a choice-of-court agreement, the
TAKAHASHI K., ‘Damages for Breach of a Choice-of-Court Agreement’ in: thisYearbook, Volume 10 (2008), pp. 57-91. Both the present and previous articles are revised
versions of my Japanese article ‘Kankatsu Gôi Ihan no Songai Baishô [Damages for Breachof Jurisdiction Agreement]’ in: Kokusai Shiô Nenpô [Japanese Yearbook of Private International Law] 2007/9, pp. 104-162.
2
It will be convenient to indicate below the issues which have been examined in theprevious article by setting out its table of contents: I. Introduction – II. What Constitutes a
Breach of a Choice-of-court Agreement? – III. Categories of Cases: A. The First Categoryof Cases; B. The Second Category of Cases – IV. An Overview of the Case Law – V. Is theQuestion Procedural or Substantive? – VI. The Legal Basis of the Claim – VII. Availabilityof the Remedy in the Forum First Seised: A. The First Category of Cases; B. The Second
Category of Cases – VIII. Availability of the Remedy in Another Forum. A. Finality of theSettlement of a Jurisdictional Battle. 1. Pleas of res judicata. 2. General Principles of Procedure Law. B. Comity towards the Court First Seised. 1. The First Category of Cases. 2. The
Second Category of Cases. – IX. Comparison with an Antisuit Injunction – X. Quantification of Damages – XI. Duty to Mitigate Loss – XII. Express Clause on Damages – XIII.
Dichotomy Between the Common Law and the Civil Law – XIV. Conclusion.
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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
defendant may seek relief in contract or tort or restitution. Among those legal
bases, the previous article has focused on the contractual basis of the claim. The
present article will consider all three legal bases (Section II). The article will thenexamine the governing law of the claim with respect to each of those legal bases(Section III). The examination will then be directed to jurisdiction to hear suchclaims (Section IV). That analysis will be followed by the examination of theenforceability of the judgment awarding damages or ordering restitution in othercountries (Section V). The present article will end by addressing whether damages
should be awarded for breach of a choice-of-law agreement (Section VI).
In Section V of the previous article, it has been acknowledged that a choiceof-court agreement possesses procedural character but has been argued that it is not
impossible to characterise the recoverability of damages for its breach as substantive. The analyses from Section II through to Section IV of the present article arebased on the assumption that the substantive characterisation is adopted by the
court seised of the claim. If the court favours the procedural characterisation,
unless it is the court first seised or the court chosen by the choice-of-court
agreement,3 it will presumably decline jurisdiction since the claim concerns theprocedure of another country.
The present article will avoid repeating the points made in the previous articles. As a consequence, the readers who only read the present article may form animpression that this analysis is overly sanguine about the recoverability of damages
for breach of a choice-of-court agreement. To demonstrate that this author is notunaware of the hurdles to recovery considered in the previous article, notably the
preclusion by the principle of res judicata, the international comity concern and the
difficulty of quantification, it is necessary to set forth below an excerpt from theConclusion (in Section XIV) of the previous article:… whether, in what circumstances, and to what extent damages may
be awarded for breach of a choice-of-court agreement depend on amyriad of factors. Thus, the claimant may not have a good chance of
success if the court treats the breach of a choice-of-court agreement
as a procedural matter. … Where the claim is made in the forum firstseised, it will not be successful if the court has earlier made irreconcilable decisions. There must be an end to the jurisdictional battle
also in the cases where the claim is made in another forum. Thus, thedecisions of the court first seised may be recognised as having theres judicata force of precluding the claim. Furthermore, it may bequeried whether awarding damages would not be contrary to international comity towards the court first seised. Comity should, however, be put in the context of the far-from-ideal reality of international litigation. If a party is aggrieved by his opponent’s unscrupulous litigational behaviour, the courts should not use comity as a
3
The court first seised will hear the claim since it concerns its own procedure. Also,
the court chosen by the choice-of-court agreement may hear the claim on the basis ofinherent jurisdiction to safeguard its process.

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Koji Takahashi
pretext for renouncing its responsibility towards him if he has such a
sufficient contact with the forum as to warrant extending to him ahelping hand. In examining implications for international comity, auseful comparison may be made with an antisuit injunction, anestablished remedy in the common law countries for breach of achoice-of-court agreement. An antisuit injunction offers a usefulpoint of comparison also in respect of effectiveness as a remedy. In
both respects, the picture is mixed and, therefore, a choice should be
wisely made between the two remedies to best fit the situation athand. The effectiveness of the remedy of damages has been doubted
due to the perceived difficulty of quantification. However, upon aclose analysis, the difficulty differs depending on the type of cases.
The duty to mitigate loss or similar concepts may be pleaded indefence in various contexts but will not be found persuasive in mostcases. A practical solution to the uncertainty over the success of thedamages claim would be an express clause on damages. It may,
however, give rise to a dispute of its own.
Two threads run throughout the present analysis. They are the distinction between
the first and second categories of cases … and the contrasts between the common
law and civil law camps.
As between the two categories of cases, the damages claim is more likely to
succeed in the first category of cases, i.e. where the court first seised dismisses or
stays its proceedings. The reasons include that negative implications for international comity are less serious [and] that the quantification of damages is less difficult …. In the second category of cases, i.e. where the court first seised decides tohear the case on the merits, the claim will face more obstacles. Nevertheless, practical justice demands that the law should be crafted and interpreted to allow theclaim at least in the cases displaying an unscrupulous behaviour, for example,
where the plaintiff has flouted a plainly valid choice-of-court agreement by bringing an action before a remote court which would, to his knowledge, exercise an
exorbitant jurisdiction and deny effect to any foreign choice-of-court agreement.
The idea of awarding damages for breach of a choice-of-court agreement
has its genesis in the common law system. Whether the seed growing in the common law field can be transplanted onto the civil law ground remains to be seen.
The present article has identified some conceptual and normative hurdles to overcome. If the common law courts cast off any remaining hesitancy in granting this
remedy, the divide between the common law and the civil law camps in theirapproach to international litigation will become wider, which may affect the strategy of drafters of choice-of-court agreements.
Since the publication of the previous article, the English practitioners’ havevoiced mixed opinions: the Bar Council of England and Wales has expressed aview in favour of the remedy4 while the Law Society of England and Wales has
4
Bar Council of England and Wales, ‘Response of the Bar Council of England andWales to the Commission’s Green Paper on the Review of Council Regulation (EC) No

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
expressed a view against it.5 The European Union Committee of the United Kingdom House of Lords has also come out against enshrining the remedy in the Brussels Regulation6 but it probably did not mean to express any view in a context moregeneral than that of reform of the Regulation. On the civil law side, it has come tothe author’s attention that the highest court of Spain (the Tribunal Supremo)
recently awarded damages to the tune of nearly 650,000 Euros for breach of a
Spanish choice-of-court agreement by treating the agreement like a substantive
contract (hereafter referred to as ‘the Spanish Tribunal Supremo case’).7 This decision admittedly muddies the waters but it is believed that the divide between thecommon law and the civil law portrayed above can be maintained. Against the
backdrop of this fluid state of play, the topic has begun to attract a greater attention
from commentators.8

44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil andCommercial Matters’ (June 2009) para. 3.9 (available on the European Commission’s website ‘Consulting the public’ at <http://ec.europa.eu/justice_home/news/consulting_public/news_consulting_0002_en.htm> as of February 2010).
5‘Review of Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters – Brussels I. Response of the Law Society of England and Wales’ (July 2009) para. 12 (Also available on the European Commission’s website, note 4).
6
The European Union Committee of the House of Lords, ‘Green Paper on the Brussels I Regulation: Report with Evidence’ 21st Report of Session 2008–09 (HL Paper 148)
paras. 63 and 69 (Also available on the European Commission’s website, note 4).
7
STS (Sala de lo Civil, Sección 1ª), 12 January 2009, RJ 2009/544. For a brief
account in English, see REQUEJO M., ‘On the Value of Choice of Forum and Choice of Law
Clauses in Spain’, at <http://conflictoflaws.net/2009/on-the-value-of-choice-of-forum-andchoice-of-law-clauses-in-spain>. For a more detailed account and commentary in English,
see ALVAREZ S., ‘The Spanish Tribunal Supremo grants damages for breach of a Choice-ofCourt agreement’, in: IPRax 2009, p. 529. According to the latter, the Spanish Tribunal
Supremo awarded damages also in an earlier case (STS (Civil) 23 February 2007, RJ 2007
1/2 118) but, unlike the latest judgment, did not discuss the legal foundation. The earlier
case seems to belong to the second category (according to the terminology of the present
analysis) while the latest case seems to belong to the first category.
8
In addition to the works cited in the previous article, see e.g. MANKOSWSKI P., ‘Ist
eine vertragliche Absicherung von Gerichtsstandsvereinbarungen möglich?’, in: IPRax
2009, p. 23; REQUEJO M., ‘Violación de Acuerdos de Elección de Foro y Derecho a Indemnización: Estado de la Cuestión’, in: Revista Electrónica de Estudios Internacionales 2009,p. 17 (available only online at <http://www.reei.org/reei17/doc/articulos/articulo_REQUEJO_Marta.pdf>); ALVAREZ S. (note 7); BŘÍZA P., ‘Choice-of-Court Agreements: Could the Hague Choice of Court Agreements Convention and the Reform of Brussels I Regulation be the Way Out of the Gasser-Owusu Disillusion?’, in: Journal of Private
International Law 2009, p. 537; CUNIBERTI G. / REQUEJO M., ‘La sanction des clausesd'élection de for par l'octroi de dommages et intérêts’, in: ERA Forum 2010-1 (pending
publication).

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Koji Takahashi

II.

Legal Bases of the Claim

Where an action has been brought in breach of a choice-of-court agreement, thedefendant may seek remedies in contract or tort or restitution. After recapping thepoints made in the previous article regarding the contractual basis of the claim, thefollowing analysis will proceed to examine the tortious and restitutionary bases. As
explained in Section I above, the analysis in this Section is based on the assumption that the court seised of the claim characterises it as substantive rather thanprocedural. Instead of seeking to arrive at a definitive conclusion under any particular legal systems, the following analysis will explore the issues which will be
pertinent to many of them, drawing materials from various sources.

A.

Contract

Under many legal systems, notably those of the civil law countries, contractual
liability is based on fault and therefore would not be triggered unless the breach is
caused intentionally or negligently. In the context of the present analysis, it would
mean either the knowledge of the breach of a choice-of-court agreement or theignorance of it due to negligence. In many cases of the first category, it would bepossible to find intent or negligence since the court first seised in that category ofcases also acknowledges that there is a breach. Making such a finding would be
more difficult in some of the cases of the second category where the court firstseised does not acknowledge that there is a breach, though there may still be room
to find an intentional breach in such cases as where the plaintiff has flouted aplainly valid choice-of-court agreement by bringing an action before a remotecourt which would, to his knowledge, exercise an exorbitant jurisdiction and denyeffect to any foreign choice-of-court agreement.
The same difficulty does not arise under the legal systems, typically thecommon law systems, which adopt a strict liability regime for breach of contract.
Notwithstanding that, under the traditional common law approach, the usual remedy for breach of a choice-of-court agreement has not been the award of damages
but a stay of proceedings or, where the action was brought abroad, the issuing of anantisuit injunction. The reasons given in one English decision were the difficulty ofquantifying damages for breach of a choice-of-court agreement and the negative
impact that damages award might have on international comity.9 It has been argued
in Section VI of the previous article that the difficulty of quantification per se is
not a good reason to deny relief. As regards the comity concern, since it is aconsideration extraneous to the contractual theory, reference should be made to thediscussion in Section VIII.B of the previous article.

978

OT Africa Line Ltd v. Magic Sportswear Corp [2005] 1 C.L.C. 923 para. 33 (CA).

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
B.

Tort

Where an action has been brought in breach of a choice-of-court agreement, thedefendant may make a claim in tort to seek damages. In some legal systems, aninstitution of an action may constitute a tortious act in certain circumstances. Thus,
the American Law Institute's Restatement (Second) of Law of Torts puts it
concisely in Section 674:
One who takes an active part in the initiation, continuation or procurement of civil proceedings against another is subject to liability tothe other for wrongful civil proceedings if:(a) he acts without probable cause, and primarily for a purpose otherthan that of securing the proper adjudication of the claim in which
the proceedings are based, and(b) except when they are ex parte, the proceedings have terminatedin favor of the person against whom they are brought.
A challenge for any legal system willing to treat the institution of an action in certain circumstances as a tortious act is how to define the circumstances, so that theright to seek judicial remedies is not unduly restricted. In one case, the JapaneseSupreme Court stressed that a great care should be taken to avoid imposing undue
restrictions on the right to seek judicial remedies and declared that the institution ofan action was generally not a tortious act.10 But the Court acknowledged that where
the institution of an action was plainly unreasonable in the light of the purpose of
the judicial system, it could constitute a tortious act. The French Cour de cassation,
too, was cautious when it held that the institution of an action was in principle aright and did not give rise to liability to pay damages unless it was done with malice, bad faith or gross negligence.11
The courts which have power to punish abusive procedural steps by meansof a costs order may not find it necessary to treat a wrongful institution of an action
as a tort. In Japan, the costs order is issued against the losing party12 but it only
covers the court filing fees and not lawyers’ fees13 and is imposed irrespective ofintent or negligence, with the result that it is not effective to curb abusive actions.
Distinguishing an order for costs in that sense from an award of damages, theJapanese Grand Court of Judicature (Taishin-in)14 held obiter that damages could
e.g the judgment of the Supreme Court on 26 January 1988 (reported in 42-1
Minshu 1).
11
The French Cour de cassation Civ.2e, 11 January 1973, n° 71-12.446 (reported in
Bulletin des arrêts Cour de Cassation Chambre civile 2 N. 17 P. 12).
12
Article 61 of the Code of Civil Procedure [Minji Soshô Hô] (Japan).
13
Article 2 of the Act on Legal Costs [Minji Hiyô Tou ni Kansuru Hôritsu] (Japan).
14
Japan’s highest court in the period prior to the Second World War. Its decisions
are still considered to have a status of authority today unless they have been overruled by theSupreme Court, which is the post-War highest court.
10

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Koji Takahashi
be awarded to allow the defendant to recover his lawyer’s fees from the plaintiff
where the institution of the action was deemed to be a tortious act.15
The loss arising from the wrongful institution of an action is pure economic
loss since it is financial rather than physical. Some legal systems treat pure economic loss differently within its overall regime for tort liability, while others makeno distinction. Under English law, while the largest category of tort is negligence,
its core is to protect persons and property.16 The protection of purely economic
interests is largely17 left to the defined categories of intentional torts, which theEnglish courts would not be easily persuaded to expand. One such category is thetort of malicious prosecution, which was held by the House of Lords in Gregory v.
Portsmouth City Council18 to be limited to the malicious institution of criminal
prosecutions and certain civil proceedings which constituted special cases of abuseof legal process. Those special cases had been held to include malicious petition of
bankruptcy, malicious commencement of execution proceedings, and malicious
detention of ships. Lord Steyn observed that the extension of the tort to a civil
action was less necessary in England than in the U.S., referring to the fact that the
English courts, unlike the U.S. counterpart, had power to impose costs to deter
groundless actions.19 On that reasoning, where an action is brought before a foreign
court which has no power of imposing costs to deter groundless actions, the extension of the tort may be warranted.20 Such reasoning was adopted when the Court ofAppeal in Union Discount Co v. Zoller21 awarded damages for the institution of anaction in New York in breach of an English choice-of-court agreement.22 That wase.g the judgment of the Grand Court of Judicature on 2 November 1943 (reported
in 22 Minshu 1179).
16
Murphy v. Brentwood District Council [1991] 1 A.C. 398.
17
An exception is the principle enunciated by the House of Lords in Hedley Byrne[1964] A.C. 465.
18
[2000] 1 A.C. 419.
19
Ibid., 429.
20
Accord: THAM C.H., ‘Damages for breach of English jurisdiction clauses: morethan meets the eye’, in: LMCLQ 2004, p. 46 et seq., at 62.
21[2002] 1 W.L.R. 1517 (CA) paras 11, 38.
22
Another category of intentional economic tort, the tort of procuring a breach ofcontract, was considered in a recent English case, Horn Linie GmbH & Co. v. Panamericana
Formas E Impresos S.A., Ace Seguros S.A. [2006] EWHC 373 para. 26. In that case, Morison J visited the question whether damages were recoverable in respect of a foreign action
brought in breach of an English choice-of-court agreement and held obiter that awarding
damages as a remedy for a tort of procuring a breach of contract would involve legallydifficult questions but observed that it might offer a more ideal solution than an antisuit
injunction which might be seen as an undue interference with foreign proceedings. The court
mentioned the legally difficult questions presumably because this type of tort, also called thetort of inducement of breach of contract, is supposed to arise from a three-party situation(OBG Ltd v. Allan [2008] 1 AC 1. See also DUGDALE A. / JONES M. / SIMPSON. M., Clerk
and Lindsell on Torts (19th ed., 2006) para 25-15; BURTON O., ‘Two Tripartite Economic
Torts’, in: Journal of Business Law 2008, at 723, i.e. where a person who is not party to a
15

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
a case belonging to the first category. It would be a fortiori in the second categoryof cases since the court first seised, quite contrary to punishing the institution of
the action by means of a costs order, decides to hear the action.
The pure economic loss will be more readily recoverable under legal systems which adopt the French tradition of a single compensation rule.23 Article 1382
of the French Code Civil embraces all kinds of losses, stipulating that ‘Any act
whatever of man, which causes damage to another, obliges the one by whose fault
it occurred, to compensate it.’24 Negligent conducts are subject to the same rule asintentional acts.25 The Japanese tort law also belongs to the French tradition26 and
its Civil Code provides in Article 709 that anyone who intentionally or negligently
violates other’s rights or interests worthy of legal protection must compensate forthe losses thereby caused. When the Japanese Supreme Court acknowledged thatthe institution of an action could constitute a tortious act if it was plainly unreasonable in the light of the purpose of the judicial system, it alluded to the case where
the plaintiff was aware that the rights he asserted had no ‘factual or legal foundation.’ What the Court apparently had in mind was the case where the substantive
claim lacked foundation. But the unrestricted language of Article 709 is open toembrace all types of conducts. Therefore, the institution of an action in breach of achoice-of-court agreement may be deemed to be a tortious act if it is found to beplainly unreasonable in the light of the purpose of the judicial system.
It should be noted that the tort claim is not founded upon the breach of achoice-of-court agreement per se but upon a broader context in which the action
has been commenced. Though a breach of a choice-of-court agreement is a major
element of that context, the test is whether the whole circumstances are such thatthe institution of the action is, under the Restatement, ‘primarily for a purpose
other than that of securing the proper adjudication of the claim’ or, under the test of
the Japanese Supreme Court, ‘plainly unreasonable in the light of the purpose of
the judicial system.’ Since the procedural character of a choice-of-court agreement
does not have a direct impact, the tort claim is more conducive to substantive characterisation than the contractual claim. It means that the court which would notallow a contractual claim to recover damages for breach of a choice-of-court
contract has knowingly procured or induced a party to the contract to break it without
reasonable justification or excuse.
23
WAGNER G., ‘Comparative Tort Law’, in: REIMANN M. / ZIMMERMANN R. (eds.),
The Oxford Handbook of Comparative Law, Oxford 2006, p. 1012 et seq., at 1020 argues
that the difference between English and Continental legal systems is more apparent than real
but does not deny that a difference exists between English law and French law on the recoverability of pure economic loss.
24
English translation available on Légifrance <http://www.legifrance.gouv.fr>.
25
Article 1383 of the French Code Civil which provides, ‘Everyone is liable for thedamage he causes not only by his intentional act, but also by his negligent conduct or by his
imprudence.’ (English translation available on Légifrance).
26
HIRAY Y., ‘Japanese Tort Law in Comparative Perspective’, in: The JapaneseAnnual of International Law 1990, p. 90 et seq., at 91.

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Koji Takahashi
agreement by treating it as a procedural matter may allow a tort claim, provided
that the requirements in all other respects are fulfilled.
Some legal systems do not permit concurrent claims in contract and tort.27
Under such systems, if a contractual claim is considered to be available to seek
damages for breach of a choice-of-court agreement, a concurrent tort claim will not
be allowed.28

C.

Restitution

A restitutionary claim is not a claim seeking to recover damages but is a claim
seeking to strip away gain. It is outside the scope of the present article if theexpression ‘damages for breach of a choice-of-court agreement’ is strictly understood. However, it merits an examination since, by bringing an action in breach ofa choice-of-court agreement, the plaintiff may obtain gain and the defendant may
wish to deprive him of it.
In the first category of cases, since the court first seised refuses to hear thecase, both parties may suffer losses in the form of costs but neither will obtaingain. No restitutionary claim will therefore be available.
In the second category of cases, since the court first seised decides to hear
the case, the plaintiff obtains gain if the judgment is more favourable to him thanthat which would be rendered in the forum chosen by the choice-of-court agreement. Since the gain obtained by the plaintiff in this situation is also manifested as
the loss incurred by the defendant, the defendant may make a claim in contract or
tort to recover damages. However, as observed in Section II.B above, a tort claim
may not be granted unless the wrong has been committed intentionally or negligently. As examined in Section II.A, a contractual claim, too, may be subject to afault-based liability regime depending on the applicable legal system. Since fault
will not be a prerequisite for a restitutionary claim, the absence of intention or
negligence will not constitute an obstacle if the defendant frames the claim in restitution.
Even if a claim framed in contract or tort is considered to be available, aconcurrent restitutionary claim should not be precluded29 since the cause of action
is different: a claim for damages, whether framed in contract or tort, is founded on
the wrong causing losses whereas a restitutionary claim is founded on the wrong
resulting in gain. That is not, however, the position accepted by all legal systems.
27
e.g. French law adopts the principle of non-cumul des responsabilités contractuelle et délictuelle: Cour de cassation, Ch Civ., 11 January 1922; cf. Japanese law allows
concurrent claims: e.g. the judgment of the Grand Court of Judicature on 20 October 1917
(reported in 23 Minroku 1821).
28
In the Spanish Tribunal Supremo case, when awarding damages, the court
expressed preference for the contractual characterisation and did not comment on the possibility of non-contractual claims notwithstanding that the plaintiff relied also on a tort claim:
ALVAREZ S. (note 8).
29This is the position widely accepted under Japanese law.

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
In English law, the availability of restitution for wrongs, as distinguished fromrestitution for subtractive enrichment, is severely restricted.30 Thus, restitution for a
tort is normally only granted for proprietary torts in which the title to, or possession of, the property of the injured party has been infringed. With respect to restitution for a breach of contract, the traditional view is that it does not succeed savein exceptional circumstances such as where the breach of contract also constitutes aproprietary wrong (whether breach of a restrictive covenant or a tort) or an equitable wrong (such as breach of confidence or breach of fiduciary duty).31 The restriction was apparently somewhat relaxed by the House of Lords in Attorney-Generalv. Blake,32 in which it was held that restitution of profits could be ordered for abreach of contract in an exceptional case where damages measured by a plaintiff's
loss or specific relief were inadequate or unavailable, especially if the plaintiff had
a legitimate interest in preventing the defendant’s profit-making activity. In theabsence of more specific guidance, it is not certain how that test would be applied
to the case of a breach of a choice-of-court agreement even if we assume for thesake of argument that damages do not provide adequate relief. If, as it would seem,the circumstances must be something out of ordinary, a breach of a choice-of-court
agreement would not normally so qualify.
In many civil law systems, both restitution for wrongs and restitution for
subtractive enrichment will be covered by a broad rule allowing the claimant todeprive the defendant of gain obtained without legal basis.33 Under Japanese law,for example, restitution is granted if the defendant has gained at the expense of theclaimant in the circumstances where the gain has no legal basis.34 If, by bringing anaction in breach of a choice-of-court agreement, the plaintiff has obtained gain in
the shape of a more favourable judgment than that which would be rendered in theforum chosen by the choice-of-court agreement, that gain may be deemed to haveno ‘legal basis,’ depending on the interpretation of that expression under the applicable law.35
For a critique, see VISSER D., ‘Unjustified Enrichment in Comparative Perspective’, in: REIMANN M. / ZIMMERMANN R. (eds.), The Oxford Handbook of Comparative Law,
Oxford 2006, p. 969 et seq., at 979.
31
BURROWS A. (ed.), English Private Law (2nd ed. 2007) para. 18.236 (by BURROWS
A.).
32[2001] 1 AC 268, 285.
33
cf. In English law, the absence of legal basis is not enough but it is necessary to
identify a specific ‘unjust factor’ such as mistake or duress. Although the influential late
professor Birks advocated abandoning that approach in favour of the civil-law approach in
his last monograph Unjust Enrichment (2nd edn, 2005), that view has not earned a wide
support in England: See VISSER D. (note 30), at 997.
34
Article 703 of the Civil Code (Japan).
35
If such an interpretation is possible, it might be wondered whether restitutionary
relief is available even in the absence of a choice-of-court agreement if a more favourable
judgment has been obtained from a foreign court which would not have jurisdiction in theeyes of the court from which the relief is claimed. It might further be wondered whether
restitutionary relief is also available if for whatever reason the foreign favourable judgment
30

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Koji Takahashi
It should be noted that the restitutionary claim is not founded upon thebreach of a choice-of-court agreement per se but upon a broader context in which
the breach has resulted in the plaintiff’s gain. Since the procedural character of achoice-of-court agreement does not have a direct impact, the restitutionary claim ismore conducive to substantive characterisation than the contractual claim. It meansthat the court which would not allow a contractual claim to recover damages forbreach of a choice-of-court agreement by treating it as a procedural question may
allow a restitutionary claim to strip away the plaintiff’s gain, provided that therequirements in all other respects are fulfilled.

III. Governing Law
As examined in the preceding Section, where an action has been brought in breachof a choice-of-court agreement, the defendant may counter by making a claim incontract or tort to recover damages for the breach or by making a claim in restitution to strip away the plaintiff’s gain resulting from the breach. The governing lawof the claim on each legal basis will be examined in turn below. As explained in
Section I above, the analysis in the present Section is based on the assumption thatthe court seised of the claim characterises it as substantive rather than procedural.

A.

Contract

The choice-of-law rules of most countries will give effect to the parties’ choice oflaw for their contract provided that it satisfies the prescribed conditions.36
If there is an express choice-of-law agreement specifically made for disputes arising from the breach of a choice-of-court agreement, effect will be given
to it. Such an express choice-of-law agreement is not wholly inconceivable. Sincesome of the model clauses for a choice-of-court agreement have begun to suggest
including an express provision on damages for its breach,37 it is a short step toinclude an express choice-of-law agreement for the damages claim.
However, in the majority of cases, even the parties who are legally prudent
to conclude a choice-of-court agreement do not take the trouble of negotiating a
is not eligible for recognition in the forum in which the relief is sought. To avoid perpetuating cross-border litigation, each legal system will rein in the availability of restitutionary
relief within the limit as it sees fit.
36
Article 3 of the Rome I Regulation (The Regulation No. 593/2008 of the European
Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations: OJ L/2008/177/6); Article 7 of the Act on the Application of Laws [Hô no Tekiyô ni
Kansuru Tsûsoku Hô] (Japan, an English translation of the Act by ANDERSON, K. / OKUDA
Y. is available in: this Yearbook 2006, pp. 427-441).
37
As examined in Section XII of the previous article.

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
choice-of-law agreement to sort out disputes arising from a possible breach of theirchoice-of-court agreement. Then, a contractual damages claim for breach of achoice-of-court will be governed by the law which governs the agreement. As towhat that law is, the positions under the choice-of-law rules of different countries
will be different.38 The likely options are the governing law of the substantive
contract to which the choice-of-court agreement is attached,39 the law of the forum
chosen by the choice-of-court agreement,40 and the law specified by the choice-oflaw rules of the forum chosen by the choice-of-court agreement.
The last of those options has been adopted by Articles 5(1) and 6(a) of the2005 Hague Convention on Choice of Court Agreements41 read in conjunction with
its explanatory report.42 The position has been defended on the basis that it serves
to avoid the undesirable result of parallel proceedings and the denial of justicewhich might arise if the court seised and court chosen apply different laws.43 It is tobe wondered whether the same objective could not be achieved equally well, withthe added advantage of simplicity, by the second option, i.e. the law of the forum
chosen by the choice-of-court agreement.
The first and second options tend to coincide with each other in practice.
That is because where parties to a contract conclude a choice-of-court agreement,
they often favour the application of the law of the chosen forum and conclude achoice-of-law agreement accordingly. Even in the absence of an express choice-oflaw agreement, the choice-of-court agreement may serve as evidence of an implied
choice in favour of the law of the chosen court.
Those two options did not coincide with each other in the U.S. case of RGC
International Investors v. Ari Network Services.44 In that case, a choice-of-court
agreement granting exclusive jurisdiction to the District Court of Delaware wascontained in a contract which expressly selected Wisconsin law to govern the‘rights and liabilities created thereunder.’ An action was first brought in Wisconsin
but the court had declined to hear it. The defendant to that action then brought aclaim in Delaware for damages for breach of the choice-of-court agreement. The
38
There is no uniformity among the EU Member States since Article 1(2)(e) of theRome II Regulation excludes a choice-of-court agreement from its scope of application.
39
This is the option adopted by the English case law as observed by COLLINS L. et
al. (eds.), Dicey, Morris & Collins on the Conflict of Laws, 14th ed., London 2006, para 12090.
40
As apparently suggested in YEO N./TAN D., ‘Damages for Breach of Exclusive
Jurisdiction Clauses’, in: WORTHINGTON S. (ed.) Commercial Law and Commercial Practice(Oxford and Portland Oregon 2003) Ch 14, p. 403 et seq., at 404.
41
Not in force at the time of writing (September 2009).
42
HARTLEY T. / DOGAUCHI M., ‘Explanatory Report on the 2005 Hague Choice of
Court Agreements Convention’ (2007) para 125.
43
See e.g. SCHULZ A., ‘The Hague Convention of 30 June 2005 on Choice of Court
Agreements’, in: Journal of Private International Law 2006, p. 243 et seq., at 256.
442004 WL 189784 (United States District Court, D. Delaware 2004) (Not reported
in F.Supp.2d).

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court dismissed the claim on the ground that no authority was cited for the proposition that such remedy was available under Wisconsin law. The court thus
favoured the first option, i.e. the governing law of the substantive contract to which
the choice-of-court agreement is attached. But this decision leaves room foranother interpretation: the court may have construed the clause choosing Wisconsin law to govern the ‘rights and liabilities created thereunder’ as covering disputes
arising from the breach of a choice-of-court agreement.

B.

Tort

1.

Classification

As observed in Section II.B above, a tort claim seeking damages for breach of achoice-of-court agreement is not founded solely upon the breach of a choice-ofcourt agreement. But it is undeniably closely connected with the agreement. Wherea claim framed in tort has a close connection with a contractual relationship, it
depends on the applicable set of choice-of-law rules whether it is classified as tort
or as contract.
If it is classified as contract, the rest of the choice-of-law analysis will be as
set out in Section III.A above.
It is classified as tort under, for example, the Rome II Regulation45 since it
contemplates in Article 4(3) the possibility of such a claim falling within the
choice-of-law rules for tort.46 The position is the same under the Japanese choiceof-law rules since a tort claim having a close connection with a contractual relationship is expressly treated under a choice-of-law rule for tort.47 Under such rules,
a tort claim seeking damages for breach of a choice-of-court agreement will be
subject to the choice-of-law rules for tort. Then, the next step is to examine theconnecting factors.

2.

Connecting Factors

The connecting factors depend on the precise formulation of the applicable choiceof-law rules. However, the following broad observation may be possible.
Under the choice-of-law rules of many countries, the governing law of a tort
claim will be the law of the place of tort or, more precisely, either the law of theplace in which the tortious act has occurred or the law of the place in which theRegulation (EC) No 864/2007 of the European Parliament and of the Council on
the Law Applicable to Non-Contractual Obligations [2007] O.J. L199/40.
46
Recital 11 of the Regulation makes it clear that the concepts covered by theRegulation are subject to European autonomous meanings.
47
Article 20 of the Act on the Application of Laws [Hô no Tekiyô ni KansuruTsûsoku Hô] (Japan).
45

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ensuing loss has occurred.48 Which places would such rules point to if they areapplied to the cases where a tort claim is made to recover damages for breach of achoice-of-court agreement? It is easy to imagine that the place of tortious act will
be localised in the forum first seised. The place of ensuing loss, too, will be localised in the same forum since what the claim seeks to recover in the first category ofcases are principally the costs incurred and left unrecovered in that forum. Also inthe second category of cases, what the claim seeks to recover are principally thecosts incurred and left unrecovered in the forum first seised as well as the expenses
which may have been incurred to comply with the costs order and the judgment on
the merits rendered in that forum. Although the actual financial pain may be felt in
the country where the account is maintained, that place will be irrelevant since theloss would have to be the direct result of the tortious act49 or the place of the ensuing loss would have to be foreseeable.50
The choice-of-law rules of some countries may contain a rule of displacement51 under which the otherwise applicable law is displaced by the law of theplace with which the tort is manifestly more closely connected in the light of all thecircumstances of the case. Under such rules, a tort claim seeking damages forbreach of a choice-of-court agreement will in the final analysis be governed by thelaw which governs the agreement since the claim is undeniably closely connectedwith the agreement. As to what law governs a choice-of-court agreement, reference
should be made to the discussion in Section III.A above.
The choice-of-law rules of some countries may allow the parties to choose
the governing law before a tortious act takes place and may give the party autonomy precedence over the objective connecting factors.52 Under such rules, effectwill be given to an express choice-of-law agreement specifically made for disputes
arising from the breach of a choice-of-court agreement, if it is couched in terms
wide enough to cover a claim in tort. As noted in Section III.A above, such an
express choice-of-law agreement is, albeit not wholly inconceivable, unlikely to beconcluded in practice.
One caveat is in order. The choice-of-law rules for tort of some countries
may retain what is known as the double-actionability rule,53 under which thee.g. Article 4(1) of the Rome II Regulation; Article 17 of the Act on the Application of Laws [Hô no Tekiyô ni Kansuru Tsûsoku Hô] (Japan).
49
e.g. Article 4(1) of the Rome II Regulation.
50
e.g. Article 17 of the Act on the Application of Laws [Hô no Tekiyô ni KansuruTsûsoku Hô] (Japan).
51
e.g. Article 4(3) of the Rome II Regulation; Article 20 of the Act on the Application of Laws [Hô no Tekiyô ni Kansuru Tsûsoku Hô] (Japan).
52
e.g. Article 14(1)(b) of the Rome II Regulation but only if the choice is made byan agreement freely negotiated between parties pursuing a commercial activity. cf. Article
21 of the Act on the Application of Laws [Hô no Tekiyô ni Kansuru Tsûsoku Hô] (Japan)
only allows the parties to change the governing law after a tort has taken place.
53
e.g. Article 22 of the Act on the Application of Laws [Hô no Tekiyô ni KansuruTsûsoku Hô] (Japan). The rule is based on dubious policy-oriented grounds and is seen by
many theorists as an anomaly. For details, see TAKAHASHI K., ‘A Major Reform of Japanese48

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cumulative application of the law of the forum is reserved. If the claim is broughtin the forum adopting such a rule, the hurdle that it must overcome is so much thehigher since it has to meet also the requirements of the law of the forum.

C.

Restitution

As observed in Section II.C above, restitution will not be available in the first category of cases, since no gain accrues to either party. The following analysis will
therefore focus on the second category of cases.

1.

Classification

As observed in Section II.C above, a restitutionary claim seeking to strip away thegain which has resulted from a breach of a choice-of-court agreement is notfounded solely upon the breach of a choice-of-court agreement. But it is undeniably closely connected with the agreement. Where a claim framed in restitution has
a close connection with a contractual relationship, it depends on the applicable setof choice-of-law rules whether it is classified as restitution or as contract.
If it is classified as contract, the rest of the choice-of-law analysis will be as
set out in Section III.A above.
It is classified as restitution under, for example, the Rome II Regulation
since it contemplates in Article 10(1) the possibility of such a claim falling within
the choice-of-law rules for restitution.54 The position is the same under the Japanese choice-of-law rules since the rules for restitution contain a reference to aclaim having a close connection with a contractual relationship.55 Under such rules,
a restitutionary claim seeking to strip away the gain which has resulted from a
breach of a choice-of-court agreement will be subject to the choice-of-law rules forrestitution. Then, the next step is to examine the connecting factors.

Private International Law’, in: Journal of Private International Law 2006, p. 333-334.
Among the common law countries which had been influenced by the English line of cases
originating from Phillips v Eyre (1870) LR 6 QB 1, some have since rejected the doubleactionability rule (e.g. the Supreme Court of Canada in Jensen v Tolofson [1994] 3 SCR
1022; the Australian High Court in Régie Nationale des Usines Renault SA v Zhang (2002)
187 ALR 1) but there are presumably others which still retain it.
54
cf. CHONG A., ‘Choice of Law for Unjust Enrichment/Restitution and the Rome II
Regulation’, in: ICLQ 2008, p. 863, at 872, takes the view that the classification of a restitutionary claim for wrong under the Regulation is not unequivocal, pointing out the danger
that the English courts might classify it as wrong and falling outside the scope of Article 10
whereas the German courts would be likely to classify it as falling within Article 10.
55
Article 15 of the Act on the Application of Laws [Hô no Tekiyô ni KansuruTsûsoku Hô] (Japan).

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2.

Connecting Factors

The connecting factors depend on the precise formulation of the applicable choiceof-law rules. However, the following broad observation may be possible.
Under the choice-of-law rules of some countries, the governing law of a
restitutionary claim will be the law of the country where the causal facts have takenplace56 or, more precisely, the law of the place where the gain has accrued.57 If suchrules are applied to the cases where a restitutionary claim is made to strip away thegain which has resulted from a breach of a choice-of-court agreement, whichplaces would they point to? It is easy to imagine that the place of causal facts will
be localised in the forum first seised since, in the second category of cases, theinstitution of the action in breach of a choice-of-court agreement can be deemed tobe the fact causing the gain. It is equally likely that the place of gain will also be
localised in the forum first seised since, in the second category of cases, the gain
can be deemed to have accrued in that forum through the costs order and the judgment on the merit.
Where restitution concerns a relationship arising out of a contract, thechoice-of-law rules of some countries may give priority to the law that governs that
relationship.58 Under such choice-of-law rules, a restitutionary claim seeking tostrip away the gain which has resulted from a breach of a choice-of-court agreement will be governed by the law that governs the choice-of-court agreement. As
to what law governs a choice-of-court agreement, reference should be made to thediscussion in Section III.A above.
The choice-of-law rules of some countries may contain a rule of displacement59 under which the otherwise applicable law is displaced by the law of theplace with which the restitution is manifestly more closely connected in the light of
all the circumstances of the case. Under such rules, a restitutionary claim seeking
to strip away the gain which has resulted from a breach of a choice-of-court
agreement will in the final analysis be governed by the law which governs theagreement since the claim is undeniably closely connected with the agreement.
The choice-of-law rules of some countries60 may allow the parties to choose
the governing law before the event causing unjust enrichment takes place and may
give the party autonomy precedence over the objective connecting factors. Under
56
e.g. Article 14 of the Act on the Application of Laws [Hô no Tekiyô ni KansuruTsûsoku Hô] (Japan).
57
e.g. Article 10(3) of the Rome II Regulation.
58
e.g. Article 10(1) of the Rome II Regulation.
59
e.g. Article 10(4) of the Rome II Regulation; Article 15 of the Act on the Application of Laws [Hô no Tekiyô ni Kansuru Tsûsoku Hô] (Japan).
60
e.g. Article 14(1)(b) of the Rome II Regulation but only if the choice is made byan agreement freely negotiated between parties pursuing a commercial activity. cf. Article
16 of the Act on the Application of Laws [Hô no Tekiyô ni Kansuru Tsûsoku Hô] (Japan)
only allows the parties to change the governing law after the event causing unjust enrichment has taken place.

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such rules, effect will be given to an express choice-of-law agreement specificallymade for disputes arising from the breach of a choice-of-court agreement, if it iscouched in terms wide enough to cover a claim in restitution. As noted in Section
III.A above, such an express choice-of-law agreement is, albeit not wholly inconceivable, unlikely to be concluded in practice.

IV. Jurisdiction
As examined in Section II above, where an action has been brought in breach of achoice-of-court agreement, the defendant may counter by making a claim incontract or tort to recover damages for the breach or by making a claim in restitution to strip away the plaintiff’s gain resulting from the breach. Jurisdiction toentertain such claims will be examined below. As explained in Section I above, theanalysis in the present Section is based on the assumption that the court seised of
the claim characterises it as substantive rather than procedural.
The jurisdictional bases depend on the precise formulation of the jurisdictional rules of the forum in which the claim is brought. Instead of seeking to arrive
at a definitive conclusion under any particular jurisdictional rules, the following
analysis will explore the issues which will be pertinent to many of them, drawing
materials from various sources.61
The jurisdictional rules of many countries provide for what may be called‘consent jurisdiction,’ ‘home-court jurisdiction,’ ‘submission jurisdiction,’ ‘derived
jurisdiction’ (compétence dérivée) and ‘claim-based jurisdiction.’ In considering
jurisdiction over a claim seeking relief against a breach of a choice-of-court
agreement, the central issue is the availability of the consent jurisdiction since if it
confers exclusive jurisdiction on the court chosen by the agreement, all the rest of
the jurisdictional bases, except ‘submission jurisdiction,’ become irrelevant.
It must be noted that even if the court seised of the claim has jurisdiction
under the bases examined below, it may decline to exercise it if it has discretion to
do so and takes the view that hearing a claim for damages for breach of a choiceof-court agreement would infringe comity towards the court first seised. Such aview is more likely to be taken in the second category of cases than the first category since, as noted in Section VIII.B.2 of the previous article, the negative implication for comity is greater in the second category.

61
In the following discussions, some provisions of the Code of Civil Procedure(Japan) will be cited. The Code contains provisions for determining the internal jurisdiction.
Under the case law, international jurisdiction has been determined by the mutatis mutandis
applications of those provisions. The references in the following discussion to the provisionsof the Code of Civil Procedure should be understood in that sense. The Japanese Ministry ofJustice is currently preparing legislation for international jurisdiction.

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A.

Consent Jurisdiction

Under the jurisdictional rules of many countries, a choice-of-court agreement will
be given effect if it satisfies the conditions prescribed by the rules.62
If there is an express choice-of-court agreement specifically made for disputes arising from the breach of another choice-of-court agreement, the effect will
be given to it. Such an express choice-of-court agreement is not wholly inconceivable. Since some of the model clauses for a choice-of-court agreement have begun
to suggest including an express provision on damages for its breach,63 it is a shortstep to include an express choice-of-court agreement for the damages claim.
However, in the majority of cases, even the parties who are legally prudent
to conclude a choice-of-court agreement do not take the trouble of negotiating
another choice-of-court agreement to sort out disputes arising from a possible
breach of the choice-of-court agreement which they have concluded. Should thelatter agreement then be interpreted as covering such disputes within its scope of
application?
There is an English case in which an arbitration agreement was interpreted
as covering a damages claim for its breach.64 When the English court took jurisdiction to hear a damages claim for breach of an English choice-of-court agreement inUnion Discount v. Zoller,65 it may have interpreted the agreement as covering theclaim, although it did not consciously discussed the question.66 Similarly, when the
Spanish Tribunal Supremo took jurisdiction to hear a damages claim for breach ofa Spanish choice-of-court agreement, it may have interpreted the agreement ascovering the claim, although it did not consciously discussed the question, either.67
It should be noted that if a choice-of-court agreement is interpreted as covering disputes arising from its breach, it means that the court chosen by the agreement has exclusive jurisdiction since a breach of a choice-of-court agreement islogically only conceivable where the agreement is exclusive.68 If, on the other
hand, a choice-of-court agreement is not interpreted as covering disputes arisingfrom its breach, a number of courts may have jurisdiction. As will be examined
below, those may include the court first seised, the defendant’s home court, thecourt to the jurisdiction of which the defendant has submitted, and the court chosen
by the choice-of-court agreement as the court for the place of performance of thecontractual obligation or as the court for the place where the loss caused by a tort
62

Article 23 of the Brussels I Regulation; Article 11 of the Code of Civil Procedure(Japan).
As examined in Section XII of the previous article.
Mantovani v. Carapelli [1978] 2 Lloyd's Rep. 63, 73 (per Donaldson J), affirmedby the Court of Appeal in Mantovani v. Caparelli [1980] 1 Lloyd's Rep 375, 382.
65
[2002] 1 W.L.R. 1517(CA). For the facts, see Section IV of the previous article.
66
Another, albeit not likely, possibility is that the court relied on the claim-based
jurisdiction for contract (See Section IV.E.1 below).
67
ALVAREZ S. (note 7).
68
See Section II of the previous article.
63
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has occurred. The inquiry must, therefore, be directed to ascertain whether reasonable persons in the parties’ position would have intended to agree that disputes
arising from the breach of the choice-of-court agreement must, rather than may, bebrought in the chosen court.
Some policy considerations militate in favour of the interpretation that achoice-of-court agreement covers disputes arising from its breach. Firstly, if thecourt chosen by a choice-of-court agreement does not have exclusive jurisdiction,
the risk of parallel proceedings (lis alibi pendens) or concurrent related proceedings may arise. Parallel proceedings may arise, for example, if a damages claim forbreach of a choice-of-court agreement is brought in the defendant’s home court aswell as in the court chosen by the agreement. Concurrent related proceedings may
arise if, for example, a damages claim in contract is brought in the court first seised
and a damages claim in tort is brought in the court chosen by the agreement. It istrue that the risk of parallel or concurrent related proceedings exists with respect toany disputes. But what the present analysis is concerned with is a dispute about
where the dispute on the substance should have been heard: the situation is alreadycomplicated with a single set of proceedings. That complication would be exacerbated if parallel or concurrent related proceedings are permitted to arise.
Secondly, if jurisdiction is to be concentrated in one forum, the court chosen
by the choice-of-court agreement would be best placed to hear the dispute. Otherwise, an anomalous situation may arise in which another court awards damages forbreach of a choice-of-court agreement finding the agreement to be valid and exclusive when the court chosen by the agreement would find the same agreement to beinvalid or non-exclusive.
Thirdly, the chosen court is best placed to hear the claim particularly in thesecond category of cases since the quantification of damages involves speculation
on what costs order and judgment on the merits the chosen court would render,69 atask difficult to undertake for other courts.
Each of those policy arguments may be rebutted or neutralised. To begin
with the last, the difficulty of quantification can be, and will normally be, resolved
through the operation of the rules concerning the burden of proof. If the defendant
to the damages claim fails to make out to the satisfaction of the court what costs
order and judgment on the merits the chosen court would render, the court hearing
the damages claim may legitimately disregard that factor in quantifying the damages.
As regards the second policy argument, anomalous though the situation may
look, it is not entirely indefensible. The whole idea of awarding damages forbreach of a choice-of-court agreement is founded on the notion that if a party isaggrieved by his opponent’s unscrupulous litigational behaviour, the courts should
not shrink from offering the remedy provided that the nexus with the case is sufficiently strong.70 If this basic policy stance is accepted, it is arguable that the courts
See Section X of the previous article.
See the conclusion in Section XIV of the previous article, as reproduced in part in
Section I of the present article.
69
70

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with such a close nexus with the case as to have jurisdiction on one of the bases
examined below should be allowed to offer the remedy even if the possibility
exists that the court chosen by the choice-of-court agreement may find the agreement invalid or non-exclusive.
The first policy argument may be neutralised by a different policy argument
in favour of having multiple forums available. Thus, from the viewpoint of theparty aggrieved by the breach of a choice-of-court agreement, if a number of courts
have jurisdiction, it would be easier to bring a claim in the country where the opposite party has assets. That consideration may be important because, as will be
examined in Section V below, a judgment granting relief for breach of a choice-ofcourt agreement may not, depending on the factual circumstances, be enforced inmany countries.
If it is accepted from the foregoing analysis that the policy considerations
are not conclusive on either side, the interpretation will depend on the factual circumstances of the case. The remainder of this Section will proceed on the premisethat the choice-of-court agreement in the given case does not, upon its properinterpretation, cover disputes arising from its breach.

B.

Home-court Jurisdiction

Under the jurisdictional rules of many countries, defendant’s home court has jurisdiction. Whether the ‘home’ means domicile, residence, habitual residence, orother similar concepts depends on the precise formulation of each such rule.71 The
home-court jurisdiction, unlike the claim-based jurisdiction, is generally available
irrespective of the legal basis of the claim. It should, therefore, be available also
where a claim is brought seeking relief against a breach of a choice-of-court
agreement, whether it is framed in contract, tort, or restitution.

C.

Submission Jurisdiction

Under the jurisdictional rules of many countries, jurisdiction will be vested in the
court to which the defendant has submitted by taking the prescribed procedural
steps.72 The submission jurisdiction, like the home-court jurisdiction, will be generally available irrespective of the legal basis of the claim. It should, therefore, beavailable also where a claim is brought seeking relief against a breach of a choice71
e.g. ‘domicile’ under Article 2 of the Brussels I Regulation (domicile); ‘domicile’and ‘presence’ under Article 4(2) of the Code of Civil Procedure (Japan); ‘presence’ in thecommon law: see e.g. Colt Industries Inc v. Sarlie [1966] 1 WLR 440, Burnham v. Superior
Court of California 109 L Ed 2d (1990).
72
e.g. under Article 24 of the Brussels I Regulation, it is an entering of appearance
without contesting jurisdiction; under Article 12 of the Code of Civil Procedure (Japan), it ismaking an argument on the merits or making a statement in the preparatory proceeding
without contesting jurisdiction.

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of-court agreement, whether it is framed in contract, tort, or restitution. Unlike thehome-court jurisdiction, the submission jurisdiction should be available even if the
choice-of-court agreement is interpreted as covering the damages claim since it
implies that the parties have made a fresh agreement on the choice of court. But thepractical utility of this jurisdictional basis for bringing such a claim will be limited.
The reason is firstly that if the claim is brought in a forum other than the forum
first seised, the defendant is not likely to submit to the court because his favourite
forum is likely to be the forum first seised as manifested by the fact that he has
earlier brought proceedings there notwithstanding that he may possibly be accusedof breaching the choice-of-court agreement. Another reason is that even though thedefendant may be more willing to submit to the court first seised, the claimant is
not very likely to bring the claim there since, as examined in Section VI of theprevious article, the chances of the claim being granted by that court are not high.

D.

Derived Jurisdiction

Under the jurisdictional rules of many countries, the court which has jurisdiction
over a claim on some basis may have what may be termed ‘derived jurisdiction’over another closely connected claim.73 A counter claim, for example, may besubject to derived jurisdiction if it is closely connected with the main claim overwhich the court has jurisdiction on some basis.
In the second category of cases, since the court first seised decides to hear
the case notwithstanding the defendant’s allegation that the action has beenbrought in breach of a choice-of-court agreement, the defendant may bring acounter claim seeking relief for the breach.74 The court may, however, hold that it
is not competent either jurisdictionally or procedurally to hear the claim, if it findsthat the connection between the counter claim and the main claim is not sufficiently close. Such a finding is possible since the main claim is a substantive claim
whereas the counter claim is founded on the choice-of-court agreement. If the court
uses a more lenient test to gauge the connection, it may find itself to be jurisdictionally and procedurally competent to hear the claim brought as a counter claim.

E.

Claim-based Jurisdiction

1.

Contract

Under the jurisdictional rules of many countries, jurisdiction over a contractual
claim will be vested in the courts for the place where the obligation is to bee.g. Article 6 of the Brussels I Regulation.
As discussed in Section VII.B of the previous article, even in the second categoryof cases, there are circumstances in which the court first seised may grant relief against thealleged breach of the choice-of-court agreement.
73
74

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Damages for Breach of a Choice-of-Court Agreement: Remaining Issues
performed.75 Where a contractual claim is made to recover damages for breach of achoice-of-court agreement, (1) with respect to which obligation will the place ofperformance be determined and (2) which place will be pointed to as the place ofperformance?
As regards the first question, where damages are claimed for breach of acontract generally, two interpretations are possible. The first is to determine theplace of performance with respect to the obligation to pay damages. The second
interpretation is to do the same with respect to the obligation the breach of which
has given rise to the damages claim. The latter interpretation was adopted by theEuropean Court of Justice76 when it interpreted the words ‘the obligation in question’ in Article 5(1) of Brussels Convention.77 It is submitted that the sameinterpretation should be adopted for similar jurisdictional rules of other countries if
the point is not settled,78 since it is defensible in principle. The main rationale for
conferring jurisdiction on the courts for the place of performance of a contractual
obligation is twofold. Firstly, it is usually not contrary to the parties’ wishes tohave their contractual dispute resolved in the place of performance.79 Secondly, therelevant evidence is often located in the place of performance. As regards the firstrationale, when parties entered into a contract, the place of payment of damages
was unlikely to be in their contemplation whereas they were usually aware of theplace of performance of the obligation the breach of which has given rise to thedamages claim. As to the second rationale, the relevant evidence is not necessarily
located in the place of payment of damages but is often found in the place of performance of the obligation the breach of which has given rise to the damages
claim. Under the preferred interpretation, where a contractual claim is made torecover damages for breach of a choice-of-court agreement, the place of performance would be determined not with respect to the obligation to pay damages butwith respect to the obligation under the choice-of-court agreement.
Turning to the second question, the determination of the place of performance of the obligation under a choice-of-court agreement encounters a difficulty
since the agreement does not impose an obligation to sue on the parties unwillingto sue but creates an obligation not to sue elsewhere than the chosen forum. On thebasis that it imposes an obligation to sue in the chosen forum if the party decides to75
e.g. Article 5(1) of the Brussels I Regulation; Article 5(1) of the Code of Civil
Procedure (Japan).
76
Case 14/76, de Bloos v. Bouyer [1976] E.C.R. 1497.
77
Article 5(1)(a) of the Brussels I Regulation uses the same wording. Since a choiceof-court agreement is neither a contract for sale nor a contract for the provision of services(see subparagraph (b)), it will come under subparagraph (c) which refers back to the generalrule contained in subparagraph (a).
78
e.g. in Japan, the judgment of the Tokyo District Court on 23 April 1993 (840
Hanrei Times 197) took the former interpretation while the judgment of the Tokyo District
Court on 14 January 1994 (861 Hanrei Times 267) adopts the latter interpretation.
79
It should be noted that there is a subtle difference from the rationale for theconsent jurisdiction. The latter is based on the parties’ positive expectation to have theirdispute resolved in the chosen forum.

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Koji Takahashi
sue at all, the chosen forum may be regarded as the place of performance. Such aninterpretation is not entirely satisfactory since the relevant evidence is not particularly likely to be situated in the chosen forum. But it may be supported since having a dispute concerning a choice-of-court agreement resolved in the forum chosen
by the agreement would usually not be contrary to the parties’ wishes.
If the interpretations suggested above are accepted, the court chosen by achoice-of-court agreement will have jurisdiction to hear a contractual claim fordamages for breach of the agreement.

2.

Tort

Under the jurisdictional rules of many countries, jurisdiction over a claim in tort
will be vested in the courts for the place where the tort has occurred,80 or more
precisely, the courts for the place where the tortious act has occurred and/or theplace where the ensuing damage has occurred.81 While choice-of-law rules would
have to choose between those places, jurisdictional rules may specify the courts ofeither or both of those places. If such jurisdictional rules are applied to the cases
where a tort claim is made to recover damages for breach of a choice-of-court
agreement, which places will they point to? The analysis is essentially the same asthat undertaken earlier in Section III.B.2 for the choice-of-law rules for tort. Thus,
it can hardly be doubted that the place of tortious act will be localised in the forum
first seised. The place of ensuing loss, too, will be localised in the same forum
since what the claim seeks to recover in the first category of cases are principally
the costs incurred and left unrecovered in that forum. Also in the second categoryof cases, what the claim seeks to recover are principally the costs incurred and left
unrecovered in the forum first seised as well as the expenses which may have been
incurred to comply with the costs order and the judgment on the merits rendered inthat forum. Although the actual financial pain may be felt in the country where theaccount is maintained, that place will be irrelevant since such an indirect financial
loss will not be enough to found tort jurisdiction.82

80
e.g. Article 5(3) of the Brussels I Regulation; Article 5(9) of the Japanese Code ofCivil Procedure as applied by way of analogy to determine the international jurisdiction of
the Japanese courts.
81
Jurisdiction is conferred on the courts of both places under Article 5(3) of theBrussels I Regulation: Bier v. Mines de Potasse (Case 21/76) [1976] ECR 1735, a decision
under the Brussels Convention then in force. The Japanese courts, too, have held that they
had jurisdiction if either the tortious act or the ensuing damages took place in Japan: e.g. thejudgment of the Tokyo District Court on 27 May 1965 (16-5 Kaminshu 923).
82
Under the Brussels I Regulation / Convention, see Antonio Marinari v. Lloyds
Bank plc and Zubaidi Trading Company C-364/93 [1995] ECR I-02719; under Japaneselaw, see e.g. the judgment of the Tokyo District Court on 15 February 1984 (35-1~4 Kaminshu 69).

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3.

Restitution

The jurisdictional rules of many countries provide for no jurisdictional bases specifically designed for a restitutionary claim.83 The jurisdictional bases available
irrespective of the legal basis of the claim, such as the home-court jurisdiction andthe submission jurisdiction, will be available. Furthermore, restitution for wrongs84
may be classified as the wrong to which it relates, with the result that jurisdictional
basis for contract or tort may also be available. Thus, under the Brussels I Regulation / Convention, there is a suggestion85 that Article 5(1) for matters ‘relating to acontract’ is applicable where the wrong constitutes a breach of a consensual relationship,86 while Article 5(3) for ‘matters relating to tort’ is applicable where thewrong constitutes a tort.87 Such a suggestion should be supported as it has the meritof allowing the consolidation of claims. It has been argued in Section II.C abovethat a restitutionary claim for wrongs does not share the same cause of action as aclaim in tort or contract. But that should not prevent the consolidation of claims on
the jurisdictional sphere for the sake of procedural convenience. If such a suggestion is accepted, a restitutionary claim arising out of a breach of a choice-of-court
agreement may be brought in the courts which have jurisdiction over a claim
seeking damages for the breach either in contract or tort.

V.

Enforceability of the Judgment in Other Countries

Where a judgment has been rendered awarding damages for breach of a choice-ofcourt agreement or ordering restitution of the gain which had resulted from thebreach, if the judgment debtor does not have sufficient assets in the country of therendering court, the judgment creditor may wish to seek enforcement in othercountries. How likely will such a judgment be enforced?88 The precise require83
e.g. The Brussels I Regulation contains no jurisdictional basis specificallyintended for a restitutionary claim.
84
Other types of restitution will be treated differently. See e.g. TAKAHASHI K. ‘Jurisdiction over a Claim for Restitution of Benefits Conferred under a Void Contract: under theBrussels Convention’ in: SCHRAGTE E.J.H. (ed.) Unjust Enrichment and the Law ofContract, The Hague 2001, p. 397-404.
85
PANAGOPOULOS G., Restitution in Private International Law, Oxford 2000, p. 228(a suggestion under the Brussels Convention).
86
The same interpretation would be possible under Article 5(1) of the Code of Civil
Procedure (Japan), referred to in Section IV.E.1 above.
87
MAGNUS U. / MANKOWSKI P., (eds), Brussels I Regulation, Munich 2007, Art. 5,
note 197 (by MANKOWSKI P.) suggests that restitution for wrongs is covered by Article 5(3)arguing that the latter is not restricted to claims for damages.
88
BRIGGS A., The Agreements of Jurisdiction and Choice of Law, Oxford 2008, para
8.43 says that an English judgment awarding damages for breach of a choice-of-court

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Koji Takahashi
ments for enforcement depend on the law (‘enforcement rules’) of the country
where enforcement is sought.89 However, the following broad observation may bepossible.
The enforcement rules of many countries prohibit the court (‘enforcing
court’) from engaging in the review of the substance of the foreign judgment (révision au fond)90 unless the judgment is so offensive that its enforcement would betantamount to infringing the international public policy (ordre public) of theenforcing country.91 It follows that in the case where the enforcement of a foreign
judgment granting relief for breach of a choice-of-court agreement is sought, it is
not relevant if the enforcing court would not grant the same remedy on the facts ofthe case. Nor is it relevant if the enforcing court finds the choice-of-court agreement in question invalid or non-exclusive. It is submitted that it is also immaterial
if the enforcing court would not grant remedies for breach of a choice-of-court
agreement for the reason that it would regard the question as procedural. However,if the enforcing court finds that the enforcement would be contrary to internationalcomity towards the court first seised,92 that reason may be sufficient to justify
invoking the ordre public to deny enforcement, though this proposition, too, may
be doubted as it might be thought that international comity should have no bearing
on the ordre public, the latter being constituted by the fundamental principles ofthe domestic legal system.
Under the enforcement rules of many countries, a foreign judgment will not
be enforced if it is incompatible with any domestic judgment.93 In the second category of cases, the judgment granting relief for breach of a choice-of-court agreement may not be enforced in the forum first seised since it may be deemed

agreement is ‘in reality unlikely to have international legs’ while YEO N./TAN D., ‘Damages
for Breach of Exclusive Jurisdiction Clauses’, in: WORTHINGTON S. (ed.) Commercial Law
and Commercial Practice, Oxford and Portland Oregon 2003, Ch 14, p. 403 et seq., at 416
suggests that a judgment awarding damages would, unlike an antisuit injunction, be enforceable under the Brussels I Regulation.
89
e.g. Article 45 of the Brussels I Regulation incorporating by reference the requirements for the recognition of foreign judgments as laid down in Article 34; Article 24 of the
Civil Execution Act (Japan) incorporating by reference the requirements for the recognitionof foreign judgments as laid down in Article 118 of the Code of Civil Procedure (Japan).
90
e.g. Article 45(2) of the Brussels I Regulation; Article 24(2) of the Civil Execution
Act (Japan).
91
e.g. Articles 34(1) and 45 of the Brussels I Regulation; Article 118(3) of the Codeof Civil Procedure (Japan).
92
As seen in Section VIII.B of the previous article, the negative implication for comity is greater in the second category of cases than in the first category.
93
e.g. Articles 34(3) and 45 of the Brussels I Regulation; Article 118(3) of the Codeof Civil Procedure (Japan) requires compatibility with the ordre public of Japan, which has
been interpreted by the case law (e.g. the judgement of the Osaka District Court on 22
December 1977, 361 Hanrei Times 127) as requiring also compatibility with domestic
judgments.

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inconsistent with the judgment of the court first seised in the sense that it implies
denial of the jurisdiction of that court.94
The enforcement rules of many countries will require the enforcing court toverify according to its own jurisdictional rules that the rendering court had jurisdiction to hear the case.95 In the second category of cases, it may happen that theenforcing court considers that the court granting relief for breach of a choice-ofcourt agreement had jurisdiction on such basis as examined in Section IV above
and also considers that the court first seised had jurisdiction to hear the merits.
Then, the enforcing court may face two foreign judgments which may be seen as
inconsistent with each other. Where there are inconsistent foreign judgments eachof which would otherwise be eligible for recognition, the enforcement rules ofsome countries give priority to the judgement delivered earlier in time.96 Under
such rules, the judgment granting relief for breach of a choice-of-court agreement
may not be enforced since it is normally97 rendered after the judgment of the court
first seised has been delivered.98

VI. Damages for Breach of a Choice-of-Law
Agreement?
There is a view which says that damages should be awarded for breach of a choiceof-law agreement where a party to the agreement undermines it by bringing an
94
It is unclear whether this will be the outcome under Article 34(3) of the Brussels I
Regulation since the cause of action may have to be the same for two judgments to be
regarded as irreconcilable within the meaning of that provision (cf. Article 34(4) which
expressly makes this point clear). COLLINS L. et al. (eds.), Dicey, Morris & Collins on the
Conflict of Laws, 14th ed.. London 2006, para 14-219 suggests that an English judgmentissuing an antisuit injunction and a foreign judgment obtained in defiance of the injunction
are not irreconcilable within the meaning of Article 34(3). If this view is correct, a judgment
granting relief for breach of a choice-of-court agreement would not be irreconcilable withthe judgment rendered by the court first seised.
95
e.g. Article 118(1) of the Code of Civil Procedure (Japan). cf. Article 35(3) of theBrussels I Regulation prohibits the review of jurisdiction, except the bases which are enumerated in subparagraph (1) but do not include the consent jurisdiction.
96
e.g. see Article 45 referring to Article 34(4) of the Brussels I Regulation.
97
For a more detail discussion on the timing of granting the relief, see the discussion
in Section X of the previous article on the identification of the precise timing at which theloss is deemed to have materialised.
98
This will not be the outcome under Article 34(4) of the Brussels I Regulation. That
provision expressly requires the cause of action (in the French text, ‘objet’ and ‘cause’) to be
the same for two judgments to be deemed irreconcilable. Therefore, a judgment granting
relief for breach of a choice-of-court agreement will not be seen as irreconcilable with thejudgment rendered by the court first seised.

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action in a forum which would not respect the choice. Professor Briggs is the major
proponent.99 He illustrates the point as follows:100
When in the last decade the Russian economy went into collapse,
many Russian banks which had engaged in speculative financialtransactions suddenly found that they were unable to meet their obligations. Though the obligations created by these complicated financial transactions were expressed to be governed by English law,some banks brought proceedings before the Russian courts to seek
the annulment of the contracts on the ground that the contracts were,as they alleged, governed by Russian law, or that the contracts, even
if governed by English law, were liable to be annulled by a Russian
court. When they did that, did the Russian banks breach their original promises? It seems to me that they did. Did their doing soamount to a breach of contract? It seems to me that it did. Did theRussian court do anything wrong when it annulled the contracts? No,
for a Russian court is obliged to apply Russian law. But the allegation of breach is not made against the Russian court, but against theRussian bank: did the Russian bank act inconsistently with the legal
obligations created in the contract when it sought to have its performance obligations altered by decree of a Russian court which was
asked to apply Russian law? It seems to me that it did; and in this it
is to be seen as having breached its contract. In short it did not dowhat it had promised to do, which was to assume and perform theobligations of an agreement which was to be governed by English
law. … It is, to my mind, open to an English court to conclude that achoice of law provision in a contract can be broken by taking proceedings in a court which will not give it conclusive effect, or evenby advancing a case which is inconsistent with it. …
This proposition will provoke many questions. The following two seem mostimportant. Firstly, it may be asked who is to decide whether a particular choice-oflaw agreement is valid and should be given effect. A choice-of-law agreement may
be seen as valid in one forum but may be not in another since the existence andvalidity of the parties' consent as to the choice of the law may be determined bydifferent legal systems in different forums.101 Furthermore, whether and to what99
See BRIGGS A., ‘Distinctive aspects of the conflict of laws in common law systems: Autonomy and agreement in the conflicts of laws’, in: Doshisha Law Review 2005
vol. 308 p. 21 (available at <http://elib.doshisha.ac.jp/cgi-bin/retrieve/sr_bookview.cgi/
U_CHARSET.utf-8/BD00005456/Body/028003080009.pdf>) paras. 32-34; BRIGGS A., ‘The
Further Consequences of a Choice of Law’, in: Law Quarterly Review 2007, p. 18 et seq., at21; BRIGGS A., The Agreements of Jurisdiction and Choice of Law, Oxford 2008, paras
11.45 et seq.
100
BRIGGS A., ‘Distinctive aspects’ (note 97), para. 34.
101
In some forums, it may be determined by the law of the forum (lex fori). In otherforums, it may be determined by the law which would govern the agreement if it were valid.

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extent party autonomy is given effect depend on the choice-of-law rules of theforum. In some forums, party autonomy will be confined to contractual obligations,whereas in others it may be permitted also for some non-contractual obligations.
While autonomy will be respected for contractual obligations in most forums,
exceptions will be allowed to varying degrees. In dealing with the breach of achoice-of-court agreement throughout the present and previous articles, the analysis has proceeded on the basis that it is the court seised of the damages claim whichis to determine whether a choice-of-court agreement is valid and exclusive irrespective of whether the court first seised makes the same finding.102 The same
approach may be taken when we deal with a choice-of-law agreement: it is thecourt seised of the damages claim which is to determine, in accordance with its
choice-of-law rules, whether the choice-of-law agreement is valid and should begiven effect.
Secondly, it may be asked what constitutes a breach of a choice-of-law
agreement. Professor Briggs argues that a choice-of-law agreement can be broken
by taking proceedings in a court which will not give effect to it.103 With respect,
this view would be undeniably right if a choice-of-law agreement expressly
contains an undertaking not to bring an action in a court which would deny effectto it. However, if, as in most cases, a choice-of-law agreement does not containsuch an express undertaking, it would seem difficult to read into it an implied
undertaking to do the same.104 If such an undertaking could be implied, the sameshould be possible with all other contractual terms. The upshot would be that an
assertion of nullity of any terms would constitute their breach and entail liability.
While it would be possible to argue that there is a breach of a choice-of-court
agreement when proceedings are taken in a non-chosen forum,105 it is not possible
to conceive of a breach of a choice-of-law agreement since it is silent as to where
In some of the latter, the party disputing the existence of the agreement may, by way of
exception, be allowed to invoke the law of the country in which he is habitually resident(e.g. Article 10 of the Rome I Regulation).
102
See the previous article, p. 58.
103
However, when it comes to the quantification of damages, a difficulty will arise
where there are a number of courts which would give effect to the choice-of-law agreement.
BRIGGS A., The Agreements of Jurisdiction (note 97), at para 11.71, suggests that the court
which would give the most favourable ruling for the breaching party should be identified forthe purpose of quantification.
104
cf. BRIGGS A., The Agreements of Jurisdiction (note 97), while acknowledging
that the question is one of construction (para. 11.53), maintains that a choice-of-law agreement necessarily implies such an undertaking (para 11.52). Professor Briggs explains thatthe absence of a choice-of-court agreement ought not to be seen as a problem, citing thepossibility that parties may settle the choice of law while leaving the choice of court to be
determined later (para 11.52).
105
cf. DICKINSON A., ‘Restitution and incapacity: a choice of law solution?’, in:
Restitution Law Review 1997, p. 66, fn.26, argues that both a choice-of-court agreement anda choice-of-law agreement are a request to the court to give effect to them and accordingly,
relief of damages could not be granted for their breach.

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proceedings must be taken.106 Therefore, a parallel cannot be drawn between
them107 and it must be concluded that a contractual claim seeking damages forbreach of a choice-of-law agreement could not be allowed unless the agreement
contains an express undertaking not to bring an action in a court which would denyeffect to it.
The preceding argument finds support in a recent Australian decision. In
Ace Insurance v. Moose Enterprise,108 an antisuit injunction was sought to restrain
an action in California, which had been brought to take advantage of Californian
law notwithstanding that there was an express choice-of-law agreement in favourof ‘the law of Australia, its States and Territories.’ One of the submissions on
which the application was based presupposed that if the Californian court delivereda judgment favourable to its plaintiff as the result of the application of Californianlaw, damages for breach of the choice-of-law agreement would be recoverable inAustralia. The New South Wales Supreme Court granted an antisuit injunction but
refused to endorse that submission. Brereton J observed that at the foundation ofthat submission was the proposition that the choice-of-law agreement was promissory in effect and held:
47. ... the courts have long recognized that a choice of law clause is
not a choice of jurisdiction clause, and does not have the effect of achoice of jurisdiction clause ... No doubt a contractual provision
could be framed which unambiguously contained a promise to do
nothing that might result in some other system of law becoming
applicable. However, in my opinion that is not ordinarily the effectof a choice of law clause, which is usually declaratory of the intent
of the parties, rather than promissory. …
…
51. … Where a choice of law is ‘inferred’ rather than ‘express’, it is
not conceivable that there would be an implied negative stipulation
not to invoke the jurisdiction of a court, which would apply a law
other than the chosen one. In my view, that supports the conclusionthat where there is an express choice of law, there is similarly no106
cf. in the Spanish Tribunal Supremo case, in stating the reasons for awarding
damages for breach of a Spanish choice-of-court agreement, the court mentioned the breachof a Spanish choice-of-law agreement always alongside with the breach of the choice-ofcourt agreement: ALVAREZ S. (note 7).
107
A parallel could be more aptly drawn between a choice-of-court agreement and an
arbitration agreement. However, the remedy of damages for breach of an arbitration agreement has its own history of development and involves certain issues which would not arise
from breach of a choice-of-court agreement such as whether the arbitral tribunal has competence to hear the damages claim and whether the court of the seat of arbitration or othercourts have jurisdiction to do the same. Therefore, it merits a full analysis in a separate
article.
108[2009] NSWSC 724 (31 July 2009).

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implied obligation not to invoke the jurisdiction of a court, which
will not apply the chosen law .... It may well be that the parties could
frame a provision which was promissory in effect, but – given theconventional function of a choice of law clause – it would requirevery clear language to make it promissory rather than declaratory.
It should be noted that the conclusion put forward above, namely that a contractual
claim seeking damages for breach of a choice-of-law agreement is not available,
does not preclude the possibility of a tort claim since such a claim does not rely on
the untenable concept of ‘breach of a choice-of-law agreement’ but is founded on
the broad context in which the action has been commenced. Thus, the institution ofan action may be deemed a tortious act if the circumstances are such that the institution of the action is, under the test of the Restatement, ‘primarily for a purpose
other than that of securing the proper adjudication of the claim’ or, under the test of
the Japanese Supreme Court, ‘plainly unreasonable in the light of the purpose of
the judicial system.’ If there is a choice-of-law agreement which, according to the
choice-of-law rules of the court seised of the tort claim, is valid and should begiven effect, the fact that the agreement would not be given effect in the foreign
forum in which the action has been brought may form a significant part of the circumstances making the institution of the action a tortious act. The circumstances inwhich the Russian banks brought actions in Russia as portrayed by Professor
Briggs in the passage quoted above might fit the profile.
It should be noted that also in the context of a tort claim, a parallel cannot
be drawn with the breach of a choice-of-court agreement since the ‘breach of achoice-of-law agreement’ is logically inconceivable. Thus, the first and the second
categories into which the cases involving the breach of a choice-of-court agreement have been classified have no relevance to the cases involving a choice-of-law
agreement. Nor can the analysis on the governing law109 be fully extended to thecases involving a choice-of-law agreement: if the applicable choice-of-law rules
contain a rule of displacement under which the otherwise applicable law is displaced by the law of the place with which the tort is manifestly more closely
connected, the proposition that the tort claim is closely connected with the governing law of the choice-of-law agreement is less defensible than the proposition
that the tort claim is closely connected with the governing law of the choice-ofcourt agreement.
The remaining question is whether a restitutionary remedy is available.
Suppose that the plaintiff has obtained a favourable judgment in a forum where thechoice-of-law agreement is denied effect – a judgment more favourable than thatwhich he would obtain in a forum where the agreement is given effect. Could thedefendant make a restitutionary claim to deprive the plaintiff of the gain? The
answer must be in the negative since it cannot be said that the favourable judgment
lacks legal foundation, given that a choice-of-law agreement does not mandate an
action to be brought in a particular forum.

109

Section III.B above.

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VII. Final Remarks
The previous and present articles have considered a number of issues. The analysis
has often been technical. However, underneath all those issues, there lies a fundamental policy question: where to draw a line between autonomy and coordination.
The starting point is autonomy. Each country, as a sovereign entity,
constructs from factual situations its own legal order according to its own law
which include choice-of-law rules. However, if each country sticks with its own
point of view, one and the same factual situation may be given different legal
meanings by different countries. Acknowledging the possibility that the interests ofprivate persons may be harmed through the fragmentation of their legal positions
along borderlines, private international law accommodates some mechanisms for
coordination with the legal orders of other countries.
Each country is free to determine the extent to which and the context inwhich autonomy is surrendered in favour of coordination in its private internationallaw. Thus, in the spirit of promoting coordination, some countries accept the second degree renvoi (i.e. the application of the law of a third country referred to by
the choice-of-law rules of the country which is specified by the choice-of-law rulesof the forum on the condition that the choice-of-law rules of the third country designate its own law). Some countries choose to determine preliminary questions by
the law governing the principal questions. And some countries opt to resolve theinternal conflict-of-law problems of a federal state by consultation with the law ofthat state. Also, many countries recognise foreign judgments without reviewing thesubstance albeit within the limit of its public policy. Some countries go further byembracing the theory of the recognition of situations (reconnaissance des situations).
The remedy of damages for breach of a choice-of-court agreement should
be seen in this wider context. It is true that the court determining the availability of
the remedy cannot act solely on its point of view since, as examined in the present
article on the assumption that the court seised of the claim characterises it as substantive, the availability depends also on the applicable law, which may, dependingon the facts, be a foreign legal system. Yet, the remedy is undeniably an instrument
to enhance autonomy, as apparent from the premise of the discussion that if a
breach of a choice-of-court agreement exists from the perspectives of the court
before which the remedy is sought, it is deemed to exist irrespective of whether itdoes exist from the viewpoints of other countries. It must be acknowledged thateven if deployed in the best intention as a shield for preserving autonomy, this
remedy may be viewed by other countries as a weapon capable of disturbing theirautonomy and may thus undermine comity. It shares this feature with an antisuit
injunction. The basic position, however, remains that a country and its courts arefree to stand up for their own belief that circumstances dictate that the aggrieved104

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party should be granted relief, so long as they stay clear of violating public international law.110

However, in the intra-EU context, in which ‘mutual trust’ is the name of thegame, a greater emphasis has been placed on coordination.
110

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