# EUR-Lex - 52014PC0046 - EN

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# 52014PC0046

**Proposal for a COUNCIL DECISION on the approval, on behalf of the European Union, of the Hague Convention of 30 June 2005 on Choice of Court Agreements /* COM/2014/046 final - 2014/0021 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

1.1.        Purpose of the proposal

The Commission is proposing that the EU
approves the 2005 Convention on Choice of Court Agreements. The Convention was
signed by the Union on 1 April 2009 on the basis of the Council Decision
2009/397/EC[1].

The Action Plan implementing the Stockholm
Programme announced the Commission's intention to propose approval of the
Convention in 2012.

Having the EU approve the Convention would
reduce legal uncertainty for EU companies trading outside the EU by ensuring
that choice of court agreements included in their contracts are respected and that
judgments issued by the courts designated in such agreements would be eligible
for recognition and enforcement in the other Contracting Parties to the
Convention.

Overall, approval of the Convention by the
EU would complement the realisation of the aims underlying the EU rules on the prorogation
of jurisdiction, by creating a harmonised set of rules within the EU in respect
of third states which will become Contracting Parties to the Convention.

1.2.        The Hague Convention of 30
June 2005 on Choice of Court Agreements

The Convention on Choice of Court Agreements
was concluded on 30 June 2005 under the auspices of the Hague Conference on
Private International Law. It is designed to offer greater legal certainty and
predictability for parties involved in business-to-business agreements and
international litigation by creating an optional worldwide judicial dispute
resolution mechanism alternative to the existing arbitration system.

In particular, the objective of the Convention is to promote international trade
and investment through enhanced judicial cooperation by introducing uniform
rules on jurisdiction based on exclusive choice of court agreements and on the recognition
and enforcement of judgments given by the chosen courts in its Contracting Parties.

The Convention seeks to achieve a balance
between (i) the need to guarantee to the parties that only the courts chosen by
them will hear the case and that the resulting judgment will be recognised and
enforced abroad, and (ii) the need to allow States to pursue some aspects of
their public policy, related in particular to the protection of weaker parties,
protection against serious unfairness in particular situations and guaranteed
respect for some grounds of exclusive jurisdiction of States.

1.3.        How
the Convention relates to the Brussels I Regulation

At EU level, international jurisdiction of the
Union courts based on choice of court agreements is governed by the Council
Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement
of judgments in civil and commercial matters (the Brussels I Regulation)[2] (to be replaced by
Regulation (EU) No 1215/2012 of the European Parliament and of the Council on
jurisdiction and the recognition and enforcement of judgments in civil and
commercial matters (Recast)[3]
as of 10 January 2015). The Brussels I Regulation does not however govern the
enforcement in the Union of choice of court agreements in favor of third State
courts[4].
This would be achieved once the Convention on Choice of Court Agreements is approved
by the Union.

The recent amendments to the Brussels I
Regulation (the Brussels I Regulation (recast)) have strengthened party
autonomy by ensuring that choice of court agreements may not be circumvented by
parties seizing other courts in violation of such agreements. At the same time,
these amendments ensure that the approach to choice of court agreements for
intra-EU situations is consistent with the one that would apply to extra-EU
situations under the Convention, once approved by the Union. The Brussels I
Regulation (recast) thus prepares the ground for the EU to proceed with the
approval of the Convention.

The relationship between the rules contained
in the Convention and the existing and future EU rules is set out in Article
26(6) of the Convention as follows:

‘This Convention shall not affect the
application of the rules of a Regional Economic Integration Organisation that
is a Party to this Convention, whether adopted before or after this Convention

a) where none of the parties is resident in a Contracting State that is not a Member State of the Regional Economic Integration Organisation;

b) as concerns the recognition or enforcement
of judgments as between Member States of the regional Economic Integration
Organisation.’

Consequently, the Convention affects the
application of the Brussels I Regulation if at least one of the parties is
resident in a Contracting State to the Convention. The Convention will prevail
over the jurisdiction rules of the Regulation except if both parties are EU
residents or come from third states, not Contracting Parties to the Convention.
With regard to the recognition and enforcement of judgments, the Regulation
will prevail where the court that made the judgment and the court in which
recognition and enforcement is sought are both located in the Union.

The Convention, once approved by the EU, will
therefore reduce the scope of application of the the Brussels I Regulation.
Nevertheless, this reduction of scope is acceptable in the light of the
increase in the respect for party autonomy at international level and increased
legal certainty for EU companies engaged in trade with third State parties.

1.4.        Benefits
for European business

A choice of court agreement is a significant
element in the negotiation of international contracts, as it ensures legal
predictability in the event of a dispute. It is therefore an important element
in the risk assessment for companies when engaging in international trade. The
figures collected in the course of preparing of the Commission’s proposal on
signature of the Convention and on the Brussels I Regulation (recast)[5] show the importance of
choice of court agreements for EU business in their B2B relations.

The effectiveness of
choice of court agreements within the EU is ensured through the Brussels I Regulation. Party autonomy needs to be
ensured not only within the EU but also beyond the EUʼs borders. The
Convention will give EU business the necessary legal certainty that their
choice of court agreements in favour of a court outside the EU are respected in
the EU, and that agreements in favour of a court in the EU are respected in
third States. It will also ensure that EU businesses can be confident that a
judgment given by the chosen court in the EU is eligible for recognition and
enforcement in third states, Contracting Parties to the Convention, and vice
versa.

The Commissionʼs impact assessment on
conclusion of the Convention by the EU (SEC/2008/2389
final) concluded that approving the Convention could increase businessʼs
propensity to include choice of court agreements in international contracts,
because of the greater legal certainty. Overall, it may act as a stimulus to
international trade.

The benefits to EU business that emerge
from approval by the EU of the Convention will increase with the number of
ratifications of the Convention in particular by the Unionʼs main commercial
partners.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

Before proposing the Council decision on the
signature of the Convention, the Commission carried out in 2008 an impact assessment
on conclusion of the Convention by the EU[6].
It found that conclusion of the Convention would be beneficial in terms of
promoting legal certainty and predictability for European businesses in respect
of third States.

The impact assessment suggested that, when
approving the Convention, the EU might consider making declarations under
Article 21 of the Convention excluding from its scope copyright and related
rights (where validity of these rights is linked to the Member States) and
insurance contracts (where the policyholder is domiciled in the EU and the risk
or insured event, item or property is related exclusively to the EU). Given the
impact on both industries and the fact that the views of the stakeholders have
in the past been divided, the Commission further considered the need to make
such declarations. Notably, its decision to propose the approval of the
Convention with a declaration on the scope of the Convention was preceded by
consultations with the Member States in the Council Working Party on Civil Law
Matters (General Questions) on 28 May 2013 (for further information see point
3.2 below).

3.           LEGAL ELEMENTS OF THE
PROPOSAL

3.1.        Union competence with
respect to the Convention

The Convention makes it possible for a
Regional Economic Integration Organisation, depending on the scope of the competencies
over the subject matter of the Convention, to conclude the Convention together
with its Member States or alone, with the consequence of binding its Member
States (Articles 29-30). The relevant declaration can be made at the time of
signing, acceptance, approval or accession to the Convention.

When the EU signed the Convention, it declared
in accordance with Article 30 of the Convention that it exercises competence
over all the matters governed by the Convention and that its Member States will
not be Contracting Parties to the Convention, but will be bound by it by virtue
of its conclusion by the EU. Therefore, there is no need for the EU to make a further
declaration under Article 30 when it approves the Convention.

3.2.        Declarations under the
Convention affecting its substantive scope

In the interests of flexibility and of maintaining
its potentially broad appeal, the Convention makes it possible for the
Contracting Parties to extend or reduce its substantive scope by making the
relevant declarations (Articles 19-22). Declarations may be made upon signature
or approval or at any time thereafter, and may be modified or withdrawn at any
time. When signing the Convention, the Union made no declarations under these
Articles. As mentioned above, the Commission carried out further
consultations with the Member States in May-June 2013 on the need for such declarations.
The results of the consultations are presented below.

3.2.1.     Declarations
under Articles 19, 20 and 22

Article 19 permits a State to make a declaration
by virtue of which its courts may refuse to determine disputes to which an
exclusive choice of court agreement applies in cases which show no other
connection with their State except for the choice of court. Article 20 permits a
State to make a declaration that its courts may refuse to
recognise or enforce a judgment given by a court of another Contracting State
if the parties were resident in the requested State, and the relationship of
the parties and all other elements relevant to the dispute, other than the
location of the chosen court, were connected only with the requested State. Articles
19 and 20 thus permit to exclude from the scope of the Convention certain
situations which, other than the choice of court, show no other international
element.

Article 22 offers the possibility for a State
to extend the scope of the Convention to cover non-exclusive choice of court
agreements as far as the recognition and enforcement of judgments is concerned.
Because of the reciprocity principle, the obligation to recognize and enforce judgments
based on non-exclusive choice of court agreements extends only to judgments
given by courts of other Contracting Parties that have themselves made Article
22 declarations.

With respect to Articles 19 and 20, it should be
pointed out that Union law recognises choice of court agreements in situations
where the choice of court is the only connection to the State of the chosen
court. Union law does not require an additional connection to the chosen State
besides the choice of court. There therefore seems no reason to exclude such
situations from the scope of the Convention. This was confirmed in the
consultations carried out by the Commission among Member States regarding
possible declarations under Articles 19-20. The Commission therefore does not
propose making declarations under these Articles.

With respect to Article 22, if the scope of
the Convention were extended, the recognition and enforcement of judgments
given on the basis of non-exclusive choice of court agreements would lead to
the result that the courts of EU Member States in general could not take
jurisdiction in situations where they would be seized by one of the parties after
a judgment based on a non-exclusive choice of court agreement had already been given
by the court of another Contracting Party which had made a declaration under
Article 22. The Commission does not propose making the declaration under
Article 22 when the Convention is approved. Given that the Article is based on reciprocity
principle, the potential declaration could be possibly considered at a later
stage once the interests of other Contracting Parties to the Convention in
extending its scope under Article 22 have become evident. The views of the
Member States which replied to the Commissionʼs consultation support in
principle the Commissionʼs proposal to proceed without declaration at the
moment.

3.2.2.     Declarations
under Article 21

3.2.2.1.  The
declarations in general

Article 2 of the Convention already provides
for a number of exclusions from its scope. In addition, Article 21 allows the
Contracting Party to extend the list of excluded matters by making a
declaration specifying the matter that it intends to exclude. Consequently, the
Convention would not apply with regard to that matter in the State making the
declaration, and, because of reciprocity, other States would not apply the
Convention to the matter in question where the chosen court is in the State which
had made the declaration. Furthermore, the following conditions must be met for
the declaration: there has to be a strong interest on the part of the declaring
state in not applying the Convention to a specific matter; the declaration may
not be broader than necessary and the specific matter excluded must be clearly
and precisely defined[7].

The Commission’s impact assessment of 2008 suggested
to give consideration to the Union making a declaration under Article 21 of the
Convention and thereby exclude from its scope matters relating to insurance
contracts - where the policyholder is domiciled in the EU and the risk or
insured event, item or property is related exclusively to the EU – and to
copyright and related rights where the validity of these rights is linked to a
Member State. The aim of such declarations would be to
protect the weaker party to an insurance contract (similar to the protection available
under the Brussels I Regulation) and to a copyright contract from having to
litigate in the chosen court which may have been imposed on them by a
co-contractor in a stronger position, and, arguably, to ensure the application
of certain standards on copyright and related rights established under EU law.

As mentioned earlier, the Commission has
carried out further consultations with the Member States on the need for any
declarations under Article 21, taking into account the policy with respect to
choice of court agreements in Union law and bearing in mind that due to the
reciprocity principle, the exclusion of a specific matter from the scope would mean
that choice of court clauses in favor of Union courts which might benefit EU
parties would not be enforced in third States Contracting Parties to the
Convention. Taking into account the results of the consultation, the Commission
proposes to limit the declaration under Article 21 to those matters where Union
law equally limits party autonomy. This is the case, for matters falling with
the scope of the Convention, only with respect to certain type of insurance
contracts concluded for purposes which can be regarded as being within the
trade or profession engaged in by the parties. Such a limited exclusion will
ensure a coherent approach to choice of court within and outside the Union.

3.2.2.2.  The
proposed declaration on insurance contracts

The Brussels I
Regulation (Section 3) provides for special protective jurisdiction in matters
of insurance aimed at protecting the weaker party (the policyholder, the
insured party or a beneficiary) and the economic interests of the general
public of the place where the weaker party is located. The insured party, as
plaintiff, therefore has a choice of suing the insurer at several places,
including the place where the insured party is domiciled; the insurer, as
plaintiff, can sue the insured party in principle only where the latter is
domiciled. These protective jurisdiction rules are based on the premise that
the insured party is always the weaker party, even if he acts as a commercial
operator in B2B relations. There is no change to this presumption in the
Brussels I Regulation (recast). For this reason, the possibility of the parties
concluding the choice of court agreement has been limited (Article 13 of the
Regulation). The protective jurisdiction rules in Section 3, in cases against
the insurer, apply only if the latter is domiciled or deemed to be domiciled (via
branch, agency or establishment) in the EU. There is no change to this
protective policy in the Brussels I Regulation (recast).

The Convention on its part applies to
insurance matters without limiting party autonomy to conclude choice of court agreements.
The only substantive limitation results from Article 2(1)(a) of the Convention
which excludes insurance contracts entered into by private persons as
consumers. This is partially contrary to the regime established in the Brussels
I Regulation insofar as, for instance, the Convention would apply to insurance
contracts concluded by SMEs. Once the Convention is approved by the EU, certain
insurance contracts which now fall under the Brussels I Regulation, e.g.
contracts between an EU policyholder and the EU branch of an insurer with headquarters
outside the EU (Article 9(2) of the Regulation) would fall within the scope of
the Convention (Article 26(6), in conjunction with Article 4(2) of the
Convention). Therefore, if the Convention were to be concluded without
excluding insurance contracts, there would be a lack of parallelism with the protective
policy established in the Brussels I Regulation which allows the insured party to
sue an EU insurer (or a EU branch of third State insurer) in his own place of
domicile irrespective of any other jurisdiction available under a choice of
court agreement. The downside of the complete exclusion of insurance contracts,
from the point of view of European insurers, is that choice of court clauses they
have negotiated with non-European policyholders would not be recognised and
enforced in third States which are Contracting Parties to the Convention. From
the perspective of the European policyholders, these would lose the advantage
of having the decisions of EU courtsʼ (chosen by the parties) recognised
and enforced outside the Union under the Convention. However, the advantages of
having at external level the same regime protecting the interests of EU weaker
parties as under EU internal legislation, out-weight these disadvantages.

The views of the Member States
which replied to the Commission’s consultation on this matter were mixed with an
almost equal numbers for and against excluding insurance contracts from the
scope of the Convention. The Commission therefore proposes, following the
impact assessment and in order to ensure consistency with EU internal
protective legislation, to exclude certain type of insurance matters from the
scope of the Convention without further conditions. Article 21 of the
Convention requires any declaration to be formulated by subject matter only. As
a result, any declaration under Article 21 could not be formulated in such a
way that it would benefit unilaterally EU parties.

Articles 13 and 14 of the Brussels I Regulation
do not limit party autonomy in insurance contracts in all cases. There are a
number of exceptions in which parties are allowed to designate the court
competent to hear their disputes. The proposed declaration is formulated in a
way so as to allow as much as possible those choice of court agreements which
are recognised in Union law to be equally recognised at the international level
through the Choice of Court Convention. Nevertheless, in light of the
formulation of the exceptions under Union law, which are designed to protect EU
policy holders only, and the requirement of the Convention that the declaration
should refer to subject matter only, it does not seem possible to ensure
complete coherence between the Convention on the one hand and Union law on the
other hand. In particular, Article 13(4) of the Brussels I Regulation
recognises and enforces choice of court agreements concluded with policy
holders domiciled outside the EU, unless the insurance is compulsory or relates
to immoveable property in a Member State. As it is not possible, under the
Convention, to distinguish between policy holders domiciled in and outside the Union, the Commission proposes not to mirror the exception of Article 13(4) in the
declaration. This would have the effect that insurance contracts concluded by
policyholders domiciled outside the Union would not be governed by the
Convention and would remain governed by internal Union law. As a result,
European companies concluding agreements with non-EU policyholders would be
ensured to see their choice of court agreement upheld by Union courts on the
basis of Article 13(4); European policyholders concluding agreements with
non-EU insurance providers would still have access to the EU courts on the
basis of Section 3 of Chapter II of the Brussels I Regulation.

Overall, the proposed declaration aims to ensure
that:

· 
the carve-out is as small as is needed to achieve
the goal of protecting the interests of weaker parties in insurance contracts as
reflected in the protective jurisdiction rules of the Brussels I Regulation.
The courts of the EU Member States will be allowed (on the basis of EU or
national law, when applicable) to hear the insurance dispute despite a choice
of court agreement in favour of the courts of a third State which is a Contracting
Party to the Convention;

· 
it is consistent with the Convention. The
declaration is based solely on the subject matter and is neutral;

· 
there is a parallelism with the Brussels I
Regulation which, in its Articles 13 and 14, defines the situations when choice
of court agreements are allowed in insurance contracts;

· 
both the excluded subject matter – insurance
contracts – and the situations when the carve-out does not apply are clearly
and precisely defined.

2014/0021 (NLE)

Proposal for a

COUNCIL DECISION

on the approval, on behalf of the European
Union, of the Hague Convention of 30 June 2005 on Choice of Court Agreements

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 81(2), in conjunction
with point (a) of the first subparagraph of Article 218(6) thereof,

Having regard to the proposal from the
European Commission,

Having regard to the consent of the
European Parliament[8],

Whereas:

(1)       The European Union is
working towards the establishment of a common judicial area based on the
principle of mutual recognition of judicial decisions.

(2)       The Convention on Choice
of Court Agreements concluded on 30 June 2005 under the auspices of the Hague
Conference on Private International Law (hereinafter referred to as the
Convention) makes a valuable contribution to promoting party autonomy in
international commercial transactions and increasing the predictability of
judicial solutions in such transactions. In particular, the Convention ensures
the necessary legal certainty for the parties that their choice of court
agreement is respected and that a judgment given by the chosen court is
eligible for recognition and enforcement in cross-border situations.

(3)       Article 29 of the
Convention allows Regional Economic Organisations such us the European Union to
sign, accept, approve or accede to the Convention. The Union signed the
Convention on 1 April 2009, subject to the conclusion of the Convention at a
later date, in accordance with Council Decision 2009/397/EC[9].

(4)       The Convention affects Union
secondary legislation on jurisdiction based on choice by the parties and the
recognition and enforcement of the resulting judgments, in particular Council
Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters[10]. Regulation
(EC) No 44/2001 is to be replaced as of 10 January 2015 by
Regulation (EU) No 1215/2012 of the European Parliament and of the
Council of 12 December 2012 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters[11].

(5)       Whereas Regulation (EU) No
1215/2012 prepared the ratification of the Convention by ensuring coherence
between the Union rules on choice of court in civil and commercial matters and
those of the Convention. It would therefore be appropriate for the Convention
to enter into force in the Union on the same date of the entry into application
of Regulation (EU) No 1215/2012.

(6)       When signing the
Convention, the Union declared under Article 30 of the Convention that it
exercises competence over all the matters governed by the Convention. Consequently,
the Member States should be bound by the Convention by virtue of its approval
by the Union.

(7)       Moreover, the Union, should, when approving the Convention, make the declaration allowed under Article 21
excluding from the scope of the Convention insurance contracts in general,
subject to defined exceptions. The purpose of the declaration is to preserve
the protective jurisdictional rules available to the policyholder, the insured party
or a beneficiary in insurance contracts under Section 3 of Regulation (EC) 44/2001. The exclusion should be
limited to whatever is necessary to protect the interests of the weaker parties
in insurance contracts.

(8)       The United Kingdom and Ireland are bound by Council Regulation (EC) No 44/2001 and are therefore taking
part in the adoption of this Decision.

(9)       In
accordance with Articles 1 and 2 of Protocol (No 22) on the position of Denmark,
annexed to the Treaty on European Union and to the Treaty on the Functioning of
the European Union, Denmark is not taking part in the adoption of this decision
and is not bound by it or subject to its application,

HAS ADOPTED THIS DECISION:

Article 1

The Hague Convention of 30 June 2005 on Choice of Court Agreements (̒the
Conventionʼ) is hereby approved on behalf of the European
Union.

The text of the
Convention is attached to this Decision as Annex I.

Article 2

The President of the Council shall
designate the person empowered to proceed, on behalf of the European Union, to
deposit the instrument referred to in Article 27(4) of the Convention in order
to express the consent of the European Union to be bound by the Agreement.

Article 3

When depositing the instrument referred to
in Article 27(4) of the Convention, the Union shall make the declaration
provided in Article 21 concerning insurance contracts.

The text of that declaration is attached as
Annex II.

Article 4

This
Decision shall enter into force on the day of its adoption.

Done at Brussels,

For
the Council

The
President

[1]               OJ L 133, 29.5.2009, p. 1.

[2]               OJ L 12, 16.1.2001, p. 1.

[3]               OJ L 351, 20.12.2012, p. 1.

[4]               Enforcement in the Union of choice of court
agreements in favour of Switzerland, Iceland and Norway courts is governed by
the 2007 Lugano Convention on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters.

[5]               Commission staff working paper accompanying the proposal
for a Council Decision on the signing by the European Community of the
Convention on Choice of Court Agreements, SEC(2008) 2389 of 5 9 2008 and Impact
Assessment accompanying the Commission’s proposal for the Brussels I Regulation
(recast), SEC (2010) 1547 final of 14 12 2010.

[6]               Referred to in footnote 5.

[7]               As further explained in the
Explanatory Report to the Convention: ‘it was intended by the Diplomatic
Session that this provision should apply only to discrete areas of law of the
kind excluded by Article 2(2). The declaration cannot use any criterion other
than subject matter. It could, for example, exclude ‘contracts of marine
insurance’, but not ‘contracts of marine insurance where the chosen court is
situated in another State’’ (paragraph 235). Thus, the only criterion permitted
is that of subject matter.

[8]               OJ C , , p. .

[9]               OJ L 133, 29.5.2009, p. 1.

[10]             OJ L 12, 16.1.2001, p. 1.

[11]             OJ L 351, 20.12.2012, p. 1.

ANNEX
1

CONVENTION
ON CHOICE OF COURT AGREEMENTS

The States Parties to the
present Convention,

Desiring to promote
international trade and investment through enhanced judicial cooperation,

Believing that such
cooperation can be enhanced by uniform rules on jurisdiction and on recognition
and enforcement of foreign judgments in civil or commercial matters,

Believing that such
enhanced cooperation requires in particular an international legal regime that
provides certainty and ensures the effectiveness of exclusive choice of court
agreements between parties to commercial transactions and that governs the
recognition and enforcement of judgments resulting from proceedings based on
such agreements,

Have resolved to conclude
this Convention and have agreed upon the following provisions:

CHAPTER I

SCOPE AND DEFINITIONS

Article 1

Scope

1. This Convention shall
apply in international cases to exclusive choice of court agreements concluded
in civil or commercial matters.

2. For the purposes of
Chapter II, a case is international unless the parties are resident in the same
  Contracting State and the relationship of the parties and all other elements
relevant to the dispute, regardless of the location of the chosen court, are
connected only with that State.

3. For the purposes of
Chapter III, a case is international where recognition or enforcement of a
foreign judgment is sought.

Article 2

Exclusions from scope

1. This Convention shall
not apply to exclusive choice of court agreements:

(a) to which a natural
person acting primarily for personal, family or household purposes (a consumer)
is a party;

(b) relating to contracts
of employment, including collective agreements.

2. This Convention shall
not apply to the following matters:

(a) the status and legal
capacity of natural persons;

(b) maintenance
obligations;

(c) other family law
matters, including matrimonial property regimes and other rights or obligations
arising out of marriage or similar relationships;

(d) wills and succession;

(e) insolvency,
composition and analogous matters;

(f) the carriage of
passengers and goods;

(g) marine pollution,
limitation of liability for maritime claims, general average, and emergency
towage and salvage;

(h) anti-trust
(competition) matters;

(i) liability for nuclear
damage;

(j) claims for personal
injury brought by or on behalf of natural persons;

(k) tort or delict claims
for damage to tangible property that do not arise from a contractual
relationship;

(l) rights in rem in
immovable property, and tenancies of immovable property;

(m) the validity, nullity,
or dissolution of legal persons, and the validity of decisions of their organs;

(n) the validity of
intellectual property rights other than copyright and related rights;

(o) infringement of
intellectual property rights other than copyright and related rights, except
where infringement proceedings are brought for breach of a contract between the
parties relating to such rights, or could have been brought for breach of that
contract;

(p) the validity of
entries in public registers.

3. Notwithstanding
paragraph 2, proceedings are not excluded from the scope of this Convention
where a matter excluded under that paragraph arises merely as a preliminary
question and not as an object of the proceedings. In particular, the mere fact
that a matter excluded under paragraph 2 arises by way of defence does not
exclude proceedings from the Convention, if that matter is not an object of the
proceedings.

4. This Convention shall
not apply to arbitration and related proceedings.

5. Proceedings are not
excluded from the scope of this Convention by the mere fact that a State,
including a government, a governmental agency or any person acting for a State,
is a party thereto.

6. Nothing in this
Convention shall affect privileges and immunities of States or of international
organisations, in respect of themselves and of their property.

Article 3

Exclusive choice of
court agreements

For the purposes of this
Convention:

(a) ‘exclusive choice of
court agreement’ means an agreement concluded by two or more parties that meets
the requirements of paragraph (c) and designates, for the purpose of deciding
disputes which have arisen or may arise in connection with a particular legal
relationship, the courts of one Contracting State or one or more specific
courts of one Contracting State to the exclusion of the jurisdiction of any
other courts;

(b) a choice of court
agreement which designates the courts of one Contracting State or one or more
specific courts of one Contracting State shall be deemed to be exclusive unless
the parties have expressly provided otherwise;

(c) an exclusive choice of
court agreement must be concluded or documented:

(i) in writing; or

(ii) by any other means of
communication which renders information accessible so as to be usable for
subsequent reference;

(d) an exclusive choice of
court agreement that forms part of a contract shall be treated as an agreement
independent of the other terms of the contract. The validity of the exclusive
choice of court agreement cannot be contested solely on the ground that the
contract is not valid.

Article 4

Other definitions

1. In this Convention,
‘judgment’ means any decision on the merits given by a court, whatever it may
be called, including a decree or order, and a determination of costs or
expenses by the court (including an officer of the court), provided that the
determination relates to a decision on the merits which may be recognised or
enforced under this Convention. An interim measure of protection is not a
judgment.

2. For the purposes of
this Convention, an entity or person other than a natural person shall be
considered to be resident in the State:

(a) where it has its
statutory seat;

(b) under whose law it was
incorporated or formed;

(c) where it has its
central administration; or

(d) where it has its
principal place of business.

CHAPTER II

JURISDICTION

Article 5

Jurisdiction of the
chosen court

1. The court or courts of
a Contracting State designated in an exclusive choice of court agreement shall
have jurisdiction to decide a dispute to which the agreement applies, unless
the agreement is null and void under the law of that State.

2. A court that has
jurisdiction under paragraph 1 shall not decline to exercise jurisdiction on
the ground that the dispute should be decided in a court of another State.

3. The preceding
paragraphs shall not affect rules:

(a) on jurisdiction
related to subject matter or to the value of the claim;

(b) on the internal
allocation of jurisdiction among the courts of a Contracting State. However, where the chosen court has discretion as to whether to transfer a case, due
consideration should be given to the choice of the parties.

Article 6

Obligations of a court
not chosen

A court of a Contracting State other than that of the chosen court shall suspend or dismiss
proceedings to which an exclusive choice of court agreement applies unless:

(a) the agreement is null
and void under the law of the State of the chosen court;

(b) a party lacked the
capacity to conclude the agreement under the law of the State of the court
seised;

(c) giving effect to the
agreement would lead to a manifest injustice or would be manifestly contrary to
the public policy of the State of the court seised;

(d) for exceptional
reasons beyond the control of the parties, the agreement cannot reasonably be
performed; or

(e) the chosen court has
decided not to hear the case.

Article 7

Interim measures of
protection

Interim measures of
protection are not governed by this Convention. This Convention neither
requires nor precludes the grant, refusal or termination of interim measures of
protection by a court of a Contracting State and does not affect whether or not
a party may request or a court should grant, refuse or terminate such measures.

CHAPTER III

RECOGNITION AND
ENFORCEMENT

Article 8

Recognition and
enforcement

1. A judgment given by a
court of a Contracting State designated in an exclusive choice of court
agreement shall be recognised and enforced in other Contracting States in accordance
with this Chapter. Recognition or enforcement may be refused only on the
grounds specified in this Convention.

2. Without prejudice to
such review as is necessary for the application of the provisions of this
Chapter, there shall be no review of the merits of the judgment given by the
court of origin. The court addressed shall be bound by the findings of fact on
which the court of origin based its jurisdiction, unless the judgment was given
by default.

3. A judgment shall be
recognised only if it has effect in the State of origin, and shall be enforced
only if it is enforceable in the State of origin.

4. Recognition or
enforcement may be postponed or refused if the judgment is the subject of
review in the State of origin or if the time limit for seeking ordinary review
has not expired. A refusal does not prevent a subsequent application for
recognition or enforcement of the judgment.

5. This Article shall also
apply to a judgment given by a court of a Contracting State pursuant to a
transfer of the case from the chosen court in that Contracting State as permitted by Article 5(3). However, where the chosen court had discretion as to
whether to transfer the case to another court, recognition or enforcement of
the judgment may be refused against a party who objected to the transfer in a
timely manner in the State of origin.

Article 9

Refusal of recognition
or enforcement

Recognition or enforcement
may be refused if:

(a) the agreement was null
and void under the law of the State of the chosen court, unless the chosen
court has determined that the agreement is valid;

(b) a party lacked the
capacity to conclude the agreement under the law of the requested State;

(c) the document which
instituted the proceedings or an equivalent document, including the essential
elements of the claim:

(i) was not notified to
the defendant in sufficient time and in such a way as to enable him to arrange
for his defence, unless the defendant entered an appearance and presented his
case without contesting notification in the court of origin, provided that the
law of the State of origin permitted notification to be contested; or

(ii) was notified to the
defendant in the requested State in a manner that is incompatible with
fundamental principles of the requested State concerning service of documents;

(d) the judgment was
obtained by fraud in connection with a matter of procedure;

(e) recognition or
enforcement would be manifestly incompatible with the public policy of the
requested State, including situations where the specific proceedings leading to
the judgment were incompatible with fundamental principles of procedural
fairness of that State;

(f) the judgment is
inconsistent with a judgment given in the requested State in a dispute between
the same parties; or

(g) the judgment is
inconsistent with an earlier judgment given in another State between the same
parties on the same cause of action, provided that the earlier judgment fulfils
the conditions necessary for its recognition in the requested State.

Article 10

Preliminary questions

1. Where a matter excluded
under Article 2(2), or under Article 21, arose as a preliminary question, the
ruling on that question shall not be recognised or enforced under this
Convention.

2. Recognition or
enforcement of a judgment may be refused if, and to the extent that, the
judgment was based on a ruling on a matter excluded under Article 2(2).

3. However, in the case of
a ruling on the validity of an intellectual property right other than copyright
or a related right, recognition or enforcement of a judgment may be refused or
postponed under the preceding paragraph only where:

(a) that ruling is
inconsistent with a judgment or a decision of a competent authority on that
matter given in the State under the law of which the intellectual property
right arose; or

(b) proceedings concerning
the validity of the intellectual property right are pending in that State.

4. Recognition or
enforcement of a judgment may be refused if, and to the extent that, the
judgment was based on a ruling on a matter excluded pursuant to a declaration
made by the requested State under Article 21.

Article 11

Damages

1. Recognition or
enforcement of a judgment may be refused if, and to the extent that, the
judgment awards damages, including exemplary or punitive damages, that do not
compensate a party for actual loss or harm suffered.

2. The court addressed
shall take into account whether and to what extent the damages awarded by the
court of origin serve to cover costs and expenses relating to the proceedings.

Article 12

Judicial settlements (transactions
judiciaires)

Judicial settlements (transactions
judiciaires) which a court of a Contracting State designated in an
exclusive choice of court agreement has approved, or which have been concluded
before that court in the course of proceedings, and which are enforceable in
the same manner as a judgment in the State of origin, shall be enforced under
this Convention in the same manner as a judgment.

Article 13

Documents to be
produced

1. The party seeking
recognition or applying for enforcement shall produce:

(a) a complete and
certified copy of the judgment;

(b) the exclusive choice
of court agreement, a certified copy thereof, or other evidence of its
existence;

(c) if the judgment was
given by default, the original or a certified copy of a document establishing
that the document which instituted the proceedings or an equivalent document
was notified to the defaulting party;

(d) any documents
necessary to establish that the judgment has effect or, where applicable, is
enforceable in the State of origin;

(e) in the case referred
to in Article 12, a certificate of a court of the State of origin that the
judicial settlement or a part of it is enforceable in the same manner as a
judgment in the State of origin.

2. If the terms of the
judgment do not permit the court addressed to verify whether the conditions of
this Chapter have been complied with, that court may require any necessary
documents.

3. An application for
recognition or enforcement may be accompanied by a document, issued by a court
(including an officer of the court) of the State of origin, in the form
recommended and published by the Hague Conference on Private International Law.

4. If the documents
referred to in this Article are not in an official language of the requested
State, they shall be accompanied by a certified translation into an official
language, unless the law of the requested State provides otherwise.

Article 14

Procedure

The procedure for
recognition, declaration of enforceability or registration for enforcement, and
the enforcement of the judgment, are governed by the law of the requested State
unless this Convention provides otherwise. The court addressed shall act
expeditiously.

Article 15

Severability

Recognition or enforcement
of a severable part of a judgment shall be granted where recognition or
enforcement of that part is applied for, or only part of the judgment is
capable of being recognised or enforced under this Convention.

CHAPTER IV

GENERAL CLAUSES

Article 16

Transitional provisions

1. This Convention shall
apply to exclusive choice of court agreements concluded after its entry into
force for the State of the chosen court.

2. This Convention shall
not apply to proceedings instituted before its entry into force for the State
of the court seised.

Article 17

Contracts of insurance
and reinsurance

1. Proceedings under a
contract of insurance or reinsurance are not excluded from the scope of this
Convention on the ground that the contract of insurance or reinsurance relates
to a matter to which this Convention does not apply.

2. Recognition and
enforcement of a judgment in respect of liability under the terms of a contract
of insurance or reinsurance may not be limited or refused on the ground that
the liability under that contract includes liability to indemnify the insured
or reinsured in respect of:

(a) a matter to which this
Convention does not apply; or

(b) an award of damages to
which Article 11 might apply.

Article 18

No legalisation

All documents forwarded or
delivered under this Convention shall be exempt from legalisation or any
analogous formality, including an Apostille.

Article 19

Declarations limiting
jurisdiction

A State may declare that
its courts may refuse to determine disputes to which an exclusive choice of
court agreement applies if, except for the location of the chosen court, there
is no connection between that State and the parties or the dispute.

Article 20

Declarations limiting
recognition and enforcement

A State may declare that
its courts may refuse to recognise or enforce a judgment given by a court of
another Contracting State if the parties were resident in the requested State,
and the relationship of the parties and all other elements relevant to the
dispute, other than the location of the chosen court, were connected only with
the requested State.

Article 21

Declarations with
respect to specific matters

1. Where a State has a
strong interest in not applying this Convention to a specific matter, that
State may declare that it will not apply the Convention to that matter. The
State making such a declaration shall ensure that the declaration is no broader
than necessary and that the specific matter excluded is clearly and precisely
defined.

2. With regard to that matter,
the Convention shall not apply:

(a) in the Contracting
State that made the declaration;

(b) in other Contracting States, where an exclusive choice of court agreement designates the courts,
or one or more specific courts, of the State that made the declaration.

Article 22

Reciprocal declarations
on non-exclusive choice of court agreements

1. A Contracting State may
declare that its courts will recognise and enforce judgments given by courts of
other Contracting States designated in a choice of court agreement concluded by
two or more parties that meets the requirements of Article 3(c), and
designates, for the purpose of deciding disputes which have arisen or may arise
in connection with a particular legal relationship, a court or courts of one or
more Contracting States (a non-exclusive choice of court agreement).

2. Where recognition or
enforcement of a judgment given in a Contracting State that has made such a
declaration is sought in another Contracting State that has made such a
declaration, the judgment shall be recognised and enforced under this
Convention, if:

(a) the court of origin
was designated in a non-exclusive choice of court agreement;

(b) there exists neither a
judgment given by any other court before which proceedings could be brought in
accordance with the non-exclusive choice of court agreement, nor a proceeding
pending between the same parties in any other such court on the same cause of
action; and

(c) the court of origin
was the court first seised.

Article 23

Uniform interpretation

In the interpretation of
this Convention, regard shall be had to its international character and to the
need to promote uniformity in its application.

Article 24

Review of operation of
the Convention

The Secretary General of
the Hague Conference on Private International Law shall at regular intervals
make arrangements for:

(a) review of the
operation of this Convention, including any declarations; and

(b) consideration of
whether any amendments to this Convention are desirable.

Article 25

Non-unified legal
systems

1. In relation to a Contracting State in which two or more systems of law apply in different territorial
units with regard to any matter dealt with in this Convention:

(a) any reference to the
law or procedure of a State shall be construed as referring, where appropriate,
to the law or procedure in force in the relevant territorial unit;

(b) any reference to
residence in a State shall be construed as referring, where appropriate, to
residence in the relevant territorial unit;

(c) any reference to the
court or courts of a State shall be construed as referring, where appropriate,
to the court or courts in the relevant territorial unit;

(d) any reference to a
connection with a State shall be construed as referring, where appropriate, to
a connection with the relevant territorial unit.

2. Notwithstanding the
preceding paragraph, a Contracting State with two or more territorial units in
which different systems of law apply shall not be bound to apply this
Convention to situations which involve solely such different territorial units.

3. A court in a
territorial unit of a Contracting State with two or more territorial units in
which different systems of law apply shall not be bound to recognise or enforce
a judgment from another Contracting State solely because the judgment has been
recognised or enforced in another territorial unit of the same Contracting State under this Convention.

4. This Article shall not
apply to a Regional Economic Integration Organisation.

Article 26

Relationship with other
international instruments

1. This Convention shall
be interpreted so far as possible to be compatible with other treaties in force
for Contracting States, whether concluded before or after this Convention.

2. This Convention shall
not affect the application by a Contracting State of a treaty, whether
concluded before or after this Convention, in cases where none of the parties
is resident in a Contracting State that is not a Party to the treaty.

3. This Convention shall
not affect the application by a Contracting State of a treaty that was
concluded before this Convention entered into force for that Contracting State, if applying this Convention would be inconsistent with the obligations of
that Contracting State to any non-Contracting State. This paragraph shall also
apply to treaties that revise or replace a treaty concluded before this
Convention entered into force for that Contracting State, except to the extent
that the revision or replacement creates new inconsistencies with this Convention.

4. This Convention shall
not affect the application by a Contracting State of a treaty, whether
concluded before or after this Convention, for the purposes of obtaining
recognition or enforcement of a judgment given by a court of a Contracting State that is also a Party to that treaty. However, the judgment shall not be
recognised or enforced to a lesser extent than under this Convention.

5. This Convention shall
not affect the application by a Contracting State of a treaty which, in
relation to a specific matter, governs jurisdiction or the recognition or
enforcement of judgments, even if concluded after this Convention and even if
all States concerned are Parties to this Convention.

This paragraph shall apply
only if the Contracting State has made a declaration in respect of the treaty
under this paragraph. In the case of such a declaration, other Contracting
States shall not be obliged to apply this Convention to that specific matter to
the extent of any inconsistency, where an exclusive choice of court agreement
designates the courts, or one or more specific courts, of the Contracting State that made the declaration.

6. This Convention shall
not affect the application of the rules of a Regional Economic Integration
Organisation that is a Party to this Convention, whether adopted before or
after this Convention:

(a) where none of the
parties is resident in a Contracting State that is not a Member State of the Regional Economic Integration Organisation;

(b) as concerns the
recognition or enforcement of judgments as between Member States of the
Regional Economic Integration Organisation.

CHAPTER V

FINAL CLAUSES

Article 27

Signature,
ratification, acceptance, approval or accession

1. This Convention is open
for signature by all States.

2. This Convention is
subject to ratification, acceptance or approval by the signatory States.

3. This Convention is open
for accession by all States.

4. Instruments of
ratification, acceptance, approval or accession shall be deposited with the
Ministry of Foreign Affairs of the Kingdom of the Netherlands, depositary of
the Convention.

Article 28

Declarations with
respect to non-unified legal systems

1. If a State has two or
more territorial units in which different systems of law apply in relation to
matters dealt with in this Convention, it may at the time of signature,
ratification, acceptance, approval or accession declare that the Convention
shall extend to all its territorial units or only to one or more of them and
may modify this declaration by submitting another declaration at any time.

2. A declaration shall be
notified to the depositary and shall state expressly the territorial units to
which the Convention applies.

3. If a State makes no
declaration under this Article, the Convention shall extend to all territorial
units of that State.

4. This Article shall not
apply to a Regional Economic Integration Organisation.

Article 29

Regional Economic
Integration Organisations

1. A Regional Economic
Integration Organisation which is constituted solely by sovereign States and
has competence over some or all of the matters governed by this Convention may
similarly sign, accept, approve or accede to this Convention. The Regional
Economic Integration Organisation shall in that case have the rights and obligations
of a Contracting State, to the extent that the Organisation has competence over
matters governed by this Convention.

2. The Regional Economic
Integration Organisation shall, at the time of signature, acceptance, approval
or accession, notify the depositary in writing of the matters governed by this
Convention in respect of which competence has been transferred to that
Organisation by its Member States. The Organisation shall promptly notify the
depositary in writing of any changes to its competence as specified in the most
recent notice given under this paragraph.

3. For the purposes of the
entry into force of this Convention, any instrument deposited by a Regional
Economic Integration Organisation shall not be counted unless the Regional
Economic Integration Organisation declares in accordance with Article 30 that
its Member States will not be Parties to this Convention.

4. Any reference to a ‘Contracting State’ or ‘State’ in this Convention shall apply equally, where appropriate,
to a Regional Economic Integration Organisation that is a Party to it.

Article 30

Accession by a Regional
Economic Integration Organisation without its Member States

1. At the time of
signature, acceptance, approval or accession, a Regional Economic Integration
Organisation may declare that it exercises competence over all the matters
governed by this Convention and that its Member States will not be Parties to
this Convention but shall be bound by virtue of the signature, acceptance,
approval or accession of the Organisation.

2. In the event that a
declaration is made by a Regional Economic Integration Organisation in
accordance with paragraph 1, any reference to a ‘Contracting State’ or ‘State’ in this Convention shall apply equally, where appropriate, to the Member
States of the Organisation.

Article 31

Entry into force

1. This Convention shall
enter into force on the first day of the month following the expiration of
three months after the deposit of the second instrument of ratification,
acceptance, approval or accession referred to in Article 27.

2. Thereafter this
Convention shall enter into force:

(a) for each State or
Regional Economic Integration Organisation subsequently ratifying, accepting,
approving or acceding to it, on the first day of the month following the
expiration of three months after the deposit of its instrument of ratification,
acceptance, approval or accession;

(b) for a territorial unit
to which this Convention has been extended in accordance with Article 28(1), on
the first day of the month following the expiration of three months after the
notification of the declaration referred to in that Article.

Article 32

Declarations

1. Declarations referred
to in Articles 19, 20, 21, 22 and 26 may be made upon signature, ratification,
acceptance, approval or accession or at any time thereafter, and may be
modified or withdrawn at any time.

2. Declarations,
modifications and withdrawals shall be notified to the depositary.

3. A declaration made at
the time of signature, ratification, acceptance, approval or accession shall
take effect simultaneously with the entry into force of this Convention for the
State concerned.

4. A declaration made at a
subsequent time, and any modification or withdrawal of a declaration, shall
take effect on the first day of the month following the expiration of three
months after the date on which the notification is received by the depositary.

5. A declaration under
Articles 19, 20, 21 and 26 shall not apply to exclusive choice of court
agreements concluded before it takes effect.

Article 33

Denunciation

1. This Convention may be
denounced by notification in writing to the depositary. The denunciation may be
limited to certain territorial units of a non-unified legal system to which
this Convention applies.

2. The denunciation shall
take effect on the first day of the month following the expiration of 12 months
after the date on which the notification is received by the depositary. Where a
longer period for the denunciation to take effect is specified in the notification,
the denunciation shall take effect upon the expiration of such longer period
after the date on which the notification is received by the depositary.

Article 34

Notifications by the
depositary

The depositary shall
notify the Members of the Hague Conference on Private International Law, and
other States and Regional Economic Integration Organisations which have signed,
ratified, accepted, approved or acceded in accordance with Articles 27, 29 and
30 of the following:

(a) the signatures,
ratifications, acceptances, approvals and accessions referred to in Articles
27, 29 and 30;

(b) the date on which this
Convention enters into force in accordance with Article 31;

(c) the notifications,
declarations, modifications and withdrawals of declarations referred to in
Articles 19, 20, 21, 22, 26, 28, 29 and 30;

(d) the denunciations
referred to in Article 33.

In witness whereof the
undersigned, being duly authorised thereto, have signed this Convention.

Done at The Hague, on 30
June 2005, in the English and French languages, both texts being equally
authentic, in a single copy which shall be deposited in the archives of the
Government of the Kingdom of the Netherlands, and of which a certified copy
shall be sent, through diplomatic channels, to each of the Member States of the
Hague Conference on Private International Law as of the date of its Twentieth
Session and to each State which participated in that Session.

ANNEX
II

Declaration
by the Union in accordance with Article 21 of the Convention on Choice of Court
Agreements

1. The European Union hereby declares under
Article 21 of the Convention that, except as provided below, it will not apply
the Convention to insurance contracts.

2. This declaration shall not apply where:

(a) 
the choice of court agreement is entered into
after a dispute has arisen, or

(b) 
without prejudice to Article 1, paragraph 2 of
the Convention, the choice of court agreement is concluded between a
policyholder and an insurer, both of whom are at the time of conclusion of the
contract domiciled or habitually resident in the same State and which has the
effect of conferring jurisdiction on the courts of that State even if the
harmful event were to occur abroad, provided that such an agreement is not
contrary to the law of that State, or

(c) 
the choice of court agreement relates to a
contract of insurance in so far as it covers one or more of large risks as
specified in paragraph 3.

3. Large risks referred to in point (c) of
paragraph 2 include transport (aircraft, ships, rail and goods in transit),
credit and suretyship, as well as other risks where the policyholder carries on
a business of a certain size, as set out in paragraph 4.

4. The
following are the risks referred to in paragraph 3:

(2) 
any loss of or damage to:

(a) 
seagoing ships, installations situated offshore
or on the high seas, or aircraft, arising from perils which relate to their use
for commercial purposes;

(b) 
goods in transit, other than passengers'
baggage, where the transit consists of or includes carriage by such ships or
aircraft;

(3) 
any liability, other than for bodily injury to
passengers or loss of or damage to their baggage:

(a) 
arising out of the use or operation of ships,
installations or aircraft as referred to in point 1(a) insofar as, in respect
of the latter, the law of the State bound by this Convention in which such aircraft
are registered does not prohibit agreements on jurisdiction regarding insurance
of such risks;

(b) 
for loss or damage caused by goods in transit as
described in point 1(b);

(4) 
any financial loss connected with the use or
operation of ships, installations or aircraft as referred to in point 1(a), in
particular loss of freight or charter-hire;

(5) 
any risk or interest connected with any of those
referred to in points 1 to 3;

(6) 
notwithstanding points 1 to 4, all following large
risks:

(a) 
a damage to or loss of railway rolling stock;

(b) 
a damage to or loss of aircraft;

(c) 
a damage to or loss of river and canal vessels,
lake vessels, sea vessels;

(d) 
a damage to or loss of goods in transit or baggage,
irrespective of the form of transport;

(e) 
a liability arising out of the use of aircraft
(including carrier’s liability);

(f) 
a liability arising out of the use of ships,
vessels or boats on the sea, lakes, rivers or canals (including carrier’s
liability);

(g) 
any credit or suretyship risk where the policy
holder is engaged professionally in an industrial or commercial activity or in
one of the liberal professions and the risk relates to such activity;

(h) 
in case of a policy holder that carries on a
business of a certain size:

· 
any loss or damage to land vehicles (including
motor vehicles);

· 
any loss of or damage to property due to fire,
explosion, natural forces (including storm), nuclear energy, land subsidence,
hail, frost or theft;

· 
any liability arising out of the use of motor
vehicles operating on the land (including carrier’s liability);

· 
any miscellaneous financial loss deriving from
employment risks, insufficiency of income (general), bad weather, loss of
benefits, continuing general expenses, unforeseen trading expenses, loss of
market value, loss of rent or revenue, other indirect trading loss, other
non-trading financial loss or other forms of financial loss.

5. For
the purposes of point 5(h), the policy holder that carries
on a business of a certain size means the policyholder that exceeds the limits
of at least two of the following criteria:

· 
a balance-sheet total of EUR 6,2 million;

· 
a net turnover of EUR 12,8 million;

· 
an average number of 250 employees during the
financial year.