Party Autonomy to Choose a Forum: Philosophical and Historical Justification — Milana Karayanidi

Student post: Milana Karayanidi

On March 18-19, the Young Comparativists Committee (YCC) of the American Society of Comparative Law (ASCL) hosted its fifth annual global conference at Tulane University Law School. Many scholars presented their papers relating to teaching and writing in comparative law, and more than 100 scholars from 80 countries attended. At the conference, I presented my work on Normative View of Party Autonomy to Choose a Forum in a Comparative Perspective. My paper emphasized the unprecedented rate of recognition of forum selection clauses in international civil and commercial transactions. I discussed theoretical justifications of the principle of party autonomy in choosing jurisdiction, drawing upon Kantian ideas of individual autonomy, non-instrumentalist private law theory accounts, and the increasing dominance of contractual principles within the modern law of civil procedure. In addition, I examined the reasons for limiting party autonomy in view of considerations of equality and certain public interests. Furthermore, I examined the evolution of party autonomy to choose a forum within the national systems of the U.S., Germany and Russia. I argued that some of the rationales behind the historical developments that led to party autonomy recognition in these national systems can be used to justify party autonomy in international dispute resolution.

In particular, my paper focused on the concepts and ideas that support the overall enforcement of freely negotiated forum selection clauses. First, such enforcement is harmonious with the philosophical ideas of liberalism. Notions of autonomy such as those articulated by Kant are  fundamental to liberalism. Enlightened liberal thought further develops this idea, which generally requires respect for the rational choices of individual actors. These views provide the philosophical underpinnings for legal rules that enforce parties’ (individuals’) choice of a competent forum to settle their private disputes. Secondly, party autonomy to choose a forum finds support in rights-based private law theories. In particular, non-instrumentalists in private law claim that private law is autonomous and non-political. Accordingly, choices as to fora can be conceptualized as a right enjoyed by private actors to set the terms of their interaction in the manner most suited to their economic and practical interests. Finally, party autonomy to choose forum is consistent with a broader trend favoring the contractualization of civil procedure, i.e., the migration of contract theory postulates into procedure. Notwithstanding the procedural nature of forum selection clauses, because of contractualization of procedure, the contractual theoretical notions of consent and efficiency justify enforcement of all contractual terms, including forum selection clauses.

Furthermore, in searching to justify party autonomy in international dispute resolution, I traced its origin within certain national legal systems. I was particularly interested in the reasons for recognizing a private power to choose jurisdiction as it has developed in domestic legal regimes, with the aim of drawing lessons for the international setting. The three national systems of inquiry included the U.S., Germany and Russia, chosen based on their influential role in their corresponding regions. The historical exercise revealed a general evolution toward increased party autonomy to choose forum.

In the U.S., a widely accepted view attributes the beginning of recognition of the dispute resolution clauses to Bremen v. Zapata in 1972. Nevertheless, as Professor Marcus demonstrates, consensual adjudicatory procedure began in admiralty cases long before that. In conjunction with exercising their discretionary power to decline jurisdiction under forum non conveniens, courts recognized the parties’ choice of forum as another reason to do so. In addition, the notion of freedom of contract played a significant role in recognizing party autonomy to choose a forum. Finally, in Bremen, forum selection clauses were recognized as generally acceptable.

Based on my inquiry into the German legal history, party autonomy to choose forum was already recognized in the Code of Civil Procedure Rules of Germany enacted in 1877. Prior to that, no uniform legislation on civil law and civil procedure existed in Germany. Over thirty different legal systems in the German state featured various rules. In some of these territories (e.g., Bavaria), the French civil law traditions influenced local codification efforts. Furthermore, the French revolution, in proclaiming men free and equal in their rights, and upholding the principle of fair trial and due process of law, had its share of influence on the public officials and scholars in neighboring European states. Similarly, Russian civil procedure envisaged party autonomy to choose a forum in the nineteenth century. This happened first in the commercial context: the Statute of Commercial Procedure of 1832 recognized parties’ choice of (civil) court. In particular, it facilitated the option for merchants to utilize local civil courts to settle disputes instead of traveling to commercial courts in distant locations. Later, the Code of Civil Procedure, enacted during the great judicial reform of 1864, recognized party autonomy in choosing jurisdiction in civil matters as well. The drafters of these provisions drew on their familiarity with both Russian and Western (French and German) traditions.

In sum, the most significant historical factors that led to judicial enforcement of forum selection agreements included: practical convenience sought in admiralty cases, the value placed by courts on principles of freedom of contract, the concurrent development of forum non conveniens, the French revolution and the values that it proclaimed, and, the practicality of settling disputes locally at the convenience of the parties. Similar rationales, I argue—especially those relating to efficiency—may be carried over today and applied to justify party autonomy in international dispute resolution.

While identifying powerful considerations favoring the enforcement of forum selection clauses, my paper also acknowledges potentially countervailing considerations, including the ability of more sophisticated parties to take advantage of the less sophisticated.  To protect the rights of all market participants, including those with weaker bargaining power, some constraints should be placed on party autonomy to choose a forum. For example, forum selection clauses inserted unilaterally in contracts of adhesion should only be given effect where they do not abrogate the weaker party’s access to justice.

One might argue that limiting party autonomy is inconsistent with Kantian notions of individual autonomy. On the contrary, constrained party autonomy fully resonates with Kantian theory. When individuals act in conformity with the categorical imperative (doing the right thing because it is right), they will act freely, but, within the constraints imposed by considerations of morality. Appropriate constraints on party autonomy are necessary to protect the autonomy of others. Thus, the position defended in my paper is fully consistent with genuinely Kantian views (after all, we cannot be half-hearted Kantians, as Professor Stevens rightly observes).

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