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Publication Date

3-2011

Document Type

Article

Abstract

Three federal appellate decisions have now addressed whether, in cases subject to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), parties may agree to waive their right to remove to federal court through forum selection clauses. In all three cases, each court held that to be enforceable the waiver must be expressed in "clear and unequivocal" terms or meet some other heightened standard of scrutiny. These court decisions present several significant points. First, the decisions of these courts to deviate from general principles of contract construction and analyze the waiver issue under heightened scrutiny is out of step with the principles established by the Supreme Court of the United States for construing forum selection clauses in international contracts and arbitration provisions generally. Second, these decisions conflict with the well-recognized ability of foreign commercial entities to draft such clauses with clarity to avoid waiver of the right to remove. Third, the court decisions are at odds with the international business community's preference for liberal enforcement of forum selection clauses, as the provisions of the Hague Convention on Choice of Court Agreements (Hague Convention) points out. Finally, the decisions impose a preference for federal court adjudication on parties' privately negotiated agreements that is absent from the text of the New York Convention. However, contrary to the prevailing judicial view, the intent of parties to waive their right to remove in cases subject to the New York Convention should be determined-as it would be in any other case-by applying ordinary principles of contract construction.

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