E-Commerce: Hague Treaty Talks On Long Track Again

Lengthy negotiations for an international treaty that covers jurisdiction on cross-border online transactions have been energized, ensuring at least another year of debate over what should be in the text.

"The process is going to continue," said a U.S. official involved in the negotiations being conducted under The Hague Conference on Private International Law in the Netherlands. At issue is the Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters.

A special meeting to consider how to proceed on the years-old, sometimes contentious talks held in The Hague in late April hatched a treaty-drafting group to prepare a new text by early 2003.

"The focus of the [April] meeting was how could we possibly scale back the convention in some way," the official said. The United States was in a minority role in pushing for a significantly smaller, less controversial treaty, with the possibility of enlargement later. Other countries, such as Australia, entered the meeting with the idea of returning to a more comprehensive draft from 1999.

As a compromise, the small drafting group will begin by focusing on "core" provisions for the treaty. It will pass its work on to a formal meeting of a special commission, which includes non-governmental organization, in the first half of 2003. Governments hope to conclude the treaty with a final diplomatic conference before the end of 2003.

Among the core provisions the drafting group will work with are that The Hague Conference secretariat is the coordinator of the process, and that the process will be transparent, with new drafts circulated publicly, and comments solicited from all interested parties.

One non-governmental source said the secretariat is preparing a new draft of the treaty for circulation in June.

Based on the core provisions, the treaty also would potentially cover cases involving contracts with businesses that had "choice of forum" clauses designating jurisdiction ahead of time, a company sued in its principle place of business, or where the business does not dispute the jurisdiction of the case.

The core draft also likely will cover physical torts, usually meant to involve injury to consumers as a result of a purchased product. Other areas of coverage would be cases involving trusts created for beneficiaries, suits brought against a company's branch and counter claims, which result when one party's suit against another opens the first party's jurisdiction for a counter suit by the second party.

Consumer groups, such as the Consumer Project on Technology led by James Love, are concerned about whether the treaty will contain speech and intellectual property torts, which they oppose.

They also remain concerned about "non-negotiated" contracts. For example, to buy software online, a consumer may be required to click to agree with existing contract terms. Groups also will monitor language on the "first sale" doctrine, regarding the exhaustion of rights.

by Teri Rucker
by William New

National Journal's Technology Daily