05-08-2002

E-Commerce: Hague Leader Foresees Limited Treaty For Online Disputes

The head of the coordinating body for negotiations on a jurisdictional treaty covering cross-border online transactions predicts that a limited treaty will emerge next year.

Hans Van Loon, secretary general of the Hague Conference on Private International Law in the Netherlands, said in a Tuesday interview that pressure to expand the scope of the jurisdictional treaty during negotiations ultimately would fail.

"I think other states will continue to press for expanding the scope," Van Loon said. "But we will see. We will take a very pragmatic approach, with a view that if we start small, as we add rules on jurisdiction -- for example, for contracts with consumers -- we will see considerable difficulties and unresolved policy issues" that will prevent consensus from being reached.

At a late-April meeting, lead delegates from the 59 Hague countries agreed over the next year to draft a convention based on less controversial "core" provisions. They include more than sought by the United States but less than some other countries sought.

Barbara Wellbery, a partner at the Washington law firm Morrison and Foerster, called the Hague compromise a "mixed bag." "It's not what we had hoped, a straight line to a narrower convention," she said.

"I hope Hans Van Loon is right," Wellbery said Wednesday. "I don't think it's a given by any means. There's going to be constant pressure to expand the scope. This is a very fragile situation."

The Hague permanent bureau is preparing, for late-June publication, a "scientific paper" that will highlight difficult issues and explain what happens in starting with a smaller treaty, Van Loon said.

Van Loon will oversee the appointment of 15 to 20 experts to the drafting committee, which will work to build consensus. "We would eliminate in the first stage of work anything too sensitive," he said.

The drafting committee likely will meet three or four times, starting in September, he said. In the first half of 2003, the lead delegates will consider the convention again and could accept, reject or modify the drafting committee's work.

A U.S. official said Monday that he hopes the United States, based on its size, will have three or four designates on the drafting committee. He noted that the 15 nations of the European Union together are only a little larger in population and economy than the United States.

But Van Loon would not say how many U.S. representatives there would be. "We will make sure we have a credible geographic distribution," he said, including people familiar with the topics and some who have participated in previous work on the convention. He noted that the United States pays as much to the Hague conference as countries such as Germany, France or Japan.

Meanwhile, the private sector appears poised to increase its attention to the treaty. "If the Hague convention is going to come out in a way that does not thwart e-commerce, industry is going to have to really mobilize -- and not just in the U.S.," Wellbery said.

by William New

National Journal's Technology Daily