Introduction
This essay explores whether the “New York Star” principle, derived from the case of *The Hollandia* (1982), applies to jurisdiction clauses in the context of international commercial contracts. The principle, often associated with the enforceability of choice of law and forum selection clauses under the Hague Rules, raises questions about its relevance to jurisdiction agreements more broadly. This analysis is pertinent for understanding how courts balance contractual autonomy with statutory obligations, particularly in the United Kingdom. The essay will first outline the “New York Star” principle, then assess its application to jurisdiction clauses through relevant case law and academic perspectives, and finally consider the implications for legal practice. Through this, a sound understanding of the intersection between private agreements and public policy will be demonstrated.
Understanding the “New York Star” Principle
The “New York Star” principle emerged in the context of carriage of goods by sea, specifically from the House of Lords decision in *The Hollandia* (1982), also reported as *Owners of Cargo Lately Laden on Board Ship or Vessel Hollandia v Owners of Ship or Vessel Hollandia (The Hollandia)*. In this case, the court held that a choice of law clause selecting a jurisdiction with lower liability limits than those mandated by the Hague Rules (as implemented by the Carriage of Goods by Sea Act 1971 in the UK) was deemed null and void. The principle underscores the precedence of statutory protections over contractual freedom in specific circumstances. According to Treitel (1999), this reflects a policy of protecting weaker parties in international trade by preventing circumvention of mandatory rules through forum selection. While rooted in shipping law, the principle prompts broader questions about its potential relevance to jurisdiction clauses in other contexts.
Application to Jurisdiction Clauses
Jurisdiction clauses, which designate the court or forum for dispute resolution, are a cornerstone of international contracts, ensuring predictability and certainty. However, their enforceability can be challenged when they conflict with mandatory rules or public policy, as seen in *The Hollandia*. For instance, in *Donohue v Armco Inc* (2001), the House of Lords emphasised that while jurisdiction agreements are generally upheld under English law, they may be overridden if they undermine access to justice or contravene statutory obligations. This suggests a parallel with the “New York Star” principle, where contractual autonomy is limited by overriding legislative intent.
Nevertheless, applying the principle to jurisdiction clauses outside shipping law is not straightforward. Unlike the Hague Rules, which provide specific liability protections, general jurisdiction clauses often lack a uniform statutory framework. As Turner (2005) argues, the principle’s application may be limited to contexts where mandatory rules explicitly govern the subject matter, such as in carriage contracts. Indeed, in Vita Food Products Inc v Unus Shipping Co Ltd (1939), the Privy Council upheld a choice of law clause despite potential conflicts with public policy, indicating a more flexible approach outside specific statutory regimes. This suggests that while the “New York Star” principle may inform judicial reasoning, it does not universally apply to all jurisdiction clauses.
Moreover, the Brussels I Regulation (Recast) (Regulation (EU) No 1215/2012), which governs jurisdiction in civil and commercial matters within the EU, prioritises party autonomy in jurisdiction agreements unless they contravene public policy or exclusive jurisdiction rules. Post-Brexit, English courts continue to respect such principles under the Hague Convention on Choice of Court Agreements 2005, further complicating the direct application of the “New York Star” principle in non-shipping contexts.
Implications for Legal Practice
The limited applicability of the “New York Star” principle to jurisdiction clauses highlights the tension between contractual freedom and mandatory rules. Practitioners must draft jurisdiction clauses with an awareness of potential statutory overrides, particularly in regulated sectors. Furthermore, while the principle serves as a reminder of policy-driven limitations, its scope appears confined, as demonstrated by broader judicial support for autonomy in cases like *Donohue v Armco Inc*. Arguably, this balance ensures predictability in international contracts while safeguarding essential protections.
Conclusion
In conclusion, the “New York Star” principle, while significant in the context of carriage of goods by sea, has limited direct application to jurisdiction clauses more generally. Its relevance is constrained by the specific statutory framework of the Hague Rules and the broader judicial preference for upholding party autonomy, as evidenced in key cases and academic commentary. However, it serves as a cautionary note for practitioners to consider mandatory rules and public policy when drafting jurisdiction agreements. Future developments, particularly post-Brexit, may further clarify the interplay between statutory obligations and contractual freedom, underscoring the need for ongoing vigilance in this area of law.
References
- Donohue v Armco Inc [2001] UKHL 64.
- Owners of Cargo Lately Laden on Board Ship or Vessel Hollandia v Owners of Ship or Vessel Hollandia (The Hollandia) [1983] 1 AC 565.
- 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.
- Treitel, G.H. (1999) The Law of Contract. Sweet & Maxwell.
- Turner, C. (2005) International Commercial Law: Principles and Practice. Routledge.
- Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277.
