Southern Common Market (MERCOSUR)
DECISIONS OF THE COUNCIL OF COMMON MARKET
MERCOSUR/CMC/DEC. Nš 01/94: BUENOS AIRES PROTOCOL ON INTERNATIONAL JURISDICTION IN CONTRACTUAL MATTERS
The Governments of the Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay, and the Oriental Republic of Uruguay,
WHEREAS: The Treaty of Asuncion, signed on 26 March 1991, establishes the commitment of the State Parties to reconcile their legislations in the pertinent areas;
REAFFIRMING the desire of the State Parties to agree upon common legal solutions to reinforce the integration process;
UNDERSCORING the need to provide the States Parties' private sector with a framework of legal security that will guarantee just solutions and international harmony in judicial and arbitration related decisions associated with contracting in the context of the Treaty of Asuncion;
CONVINCED of the importance of adopting common rules on international jurisdiction in contractual matters, for the purpose of promoting the development of economic relations among the State Parties' private sectors;
AWARE that, in the area of international business, contracting is the legal format of the commerce that takes place in connection with the integration process;
Scope of Application
This Protocol shall be applied to the international adjudicatory jurisdiction relating to international contracts of a civil or commercial nature entered into between private entitles?-natural or juridical persons:
a. with domicile or corporate headquarters in different State Parties to the Treaty of Asuncion;
b. when at least one of the parties to the contract has its domicile or corporate headquarters in a State Party of the Treaty of Asuncion, and an agreement also has been made on selection of venue in favor of a judge of a State Party, and there is a reasonable connection, according to the rules of jurisdiction of this Protocol.
The scope of application of this Protocol excludes:
1. legal negotiations between the bankrupt and their creditors, and other analogous procedures, especially agreements between insolvents and their creditors;
2. agreements in the area of family and inheritance law;
3. social security contracts;
4. administrative contracts;
5. labor contracts;
6. contracts for sale to the consumer;
7. transportation contracts;
8. insurance contracts;
9. rights in rem.
The procedural requirement of international jurisdiction in contractual matters shall be considered fulfilled when the jurisdictional body of a State Party assumes jurisdiction according to the stipulations of this Protocol.
SELECTION OF JURISDICTION
1. In disputes that arise in international contracts concerning civil or commercial matters, the courts of the State Party to whose jurisdiction the contracting parties have agreed in writing to submit, shall have jurisdiction, provided that this agreement has not been obtained abusively.
2. Opting in favor of arbitration courts may be agreed upon.
1. The agreement on selection of jurisdiction may be made at the time that the contract is entered into, during its effective period, or when the dispute has arisen.
2. The validity and effects of the agreement on selection of venue shall be governed by the law of the State Parties that would have jurisdiction according to the provisions of this Protocol.
3. In all cases, the law most favorable to the validity of the agreement shall be applied.
Whether or not jurisdiction has been selected, it shall be understood as extended in favor of the State Party in which the suit has been brought when the respondent, after it has been filed its answer, accepts it voluntarily, positively, and not falsely.
In the absence of an agreement, those having jurisdiction at the plaintiffs selection are:
a. The judges of the location for fulfillment of the contract;
b. The judges of the respondent's domicile;
c. The judges of plaintiff's domicile or corporate headquarters when it demonstrates that it has fulfilled its obligation.
1. For purposes of Article 7, letter a), location for fulfillment of the contract shall be interpreted as the State Party in which the obligation serving as a basis for the claim has been or should be fulfilled.
2. Fulfillment of the claimed obligation shall be:
a. For contracts on certain, individualized things: the location at which they existed at the time that they were entered into;
b. For contracts on things determined by their type: the location of the debtor's domicile at the time that they were entered into;
c. For contracts involving fungibles, the location of debtor's domicile at the time the contract was entered into;
d. In contracts dealing with provision of services:
1. If they affect things: the location where they existed at the time that the contract was entered into;
2. If their effectiveness is related to any special location: the one in which the effects must necessarily occur;
3. Apart from these cases: the location of the debtor's domicile at the time that the contract was entered into.
1. For purposes of Article 7, letter b), the domicile of the respondent shall be interpreted as:
a. When natural persons are involved:
1. Their usual residence;
2. Subsidiarily, the principal center of their business;
3. In the absence of these circumstances, the location of the simple residence.
b. When juridical persons are involved: the principal administrative headquarters.
1. If the juridical person has branches, establishments, agencies, or any kind of representation, it shall be considered domiciled in the location where it operates and is subject to the jurisdiction of local authorities, in matters concerning the operations conducted there. This description is not an obstacle to the plaintiff's right to file suit in the courts where its principal administrative headquarters are located.
The judges of the principal administrative headquarters are competent to hear litigation that arises between partners in their capacity as such.
Juridical persons with headquarters in one State Party that enter into contracts in another State Party may be sued before judges of the latter.
If there are several respondents, the State Party of the domicile of any of them shall have jurisdiction.
Suits based on obligations involving a guaranty of a personal nature, or for the intervention of third parties, may be filed in the court that is hearing the principal suit.
If a counterclaim is founded upon the act or deed on which the principal suit was based, the judges who heard the principal suit shall also have jurisdiction for hearing the counter-claims.
JURISDICTION AS A REQUIREMENT FOR RECOGNITION AND EXECUTION OF ARBITRATION JUDGMENTS AND DECISIONS
The international jurisdiction regulated by Article 20, letter c) of the Las Leņas Protocol on Jurisdictional Cooperation and Assistance in Civil, Commercial, Labor, and Administrative Matters shall be subject to the provisions of this Protocol.
CONSULTATIONS AND RESOLUTIONS OF CONTROVERSIES
1. Controversies that may arise among the State Parties in connection with the application, interpretation, or non-fulfillment of the provisions contained in this Protocol shall be resolved through direct diplomatic negotiations.
2. If an agreement cannot be reached through such negotiations, or if the controversy is only partly resolved, the procedures called for in the System for Solution of Controversies in effect among the Parties to the Treaty of Asuncion shall be applied.
1. This Protocol, an integral part of the Treaty of Asuncion, shall go into effect thirty (30) days after the deposit of the second ratification instrument in relation to the first two States that ratify it.
2. For the other signatories, it shall go into effect on the thirtieth (30) day after the deposit of the respective ratification instrument, in the order in which the ratifications were deposited.
Accession to the Treaty of Asuncion on the part of a State shall imply, ipso jure, accession to this Protocol.
1. The Government of the Republic of Paraguay shall be the depositary of this Protocol and of the ratification instruments, and shall send duly authenticated copies thereof to the Governments of the other State Parties.
2. The Government of the Republic of Paraguay shall notify the Governments of the other State Parties of the date on which this Protocol goes into effect, and the date of deposit of the ratification instruments.
Executed in the city of Buenos Aires, on the fifth of August of 1994, in an original in the Spanish and Portuguese languages, both texts being equally authentic.
By the Government of the Republic
of Argentina: GUIDO DI TELLA
By the Government of the Republic Federativa
of Brazil: CELSO L.N. AMORIM
By the Government of the Republic
of Paraguay: LUIS MARIA RAMIREZ BOETTNER
By the Government of the Eastern Republic
of Uruguay: SERGIO ABREU