November 2017 Update On Hague Conference’s Draft Convention On Recognition And Enforcement Of Foreign Judgments.

12 December, 2017

 

Since our 16 May 2017 article on the “February 2017 Draft Convention”, there have been additional developments, as reflected in the “November 2017 Draft Convention”. The Special Commission convened to discuss the November 2017 Draft Convention in mid-November 2017.

 

The developments are positive, as the overall aim at the end of the day, is to facilitate the establishment of efficient and reliable machinery for regulating cross border litigation. 

 

The November 2017 Draft Convention contains various amendments, the main ones being:

 

• Deletion of the article concerning “equivalent effects”. That article provided that if the Judgment provides for relief which is not available under the law of the State being requested to enforce it, that relief (to the extent possible) would be adapted to relief with effects equivalent to (but not going beyond) its effects under the law of the State where the Judgment was made. Possible reasons for the deletion are:-
• Difficulty of implementing relief which the jurisdiction is inexperienced in would lead to a risk of inconsistency in handling cases. 
• To an extent, forum shopping to obtain judgment in a jurisdiction with expansive remedies / relief to enable enforcement in a jurisdiction with fewer remedies / relief.
• Insertion of an article for a State to make a declaration regarding judgments pertaining to governments. The gist is that a State may declare that it shall not apply the Convention to judgments from proceedings in which it is a party, or to which any of its governmental agencies or any person acting on behalf of such governmental agency is a party, only to the extent specified in the declaration. The primary reason for this insertion is for States to obtain more control and protection in relation to judgments concerning themselves instead of having an automatic system whereby foreign judgments could be recognised and enforced. 
• Clarification of the language regarding privacy and intellectual property rights. 

 

International business requires cross border interaction. It is fundamental to have a uniform legal process for the recognition and enforcement in one State, of judgments obtained in another State. Apart from a reduction in costs, it would provide parties with certainty in seeking recourse against defaulting counterparties.  Having an official mechanism is crucial to a prosperous business environment.  

 

We shall provide further updates when the Special Commission on the Recognition and Enforcement of Foreign Judgments reconvenes in 2018.