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8 October, 2016
The Department of Justice in Hong Kong has this week released a Consultation Paper on the 2016 Preliminary Draft Convention on the Recognition and Enforcement of Foreign Judgments (the "Draft Convention"). The Draft Convention sets out criteria for the Courts of one member state to recognise and enforce judgments passed down by another member states.
The Draft Convention
The Draft Convention is part of the Hague Conference's project on international jurisdiction of courts and recognition and enforcement of foreign judgments. The Draft Convention aims to increase access to justice and to facilitate cross-border trade and investment by (i) reducing the risks and costs that come with cross-border transactions; and (ii) increasing certainty and predictability.
The Draft Convention was modelled on and sits alongside the Hague Convention on Choice of Court Agreements of 30 June 2005 (the "Choice of Court Convention"). As previously reported, the Choice of Court Convention came into operation in Singapore earlier this week. Whilst the Choice of Court Convention includes provisions regarding recognition and enforcement, these relate only to recognition and enforcement of judgments by a court designated in an exclusive choice of court agreement (namely, in a dispute resolution or choice of law clause in a contract), and accordingly the primary focus of the Choice of Court Convention is on allowing parties in civil and commercial matters to choose the exclusive court in which to resolve a dispute.
By contrast, the Draft Convention does not deal with matters of direct jurisdiction, but rather focusses on recognition and enforcement of judgments, providing a broader range of criteria as to when a judgment is eligible for recognition and enforcement. For example, a judgment may be eligible for enforcement in other member states where a person against whom enforcement is sought has his principal place of business in the member state which handed down the original judgment, and the claim arises out of the activities of that business.
The Timeline
The preliminary Draft Convention was agreed at a meeting of the Special Commission set up by the Hague Conference in June 2016. A second meeting of the Special Commission is due to be held in February 2017. The current consultation is aimed at considering views on the Draft Convention in connection with the HKSAR's representation as part of the Chinese delegation at the Special Commission ahead of the February meeting. The deadline for providing comments under the consultation is 30 November 2016.
Once the Draft Convention is finalised by the Special Commission, it will be considered by the Hague Conference. If adopted, the Hong Kong Government will consult interested parties and consider the question of application to HKSAR.
If widely accepted across different jurisdictions, the Draft Convention has the potential to facilitate increased and more effective international dispute resolution because of the certainty such a convention may bring. In Hong Kong, it would provide judgment creditors with a potentially more popular mechanism for enforcing their judgments outside Hong Kong than the current statutory scheme – the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) – which is limited to only 15 jurisdictions worldwide.
For further information, please contact:
Gareth Thomas, Partner, Herbert Smith Freehills
gareth.thomas@hsf.com
