A New Draft Of The Judgments Convention: Is It Good For America?
Posted on February 25, 2015
The Hague Conference has published a provisional edition of the Report on the Fourth Meeting of the Working Group on the Judgments Project, with a preliminary draft text. Bloggers including Claudia Madrid Martínez at Cartas Blogatorias and Pietro Franzina at Aldricus have already noted the new document. I know many American lawyers are skittish about the possibility of a Judgments Convention, and so I want to discuss the new draft text with the following question in mind: would a Judgments Convention be good for America?
Rather than give you an essay on the question, I’m going to give some bullet points that reflect my thinking on the question.
- The United States has two main interests at stake: ensuring that the judgments of our courts are recognized and enforced abroad; and ensuring that “bad” foreign judgments are not recognized or enforced at home.
- The status quo is a system under which the United States, admittedly in a clunky way that relies on state enactments of uniform laws, is generally willing to enforce foreign judgments in civil and commercial cases. Many other countries also regularly enforce US judgments in such cases, though in some countries there is little precedent for enforcement of US judgments and in some countries, at least anecdotally, recognition and enforcement is difficult or impossible to obtain. In that regard, it’s encouraging that in addition to the common law countries and the EU (as well as some of its members individually), China and Russia participated in the working group that prepared the draft.
- Under the status quo, it’s not just that US courts are willing to recognize and enforce foreign judgments. Under the uniform acts, they are obligated to recognize and enforce foreign judgments unless one of the exceptions to recognition recognized by the acts applies.
- Broadly speaking, the exceptions to the requirement of recognition in the draft text are similar to the exceptions already present in US law. Here is a comparison of the draft text with § 4 of the UFCMJRA (in cases where either text includes alternate possible provisions, I have chosen one just to keep things simple):
(Proposed) Judgments Convention UFCMJRA Service of Process “…the document which instituted the proceedings or an equivalent document, including a statement of the essential elements of the claim … was not notified to the defendant in sufficient time and in such a way as to enable him to arrange for his defense, unless the defendant entered an appearance and presented his case without contesting notification in the court of origin, provided that the law of the State of origin permitted notification to be contested” “The defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend” Fraud “The judgment was obtained by fraud in connection with a matter of procedure” “The judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case” Public Policy “recognition or enforcement would be manifestly incompatible with the public policy of the requested State, including situations where the specific proceedings leading to the judgment were incompatible with fundamental principles of procedural fairness of that State; “The judgment or the claim for relief on which the judgment is based is repugnant to the policy of this state or of the United States” Conflicting Judgments “The judgment is inconsistent with a judgment given in the requested State in a dispute between the same parties; or the judgment is inconsistent with an earlier judgment given in another State between the same parties on the same cause of action, provided that the earlier judgment fulfills the conditions necessary for its recognition in the requested state” “The judgment conflicts with another final and conclusive judgment” Contrary to Agreement The proceeding in the court of origin was contrary to an agreement or a designation in a trust instrument under which the dispute in question was to be determined other than by proceedings in the court of origin.” “The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be determined otherwise than by proceedings in that foreign court.” Personal jurisdiction and venue The proposed text doesn’t use the words “personal jurisdiction,” but Article 5(3) seems to be getting at exceptions to recognition that turn on the relationship of the defendant to the forum state. Article 5(3) also contains provisions permitting non-recognition in cases of registered intellectual property rights to avoid having the courts in one state rule, e.g., on the validity of IP rights granted by another state. “The foreign court did not have personal jurisdiction over the defendant.”
- The table is not exhaustive or complete, but it gives a sense of the overlap. There are, though, some important differences. For example, the UFCMJRA (§ 5(a)(1)) preserves the validity of “tag service,” but there is no similar provision in the draft text of the Convention. There is no recognition of particular problems of federalism that might arise; perhaps US ratification of such a convention would end up requiring enactment of a federal statute on recognition and enforcement to ensure that the United States is able to carry out its commitments despite Medellin-type problems. More importantly, the UFCMJRA (§ 4(b)(1)) has express provisions permitting non-recognition in cases where the foreign judgment “was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law.” There is no similar provision in the draft text of the Convention. Longtime readers will know that I have suggested that as long as there is a requirement that the foreign judiciary be adequate, there is no need to have an exception to recognition for case-specific fraud. The proposed draft text of the Convention has just the opposite approach: it preserves an exception to recognition for case specific procedural fraud (it’s not entirely clear what “fraud in connection with a matter of procedure” is meant to cover), but it omits an exception for foreign judiciaries judged systemically inadequate.
- So my initial big-picture view is that a Convention along the lines suggested in the draft would be basically positive for the United States, because it would require other countries to extend to our judgments more or less the same degree of recognition that we have unilaterally undertaken to extend to theirs. The biggest potential negative for the United States, though, is the absence of a provision allowing non-recognition of judgments from an inadequate judiciary. I suppose this could be addressed in several ways, e.g., an express provision; a broad reading of the public policy exception; a mechanism for determining which states’ judgments the United States would be obligated to recognize (maybe something similar to the acceptance of accession mechanism in Article 39 of the Evidence Convention). But especially in light of recent cases that shall remain nameless, I think it would be very difficult to obtain the necessary political consensus in the United States on the Convention without some way of assuring that the judgments of countries with systematically inadequate judiciaries will not need to be enforced.