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The last Hague Convention

a turning point for international business litigation?

19/09/2019

The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (“the Convention”) was signed on 2 July 2019.

The project initially started with a proposal sent in 1992 by the United States to the Permanent Bureau of the Hague Conference on Private International Law to develop an instrument harmonising the rules on the jurisdiction, recognition and enforcement of foreign judgments. The Convention finally only relates to recognition and enforcement, with negotiations on jurisdiction set to take place in 2020.

The Convention classically applies to judgments in civil and commercial matters. It however contains some unusual exclusions, such as defamation and intellectual property. It should also be noted that interim, precautionary measures, such as freezing orders of bank accounts, are not considered to be judgments and are therefore not covered by the terms of the Convention.

The absence of “direct” rules of jurisdiction has led to the inclusion of some atypical rules. For instance, the Convention includes “jurisdictional filters” to ensure that the dispute has a sufficiently strong link with the original court that heard the dispute and, therefore, that this court’s jurisdiction appears legitimate (a role usually assigned to direct rules of jurisdiction). This is a condition also verified in French common private international law, since the Simitch case law of 1985[1]. In fact, the Convention contains the same conditions for the effectiveness of foreign judgments as set out in traditional French case law, i.e. respect for international public policy, absence of fraud, and absence of irreconcilability of decisions (as well as an additional condition specific to trusts).

Under French law, just like pursuant to the Convention, the “petitioned” court asked to give effect to a foreign judgment is not authorised to review it, in other words to examine the reasoning of the foreign court. It can only ensure that the result of the judgment does not contradict rules considered essential by its legal system.

This does not mean that the movement of international judgments will be facilitated as much by the Convention as by Regulation (EU) no. 1215/2012 applicable within the European framework. This is because the party seeking recognition or enforcement of a judgment under the Convention will not be exempt from the exequatur procedure, which involves asking the foreign judge to make the judgment effective within the national territory.

Nevertheless, the adoption of common criteria should facilitate the free movement of decisions, particularly with certain powers such as China and the United States, who have not yet been bound by rules common to Europeanor Frenchplayers on that matter..

The benefits of harmonising the rules of private international law – an objective pursued by the Hague Conference since 1883 – are well known: predictability, time savings and lower costs.

Some hope that the Convention will compete with the 1958 New York Convention, guaranteeing the effectiveness of international arbitration awards.

Patience will be required in this respect, since although the Convention already has its first signatory – Uruguay – it will only come into force 12 months after its acceptance by a second State. And, once in force, the Convention will only apply to judgments resulting from proceedings brought after it came into force in the State where the judgment was rendered (“State of Origin”) and in the State where its recognition and/or enforcement are requested (“Petitioned State”).

In the meantime, although a case-by-case analysis is essential , it is likely to be beneficial to co-contracting parties wishing to facilitate enforcement of their judgments abroad to include a dedicated clause submitting potential disputes either to a court in a European Union Member State other than the United Kingdom, or to an arbitral tribunal.

The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (“the Convention”) was signed on 2 July 2019.

The project initially started with a proposal sent in 1992 by the United States to the Permanent Bureau of the Hague Conference on Private International Law to develop an instrument harmonising the rules on the jurisdiction, recognition and enforcement of foreign judgments. The Convention finally only relates to recognition and enforcement, with negotiations on jurisdiction set to take place in 2020.

The Convention classically applies to judgments in civil and commercial matters. It however contains some unusual exclusions, such as defamation and intellectual property. It should also be noted that interim, precautionary measures, such as freezing orders of bank accounts, are not considered to be judgments and are therefore not covered by the terms of the Convention.

The absence of “direct” rules of jurisdiction has led to the inclusion of some atypical rules. For instance, the Convention includes “jurisdictional filters” to ensure that the dispute has a sufficiently strong link with the original court that heard the dispute and, therefore, that this court’s jurisdiction appears legitimate (a role usually assigned to direct rules of jurisdiction). This is a condition also verified in French common private international law, since the Simitch case law of 19851. In fact, the Convention contains the same conditions for the effectiveness of foreign judgments as set out in traditional French case law, i.e. respect for international public policy, absence of fraud, and absence of irreconcilability of decisions (as well as an additional condition specific to trusts).

Under French law, just like pursuant to the Convention, the “petitioned” court asked to give effect to a foreign judgment is not authorised to review it, in other words to examine the reasoning of the foreign court. It can only ensure that the result of the judgment does not contradict rules considered essential by its legal system.

This does not mean that the movement of international judgments will be facilitated as much by the Convention as by Regulation (EU) no. 1215/2012 applicable within the European framework. This is because the party seeking recognition or enforcement of a judgment under the Convention will not be exempt from the exequatur procedure, which involves asking the foreign judge to make the judgment effective within the national territory.

Nevertheless, the adoption of common criteria should facilitate the free movement of decisions, particularly with certain powers such as China and the United States, who have not yet been bound by rules common to Europeanor Frenchplayers on that matter..

The benefits of harmonising the rules of private international law – an objective pursued by the Hague Conference since 1883 – are well known: predictability, time savings and lower costs.

Some hope that the Convention will compete with the 1958 New York Convention, guaranteeing the effectiveness of international arbitration awards.

Patience will be required in this respect, since although the Convention already has its first signatory – Uruguay – it will only come into force 12 months after its acceptance by a second State. And, once in force, the Convention will only apply to judgments resulting from proceedings brought after it came into force in the State where the judgment was rendered (“State of Origin”) and in the State where its recognition and/or enforcement are requested (“Petitioned State”).

In the meantime, although a case-by-case analysis is essential2, it is likely to be beneficial to co-contracting parties wishing to facilitate enforcement of their judgments abroad to include a dedicated clause submitting potential disputes either to a court in a European Union Member State other than the United Kingdom, or to an arbitral tribunal.


1 Cass. 1st civ., 6 February 1985 no. 83-11241

2Brexit, ne négligez pas la négociation de la clause de résolution des litiges [Brexit: don’t forget to negotiate the dispute resolution clause!], J.-F. Brun, C. Rebiffé, L. Bourgeois, https://www.lexplicite.fr/brexit-negociation-clause-de-resolution-des-litiges/


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Authors

Jean-Fabrice Brun 2020 - 600x600
Jean-Fabrice Brun
Partner
Paris
Laura Bourgeois