Thursday, 11 July 2019

Hague Conference Adopts Judgments Convention


The Hague Conference on Private International Law adopted its Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (“Convention”) on July 2 at the Hague Conference’s 22nd Diplomatic Session.  The Convention will go into effect after two countries have signed; one country – Uruguay – has already signed. The Hague Conference began work on the Convention in 1992. 

If many countries sign, the Convention will be a major improvement in international legal cooperation.    Enforcement of foreign judgments is highly restricted, or not available, in several big countries which impose a reciprocity requirement, such as the People’s Republic of China, the Russian Federation, India, Germany, Japan, and Austria.   The Convention eliminates reciprocity as a prerequisite for enforcement.  

Highlights of the Convention

The Convention requires that a judgment given by a court of a Contracting State (the “State of Origin”) shall be recognized and enforced in other Contracting States (the “Requested State”) – without any review of the merits (Art. 4) -- if it is in effect in the Contracting State (art. 4) and if the judgment meets any one of a long list of conditions are met (Art. 5).  Those conditions, which are similar to the conditions for jurisdiction in the common law in Canada, include:
a.)    the judgment debtor was habitually resident in the State of Origin;
b.)    the judgment debtor had its principal place of business, or at least a branch, there;
c.)    the judgment debtor attorned to the jurisdiction (e.g. by suing there, by consenting to jurisdiction in a forum selection clause, or by arguing the merits of the case without contesting jurisdiction);
d.)    the judgment pertains to a lease of real property located in the State of Origin; and
e.)    the judgment pertains to a tort arising from death, physical injury, or damage to/loss of property, and the act/omission causing the harm occurred in the State of Origin.

Recognition and enforcement may (not must) be refused only on specific grounds set out in the Convention, which grounds are similar to the defences found in the common law of Canada, such as a breach of natural justice, more specifically if the defendant was not properly notified of the court proceeding in the State of Origin, or, if the defendant was in the Requested State, he/she was  notified of the proceeding in a manner incompatible with the fundamental principles of the Requested State regarding service of documents.     Enforcement may also be refused if the judgment: 
a.)    is inconsistent with another judgment in the Requested State;
b.)    is inconsistent with an earlier judgment from another state;
c.)    was issued in a proceeding that was contrary to a forum selection clause;
d.)    is manifestly incompatible with the public policy of the Requested State; or
e.)    was obtained by fraud. 

           Enforcement may also be refused, or postponed, if there is a court proceeding in the Requested State involving the same parties and subject matter, provided that the court was seized before the court in the State of Origin and there is a close connection between the dispute and the Requested State. Enforcement may also be refused to the extent the judgment imposes non-compensatory damages, e.g. punitive damages.

           Unfortunately, Art. 18 allows a State that has a “strong interest in not applying .. [the] Convention to a specific matter” to exempt that matter.   In addition, Art. 19 allows a State that is a party to the judgment to exempt itself from enforcement.  This can be extended to a natural person acting for the State, or a government agency or person acting for that agency.   

Judgments in some types of cases are excluded from the Convention, such as family law, insolvency, wills and estates, defamation, intellectual property, some maritime law cases, and the carriage of passengers and goods.  Nor does the Convention apply to judgments in tax or customs matters or law enforcement.  However, the mere fact a government is a party to the proceeding does not by itself exclude the case from the reach of the Convention.    


Overall, the Convention will substantially improve international cooperation in legal matters, and substantially improve the efficacy of court judgments. 

However, the Convention unfortunately will probably not remedy the problems of excessive delays or bureaucratic requirements for enforcement proceedings seen in some countries (e.g. Mexico, India).  Although the Convention says the court in the Requested State “shall act expeditiously”, the Convention does not attempt to streamline procedures. It allows each country to follow its own procedures for enforcement.

The Convention provides welcome protection to consumers who are judgment debtors in consumer contract cases and to employees who are judgment debtors in employment contract cases.  Contracts of adhesion often contain forum selection clauses that are unfavourable to the consumer or employee.  See for example the clause for Uber drivers in Heller v Uber 2019 ONCA 1. The court in the State of Origin does not have jurisdiction, for the purpose of enforcement, based on the consumer’s or employee’s consent to the court’s jurisdiction unless that consent was addressed to the court, i.e. not given merely by way of a forum selection clause. 

The Convention does not clearly indicate whether judgments for injunctions or other monetary relief are enforceable.   The Convention’s definition of judgment (Art. 3) does not address the type of remedy, other than to exclude interim measures of protection.   Article 7 sets out six permissible grounds for refusing to enforce a judgment;  the fact  a judgment imposes a non-monetary the remedy is not among them.  Article 10 permits a State to refuse to enforce a judgment if it imposes a certain kind of remedy, namely damages such as punitive damages that do not compensate for actual loss or harm.  That article too is silent about non-monetary remedies.    I would conclude the Convention applies to non-monetary judgments.   

However, even if the Convention does not exclude such judgments, and even if it implicitly allows enforcement, the Convention does not provide much help in enforcing them.  Judgments in many of the main areas of law where such remedies are given are excluded from the Convention, for example family law (orders for access), defamation (injunctions to not publish defamatory material), anti-trust (injunctions restraining anti-competitive tactics) and intellectual property (injunctions to prevent or stop infringement).

All in all, the Convention advances international cooperation and sets a clear path toward for the wide-spread international enforcement of judgments and thus better access to justice.   Congratulations to the Hague Conference!