Hague Judgments Project in the United States

November 2016 Public Meeting

A public meeting of the Study Group on the Hague Judgments Project was held, under the auspices of the State Department’s Advisory Committee on Private International Law, on November 15, 2016 at the State Department, Office of Private International Law, South Building, 23rd and D Streets, NW, Washington, DC. The meeting was chaired by the Assistant Legal Adviser for Private International Law.

A Special Commission of the Hague Conference met in June 2016 to discuss the structure and the provisions of a draft convention on the recognition and enforcement of foreign judgments in civil and commercial matters. Another Special Commission of the Hague Conference is scheduled to meet in February 2017 to continue the drafting process.

The public meeting was convened to obtain the views of interested stakeholders on the current draft provisions of the convention.

There was support for the view that a convention on recognition and enforcement of foreign judgments would be of substantial benefit to the United States. It was pointed out that the work on judgments is an extension of work that the United States proposed decades ago. There was also support for the view that the Hague Conference would likely need at least a third Special Commission (after the February 2017 session) in light of the substantial number of issues pending with regard to the draft text.

Concern was expressed as to whether it was appropriate to follow language utilized in the 2005 Hague Convention on Choice of Court Agreements in the draft convention on recognition and enforcement of judgments in several situations. For example, a question was raised as to whether the language used in article 2(4) of the Convention on Choice of Court Agreements and article 2(3) of the draft judgements convention (“The Convention shall not apply to arbitration and related proceedings”) would exclude a judgement that circumvents an arbitration agreement. The issue would not arise under the Convention on Choice of Court Agreements since recognition and enforcement is limited to situations where there is a choice of court agreement (and not an arbitration clause). It was noted that this issue might best be addressed in a paper by the Permanent Bureau, either before the February 2017 Special Commission or between that Special Commission meeting and the one that might follow it.

Concern was also expressed as to whether it was appropriate to vary the language of the Convention on Choice of Court Agreements in the draft convention in other instances. For example, article 9(d) of the Convention on Choice of Court Agreements provides that recognition or enforcement may be refused if “the judgement was obtained by fraud in connection with a matter of procedure” while article 7(b) of the draft judgements convention only provides that recognition or enforcement may be refused if “the judgment was obtained by fraud.” Would that revision substantially broaden the fraud defense to include both extrinsic fraud (i.e. fraud that deprives the party of the opportunity to present its case to the court) and intrinsic fraud (i.e. fraud matters passed on by the original court such as false representation or the authenticity of documents)? In the United States, in most cases a judgement cannot be impeached for intrinsic fraud. The ALI 2005 Recognition Act (section 4(c)(2)) expressly provides for non-recognition of a foreign judgment where “the judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case.”

Another question was raised concerning the proposal in article 5(1)(f) of the draft text to include judgements where the defendant entered an appearance before the court of origin without contesting jurisdiction “at the first instance to do so” if the defendant would have had an arguable case that there was no jurisdiction or that jurisdiction should not be recognized under the law of the state of origin. A question was raised as to what was meant by “at the first instance to do so.” It was also questioned whether the Convention should somehow create jurisdiction where none otherwise existed simply because subject matter jurisdiction was not properly contested. It was also questioned whether this provision might have any effect other than to raise an otherwise unacceptable basis of jurisdiction to what would then be an effective basis under the Convention – and thus whether it adds anything to the remaining list under Article 5(1).

Concern was expressed with the absence of a clear antecedent for the clause “whatever it might be called” in the second sentence of Article 3(1)(b), making it advisable to change the language to “whatever the decision might be called.”

Another issue concerned the balance between enforcement of judgements in business to consumer contracts. A question was raised regarding the meaning of Article 5(2) of the draft convention which would prevent judgments against consumers from circulating at all under the Convention unless “consent was given before the court” in contrast to article 5(1) which provides for jurisdiction if “the defendant expressly consented to the jurisdiction of the court of origin in the course of proceedings in which the judgment was given.” What additional steps were contemplated in consumer cases?

Additionally, Article 7(1)(d) provides a discretionary basis for non-recognition of a judgment if “the proceedings in the court of origin were contrary to an agreement…under which the dispute in question was to be determined in a court other than the court of origin.” It was pointed out that the Choice of Court Agreements Convention creates a treaty obligation to enforce exclusive choice of court agreements and to recognize judgements resulting from jurisdiction based on those agreements. Thus, non-recognition of a judgement obtained in violation of an exclusive choice of court agreement would be mandatory. Additionally, to the extent the proceedings in the court of origin were contrary to an exclusive choice of agreement in a consumer contract (excluded from the scope of the Convention on Choice of Court Agreements) there would be a lack of balance with article 5(1) since the judgment against the business would still circulate under the Convention and another jurisdiction could recognize the judgment even if the first jurisdiction declined.

Further, it was pointed out that judgements would circulate under the convention where a court did not recognize party autonomy concerning a choice of law agreement in an international contract. It was suggested that there should be further discussion as to whether consumer contracts should be excluded from the scope of the draft convention, consistent with the Convention on Choice of Court Agreements and the Hague Principles on Choice of Law in International Commercial Contracts.

With regard to the final clauses, there was support for inclusion in the draft convention on judgements of a provision like that in article 58(5) of the Hague Convention on the International Recovery of Child Support and other Forms of Family Maintenance (2007) and Article 12 of the Apostille Convention permitting a state to opt out of a treaty relationship with another state within a given period of time.

November 2014 Public Meeting

A public meeting of the Study Group on the Hague Judgments Project was held, under the auspices of the State Department’s Advisory Committee on Private International Law, on November 10, 2014 at the State Department, Office of Private International Law, South Building, 23rd and D Streets, N.W., Washington, D.C.

A working group of experts has been meeting under the auspices of the Hague Conference on Private International Law to explore provisions of a convention on the recognition and enforcement of judgments. This working group has met on three occasions, in February 2013, February 2014, and October 2014. The next meeting of the working group is scheduled for February 2015. The public meeting was convened to review proposals and discussions at the working group thus far, and to obtain comments from participants on possible ways forward for the United States in this working group.

An update was provided on the progress of the Working Group, including the emergence of two possible approaches to the structure of a future convention. One approach would set forth some basic jurisdictional criteria for recognition and enforcement, whereas another approach would seek to avoid or minimize the use of jurisdictional criteria.

There was a discussion of certain basic jurisdictional criteria that could be part of a convention, along with certain additional jurisdictional criteria to which Contracting States could “opt in” or “opt out” in some manner. Citing prior attempts at the Hague Conference to reach agreement on jurisdictional bases, concerns were expressed about the likelihood of reaching consensus on the provisions of a judgments convention based on jurisdictional criteria. It was noted that there was general agreement among members of the Hague Conference to continue the work of the Working Group, and that the United States should continue to work constructively to develop the best possible provisions for a future instrument.

January 2013 Public Meeting

A public meeting of the Study Group on the Hague Judgments Project was held, under the auspices of the State Department’s Advisory Committee on Private International Law, on January 23, 2013 at the State Department, Office of Private International Law, South Building, 23rd and D Streets, N.W., Washington, D.C.

The Hague Conference on Private International Law will host, February 18-23, 2013, two meetings related to the Judgments Project: a working group will convene to consider a possible instrument on the recognition and enforcement of judgments, followed by an experts’ group that will consider whether the Project should include issues relating to jurisdictional rules, i.e., prescribing acceptable bases of jurisdiction. The public meeting was convened to obtain comments from participants on these topics, and specifically on the papers that had been prepared by the Permanent Bureau of the Hague Conference.

Regarding the recognition and enforcement of judgments, the discussion covered in particular the following topics:

-The substantive scope of an instrument, i.e., what areas should be covered

-What types of judgments should be covered

-The mechanics of the recognition and enforcement scheme, e.g., conditions, grounds for refusal, procedural requirements

-Consideration of the bases of jurisdiction applicable to the underlying action on the merits

-Judicial communication

Views were expressed that the Hague Conference should not, at least at this time, undertake work on jurisdictional rules. There was also discussion of the possible use of lis pendens rules to avoid parallel proceedings.