Enforcement of Foreign Judgments - Exercise of Jurisdiction in Recognition Cases

Exercise of Jurisdiction in Recognition Cases

If the country that issued the judgment and the country where recognition is sought are not parties to the Hague Convention on Foreign Judgments in Civil and Commercial Matters (presently only ratified by Cyprus, Kuwait, the Netherlands and Portugal ), the EC Council Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters or a similar treaty or convention providing for the routine of registration and enforcement between states, the courts of most states will accept jurisdiction to hear cases for the recognition and enforcement of judgments awarded by the courts of another state if the defendant or relevant assets are physically located within their territorial boundaries. Whether recognition will be given is determined by the lex fori, i.e. the domestic law of the court where recognition is sought, and the principles of comity. The following issues are considered:

• Whether the foreign court properly accepted personal jurisdiction over the defendant;
• Whether the defendant was properly served with notice of the proceedings and given a reasonable opportunity to be heard which raises general principles of natural justice and will frequently be judged by international standards (hence, the rules for service on a non-resident defendant outside the jurisdiction must match general standards and the fact that the first instance court's rules were followed will be irrelevant if the international view is that the local system is unjust);
• Whether the proceedings were tainted with fraud; and
• Whether the judgment offends the public policy of the local state.

There is a general reluctance to enforce foreign judgments which involve multiple or punitive damages. In this context, it is noted that the U.S. is not a signatory to any treaty or convention and there are no proposals for this position to change. When it comes to seeking the enforcement of U.S. judgments in foreign courts, many states are uncomfortable with the amount of money damages awarded by U.S. courts which consistently exceed the compensation available in those states. Further, the fact that the U.S. courts sometimes claim extraterritorial jurisdiction offends other states' conceptions of sovereignty. Consequently, it can be difficult to persuade some courts to enforce some U.S. judgments.