You have won a big lawsuit in your country of origin. You feel great! Then you discover that the defeated side transferred its funds and assets abroad. Now what?
A court decision is no more than a piece of paper until a foreign local judge decides to apply it. Your success is in vain without that local support. The mechanism of acquiring that assistance is referred to as recognition or domestication. It is usually complicated, time-consuming, and costly.
One of the most significant issues of the legal world for decades was the fact that there was no easy international system of enforcing judgments. Each nation was different, and they sought to find reasons to say no. They determine whether the first court had followed the right procedures, whether the judgment has contravened the local laws, or whether the case has contravened their public policy. It is a slow, difficult fight.
Yet such a struggle need not be so tough. Attorneys today possess a great arsenal: international conventions and treaties. Such international agreements compel the national courts to give some attention to foreign judgments.
The article decomposes the seven most effective conventions currently employed by lawyers. The knowledge of these tools is crucial in safeguarding your assets in the case of cross-border business.
The Foundation of Enforcement: Why Treaties Are Better
When you attempt to impose a judgment in the absence of a treaty, you are banking on a legal concept of the term comity a polite willingness of a court to defer to the decision of another court. This is highly uncertain.
The game is altered by conventions and treaties. They are international binding agreements. In a situation where a country joins a treaty, then its courts are normally bound to abide by its regulations. This changes the debate to a question of uncertainty as to whether it is polite to a definite right of the law as a treaty. This is much more dependable and faster.
These are the seven structures that we apply in converting foreign victories into domestic cash.
1. The Hague Judgments Convention (2019): The New Global Standard
When you are handling judgment enforcement, this is the agreement that everybody is discussing. It is called the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.
What is powerful about it: This convention aims to transport foreign judgments as portably as possible. It will be an immense step to establish a single enforcement system worldwide. The courts in the treaty countries will have an effective brief checklist on whether they need to accept the judgment of another country, as it is the first time.
Key Rule: The 2019 Convention is concerned with the clear rules of which court had the right jurisdiction (had authority). In the case where the first court was within the bounds of jurisdiction as prescribed by the rules of the convention, the enforcing court has very limited reasons to deny the judgment.
My Insight: This is new and not totally enforced everywhere yet, but it is the future. When I formulate a lawsuit against a foreign party, I will instantly examine whether the two nations will be encompassed by the Hague Convention of 2019. In case they are, I know the implementation road will be purer than ever. This convention is the most significant document in the portability of judgment in the present day.
2. The New York Convention (1958): The Gold Standard
Although it is technically not a court judgments convention, the most successful of all the treaties on enforcement is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). It must be included in this list since it demonstrates the world’s gold standard.
What is powerful about it: This treaty is about arbitration awards, which are not determined by government courts but by private arbitrators. The membership of the country is almost worldwide today. Courts in this treaty have to enforce awards with minimal exceptions.
Why this is important to you: In case your agreement has an arbitration clause, i.e,. You are obliged to resolve any dispute out of court, as arbitration will be far easier to enforce than a standard court decision worldwide. It is a time-tested framework that is attempted by lawyers to replicate in making court judgments.
3. The Brussels I Regulation Recast (EU): Automatic Enforcement
Enforcement in business within the European Union (EU) is very easy. The Brussels I Regulation (Recast) established an automatic procedure to identify and enforce court judgments amongst the EU member states.
What is powerful about it: In the EU, a judgment of a single member state is considered to have been made by a court in the implementing country. It is not a complex recognition process. A judge in France can pass a judgment and transfer it to a lawyer in Germany, who can then proceed to the enforcement phase. This is as automatic as international law can be.
Important Rule: The rule eliminated an intermediate procedure known as exequatur (formal approval). This is a move that accelerates the process by years.
4. The Lugano Convention: Extending the EU Model
The Lugano Convention is a treaty that applies the automatic enforcement provisions of the Brussels system to several major non-EU states in Europe, called the European Free Trade Association (EFTA) states. These are Switzerland, Norway, and Iceland.
What is powerful about it: It makes sure that a decision made in, say, Norway, is enforceable in, say, France, nearly with the same ease as a decision made in Germany. It follows the same level of expediency and predictability as the Brussels Regulation, establishing an enormous, single enforcement zone in the majority of Western Europe.
My Insight: The presence of such regional systems is a major client advantage. This is not so when interacting with parties in Europe, which is predictable. Guesswork is reduced to a minimum, and this significantly reduces the cost and risk of the enforcement stage.
5. The Hague-Visby Convention (1965): Ensuring Fairness
An award is of no use when the individual who was defeated in the case had not been informed about the case. This service of process- taking legal delivery of the court papers. To ensure that this important step is properly performed, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters is designed to follow this requirement.
What is powerful about it: A foreign court will not adopt your judgment unless they are convinced that the defendant was sufficiently notified. This treaty offers standardized and accepted means of serving documents across borders, through which the service is done in both countries legally.
Key Rule: According to the treaty, there is a system of Central Authorities in every country that is involved in the delivery of documents. It is the safest strategy that will allow the service to be valid and impossible to contest in the future through this official channel.
My Experience: This was my day-to-day work as a paralegal. On one occasion, a judgment involving seven figures was reversed just because the foreign service procedure was not processed by this convention. The entire case needed to be reinitiated. The first, the most important step to the final judgment becoming enforceable, is obtaining service under this treaty.
6. The Hague Evidence Convention (1970): Supporting the Court Case
The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters upholds the primary litigation that, consequently, makes the litigation judgment of the case more robust.
What is powerful about it: As is usually required to win a judgment, documents, testimony, or even other proofs of the foreign country are often required. This treaty ensures that a judge in a given country can request a judge in another country to collect this evidence using a legal avenue.
Key Rule: It also helps avoid the losing party from arguing that the initial judgment was made on the basis of unfairly gathered or counterfeit evidence. The evidence is compiled under the control of the court through the method of the treaty known as a Letter of Request, and it enhances the validity of the ultimate decision in the mind of the foreign court enforcing the treaty.
7. The Inter-American Convention: Western Hemisphere Focus
Montevideo Convention The Montevideo Convention, or the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Award, concerns the Americas region. It has been instrumental in the enforcement in the Western Hemisphere, particularly among the Latin Americans.
What is powerful about it: Like the European systems, this convention makes the task easier for its member states. It guarantees that the judgments become effective in countries outside the country in which they were made, in case the minimum due process provisions are adhered to.
Key Rule: It provides the minimum conditions that the foreign judgment must meet to be recognized. These rules tend to insist upon the fact that the original court had jurisdiction and that the verdict is final and not against the national peace of its country. Although it is not so automatic as the Brussels system, it eliminates much of the uncertainty.
Putting the Pieces Together: A Deeper Look
Those conventions combine to create a strong strategy.
Think of it this way:
The direct enforcement tools are the 2019 Judgments Convention, Brussels I, and Lugano. They are the keys that open the door of the courthouse to your foreign judgment.
The safety nets are the Service Convention and the Evidence Convention. They make sure that the original suit was made on a solid foundation that was legally defect-free and cannot be easily contested by the court enforcing it.
The parallel route is the New York Convention. It indicates that arbitration gives a much easier route to enforcement when compared to litigation.
When he/she employs an attorney, they must not only think of winning the suit, but rather consider the enforcement plan at the outset. Which of these treaties is applicable? Is arbitration a better option than the court to ensure that the New York Convention is applicable?
Experience Boost: The Importance of Timing
I once handled a case in which a client had been awarded a huge sum of money against a supplier in a non-treaty country. The supplier had shifted assets to a country that was a member of the treaty (member of the Inter-American Convention). The decision was sound, and since the home country was not a signatory to this convention, we were forced to apply slow and costly local law.
But in another instance, where one of the parties was in a country of Lugano, the enforcement was lightning-fast. The local assets were frozen and seized within weeks after the judge in the second country had confirmed the judgment to be valid under the Convention. The contrast was between night and day. Treaties conserve time, money, and stress.
The Simple Takeaway
International trade demands international law protection. In case your business borders, you should be aware of how your legal wins are going to be dealt with in other countries. Using a traditional system that allows a foreign judge to merely utter no is way too risky. Best Criminal Defense Attorneys for Felony Charges – Free Consultation
The strength of these seven conventions is that they substitute the obscurity of the old rules of law with the unmistakable declaration of a solemn pledge of a treaty. They compel courts to collaborate. Complete Criminal Law Handbook: Your Guide to Understanding Criminal Justice
When a cross-border litigation is on, consult your attorney on which of these potent conventions suits your case. It is the early enforcement planning that will make the difference between a win in court and a win in your business.
