On 16 July 2021, the European Commission adopted a proposalfor the European Union (“EU”) to accede to the 2019 Hague Judgments Convention (“the Convention”), an international treaty to generally facilitate the mutual recognition and enforcement of judgments in civil and commercial matters, subject to enumerated exceptions (explained below). The proposal will then have to be adopted by the European Council, with the European Parliament’s consent. The Convention is expected to positively impact the enforcement of rights, by increasing certainty and shortening timeframes for the foreign recognition and enforcement of judgements, especially in relation to enforcing judgments of EU member states outside the EU.
According to the Convention, a judgment issued by a state of origin shall be recognized and enforced in the requested state if it is eligible as such and the limited grounds for refusal do not apply. For example, exceptions to enforcement include cases where there has been a fundamental defect in notification or service of the claim, the judgment was obtained by fraud, did not meet jurisdictional requirements of the court in the state of origin, was contrary to public policy of the requested state etc. It excludes certain matters from its scope including arbitration and related proceedings, family law and intellectual property matters, certain antitrust matters and sovereign debt matters etc. Parties may also declare that the Convention does not apply to other matters.
Essentially, judgements of the origin-state can be recognized and enforced without inquiry into merits, except if such consideration could be necessary for the application of the Convention.
As evidenced by the preparatory work of the Convention, this would mean “some form of examination of the decision of the court of origin” could be necessary to determine eligibility for recognition and enforcement. For example, a judgment on a contractual obligation could require the court addressed to examine whether or not the performance of the obligation took place, and the place of performance as well. Considering the Convention is yet to be applied, it remains to be seen how and when courts find it “necessary” to delve into merits for purposes of applying the Convention.
It would be pertinent to note that proceedings that led to a judgment should have been instituted at a time when the Convention was in force for both the state of origin and the requested state, in order for the Conventions to apply to that case. In other words, the Convention will apply to the recognition and enforcement of judgments “deriving from proceedings that are instituted on or after the date” on which the Convention enters into force for the parties, which would be 12 months after the ratification of the two states (this time period provides for bilateral objections). Currently, there are no ratifications and three signatories (Israel, Ukraine and Uruguay).
In the event there is widespread ratification of the Convention in the future, the increased likelihood of enforcement and potential increased access to justice for business entities is expected to play a part in enhancing international trade and investment.