Out-Law / Your Daily Need-To-Know

Commercial courts set out position on global enforcement

Out-Law News | 10 Jul 2019 | 1:03 pm | 3 min. read

Commercial courts from around the world have set out their procedures for enforcing money judgments made by one another in a single document, intended to improve public perception and understanding of enforcement procedures.

The Multilateral Memorandum on Enforcement of Commercial Judgments for Money (107-page / 1.9MB PDF) contains contributions from the 32 member jurisdictions of the Standing International Forum of Commercial Courts (SIFoCC). SIFoCC was established in 2017 by Lord Thomas, former Lord Chief Justice of England and Wales and a former commercial court judge, to encourage and support collaboration between the world's commercial courts.

Richard Dickman, dispute resolution expert at Pinsent Masons, the law firm behind Out-Law, welcomed the initiative, which he said "sends a clear message that commercial courts around the world are receptive to the enforcement of each others' judgments, thereby serving a vital supporting role for businesses operating across borders".

"We are seeing businesses show increased levels of interest in the issue of cross-border enforcement, driven by the ever more international nature of transactions and in part by Brexit-related concerns," he said.

"Although there is no substitute for matter-specific local law advice, the memorandum should prove a useful resource when looking to get a quick picture of the enforcement risks involved in contracting with, or pursuing litigation against, a party who is, or whose assets are, located in a particular jurisdiction," he said.

Dickman Richard

Richard Dickman

Legal Director

We are seeing businesses show increased levels of interest in the issue of cross-border enforcement, driven by the ever more international nature of transactions and in part by Brexit-related concerns.

Each of the 32 contributors to the document has set out its procedures for enforcing the judgments of foreign jurisdictions in its own courts. While the focus is on commercial judgments requiring one party to pay a sum of money to another, some of the contributions also touch on how the courts enforce other types of foreign judgments.

The contributors include courts in Singapore, China, the United States, Australia, the Middle East and Africa. However, Dickman said that the contributions from EU jurisdictions including France, Germany, Ireland and the Netherlands would be of particular interest to contracting parties in the UK, given the potential that the UK could exit the EU at the end of October without a formal withdrawal agreement in place.

"If no deal is reached on reciprocal enforcement of judgments between the UK and EU, it will become less straightforward to enforce UK judgments in EU countries than it is under the current, very effective, Brussels Recast Regulation regime," he said. "However, this memorandum serves as a reminder that all is by no means lost when it comes to enforcement of UK judgments in European jurisdictions, even in a 'no deal' scenario."

"The UK is pursuing international arrangements to give businesses as much certainty as possible, such as by joining the Hague Choice of Court Convention, which provides for the enforcement of judgments given in cases where parties have included an exclusive jurisdiction clause in their contract. Last week, the Hague Convention countries, which span the globe, signed a brand new convention known as the HCCH Judgments Convention, which provides a new regime for the enforcement of civil and commercial judgments which does not depend on there being a jurisdiction clause. It is therefore significantly wider than the Choice of Court Convention, and has been described as a 'game-changer' for cross-border litigation," he said.

The 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Judgments Convention) was adopted by delegates of the Hague Conference on Private International Law (HCCH) on 2 July. It is the second multilateral treaty drafted under the auspices of HCCH's 'Judgments Project', and is intended to create a single global framework for recognition and enforcement of judgments on civil and commercial matters across borders.

The Judgments Convention is still subject to a number of formalities before it will be fully in force, including the various countries formally acceding to it. However, Dickman said it was "an exciting development at a time of uncertainty".

The SIFoCC memorandum also illustrates that readily available procedures exist for the enforcement of foreign judgments even under the national laws of many European jurisdictions, Dickman said.

"There may be additional hurdles to overcome, such as an 'exequatur' process where the court which is being asked to enforce looks at the international regularity of the judgment, as is discussed in the section of the memorandum on France." he said. "However, even this does not generally involve a re-opening of the merits of the original judgment. As is explained in relation to France, 'exequatur' generally only concerns issues such as jurisdiction, public policy and fraud."