When a company has the misfortune to face a cross-border commercial dispute with another business when the matter is decided by the court, the successful party is then facing the question of how to enforce the judgment in a different country. Enforcing a judgment in a different jurisdiction can be problematic due to the varying laws and procedures in different countries.
Many countries enforce foreign judgments based on the principle of reciprocity, meaning they will enforce judgments from countries where there is a mutual agreement between them to enforce judgments. There are a number of international agreements and conventions that facilitate of enforcement of foreign judgments.
The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. Known as Hague 2019 Judgments Convention has signatories across Europe, including the UK.
The Brussels I Regulation (recast) streamlines recognition and enforcement within the European Union. Judgments from one EU member state are automatically recognised in another, with limited grounds for refusal.
In the USA The Uniform Foreign-Country Money Judgments Recognition Act (UFMJRA) has been adopted by many states, providing a standardised approach for the recognition and enforcement of foreign judgments. States not adopting the UFMJRA may have different procedures based on common law principles.
Countries like Singapore and Hong Kong have well-established legal frameworks for the enforcement of foreign judgments.
Vincenzo Senatore, a Senior Partner, pointed out "The laws vary from country to country regarding the enforcement of foreign judgments and there are some significant differences. In the case of the countries within the European Union judgments are automatically recognised in every EU country and can be enforced through the courts." Vincenzo commented "understanding the legal framework in the jurisdiction where enforcement is sought is crucial. Some jurisdictions differentiate between types of judgments, for example, monetary -v- non-monetary or civil -v- criminal and there may be different enforcement rules that apply to the various judgments."
You have won half the battle in obtaining a judgment, unfortunately, there are still more hurdles to manage before eventually obtaining compensation.
Giambrone & Partners' litigation lawyers point out that a cross-border dispute will require the assistance of multi-jurisdictional lawyers to navigate through enforcement of a judgment in a foreign jurisdiction. Guidance by a multi-jurisdictional litigation lawyer is essential to ensure that there are no omissions with regard to the documentation and all deadlines are met.
The documents required to enforce a judgment in an overseas jurisdiction:
- A certified copy of the judgment
- An apostille under The Hague Apostille Convention or the judgment may require legalisation
- Certified translations of documents not in the language of the country where enforcement is sought
- A recognition application submitted in the court in the appropriate jurisdiction
- Evidence of proper service of process on the defendant in the original proceedings
There may be other applicable documents that are required in the local law of the jurisdiction.
Once the documents are assembled service of the application can progress on the judgment debtor in accordance with local rules. A court will then schedule a hearing to determine whether the foreign judgment meets the criteria for recognition and enforcement.
There are defences that the judgment debtor has the opportunity to raise against enforcement for example:
- Lack of jurisdiction by the original court
- The juagment was obtained by fraud
- The judgment is contrary to public policy in the enforcement jurisdiction
- The original proceedings violated principles of natural justice, such as lack of due process
In the event of the overseas court granting recognition, an order will be issued allowing enforcement of the judgment, which will then be executed in the same manner as a domestic judgment. Actions that can be taken to enforce:
- Obtaining a writ of execution allowing the seizure of the debtor's assets
- The Issue of Garnishment Orders to garnish (when money is legally withheld and sent to a third party) the debtor's wages or bank accounts
- A lien placed on the debtor's real property to secure the debt
- The appointment of a receiver to manage and dispose of the debtor's assets
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.