In 2023, the European Union and Ukraine will enter treaty relations under the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “Convention” or the “Hague Judgments Convention”). In announcing this news, the EU Council confirmed that there are no “fundamental obstacles” to prevent the EU from entering treaty relations with Ukraine under the Convention. As of September 1, 2023, the two government states will recognize each other’s civil and commercial judgments—thus limiting the “myriad of substantive, procedural, and practical hurdles” that parties may face when seeking recognition and enforcement of their judgments in foreign jurisdictions.
This agreement between the EU and Ukraine is an important step towards greater recognition of the Hague Judgments Convention, an international treaty that commits contracting states to recognize and enforce judgments in civil or commercial matters. The Convention applies to both monetary and non-monetary judgments that a court may render in civil or commercial matters. While its scope is broad, the Convention specifically excludes subjects viewed as fundamental to state sovereignty or public policy (e.g., criminal, revenue, customs, or administrative matters) and other areas that are subject to various treaty regimes or where the rules vary more significantly across jurisdictions (e.g., family disputes, intellectual property, antitrust, defamation, privacy, or armed forces matters).
The portability and enforcement of foreign judgments is important to any person or company that does business internationally. In this area, predictability is key. There exists a general presumption that foreign judgments will be recognized and enforced, and a refusal may create inefficient and uncertain litigation results. Countries may seek to recognize and enforce each other’s judgments for a myriad of reasons—including efficiency, access to justice, and comity. The current state of recognition and enforcement varies from country to country and court to court, creating confusion and inefficiency. Further ratification of the Hague Judgments Convention may ease some of that burden.
Procedure to Ratify the Hague Judgments Convention
With the EU and Ukraine ratifying the Convention, it will go into effect between these two states later this year. Several steps must take place before a treaty like the Hague Judgments Convention is effective:
- First, the states negotiate the treaty’s terms at a conference. The Hague Judgments Convention was negotiated during and concluded at the Hague Conference on Privacy and International Law on July 2, 2019.
- Second, a treaty opens for signature for a certain time following the conference. The Hague Judgments Convention has been open for signature since 2019, and in addition to the EU and Ukraine, five countries have signed—Costa Rica, Israel, the Russian Federation, the United States, and Uruguay.
- Third, signatory states may choose to ratify the treaty. A signature is not binding unless the state endorses that signature by ratification. Each foreign state has its own ratification procedure. On August 29, 2022, the EU became the first party to ratify the Hague Judgments Convention, and shortly thereafter, Ukraine became the second. The other signatories (including the United States) have yet to ratify the Convention.
- Fourth, with two contracting parties (the EU and Ukraine), the Convention is binding between those foreign states and enters into force on September 1, 2023, one year after the first two states completed ratification.
Ratification in the United States—Is It Possible? And How Would It Help American Individuals and Companies?
The United States signed the Hague Judgments Convention on March 2, 2022, but has yet to ratify it. Were it to happen, ratification would be a two-step process: the Senate formally gives its advice and consent, which empowers the president to ratify the treaty. US ratification could create a straightforward path for the recognition of US judgments abroad. Wider ratification could also provide a natural counterpart to the widely adopted New York Convention of 1958, which provides recognition and enforcement of arbitral awards across international borders.
As of June 2023, there exists no federal law governing the recognition of foreign judgments in the United States, and recognition and enforcement of judgments remain questions of state law. Most US states model their approach to recognizing foreign judgments on the Uniform Foreign Money-Judgments Recognition Act of 1962 and the Uniform Foreign-Country Money Judgments Recognition Act of 2005. US courts are liberal in recognizing foreign judgments, and typically do so unless there are specific mandatory or discretionary grounds to decline recognition. Grounds to deny recognition include, but are not limited to: doubt about the foreign court’s integrity, lack of due process rendering procedures fundamentally unfair, or judgment by fraud.
The Hague Judgments Convention Could Simplify Enforcement and Recognition of US Judgments Abroad
Because US law is generally receptive to the recognition and enforcement of foreign judgments, the Hague Judgments Convention would not drastically change the procedure for enforcement and recognition of foreign judgments in the US. For example, if a prevailing party seeks to collect on a Zimbabwean judgment in the US, there is a presumption in US courts that the Zimbabwean judgment should be recognized and enforced, absent any grounds to deny recognition. There are still procedural hurdles and costs the prevailing party will incur. The Hague Judgments Convention could make the enforcement and recognition process more efficient in the US by creating a single framework to replace the myriad of state court procedures.