Professor Ronald Brand spoke on the importance of judgment recognition among nations at The North Carolina Journal of International Law and Commercial Regulation Symposium on Friday, January 30, 2015. His lecture, titled “Understanding Judgments Recognition,” highlighted the significant developments in this area over the past fifteen years in the European Union (EU), the United States, and on a global front.
Regarding the EU, Brand focused on the Recast of Brussels I, which went into effect earlier this month and aims to improve efficiency in the judgments recognition process among member states. Brand analogized the effect of Brussels I to the Full Faith and Credit Clause of the U.S. Constitution. He suggested, however, that Brussels I results in lesser protection for parties to a judgment from non-member states in a manner that contradicts the National Treatment Clause of the GATT, which strikes down discriminatory treatment against foreigners.
Brand discussed several developments in judgments recognition in the United States in the first fifteen years of the twenty-first century. First, Brand compared two separate legislative proposals related to federal judgments recognition in the United States in 2005: the Uniform Law Commission’s proposed revision of the Uniform Foreign-Country Money Judgments Recognition Act and the American Law Institute’s proposed Federal Statute on Recognition and Enforcement of Foreign Judgments. Brand asserted that the different approaches of the two proposals represent opposing perspectives on the adoption of a uniform approach to evaluating requests for enforcement of foreign judgments. By advocating for revisions to the current policy, the Uniform Law Commission suggests it is sufficient for state courts to adopt reforms, while the American Law Institute suggests that a unified Federal approach is more appropriate. Second, Brand stressed the importance of two U.S. Supreme Court cases decided in 2011, Goodyear, which moved the U.S. position closer to the approach used by the EU under Brussels I, and Nicastro, which moved further away from uniformity with the EU.
Brand also discussed two major international developments on the horizon. The Hague Convention on Choice of Courts Agreement in 2005, which the EU and United States have both signed but not yet adopted, enhances the reliability of choice of law agreements in international contracts. Additionally, the formation of the Working Group on Judgments, suggests that changes may be on the horizon that lead to greater international comity in the foreign judgment recognition.
Presently, issues concerning foreign judgment recognition primarily arise in situations where no contract was in place between the parties, such as tort cases. As an example of a recent foreign judgment controversy, Brand referenced a widely noted U.S. court’s decision not to recognize an Ecuadorian court’s multi-billion dollar judgment against Chevron after a U.S. judge exercised forum non-conveniens and declined to hear the case here.
Because the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the “New York Arbitration Convention,” has been widely accepted internationally, many international contracts currently include arbitration clauses, thus avoiding reliance on recognition of judgments awarded in foreign courts for enforcement. However, Brand believes that dissatisfaction with the arbitration system among corporations has created a situation where “if we build it, they will come,” suggesting that international business contracts would rely on choice of law agreements over arbitration clauses if judgment enforcements were more reliable.
Posted by Jessica L. Watts on Fri. February 6, 2015 8:16 AM
Conflict of Laws, International Dispute Resolution, Symposium