Enforcement of International Judgments

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Paper is patient – as the saying goes: many parties make a choice of forum in advanced of any dispute. The issues of choice of forum and enforcement of judgments are intertwined because in evaluating a choice of forum, a party and its lawyers must consider whether a judgment of the chosen forum will be enforceable in the jurisdiction in which the defendant has assets.

The US and Germany are parties of two treaties. The first treaty is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (“New York Convention”). With limited exceptions it requires member countries to give effect to arbitration agreements and to enforce awards rendered in other countries by arbitration panels. In addition, arbitration offers other advantages: the parties can choose the arbitrators, tailor the procedures to their needs, and provide for confidentiality of the proceeding. The disadvantages are clearly the high costs, lack of reported decisions, and limited possibility of appeal. Even if a contract does not provide for arbitration, the parties may, after a dispute arises, agree to have the dispute resolved by arbitration. Different organizations can provide lawyers with model clauses. However, the lawyer has to consider modifications, deletions, and additions to such clauses.

The second treaty is the Hague Convention of June 30, 2005 on Choice of Court Agreements. The Convention applies to the choice of court agreements in civil or commercial matters. The Convention has three principal points:

Chosen court must hear the case if the agreement complies with the Convention. The seized court must dismiss any proceeding brought before the court unless one of the exceptions to the Convention applies.

Any judgment rendered by the chosen court must be recognized and enforced in other contracting states unless one of the exceptions established by the Convention applies.

International matters are a growing part of practicing law. Therefore, a lawyer needs general personal knowledge. An American lawyer can not rely on the knowledge of a foreign lawyer. Only if a lawyer has such general personal knowledge he is able to spot issues and give timely advice to clients.

Author: Melanie Schmitz, Legal Trainee Charlotte Office

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Reinhard von Hennigs