Fitch is the managing partner of Sally & Fitch LLP in
Boston. He is the author of "The Enforcement of Foreign Money
Judgments in Massachusetts," 81 MASS. LAW REVIEW 65 (1996). Hill
is a member of the Class of 2013 of Boston College Law School and
was a Summer Associate at Sally & Fitch LLP in 2012. She is a
graduate of Duke University.
The litigation of international commercial disputes in U.S.
courts is often disfavored for the simple reason that U.S.
judgments are notoriously difficult to enforce in foreign
countries.1 International arbitration is the preferred
alternative to litigation because the United States, along with 145
other countries, is a party to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, (commonly referred to
as the New York Convention), a treaty that provides for the
recognition and enforcement of international arbitral
awards.2 Within the next year, the United States is
expected to begin implementing a new treaty that will eliminate
major obstacles to the recognition and enforcement of certain civil
judgments in foreign courts. The implementation of the treaty will
give parties to international commercial agreements more
flexibility in choosing their preferred method of dispute
THE HAGUE CONVENTION ON CHOICE OF COURT AGREEMENTS
In 2009, the United States signed the Hague Convention on Choice
of Court Agreements, a treaty that establishes rules for the
enforcement of judgments among the countries party to the
convention.3 The convention is the first international
agreement the U.S. has entered concerning the reciprocal
enforcement of judgments.
The convention applies to cases in which the parties have
entered an agreement designating the court(s) of one country as the
exclusive forum to hear their disputes.4 The convention
sets forth three fundamental rules: 1) the court chosen by the
parties shall hear their case; 2) any court not chosen by the
parties must decline to hear the case; and 3) the courts of other
countries must recognize and enforce a judgment rendered by the
parties' chosen court.5 The convention applies to
"international" civil cases, meaning cases in which the parties or
other elements of the dispute have a connection to more than one
country.6 However, a number of civil matters, including
consumer transactions, certain tort actions, employment disputes,
family law matters, and intellectual property disputes, are
excluded from its scope, regardless of whether they are
"international" in nature.7
The convention aims to remove barriers to international trade by
effectuating parties' choice of court agreements. Parties to
international transactions can agree on a forum for dispute
resolution and have certainty that actions brought in other courts
will be dismissed. Moreover, parties can have confidence that a
judgment rendered by the chosen court will be enforced in signatory
countries where a defendant may have assets.
Both the U.S. and the European Union have signed the convention
and are expected to implement it within the next year.8
Argentina, Australia, Canada, Costa Rica and New Zealand are also
working toward ratification of the treaty.9 Mexico is
the only country that has officially acceded to the
treaty.10 Ideally, the U.S. and E.U. accession to the
treaty will encourage even more of the U.S.'s trading partners to
agree to it. It remains to be seen whether the convention will
receive the nearly universal embrace of the New York
BENEFITS OF THE CONVENTION
Courts within the United States already liberally enforce
foreign judgments. However, judgments rendered here frequently do
not receive the same favorable treatment abroad.11 For
example, in many European countries, courts will regularly refuse
to enforce U.S. judgments citing lack of jurisdiction, an award of
excessive damages, or a violation of the country's public
policy.12 Thus, the main benefit of the convention is
that it will increase the enforcement of U.S. judgments abroad. The
convention creates a presumption that foreign courts will enforce
judgments rendered by the parties' chosen court. Further, a court
may only refuse to recognize a judgment on the bases listed in the
convention, eliminating some uncertainty where laws vary from
country to country and state to state.13 The convention
thus adds a great deal of predictability and certainty to the
process of judgment enforcement.
The convention was modeled in large part on the New York
Convention. Actions to enforce international arbitral awards under
that convention have had a high rate of success.14
Consequently, a large majority of international commercial
agreements contain mandatory arbitration clauses.15 The
implementation of the convention will make litigation a viable
alternative to arbitration for dispute resolution in international
transactions. There are many reasons why parties may prefer
litigation for the resolution of particular kinds of potential
disputes. Parties who draft agreements that provide for the
resolution of disputes in courts shall now have confidence that the
judgment of their chosen court will be enforceable in other
EFFECT ON MASSACHUSETTS LAW
The Uniform Foreign Money Judgments Recognition Act - M.G.L.
c.235 §23A, (the UFMJRA), currently governs the recognition and
enforcement of money judgments of foreign courts in Massachusetts.
Thirty-two other states have adopted some version of the uniform
recognition act.16 The UFMJRA establishes that courts
will recognize foreign money judgments unless the party objecting
to the recognition of the judgment can prove one of the defenses
provided by the statute.17 The convention, when
implemented, will preempt the UFMJRA. However, the UFMJRA will
continue to apply in cases where the parties do not have a forum
selection agreement or the subject matter of the case does not fall
within the scope of the convention.
The convention and the UFMJRA provide similar defenses to
enforcement of a foreign judgment. Both allow a court to refuse to
recognize a foreign judgment if: 1) the defendant did not receive
sufficient notice to enable him to defend; 2) the judgment was
obtained by fraud; 3) enforcing the judgment would violate public
policy; or 4) the judgment conflicts with another
judgment.18 Under the UFMJRA, courts have interpreted
these defenses narrowly, upholding foreign judgments unless a
party's basic rights were violated.19 The same results
should occur in enforcement actions brought under the
Under the UFMJRA, a party may also object to the recognition of
the foreign judgment on the basis of lack of jurisdiction or lack
of due process.20 The jurisdiction of the foreign court
is the most frequently litigated issue in enforcement actions.
Conversely, in an action under the convention, a party cannot
object to the foreign court's jurisdiction or failure to provide
due process. Because the parties agreed that the foreign court
would be the forum for the resolution of any disputes, they may not
later object to its jurisdiction or procedures. However, the
convention does allow the party to object that the choice of court
agreement is null and void or that the party lacked capacity to
enter it.21 In actions under the New York Convention,
which provides similar defenses to the enforcement of arbitral
awards, U.S. courts have almost always held arbitration clauses
valid.22 The same result is likely for choice of court
agreements governed by the convention.
Overall, the convention comports with the existing law on the
enforcement of foreign judgments and arbitral awards. Therefore,
courts are likely to liberally enforce foreign judgments in actions
under the convention, as they have under the UFMJRA and the New
York Convention. A high enforcement rate will ensure that the
convention succeeds in making litigation in a designated forum a
viable option for parties to international transactions.
IMPLEMENTATION OF THE CONVENTION
The implementation of the convention will occur through a
combination of federal and state legislation. A new federal statute
will govern actions brought in federal court and in state court
actions where states have not enacted their own legislation. The
federal statute does not establish federal question jurisdiction
over actions brought under the convention, so federal jurisdiction
will lie only where there is diversity of citizenship. The State
Department has indicated its intent to propose the federal statute
in Congress by January 2013.
The states can enact their own laws implementing the convention.
The states may not vary the substance of the convention or the
federal statute but may establish their own procedures for
enforcement actions. The Uniform Law Commission has drafted a
uniform state statute that harmonizes the provisions of the
convention with the existing uniform state law on recognition and
enforcement of foreign judgments.23 The uniform state
law will be finalized and sent to the Massachusetts legislature
before the next legislative session begins, in January 2013.
The Massachusetts Legislature, if it enacts the state law, must
decide whether to open the Massachusetts courts to disputes that
have no connection to the state.24 The convention states
that the courts designated by the parties in their choice of court
agreement must exercise jurisdiction over the case.25
Some parties may wish to choose a "neutral" site for litigation of
their disputes.26 However, a state may declare that its
courts will not exercise jurisdiction over disputes that have no
connection to the state, even if the parties chose that
forum.27 For example, in New York, the courts will
exercise jurisdiction over a dispute that has no connection to the
state only if the parties agree that New York law will apply and
there is a minimum amount in controversy.28 The
Massachusetts legislature could put similar restrictions on the
jurisdiction of the commonwealth's courts.
Thus, there will need to be discussion within Massachusetts
regarding the most advantageous approach to implementation of The
Hague Convention of Choice of Court Agreements. However, any course
will provide a new and more reliable procedure for the recognition
and enforcement of Massachusetts judgments in foreign countries.
Albeit limited by the small but growing group of its signatories,
the convention will give parties entering international commercial
transactions the genuine alternative of litigation over arbitration
for the resolution of serious disputes that may arise between
Jonathan W. Fitch practices
international arbitration and business litigation at Sally &
Fitch LLP in Boston. He is also an arbitrator in international
Faith A. Hill, a graduate of
Duke University, is a third year student at Boston College Law
School and was a summer associate at Sally & Fitch
LLP.1See Linda J. Silberman, The
Impact of Jurisdictional Rules and Recognition Practice on
International Business Transactions: the U.S. Regime, 26 Hous.
J. Int'l L. 327, 351-352 (2004).
2See Guy S. Lipe & Timothy J. Tyler,
The Hague Convention on Choice of Court Agreements: Creating
Room for Choice in International Cases, 33 Hous. J. Int'l L.
1, 4-5 (2010). Full text of the New York Convention and a list of
contracting states is available here
(last visited July 23, 2012).
3Full Text and Status Table of the Hague Convention
on Choice of Court Agreements (Hague Convention), available here (last visited July 23, 2012).
4Hague Convention, art. 3.
5Hague Convention, art. 5, 6, and 8.
6Hague Convention, art. 1.
7Hague Convention, art 2.
8Marta Pertegás, First Secretary, Hague Conference on
Private International Law, Presentation at the First Gulf Judicial
Seminar on Cross-Frontier Legal Co-operation in Civil and
Commercial Matters: Introduction to the 2005 Choice of Court
Convention (June 21, 2011), available here.
11Silberman, supra note 2.
12See Comm. on Foreign and Comparative Law
Ass'n of the Bar of the City of New York, Survey on Foreign
Recognition of U.S. Money Judgments, 4-13, (2001), available here (last visited July 20, 2012).
13Hague Convention, art. 8(1).
14See Stavrow Brekoulakisa, Enforcement
of Foreign Arbitral Awards: Observations on the Efficiency of the
Current System and the Gradual Development of Alternative Means of
Enforcement, 19 Am. Rev. Int'l Arb. 415, 432 (2008).
15See Lipe & Tyler, supra note
16Massachusetts and fourteen other states have
enacted the UFMJRA. The Uniform Law Commission promulgated an
updated version of the UFMJRA in 2005, which 18 states have
adopted. The commonwealth has not yet adopted 2005 Act. Full text
and status of the UFMJRA is available here (last visited July 23, 2012). Full
text and status of the 2005 Act is available here (last visited July 23, 2012).
17See Mass. Gen. Laws ch. 235 § 23A
18See Hague Convention, art. 9; Mass. Gen.
Laws ch. 235 § 23A, par. 3.
19See, e.g., Violeta I. Balan, Recognition and
Enforcement of Foreign Judgments in the United States: The Need for
Federal Legislation, 37 J. Marshall L. Rev. 229, 245 (2003)
(discussing the narrowness of the public policy exception to the
URMJRA); Lucien J. Dhoogeal, Auinda v. Chevron Texaco:
Discretionary Grounds for the Non-Recognition of Foreign Judgments
for Environmental Injury in the United States, 28 Va. Envtl.
L.J. 241, 274 (2010) (discussing the narrowness of the fraud
exception to the UFMJRA).
20Mass. Gen. Laws ch. 235 § 23A, par. 2.
21Hague Convention, art. 9(a).
22See May Lu, The New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards:
Analysis of the Seven Defenses to Oppose Enforcement in the United
States and England, 23 Ariz. J. Int'l & Comp. L. 747, 757
23Uniform Law Commission, Uniform Choice of Court
Agreements Convention Implementation Act (Uniform Implementation
Act), available here (last visited July 23, 2012).
24See Uniform Implementation Act § 10.
25Hague Convention, art. 5.
26See Lipe & Tyler, supra note
3, at 3.
27Hague Convention, art. 19.
28See Carolyn A. Dubay, International
Law and Domestic Judicial Procedure: Implementing the Hague
Convention on Choice of Court Agreements in the American Federal
System, at 32-33, available here (2010).