The economic and commercial reality of the current business landscape means that many international commercial relationships have at some point become engaged in litigation resulting in a foreign judgment being handed down which is later sought to be enforced in Ireland. The extent to which a foreign judgment will be given recognition depends on the principles of private international law of the country of recognition.

In Ireland private international law has increasingly been the subject of various harmonisation measures adopted by the European Union. These have sought to standardise and simplify the rules regarding jurisdiction and the recognition and enforcement of judgments between the EU Member States. These measures include the Brussels 1 Regulations (Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) (as amended)), and the Lugano Convention (as between the EU Member States and the EFTA States, Norway, Iceland and Switzerland). The extent to which judgments handed down by the courts of Member States of the European Union are recognised and enforced by the Irish Courts will be determined in accordance with these Regulations and Convention.

As regards non-EU judgments, and cases where there is no international convention in force to provide for a reciprocal recognition of judgments (such as, for instance, between Ireland and each of America, Canada, and Egypt), the common law rules govern the question of enforceability of judgments. As will be discussed further below, these rules are restrictive in nature and may act as a considerable impediment to having one's foreign judgment recognised by an Irish court.

The Common Law Rules

The procedure for enforcing a foreign judgment under Irish common law rules takes the form of an action as for the recovery of a simple contract debt. This involves issuing summary proceedings in the High Court seeking an Irish judgment in the terms of the foreign judgment.

There are a number of prerequisites to be met under Irish common law in order for a court to recognise and enforce a foreign judgment and these are as follows:

  • the judgment must be for a definite sum. This rules out the possibility of having non-monetary judgments and enforcement of actions concerning un-liquidated debts enforced.
  • the foreign judgment must be final and conclusive. In essence this means that the foreign decree must be final and unalterable by the court that pronounced it. Even when an appeal is pending the judgment may be considered final and conclusive unless the appeal has the effect of staying the execution of the original judgment.
  • the judgment against the defendant must be given by a court of competent jurisdiction. This stipulates that the foreign court must have had 'jurisdiction' under Irish conflict of law rules to hand down final judgment. This criteria presents the most difficulties when seeking to enforce a foreign judgment in Ireland and is discussed further below.

Criteria for Assessing whether the Foreign Court is Competent In accordance with the rules of private international law, an Irish court may deem a foreign court to be competent for the purposes of enforcement if the following criteria are met:

  • the defendant must have been present in the country in question at the time of the foreign proceedings (i.e. at the time of service). Where the defendant is a company, it will be viewed as present in a foreign country if it conducts business from an address in that country, or
  • the defendant must have submitted to the jurisdiction of the foreign proceedings. Submission to the proceedings could mean that:
  • there had been a prior agreement to submit to that jurisdiction; or
  • the defendant had participated in the foreign proceedings (for instance if the judgment debtor voluntarily appeared before the foreign court or counterclaimed in the proceedings). The defendant will not be deemed to have submitted to the jurisdiction where he appeared only in order to contest the jurisdiction of the foreign court. Furthermore, a judgment handed down in default of appearance would not constitute submission to the jurisdiction of the foreign court.

These criteria to establish whether the foreign court had 'international jurisdiction' to hand down final judgment have recently been endorsed by Clarke J in Re the Matter of Flightlease (Ireland) Ltd (In Voluntary Liquidation) [2008] 1 I.L.R.M and more recently still in Thema International Fund PLC v HSBC Institutional Trust Services [Ireland] [2011] IEHC 344. They have, however, proved problematic for many litigants seeking to have their judgments enforced in Ireland. The following have been held by the Irish courts not to afford sufficient bases of jurisdiction for the purposes of recognition and enforcement:-

  • the nationality or allegiance of the defendant;
  • the domicile of the defendant;
  • reciprocity - although Irish courts assume jurisdiction on a discretionary basis over defendants out of the jurisdiction in domestic cases on certain grounds, judgments of a foreign court exercising jurisdiction on a comparable basis would not be enforceable in Ireland ;
  • the cause of action arose in the foreign country; or
  • possession by the defendant of property in the foreign country.

In summary, for a foreign court to be deemed one of competent jurisdiction for the purposes of enforcement, the defendant must have (a) been resident or present in the foreign jurisdiction at the time of proceedings, or (b) appeared or participated in the proceedings (other than to challenge jurisdiction), or (c) contracted to submit to that jurisdiction. Furthermore, even if the jurisdictional competency criteria are met, an Irish court can also refuse to enforce the judgment if the foreign judgment was obtained by fraud, if the judgment violates Irish public policy or involves certain foreign laws which will not be enforced in Ireland, if the judgment is in breach of natural justice or if it is irreconcilable with an earlier foreign judgment.

Difficulties with the Current Common Law Rules

These stringent common law rules have led to a situation where there is a considerable disparity of treatment between the Brussels Regulation/Lugano Convention judgments and those from non-EU Member States. It has been argued that by maintaining such a divide, the common law is implying that judgments beyond the remit of Europe are not worthy of the same level of respect and deference. The Brussels Regulation and the Lugano Convention are underpinned by principles such as fairness, respect, comity and justice. In contrast, the current common law rules have been described by some commentators as "principleless" and in stark need of reformulation.

If the situation arises that the enforcement of a foreign judgment is not possible in Ireland, it might be necessary for the plaintiff to re-litigate the matter de novo in Ireland. However, an Irish court would only permit litigation de novo in very limited circumstances where the plaintiff can establish that the Irish courts have jurisdiction to hear the claim. A further word of caution is that, if permitted, such an action may result in increased costs and/or the expiration of the limitation period.

The Commercial Court can fast track certain claims of not less than €1,000,000. In these challenging economic times there has been a substantial increase in the number of summary proceedings which have been dealt with very quickly. Cases are averaging 26 weeks from start to finish. This process may help to facilitate a person/entity to quickly ascertain whether the Irish court can and will recognise and enforce a non-EU judgment.

Parties are generally interested in transnational legal certainty and in avoiding repeated litigation and conflicting decisions. Furthermore the general public has an interest in international decisional harmonies and in avoiding resources being spent on re-litigation. Countries will also have a common interest in promoting cross national transactions. On the other hand, however, there are valid reasons for Irish courts to deny certain foreign judgments with the same force they grant their own judgments since the foreign procedure may be viewed as deficient, or the outcome of the foreign litigation may be viewed as objectionable. It is balancing these two conflicting views which has shaped the process of reform in Canada1 and the adoption of the Hague Judgments Convention.

The Hague Judgments Convention (the "Convention")

On the 30 June 2005 the Hague Conference on Private International Law adopted a Convention on Choice of Law Agreements, referred to as the "Hague Judgments Convention", which sets out uniform rules on jurisdiction and the recognition and enforcement of foreign judgments in civil or commercial matters. The Convention does not yet supersede the common law rules for enforcing non-EU judgments as it requires ratification by at least two states for it to enter into force. Whilst both the United States and the European Union (on behalf of all EU Member States other than Denmark) have signed the Convention, as of now, only Mexico has formally ratified it. The European Union has indicated a readiness to ratify the Convention as soon as the United States does so (consultations regarding the procedure for ratification and implementation in the U.S.A. is currently ongoing).

It is envisaged that the Convention, when ratified, will provide a degree of certainty and will ensure the effectiveness of exclusive choice of court clauses in the context of international business. It will also standardise and simplify recognition and enforcement rules in a similar manner as has been achieved by the European harmonisation measures. The impact that implementation of the Convention would have on the current regime regarding the enforcement of non-EU judgments is discussed in further detail below.

Effect of the Hague Judgments Convention

The Convention, if ratified, will render effective choice of court clauses in business-to-business agreements which are concluded in civil or commercial matters. The Convention sets out a broad range of excluded matters which was necessitated largely due to a divergence of views between the two main legal systems involved in the negotiations (civil law and common law) and also comments and objections of representatives of industry. Excluded matters include, inter alia, business-to-consumer and consumerto- consumer agreements, arbitration proceedings, IP rights, insolvency, transportation, anti-trust matters and employment agreements.

The Convention contains three main rules which are as follows:

  • the chosen court must hear the case if the choice of court agreement is valid according to the standards established by the Convention;
  • any court seized, but not chosen, must dismiss the case unless one of the exceptions established by the Convention applies; and
  • any judgment rendered by the court of a contracting state which was designated in an exclusive choice of court agreement that is valid according to the standards established by the Convention must be recognised and enforced in other contracting states unless one of the exceptions established by the Convention applies.

Conclusion

The Hague Judgments Convention is undoubtedly a commendable development in the sphere of cross border commercial relations and the reciprocal recognition of judgments. It is a major progression towards clarity, certainty and harmonisation of the rules regarding jurisdiction and the enforcement of transnational business disputes. However, it has strayed from its initial objective of creating a global judicial arena covering all sorts of jurisdictional bases, ranging from contract to tort, a general defendants' forum and other bases. Arguably, too many mutual concessions to the legal systems and industrial interests partaking in the negotiations have deprived the Convention of its initial all-embracing aspirations and have failed to bring about comprehensive harmonisation to the degree which has been achieved by the analogous European measures. For the forseeable future however ,the common law system with its limitations and rigidity continues to apply to the enforcement of foreign (non-EU) judgments in Ireland.

Footnotes

1 Many of the above criticisms have been accepted and altered by the Canadian Supreme Court. In particular, the Canadian courts have moved away from the rigidity of the competency criteria and embraced a "real and substantial connection" test which loosely mirrors the criteria which had previously only been adopted in cases concerning the recognition of foreign divorces.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.