The convention is the result of the ‘Judgments Project’, rooted in an even older idea of creating a counterpart to the successful 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), that celebrated its 60th anniversary last year. Depending upon which states ratify it, and when they do so, the Convention aims to provide an international legal framework for the mutual recognition and enforcement of judgments across borders at lower costs and shorter timeframes, offering individuals and business increased certainty when looking to enforce a judgment against their debtor overseas.
The European Commission has already confirmed that it will begin the process to prepare for EU accession. Therefore, the Convention will apply to Malta too as an EU Member State.
The Convention will apply to judgments in civil and commercial matters, thereby excluding revenue, customs and administrative matters. Specific exclusions from scope include judgments that have as their object the subject-matter that is also excluded from the Brussels Regulation Recast, such as wills and succession, insolvency, and arbitration. However, there are additional exclusions from scope, such as the carriage of goods and passengers, marine pollution, defamation and privacy. Further, Contracting States will be permitted to extend the list of matters excluded from the scope of the draft Convention simply by making a declaration to that effect.
From a temporal perspective, the Convention will only apply to judgments if both the State of origin and Requested State were party to the Convention at the time that the relevant judicial proceedings were instituted.
Eligibility for Enforcement
The Convention lays down an exhaustive list of thirteen jurisdictional grounds upon which Contracting States will be obliged to recognise foreign judgments. Only a single jurisdictional ground need be satisfied, and there is no hierarchy among them. That being said, there are certain adjustments allowed for judgments against consumers or employees, reflecting the protected status of these weaker parties.
Over and above this list, there are three exclusive bases for recognition and enforcement, in respect of:
- Judgments that ruled on the registration or validity of an intellectual property right required to be granted or registered;
- Judgments that ruled on rights in rem in immovable property; and
- Judgments that rules on a tenancy of immovable property for a period of more than six months.
The effect of this is wider than expected. If these judgments do not meet the bases of jurisdiction contained in this article, then they cannot be recognised or enforced under either the Convention or national law.
Refusal of Recognition and Enforcement
Once a judgment satisfies these eligibility requirements, recognition and enforcement can only possibly be prevented by proving one of the defences laid down by the Convention. These grounds of defence allow, but do not require, requested States to refuse recognition or enforcement.
Requested States are also permitted to refuse recognition or enforcement of a judgment to the extent that the damages awarded do not compensate for actual loss or harm suffered, thus making special allowances for legal systems that do not recognise exemplary or punitive damages.
The procedure for recognition or a declaration of enforceability, which terms refer to the so-called exequatur proceedings, shall be governed by the law of the requested State. Thus, in Malta, an application would have to be filed before the First Hall of the Civil Court for recognition of the foreign judgment in terms of the Convention. In accordance with Maltese procedural law, these first stage proceedings shall be ex parte; there is no need to notify the other party. The requesting party shall need to produce:
- a complete and certified copy of the judgment, which includes, where applicable, the court reasoning and not only the final order.
- in the case of a default judgment, an original or certified copy of the document establishing notification of defaulting party of the document instituting proceedings; and
- any other document necessary to show that the judgment has effect or is enforceable in the State of origin (or in the case of judicial settlements, a certificate showing the settlement is enforceable in the same manner as a judgment in the State of origin).
The declaration of enforceability then forms the basis for execution; the second stage of enforcement proceedings, which shall also be governed by domestic procedural law. Once this declaration is obtained, it will then be open for the other party to object to recognition and enforcement of the foreign judgment by filing an application to this effect before the Court of Appeal, on the basis that the judgment is not eligible for recognition in terms of the Convention.
The second stage, i.e. enforcement proceedings, presupposes a declaration of enforceability or registration of the judgment. These proceedings shall also be governed by the domestic procedural law of the requested State.
The law of the requested State also determines the prescriptive period relevant to seeking enforcement of a foreign judgment.
There shall be no review of the merits of the judgment. Moreover, the mere fact that the judgment is the subject of review in the State of origin shall not necessarily exclude the possibility of enforcement. The requested State can still grant recognition and enforcement, subject to the provision of security.
Provisional measures for enforcement of those judgments, such as garnishee orders and warrants of seizure, can be pursued in accordance with the national procedural law of the requested State prior to, or simultaneously with, an action for recognition. These measures can then be converted into executive ones once the declaration of enforceability is obtained.
Relationship with national law
The Convention does not prevent recognition and enforcement of a foreign judgment under national law. Therefore if a judgment is, for instance, not eligible for enforcement under the Convention, a party may still seek enforcement under national law. Moreover, judgment-creditors can even benefit from a combination of provisions from both systems. Thus, it is possible to benefit from the jurisdictional filters laid down by national law, but then benefit from the grounds for refusal set out by the Convention if they are more liberal than those contained in national law.