The role of the reciprocity requirement in the harmonization of standards for the recognition and enforcement of foreign judgments

Paragraph B - Limits of the Reciprocity Requirement Proposed Role

Although the Drafters of the proposed federal statute were keen on solving problems related to the application of the reciprocity requirement, and that by framing it and providing guidance for courts and practitioners, the reciprocity requirement as proposed by the ALI continues to present certain limits. These limits are related to the negative impact of the reciprocity requirement on the recognition and enforcement practice. In effect, where reciprocity does not really provide a solution to the problem especially in the United States (II), the subsistence of these limits shows the unsuitability of the notion in the field of the recognition and enforcement of foreign judgments (II).

I - The Proposed Reciprocity Requirement is not an Effective Solution to the Problem of Recognition and Enforcement of Foreign Judgments

The question that must be asked is as follow: Will the reciprocity requirement, as presented by the drafters of the proposed federal statute, be an effective solution to the problem of the recognition and enforcement of foreign judgments?

At a first glance, a positive answer may stand. By clarifying the scope and the methods of the application of the reciprocity requirement may lead to a liberal recognition and enforcement of foreign judgments. This is true. Because what the ALI is proposing is as follow: it is not sufficient to include a reciprocity requirement and wait for the reaction of foreign countries. It is rather to include the reciprocity requirement and to signal the willingness to cooperate. What the ALI is recommending is that by making the first step in recognizing foreign countries' judgments, they ensure to those foreign countries that their judgments will be given effect in the United States if they accept to recognize American judgments. In this context, the section7 should be combined with the other provisions of the proposed federal statute. With this respect section 2 of the final draft states that «a foreign judgment shall be recognized and enforced by courts in the United States in accordance with this Act»^392(*). In other words, if a foreign country accepts to recognize and enforce American judgments, United States' courts are under the obligation to give effect to foreign judgments^393(*), knowing that the United States are willing to make the first step and accept to recognize foreign judgments. This system is similar to the recognition and enforcement on the basis of comity, but includes the reciprocity requirement as a commitment to recognize and enforce foreign judgments, and as a balance which enables the United States to award cooperation and to punish non-cooperation.

However, this system lacks a fundamental condition. This condition is the compatibility of foreign judgments with the legal system of the enforcing state. That is to say that outside a formal agreement on the matter, every state will continue to apply its own standards for the recognition and enforcement of foreign judgments. This means that every state will accept effect to be given to foreign judgments only to those judgments which are compatible with their legal system. This stems the following: even though a state is willing to adopt a liberal judgments recognition practice, the fact that a foreign judgment is not consistent with the public policy of the enforcing state will be a sufficient reason for its non-recognition and its non-enforcement. All will depend on the compatibility of the judgment with the legal system of the enforcing state^394(*). With this respect, and looking to the possible obstacles to judgments recognition, this shows that the list as by far too long and the judgments recognition practice reveals considerable divergence^395(*).

Then the question is whether a country that commits itself to a liberal recognition practice but refuses to give effect to a foreign judgment on the basis of non compatibility of American judgments to its national standards of jurisdiction and recognition and enforcement of foreign judgments will be considered as a non reciprocating country? If the answer is yes, then judgments coming from that state should be denied full effect.

The answer of the proposed federal statute seems to be yes. If a country that refuses to enforce an American judgment because it considers that that judgment is incompatible with its legal system, the American courts will be under the obligation to decline recognition and enforcement of judgments coming from that state. It is «all or nothing» attitude i.e. accept our unique judgments recognition system or your judgments will not be recognized in the United States.

Where this system may work for American ordinary judgments, it seems that it cannot work for judgments based on what is considered «exorbitant bases of jurisdiction». As one scholar argued «some categories of American judgments will be refused enforcement almost elsewhere»^396(*).

For example, in France or in England where the reciprocity requirement does not exist as a precondition to the recognition and enforcement of foreign judgments, both countries check whether the rendering court has appropriate jurisdiction over the matter. In England it should be in accordance with English law; in France the litigation should have a real connection with the country where the foreign judgment was rendered. Thus, judgments rendered on bases of doing business jurisdiction are inconsistent with both national rules in both countries. With the proposed federal statute, judgments from France or England, which are considered as having liberal judgment recognition practice, will be refused recognition in the United States if they refuse to recognize American judgments rendered on the basis of doing business jurisdiction.

The system provided by the ALI focuses on the national standards rather than the internationally accepted standards. It may have a negative impact on ordinary judgments which are rendered on the bases of acceptable standards for the recognition and enforcement judgments. This is due to the fact that when a United States' court concludes there is lack of reciprocity just because that a foreign country's court refuses to give effect to an American judgment on the basis that the American rendering court lack jurisdiction over the matter, there are of possibilities that the foreign courts retaliate against ordinary judgments of the United States especially when that law of that country requires reciprocity. Then the focus would no longer be on whether the judgment was rendered on accepted and objective standards, but recognition and enforcement would be refused on the sole basis of reciprocity. As a result, and as one scholar stated «given the number of variables impacting on a country's decision whether to recognize a foreign judgment, including its own constitutional limitations, it is unclear that a new requirement of reciprocity will materially increase the quantum of U.S. judgments recognized abroad. Indeed...the numbers may decrease in response to such an overt display of judicial protectionism»^397(*). This is practically possible due to the fact that the solutions provided by the drafters of the proposed federal statute do not really solve the problems of the applicability of the reciprocity requirement. Those problems lead to unfairness and hamper international trade. The ultimate result of such system is that countries would emphasis on their national standards with reciprocity requirement on the detriment of the harmonization of judgments recognition and enforcement standards since reciprocity may create a world which focuses only on private interests rather than universal interests.

* ³⁹². The American Law Institute, Recognition and Enforcement of Foreign Judgments: Analysis and Proposal Federal Statute - Proposed Final Draft (April 11, 2005), section2 (a) -Recognition and Enforcement Generally, available at www.ali.org

* ³⁹³. There are also other conditions provided by section5  «Nonrecognition of a Foreign Judgment» and section6 «Bases of Jurisdiction Not Recognized or Enforced»; see The American Law Institute, Recognition and Enforcement of Foreign Judgments: Analysis and Proposal Federal Statute - Proposed Final Draft (April 11, 2005), available at www.ali.org

* ³⁹⁴. Sung Hoon Lee, Comity and Reciprocity in Foreign Judgment Recognition, The Berkley Electronic Press, 2005 available at www.expresso.com,

* ³⁹⁵. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 318 and 292

* ³⁹⁶. Richard W. Hulbert, International Jurisdiction and Judgments Project - Motion to Delete the Requirement of Reciprocity, May, 2004 available at www.ali.org

* ³⁹⁷. Katherine R. Miller, Playground Politics: Assessing the Wisdom of Writing a Reciprocity Requirement into U.S International Recognition and Enforcement Law, Georgetown Journal of International Law, winter 2004, p. 293 available at www.westlaw.com