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

Part I: The Traditional Role of Reciprocity

As it was advanced in the introduction, reciprocity has been traditionally closely connected to the notion of sovereignty. Reciprocity has always been used as a prerogative for sovereignty and employed as a device for its protection. Through the reciprocity, sovereignty is protected by establishing equality between states.

The direct consequence of this conception is that no judgment can have effect outside the country where it was rendered. This is due to public aspect of the judgment as the expression of the sovereign power and as a resolution to private disputes.

Admitting that all states are sovereign and equal, states are required to make concessions in order to see their judgments enforced abroad giving the fact that no state will accept foreign expression of power in their territory. This leads states accept that foreign sovereign authorities have effect within their territory. To put in other words, reciprocity is employed as a device to protect sovereignty prerogatives through which the recognition and enforcement of foreign judgments can be ensured, and that, by inciting foreign sovereigns to make the necessary concessions. Thus, Reciprocity has always been employed as an efficient guarantee to respect sovereignty prerogative. As a result, the recognition and enforcement practices will be liberalized. This means that the liberalization of judgments recognition is not an end in itself; it is just a result.

With this respect, sovereign may have two approaches to the problem. Either they opt for a unilateral application of the notion of reciprocity, or for multilateral application of the reciprocity. The Unilateral application refers to the policy chosen unilaterally by a sovereign. This can happen either by the consent to accept foreign judgments as independent state; or, on the contrary, to slam the door and to refuse the recognition and enforcement of foreign judgments. The multilateral application refers, on the other hand, to the efforts undertaken by sovereign to establish in a formal way methods and applications of the reciprocity. Both approaches reflect the traditional role of the reciprocity rule.

Regardless its methods of the application, reciprocity has always been applied as the rational through which extraterritorial effect of foreign judgments were granted when they were taken abroad. Accordingly, we should address, in a first chapter, the role of the reciprocity through its unilateral application (Chapter I), before addressing, in a second chapter, its role through multilateral application (Chapter II).

Chapter I: The Traditional Role through the Unilateral Application of Reciprocity

The unilateral application of reciprocity refers to the attitude that one state adopts as a solution to the problems of recognition and enforcement of foreign judgments. The solutions differ with regard to the aspect emphesized in the foreign judgments. In effect, foreign judgments can be seen as a determination of private dispute and an exercise of state authority^44(*). On the one hand, countries that consider that a judgment is a mere resolution of an international dispute favour judgments recognition and consider that a decision rendered abroad is binding as long as the foreign proceeding was regular and fair^45(*). In this context, reciprocity may tend to ensure the reception of foreign judgments through a positive application and that by showing the desire to enforce foreign judgments. On the other hand, countries that focus on the fact that a judgment is a judicial declaration of a sovereign authority, consider that foreign judgments encroach on the forum prerogative and use sovereignty as bargaining chip exacting reciprocity as a precondition to judgments recognition^46(*). As a consequence, and in both situations, reciprocity is used as an inducenment and an incentive for foreign countries to liberate their judgments recognition practice. Ultimately, this may lead to the adoption of harmonized standards that meet other countries' expectations.

Therefore, It is better to deal with reciprocity as a positive requirement in a first section (Section I) before dealing with reciprocity as a negative requirement in a second section (Section II).

Section I: Reciprocity as a Positive Requirement for the Harmonization of Standards for the Recognition and Enforcement of Foreign Judgments: The Doctrine Comity

The reciprocity, as a positive principle, finds its origin in the doctrine of Comitas Gentium^47(*). In fact, the concept of Comitas gentium or Comity was suggested by legal scholars to be a happy solution to the problem of both respecting territorial sovereignty and the recognition and enforcement of foreign judgments^48(*). Therefore, it is worthy to discuss the notion of the positive reciprocity (Paragraph I) before analysing its impact on the harmonization of standards for the recognition and enforcement of foreign judgments (Paragraph II).

Paragraph A - The notion of Positive reciprocity or Comity

The notion of the positive reciprocity has a long evolution and controversial development. It passed from an attitude of a mere courtesy and a good will for states accepting foreign judgments to have effect within the limits of their territories, (I) to the rule which underlies the recognition and enforcement of foreign judgments (II).

I - Comity as an attitude of a mere courtesy and good will

As it was already states, one of the most unquestionable principles in private international law is that no judgments would have any extraterritorial effect outside the countries where they were issued. The very obvious question that might arise in these circumstances is how to justify the reception of foreign sovereign acts within the territories of sovereign states. The problem did not seem to have existed under the Roman law where the system seemed to favour the recognition and enforcement of foreign judgments^49(*). Under the Roman law, judgments rendered abroad were not seen as the product of foreign legal systems, but simply a resolution of a private dispute^50(*). This conception of foreign judgments led to the recognition of foreign judgments on the basis of res judicata^51(*) principle^52(*).

However, as foreign states begun to emerge within defined territories, where each sovereign state governed and controlled exclusively anyone who came under its control based on the idea of sovereignty as a supreme dominion, authority or rule of independent states^53(*), the reception of foreign acts became to be perceived as a threat to the state's supreme dominion. Under this conception foreign judgments came to be regarded as governmental acts whose compulsory effect should be limited to the sovereign's territory^54(*). The question of the reception of foreign acts became problematic with the rise of international commerce and the interaction between different foreign states.

In France, D'Argentré seemed to find a solution for this problem in an attempt to settle the controversy of conflict of inter-states sovereigns in France and especially those of Bretagne and the other French sovereigns^55(*). For him, even though the rules of each nation were exclusively territorial and that could not be applicable in other dominions, there was the exception of what was called «personal laws»^56(*). Those laws are applicable to certain persons despite the place where they were situated including outside their respective countries^57(*). This doctrine was developed later by Italian jurists under the name of the «Statutist Doctrine». The Italians created a system of conflict which incorporated elements of both the personal law from the Roman system and the territorial rule from feudalism^58(*). The statutist doctrine was based on the idea that a court could determine the applicable law by looking at the nature of the laws themselves. The laws were categorized as real i.e. effective only within the limits of the legislating sovereign's territory, personal i.e. effective wherever the affected person was situated, or mixed i.e. laws that were neither real nor personal^59(*).

This system seemed to satisfy Dutch jurists who needed a legal methodology that would allow the harmonization of the law of the Dutch provinces after getting their independence from Spain. The aim of such methodology was promoting the unification of the Dutch provinces while maintaining stability^60(*).

By insisting on the sovereignty of each nation and the exceptional character of the application of foreign laws, Paul Voet described that when one nation needed to observe Comiter the laws of other nations in order to avoid disturbing settled questions, foreign laws were often given effect which goes beyond the territory where they were established^61(*). Later, Jean Voet developed the idea derived from the word Comiter. He explained that nothing obliged a sovereign state to apply foreign law, even personal, but the application of the foreign law by one nation is possible ex comitate^62(*).

The concept of comity - or courtesy among political entities involving mutual recognition of legislative, executive and judicial acts - was finalized by Ulrich Huber when he set forth the three principles according to which foreign law could be applied within the geographic territory of another sovereign^63(*). First, he stated that all states were assumed to have exclusive sovereignty within, but not beyond, their national territory where they plenty exercise their sovereignty. Secondly, all persons who were present within the sovereign territory, even temporarily, were subjected to the state's sovereign authority. Finally, so far that rights acquired under the foreign law did not prejudice to the power and right and privileges of other governments, sovereigns could apply foreign law on the basis of comity.

It is important to point out that Huber conception of comity consisted in the possibility and not the obligation of foreign sovereign to apply foreign laws. Foreign sovereigns were not required to apply foreign law, but they did so as a matter of international courtesy and good will. Therefore, the application of foreign law would only be declined when the interests of the state or its subjects are impaired^64(*).

This idea of comity was borrowed later by the American scholar Joseph Story. He emphasised the importance of comity as a rational through which foreign laws and judgments might have effects in foreign countries despite the strict notion of sovereignty. For Justice Story, comity is the solution that allows a country to accept foreign countries' expression of power and authority. Influenced by Ulrich, Justice Story laid down four principles to justify the extraterritorial application of foreign laws. He reminded that laws have effect only within the nations' territories but he added that all nations are equal and independent. The law of each nation is exclusively applicable within the territories of each nation. Finally, each nation possesses exclusive jurisdiction over its territory so that no state can bind persons or property located outside that territory^65(*).

Note that comity was conceived as a solution to the foreign sovereign expression of power including judgments. Thus, the problem was not limited to the application of foreign laws; but it was extended to the reception of foreign judgments. As the expression of a state's sovereignty, foreign judgments are considered to be governmental acts whose compulsory effects are limited to the sovereign's territory. As foreign laws, the recognition and enforcement of judgments are perceived as a threat to the state's supremacy which allows it exclusively the use of public power to give effect to a judgment.

II - Comity as a Rule Underlying the Recognition and Enforcement of Foreign Judgments: From the Doctrine of Obligation to Hilton v. Guyot:

English jurisprudence, which occasionally referred to comity as a ground for the recognition and enforcement of foreign judgments^66(*), preferred to replace the notion of comity -as courtesy and good will among foreign sovereign -with a far more defensible principle that has been called the doctrine of obligation. This may be due the vagueness, imprecision and its arbitrary character of the notion of courtesy^67(*). It was even described by some scholars as «uncertain in status and hollow in content»^68(*).

It was in 1842 when the doctrine of obligation was laid down by English courts^69(*). It stipulates that whenever a foreign court of a competent jurisdiction has adjudicated a certain sum to be due from one person to another, the liability to pay that sum becomes a legal obligation that may be enforced in England by an action of debt^70(*). This means that foreign judgments create obligations which can be compared to those arising from contracts, and these obligations are enforced in England by an action on the debt^71(*). It is then for the debtor/defendant, once the judgment is proved, to show why he should not perform the obligation^72(*).

Later, English courts confirmed their disavowal to the doctrine of comity and repeated the doctrine of obligation in the case of Schibsby v. Westenholz^73(*). It was stated that «the true principle on which the judgments of foreign tribunals are enforced in England is that...the judgments of court of a competent jurisdiction over the defendant imposes a duty or obligation on the defendant to pay a sum of money for which judgment is given, which the courts of the country are bound to enforce; and consequently that anything which negatives that duty, or form a legal excuse for not performing it, is a defence on the action^74(*)».

Once the recognition and enforcement of foreign judgments was treated as an obligation, it was necessary to lay down conditions for foreign judgments to be enforced and recognized in England and to set out specific grounds for non recognition^75(*).

The doctrine of obligation was also criticized for failing to reveal the policy consideration underlying the rules on the recognition and enforcement of foreign judgments. It was considered that the doctrine was more concerned with explaining why foreign judgments are recognized and enforces rather than with explaining which foreign judgments should be recognized and enforced.

Between the notion of obligation and the mere courtesy, comes the famous legal and modern definition of comity provided by the Supreme Court of the United States in Hilton v. Guyot in 1895. The definition was laid down on the occasion of a case on the recognition and enforcement of a French judgment in the United States. The Supreme Court, in defining the notion of comity, stated that «Comity, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of a mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to rights of its own citizens or of other persons who are under the protection of its laws»^76(*).

The Supreme Court confirmed that between the two extremes of a binding obligation and the mere courtesy situates the notion of comity. Comity is the consent by which a state accepts to give effect to foreign judgments within its territory, not as a matter of obligation or mere good will, but as a matter of acceptance taking into account common convenience and mutual necessities^77(*). In this context, the New York Court of Appeal expressed in the decision in Johnston v. Société Générale Transatlantique, citing Brown J. in Mast, Foos & Co. v. Stover Mfg Co.^78(*) that «comity is not a rule of law, but it is a rule of practice, convenience and expediency. It is something more than mere courtesy, which implied only deference to the opinion of other, since it has substantial value in securing uniformity of decision, and discouraging repeated litigation of the same question^79(*)».

The same idea was confirmed later by Third Circuit Court of Appeal in Somportex Ltd. v. Philadelphia Chewing Gum Corp. where the Court of Appeal stated that «Comity is the recognition which one nation extends within its own territory to the legislative, executive, or judicial acts of another. It is not a rule of law, but one of practice, convenience, and expediency. Although more than mere courtesy and accommodation, comity does not achieve the force of an imperative or obligation. Rather, it is a nation's expression of understanding which demonstrates due regards both to international duty and convenience and to the rights of persons protected by its own laws. Comity should be withheld only when acceptance would be contrary or prejudicial to the interest of the nation called upon to give it effect^80(*). Consequently, the modern definition of comity places the notion in a midway between binding obligation and mere good will accorded to an act of sovereign.

Recently, the idea of comity was confirmed by the Canadian Supreme Court. In 1990 Morguard Investment v. De Savoye case, the Supreme Court of Canada adhered to the approach that comity should be the basis of the judgment recognition between sister-provinces of Canada^81(*). Later, in 2003, the approach was extended to foreign judgments^82(*). The Canadian Supreme Court recognized that when the requirement of comity are met, «the judgment of [other states] courts should be respected»^83(*). In its definition of comity, the Canadian Supreme Court cited the definition of the American Supreme Court in Hilton v. Guyot^84(*).

In order to clear the notion out from any arbitrary interpretation, the Supreme Court of the United States had to lay down conditions in their absence comity can not be granted to foreign judgments. According to the Supreme, «where there has been opportunity for a full and fair trial abroad before a court of a competent jurisdiction, conducting the trial upon regular proceeding, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries, and there is nothing to show either prejudice in the court, or in the system of laws under which it was sitting, or fraud in procuring the judgment, or any other special reason why the comity of this nation should not allow it full effect, the merits of the case should not, in an action brought in this country upon the judgment, be tried afresh^85(*)». Whenever those conditions are met, the enforcing court will be compelled to give effect to a foreign judgment.

* ⁴⁴. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 292

* ⁴⁵. Id.

* ⁴⁶. Id; Professor Junger added that «if recognition is considered to entail a surrender of forum sovereignty, the temptation looms large to impose any number of addition condition for such a sacrifice».

* ⁴⁷. Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁴⁸. Susan L. Stevens, Commanding International Judicial Respect : Reciprocity and the Recognition and Enforcement of Foreign Judgments, 26 Hastings International & Comparative Law Review, 2002 - 2003 p. 117 at www.heinonline.com and www.westlaw.com. See also, Joel R. Paul, Comity in International Law, 32 Harvard International Law Journal, 1991 at www.westlaw.com

* ⁴⁹. Id.

* ⁵⁰. Id.

* ⁵¹. The principle of Res Judicata means once the judgment is rendered by court and become final, the issue is considered as being definitively settled by a judicial decision, BLACK'S LAW DICTIONARY 1312 7^th Edition 1999.

* ⁵². Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁵³. Id.

* ⁵⁴. Friedrich K. Juenger, The recognition of Money Judgments in Civil and Commercial Matters, Selected Essays on the Conflict of Law, 2002, p.284

* ⁵⁵. Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁵⁶. Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁵⁷. Id.

* ⁵⁸. Joel R. Paul, Id. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 286-287

* ⁵⁹. Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁶⁰. Pedro J. Martinez-Fraga and Greenberg Traurig, P.A. Comity as a Step Towards the Unification of Private Procedural International Law, The Berkley Electronic Press, 2006 available at www.expresso.com

* ⁶¹. Paul Lagarde, La Réciprocité en Droit International Privé, Collected Courses of The Hague Academy of Private International Law, Tome 154 of the Collection, 1977 p. 114

* ⁶². Jean Voet wrote that if the authorities of different states which were independent and sovereign, reciprocally refused their decisions by a mutual condescension, they made the condition of their subjects harder. Each of them would disturb, disrupt and cancel the acts of the other states, even the best ones, and would see the other states disturb, ruin and annihilate its acts by virtue of an eye for an eye and the rigour of the law.

* ⁶³. Sung Hoon Lee, Comity and Reciprocity in Foreign Judgment Recognition, The Berkley Electronic Press, 2005 available at www.expresso.com

* ⁶⁴. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 286-287

* ⁶⁵. Sung Hoon Lee, Comity and Reciprocity in Foreign Judgment Recognition, The Berkley Electronic Press, 2005 available at www.expresso.com,

* ⁶⁶. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 290

* ⁶⁷. Robert Perret, La Reconnaissance et L'Exécution des Jugements Etrangers Aux Etats-Unis, Librairie de Droit, p. 73~80

* ⁶⁸. Arthur von Mehren and Donald Trautman, Recognition of Foreign Adjudications: a Survey and a Suggested Approach, Harvard Law Review, 1968 available at www.westlaw.com

* ⁶⁹. Russel v. Smith 1842.

* ⁷⁰. Id.

* ⁷¹. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 290

* ⁷². These defenses are limited to the proof that the rendering court lacked jurisdiction or that the judgment was obtained by fraud. See Eugene F. Scoles, Conflict of Laws, third Edition, ST. PAUL, MINN 2000, p. 1188.

* ⁷³. Friedrich Juenger, The Recognition of Money Judgements In Civil and Commercial Matters, Selected Essays on the Conflict of Laws, p. 290

* ⁷⁴. Schibsby v. Westenholz, (1870) LR 6 QB 155 (QB, England), Janet Walker, Private International Law, Cases and Materials, 2004, p.310

* ⁷⁵. Common law countries generally follow the early English law on the recognition and enforcement of foreign judgments. The attitude adopted by English courts has been adopted to permit the successful suitor to bring an action in England on the foreign judgment. While deciding whether to give effect to foreign judgment, English court, and common law courts generally, will consider whether requirement for recognition and enforcement are met. These requirements are traditionally related to the prima facie enforceability of the foreign judgment which means that the foreign judgment should be not only issued by a court of a competent jurisdiction but also the foreign judgment should be final an conclusive. However, even though the foreign judgment is prima facie enforceable, the foreign judgment may be denied recognition and enforcement if it appears that one of the bases for non recognition, which are fraud, natural justice an public policy, are proven by the defendant.

* ⁷⁶. Hilton v. Guyot, Supreme Court of the United States, 1895, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed. 95

* ⁷⁷. J. Story, Commentaries On The Conflict Of Law 7-8, (1834), Young-Joon Mok, The Principle Of Reciprocity In The United Nations Convention On The Recognition And Enforcement Of Foreign Arbitral Awards of 1958, 21 Case W. Res. J. Int'l L. 123, 1989 at www.heinonline.com

* ⁷⁸. Mast, Foos & Co. v. Stover Mfg. Co., 177 U.S. 485, 488, 20 S.Ct. 708, 710, 44 L.Ed. 856

* ⁷⁹. Johnston v. Société Générale Transatlantique, 242 N.Y. 381, 152 N.E. 121

* ⁸⁰. Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 440 (3^rd Cir, 1971)

* ⁸¹. In Canada, as well as in the United States, judgments rendered in sister-states or sister-provinces are considered as foreign judgments. However, unlike the United States where the recognition and enforcement of sister-state judgments is governed by the Full Faith and Credit Clause (the article IV of the constitution see chapter II below the Full Faith and Credit), there is no such commend in the law of judgment recognition in Canada, and sister-provinces judgments continue be regarded as strictly foreign judgments and were treated as such. In the Morguard case, the Canadian Supreme Court changed this rule in relation to inter-provincial judgments and required that the Full Faith and Credit should be given to inter-provincial judgments. See H. Scott Fairley and John Archibald, After the Hague: Some Thoughts on the Impact on Canadian Law of the Convention on Choice of Court Agreements, ISLA Journal of International & Comparative Law, Vol. 12:417, 2006, p. 418-423

* ⁸². Beals v. Saldanha, 2003

* ⁸³. Morguard Investment v. De Savoye, 1990

* ⁸⁴. Justice La Forest, writing for The Supreme Court of Canada stated «I much prefer the more complete formulation of the idea of comity adopted by the Supreme Court of the United States in Hilton v. Guyot. Morguard Investment v. De Savoye, 1990

* ⁸⁵. Hilton v. Guyot (1895)