Reports are that the Hague
Conference on Private International Law has again postponed work on the
judgments project for six months, because of differing government views
standing in the way of the project’s progression. This project started
over 20 years ago, in 1992, and has already been shelved once due to the
irreconcilable positions of state governments. This latest temporary
shelving of the project is an unfortunate development for businesses trading
across borders, particularly those without the means to pay for lawyers and
experts in multiple countries.
The Hague Conference on
Private International Law is a multilateral body tasked with putting in place
measures to reduce the differences between legal systems around the world and
enable greater global legal cooperation. The Hague Conference cites
membership from 71 countries and 1 regional organization (the European Union).
A famous product to come out of the Hague Conference that often receives media
attention is the abduction convention, which puts in place a framework to
facilitate the return of internationally abducted children.
The judgments project was
looking at developing an arrangement to enable the judgments of one country’s
courts to be recognized in another country without parties having to initiate
new legal proceedings in the second country. Currently there is no global
framework in place to allow this to occur.
Regional arrangements
exist, such as within the European Union, as do a selection of bilateral
treaties. Notably, however, some of the major trading economies, such as China,
are largely absent from these arrangements, preventing successful parties from
enforcing their judgments against individuals and companies with their assets
in China.
In order to get around this
problem, companies have to employ local experts in several countries, resort to
arbitration or informal dispute resolution, when they would otherwise prefer to
have their dispute resolved in a court, or just write off judgment debts that
are too difficult to be recovered. While progress on the judgments project
will not necessarily improve the situation in particular countries, it is hoped
that it will turn the spotlight on this gap.
Governments around the
world continue to devote considerable resources to the promotion of free trade
agreements but little attention is paid to reducing these non-tariff barriers
to trade. Until Governments consider prioritizing projects such as these,
companies will continue to face significant trading risks.
