For the last two years, the Hague Conference has held three diplomatic sessions in preparation of a new proposed treaty to be finalized at the HAGUE in October, 2000. This proposed treaty is one of the most important treaties attempted on the subject matter of jurisdiction, recognition and enforcement of foreign judgments ("Hague Convention"). Hopefully this treaty will establish some degree of uniformity and predictability on the enforcement of foreign judgments within the signatory members. The third session of the diplomatic preparatory session resulted in a very rough preliminary draft of the treaty. A copy of this draft is attached below. The final draft will probably look very different as comments from various countries are introduced at the next session.

This treaty is very important to ATLA members. We are at the forefront of cutting edge litigation. With the increased international trade and investments of recent years, ATLA members will undoubtedly be exposed to more product, commercial, maritime, aviation, intellectual property right, and contract cases. It is very important that ATLA members with any nexus to international cases get their input on the proposed treaty before the next diplomatic session.

In particular, some of you may be able to identify other bases of jurisdiction and enforcement that current delegates have not considered. Or you may be able to identify areas where the current draft is deficient. We desperately need live examples of where the current preliminary draft is deficient or where special problems are created by the treaty language unbeknownst to us.

Those of you attending the Mid-Winter Convention are asked to attend a special "Hague Conference" briefing and discussion at the Marriott Rivercenter Hotel (Convention Site) in Conference Room #1 at 1pm on Tuesday, January 26, 1999. Those of you who cannot attend that meeting are asked to provide your written input to me by fax (415-433-3032) or by email (Hague@LauNet.Com).

We hope the final treaty will reflect a balance among the legal systems of the world. In order to do so, various compromises are needed since every country will want to maintain the sovereignty of their legal system. The treaty will not be a total reflection of the U.S. legal system but we are striving to get it as close as possible. In the end, each ATLA member needs to weigh out the benefits, deficiencies or detriments of the treaty to see if the benefits clearly outweigh any detriments. I need your comments.

Edward C.Y. Lau
Member of the U.S. Delegation to the Hague Conference

Preamble ................................................ (not yet discussed)

CHAPTER I SCOPE OF THE CONVENTION

Article 1 Substantive scope

1   This Convention applies to civil and commercial matters.

2   The Convention does not apply to the following matters -
     a     civil status and legal capacity of natural persons;
     b     maintenance obligations;
     c     matrimonial property regimes [and other rights and obligations arising out of             marriage];
     d     wills and succession;
     e     insolvency, composition or analogous proceedings;
     f      social security;
     g     arbitration and proceedings related thereto;
     [h    questions of administrative law;]
     i      taxation and customs; j

[3  A dispute is not excluded from the scope of the Convention by the mere fact that a      governmental agency or other governmental instrumentality is a party to the      proceedings.]

[4  The Convention applies to disputes within its scope of application regardless of the      nature of the body exercising judicial authority on behalf of the State.]

Article 2 Geographical scope
................................................................
(not yet discussed)

CHAPTER II GROUNDS OF JURISDICTION

Article 3 Defendant's forum

Subject to the provisions of this Convention -

a   a natural person may be sued for any claim int he courts [of the Contracting State][of      the place] where that person is habitually resident [, or, if the habitual residence      cannot be determined, where that person is domiciled];

b   a legal entity may be sued for any claim before the courts [of the Contracting State] [of      the place] where it has been incorporated or formed, or where it has its central      management, or, if that place cannot be determined, the place of its principal activity.

Article 4 Choice of court

1   If the parties have agreed that a court or courts of a State shall have jurisdiction to      settle any dispute which has arisen or may arise in connection with a particular legal      relationship, that court or those courts shall have exclusive jurisdiction unless the      parties have agreed otherwise.

2   Such agreement shall be valid as to form, if it was entered into -
     a     in writing or by any other means of communication which can be evidenced by a             text; or
     b     orally and confirmed in writing or by any other means of communication which             can be evidenced by a text; or
     c     in accordance with a usage which is regularly observed by the parties; or
     d     in accordance with a usage of which the parties were or ought to have been aware             and which is regularly observed by parties to contracts of the same nature in the             particular trade or commerce concerned; or
     [e    in accordance with any other form accepted by the court seized].

3   Reservation of protective forum - to be decided

4   Reservation of exclusive jurisdiction - to be decided

[5  Where such an agreement designates a court or courts of a non-Contracting State,      courts in Contracting States shall [decline jurisdiction] [or suspend proceedings]      [unless the court or courts chosen have themselves declined jurisdiction].]

                  Nota bene:

                  With regard to choice of court clauses, the following topics are still to be                   considered:

                  1      Sufficient links between the forum and the litigation 2 Provisional and                           protective measures 3 Warranty 4 Intervention 5 Appearance of the                           defendant

Article 5 Appearance by the defendant

1   Subject to the provisions of this Convention, a court has jurisdiction if the defendant      proceeds on the merits without contesting jurisdiction.

2   Variant 1

The defendant has the right to contest jurisdiction. Without prejudice to provisions of the law of the forum allowing more time, this right shall be exercisable

     [Option 1 - within a reasonable time after the commencement of the proceedings]

     [Option 2 - at least up to the time of the first defense on the merits].

     Variant 2

The defendant has the right to contest jurisdiction not later than the time of the first defense on the merits.

Article 6 Contracts

Variant 1

A plaintiff may bring a claim, in matters relating to contracts, in the courts of a Contracting State if

1   the plaintiff's habitual residence or seat is located in that State; and

2   the defendant engaged in activity in that State that constituted a significant step
     a      in the creation of the contract obligation on which the claim is based, such as              solicitation of business, or
     b      in the defendant's preparation to perform the obligation on which the claim is              based, or
     c      in the performance of the obligation on which the claim is based.

Variant 2

1   A plaintiff may bring a claim, in matters relating to contracts, in the Contracting State      in which the obligation in question was to be performed under the terms of the      contract, provided that a significant part thereof was in fact performed. If the claim is      based on several obligations, the principal obligation shall be determinative.

2   The preceding paragraph shall not apply where the obligation in question is to pay for      goods or services.

Article 7 Contracts with consumers
..........................................................................
(not yet discussed)

Article 8 Contracts with employees
........................................................................
(not yet discussed)

Article 9 Branches

The plaintiff may bring a claim in the courts of a Contracting State in which a branch, agency or other establishment [, or an employee or other representative] of the defendant is situated or has acted for or on behalf of the defendant in conducting regular commercial activity, including promotional activity directed at that State or the sale of goods or provision of services in that State, provided that the action is based on a claim that relates to such activity.

Article 10 Torts or delicts

1   The plaintiff may commence an action based on a claim in tort or delict in the courts of      the Contracting State -

     a      in which the act or omission of the defendant that caused the injury occurred, or      b      in which the injury arose, provided that the defendant could reasonably foresee              that the activity giving rise to the claim could result in such injury in that State,              including activity through commercial channels known by the defendant to              extend to that State.

2   The plaintiff may also commence an action in accordance with the preceding      paragraph when either the act or omission, or the injury is threatened.

[3  If an action is commenced in a jurisdiction other than that where the act or omission      that caused the injury occurred or where the defendant is habitually resident or has its      seat, the court shall have jurisdiction only in respect of the injury that occurred in that      State.]

Article 14 Provisional and protective measures

1   A court that is seized or is about to be seized of proceedings on the merits and which      has jurisdiction under the Convention has jurisdiction to take provisional or protective      measures [in connection with those proceedings].

2   A court of the place where property is located has jurisdiction to take provisional or      protective measures in respect of that property.

     Nota bene:

     With regard to provisional and protective measures, the following topics are still to be      considered:

     1.    Should the rule in the first paragraph be extended to any court having jurisdiction             under the Convention?
     2.    Should a choice of court clause prevent other courts from taking provisional or             protective measures, unless the parties have agreed otherwise?
     3.    Should there be a third paragraph as follows: "A court of a Contracting State has             jurisdiction to take provisional or protective measures if their effect is limited to             the territory of that State."?
     4.    Definition of provisional or protective measures?
     5.    Extraterritorial effects of orders in personam
     6.    Recognition and enforcement

[Article 20 Examples of prohibited grounds of jurisdiction

1   General jurisdiction of a State over the defendant may not be based exclusively on one      or more of the following [in particular] -
     a     the presence in the territory of the State of property belonging to the defendant,             [or the seizure by the plaintiff of property situated there];
     b     the nationality of the plaintiff;
     c     the nationality of the defendant;
     d     the domicile, habitual or temporary residence of the plaintiff within the territory of             the State;
     e     the carrying on of commercial or other activities by he defendant within the             territory of the State;
     f      the service of a writ upon the defendant within the territory of the State [with the             exception of actions based on a violation of human rights protected by             international conventions];
     g     [a unilateral specification of the forum by the plaintiff];
     h     [the declaration of enforceability or registration of a judgment].

2    Unless otherwise provided in the present Convention, the grounds under paragraph 1,       subparagraphs b, c, d, f and g may not also serve as grounds to establish special       jurisdiction.]

Article 23 Lis pendens

I     1     When an action having the same subject matter is already pending between the              same parties in the court of another Contracting State, the court second seized              shall stay the case if it is to be expected that the court first seized will, within a              reasonable time, render a decision capable of being recognized under this              Convention in the State of the court second seized.

      2.    The court second seized shall decline jurisdiction as soon as it is presented with              a decision rendered by the court first seized which complies with the              requirements for its recognition or enforcement under this Convention.

      [3     Variant 1

              For the purposes of the preceding paragraphs, a court is seized when an               application has been made before it and the document instituting the               proceedings or an equivalent document has been duly served on the defendant.

              Variant 2

              For the purposes of this Article, a court is deemed to be seized at the date on               which the document instituting the proceedings or an equivalent document is               filed with the court, provided that the document is received within fifteen days               (from the date of filing) by the authority or person responsible for service. Failing               this, the court is deemed to be seized when service is effected.

              However, if the document must be served before being filed with the court, the               court is deemed to be seized at the date on which the document instituting the               proceedings or an equivalent document is received by the authority or person               responsible for service, provided that the document is filed with the court within               fifteen days of receipt by the plaintiff of proof of service. Failing this, the court is               deemed to be seized when the document is filed.]

[II    1      If the court first seized determines that the court second seized in another               Contracting State has jurisdiction and is [manifestly] more appropriate to resolve               the dispute, it may suspend proceedings and direct the party concerned to               request the court second seized to exercise its jurisdiction in place of the court               first seized.

       2     In determining the appropriateness of a forum the courts concerned will consider               all relevant factors and in particular -
              a      the distance between the habitual residence, or the seat of each of the                       parties and the court seized,
              b      the nature and location of the evidence capable of contributing to the                       resolution of the dispute and the procedure necessary to obtain such                       evidence.

       3     The courts seized may proceed to an exchange of views.

       4      If the court second seized determines that it has jurisdiction and accepts                jurisdiction in place of the court first seized, the latter shall decline jurisdiction.

               If the court second seized refuses to exercise jurisdiction, the court first seized                shall revoke the suspension of the proceedings.

       [5     Such procedure shall not have the effect of allowing a party to invoke a                limitation period [time bar] with respect to a claim which was not subject to                such limitation when it was pending before the court first seized.]]

[Article 24 Declining jurisdiction (optional provision)

Variant 1

I      In the absence of an express choice of court by the parties [or an exclusive        Jurisdiction], a court of a [Contracting ] State having jurisdiction under the provisions        of the Convention may, [by way of exception and] at the request of any party at an        early stage of the proceedings, suspend consideration of the case [or decline        jurisdiction] if it considers that another [Contracting State] court has jurisdiction and        would [clearly] [manifestly] be better placed in the particular case to try the dispute        and to promote the ends of justice.

II      In deciding whether to suspend consideration [or decline jurisdiction], the requested        court shall consider [the following factors] [all the relevant factors, including in        particular the following] -
       a      the balance of convenience for the parties to the proceedings [and their                witnesses] having regard in particular to:
               -      the availability and situation of the evidence and the location of the parties                       and the witnesses,
               [-     the language of the witnesses and the documents in the proceedings,]
               -      the likely relative speed and cost of proceedings in the two courts;
       b      whether one court and not the other will be applying its own law;
       c      the desirability of avoiding a multiplicity of legal proceedings and the risk of                conflicting decisions;
       d      how far the litigation has progressed in the other court;
       e      the enforceability of any decision which may result; and
       f       the relative strengths of the connections with the two courts of the parties and                the dispute.

[III    The requested court may consult with the other court, while fully respecting the         rights of the parties, before deciding whether to suspend [or decline jurisdiction] in         favor of that court.]

[IV    The requested court [shall] [may] require the defendant to give such undertakings as         meet the end of justice, including an undertaking that he will not rely on a period of         limitation or prescription having expired.]

[V     If the requested court decides to suspend [or decline jurisdiction] in favor of the         courts of a non-Contracting State it may order the defendant to lodge security in the         requested court in an amount to satisfy any judgment of the other court in favor of         the plaintiff and to cover the costs.]

[VI    The requested court shall decide on the question whether to suspend [or decline          jurisdiction] without [undue] delay.]

VII     In the event that the other court does not assume jurisdiction, the requested court          shall [revoke the suspension of the case and] proceed to consider the case.

VIII     In the event that the other court assumes jurisdiction, the requested court may          decline jurisdiction.

(The following paragraph could be included in the Chapter on Recognition and Enforcement)

IX      A decision may not be refused or enforcement on the ground that the court         addressed takes the view that the court of origin should have declined jurisdiction.

Variant 2

No provision permitting the judge to decline jurisdiction.]

CHAPTER III RECOGNITION AND ENFORCEMENT

Article 25 The notion of decision

1      The rule of this Chapter shall apply to all decisions given by [the courts] of a         Contracting State, irrespective of the name given by that State to the decision.

2      They apply also to
        [a     decisions which order provisional or protective measures and]
        b      an award of judicial costs or expenses [even if such award does not proceed                 from a court], provided that it relates to a decision which may be recognized or                 enforced under this Convention.

Article 26 General rule

1     A decision rendered in a Contracting State shall be recognized in another        Contracting State if it is final in the State of origin.

2     To be enforceable in the State addressed, a decision must be enforceable in the        State of origin.

Article 27 Grounds for refusal of recognition and enforcement

1     Recognition or enforcement of a decision may however be refused -
       a     if the decision was rendered by a court not having jurisdiction under this               Convention,
       [b    if proceedings [between the same parties and] having the same subject matter               are pending before a court of the State addressed and those proceedings were               the first to be instituted,]
       c     if the decision is irreconcilable with a decision rendered [between the same               parties], either in the State addressed, or in another [Contracting] State,               provided that in the latter case the decision is [capable of being] recognized or               enforced in the State addressed,
       d     if recognition or enforcement of the decision would be manifestly incompatible               with the public policy of the State addressed.

2     In questions relating to the jurisdiction of the court of origin, the authority of the State        addressed shall be bound by the findings of fact on which that court based its        jurisdiction [unless the decision was given by default].

3     Without prejudice to such review as is necessary for the purpose of application of the        preceding provisions, there shall be no review of the merits of the decision rendered        by the court of origin.

Article 28 Decisions rendered by default

A decision rendered by default shall not be recognized or enforced unless the defaulting party has had, in the circumstances, sufficient time and opportunity to present his defense.

Article 29 Documents to be filed

1    The party seeking recognition or applying for enforcement shall furnish -
      a      a complete and certified copy of the decision;
      b      if the decision was rendered by default, the original or a certified copy of a               document establishing that the document which instituted the proceeding or an               equivalent document was brought to the knowledge of the defaulting party;
      c      all documents required to establish that the decision is final in the State of origin               and, as the case may be, that the decision is enforceable in that State;
      d      if the authority addressed so requires, a translation of the documents referred to              above, made by a person so qualified to do so.

2    No legalization or other like formality may be required.

3    If the terms of the decision do not permit the authority addressed to verify whether the       conditions of this Convention have been complied with, that authority may require the       production of any other necessary documents.

Article 30 Procedure

1    The procedure for the recognition, declaration of enforceability or registration for       enforcement of the decision is governed by the law of the State addressed. The       authority addressed shall act expeditiously.

2     If the decision contains provisions which are severable, one or more of them may be       separately recognized, declared enforceable or registered for enforcement.

Article 31 Costs of proceedings

No security, bond or deposit, however described, shall be required by reason only of the nationality or habitual residence of the applicant [in a Contracting State] to guarantee the payment of judicial costs or expenses.

Article 31 bis Legal aid

Variant 1

A party granted legal aid in the State of origin shall be extended such aid under equivalent conditions [to the most favorable extent] provided by the law of the State addressed in any proceedings for the recognition or enforcement of a decision.

Variant 2

Persons habitually resident in a Contracting State shall be entitled, in proceedings for the recognition or enforcement of decisions in another Contracting State, to legal aid under the same conditions as apply to persons habitually resident in the requested State.

Article 32 Effects of the decision
....................................................................
(not yet discussed)

[Article 32 bis Damages

1    In so far as a decision awards non-compensatory damages, it shall be recognized at       least to the extent that similar or comparable damages could have been awarded in       the State addressed.

2    a      [In exceptional cases] when the debtor, after proceedings at which the creditor              has the opportunity to be heard, satisfies the authority addressed that in the              circumstances, including those existing in the state of origin, [grossly] excessive              damages have been awarded, recognition may be limited to a lesser amount.
      b      In no event shall the authority addressed recognize the decision in an amount               less than the amount of damages which that authority could have awarded in               the circumstances, including those existing in the state of origin.

3    References in this Article to damages include, where appropriate, judicial costs and       expenses.]