Proposed Modifications Under Consideration
by the U.S. Delegation
(Updated 5/30/99)

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DRAFT CONVENTION ON JURISDICTION AND JUDGMENTS
 5/30/99 DRAFT

CHAPTER I  Scope
 

Article 1: Substantive Scope

    (1) This Convention applies in civil and commercial matters before courts of Contracting States.

    (2) The Convention does not apply to the following matters:

         (a) civil or marital status or 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) bankruptcy, proceedings relating to the winding up of insolvent companies or persons, judicial arrangements, compositions, and analogous proceedings;

      (f) social security;

      (g) arbitration and proceedings related thereto;

      (h) the existence or constitution of legal persons or the powers of their officers;

      (i) obligations for the provision of public revenues, including customs duties, taxes, or penalties.

      (j) navigation or operation of a ship, or loading, carriage, or discharge of a cargo.

    (3) A dispute is not excluded from the scope of the Convention by the fact that a government, its offices or departments, or officials are party to the proceedings.  However, nothing in this Convention affects the privileges and immunities of sovereign states under public international law.
     

Article 2: Geographical Scope
 
 

CHAPTER II Exercise of Jurisdiction

    Sub-Chapter A:  Required Bases of Jurisdiction

          A person, natural or legal, may be sued in a Contracting State on a ground or grounds of jurisdiction set out in this sub-chapter, subject to the provisions of this Convention and the rules of that Contracting State for the allocation of internal competence or jurisdiction among its courts.
 

Article 3: Defendant's forum

Subject to the provisions of this Convention,

    (1) a natural person may be sued for any claim in the courts of the Contracting State where that person is habitually resident;

    (2) a legal entity may be sued for any claim before the courts of the Contracting State where it --

       (a) has been incorporated or formed; or

       (b) has its central administration; or

       (c) has its principal place of business.
       

Article 4: Choice of Court

    (1) Subject to the provisions of this Convention, the Parties may agree 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, and that court shall have jurisdiction, which shall be exclusive unless the parties have agreed otherwise.

    (2) The general law of the court or courts agreed upon determines whether, and the conditions on which, effect will be given to the choice of court agreement.

    (3) A choice of court agreement shall not be respected if it is inconsistent with exclusive jurisdiction as provided by Article 13.

    (4) A choice of court 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;

      (b) orally, and confirmed in writing or by any other means of a 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 international trade or commerce, in accordance with a usage of which the parties were or ought to have been aware and which is widely known to, and regularly observed by, parties to contracts of the same nature in the particular trade or commerce concerned.
       

Article 5: Appearance by the Defendant

    (1) Subject to the provisions of this Convention, including those providing for exclusive jurisdiction, a court has jurisdiction if the defendant proceeds on the merits without contesting jurisdiction.

    (2) The general law of the forum determines the period within which a jurisdictional challenge must be raised, but must afford the defendant a reasonable opportunity to contest jurisdiction, and such contest shall not constitute an appearance on the merits.
     

Article 6: Contracts

         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; 

      (b) in the defendant's preparation to perform that obligation; or

         (c) in the defendant's performance under the contract at issue.
     

Article 9: Presence of Legal Persons

          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 and 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 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, through commercial or other channels known by him to extend to that State, could there cause such injury.  

    (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.
     

Article 12: Trusts
 
 

Sub-Chapter B:  Prohibited Bases of Jurisdiction
 

Article 20:  Prohibited Bases of Jurisdiction

    (1) Jurisdiction over a defendant may not be based exclusively on one or more of the following:

      (a) the presence, whether permanent or temporary, in the territory of the State of property belonging to the defendant, or the seizure by the plaintiff of such property;

      (b) the nationality of the plaintiff;

      (c) the nationality of the defendant;

      (d) the domicile, or the habitual or temporary residence of the plaintiff within the territory of the State;

      (e) the carrying on of commercial or other activities by the defendant within the territory of the State, unless these activities were substantial and continuous;

      (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;

    (2) Paragraph (1) does not prevent the exercise of jurisdiction over a defendant based on a matter arising out of or related to --

      (a) property of the defendant situated within the State or there seized by the plaintiff; or

      (b) commercial or other activities of the defendant within the territory of the State.
       

Sub-Chapter C:  Non-Convention Bases of Jurisdiction

Article 21: Non-Convention Bases of Jurisdiction

          This Convention does not affect the status under the law of each Contracting Party of rules of jurisdiction or competence neither required nor prohibited by this Convention.
 

Sub-Chapter D:  Other Jurisdictional Provisions

Article 13: Exclusive Jurisdiction

    (1) In claims related to rights in rem or to tenancies in immovable property, the courts of a Contracting State in which the property is situated shall have exclusive jurisdiction.

    (2) With respect to patents, trade marks, designs, or other similar rights required to be deposited or registered, the State in which the deposit or registration has been applied for, has taken place, or is deemed to have taken place under the terms of any international convention in force in that State, shall have exclusive jurisdiction to make generally applicable determinations concerning the status or validity of the deposit or registration.

    (3) Paragraph (2) does not prevent the exercise of jurisdiction over a defendant to make determinations concerning the status or validity of the deposit or registration of such rights, with effect as between the parties only.
     

Article 14: Provisional and Protective Measures

    (1) A court that is seised or is about to be seised 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.

    (3) A court has jurisdiction to take provisional or protective measures, even if it does not otherwise have jurisdiction under this Convention, provided that a court in a Contracting State is seised or is about to be seised of the proceedings on the merits and the judgment of the court so seised or to be seised could be recognized and enforced in the State in which the provisional and protective measures are to be granted.
     

Article 16: Counterclaims

         A person may be sued on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending.
 

Article 22: Authority of the Court Seised

          If a claim is brought before a court of a Contracting State and a defendant does not enter an appearance, the court shall declare of its own motion that it has no jurisdiction if jurisdiction is prohibited under Article 20.
 

Article 24: Declining Jurisdiction

          This Convention shall not preclude the operation of any national law allowing the courts of a Contracting State to decline jurisdiction in favor of another forum that has jurisdiction under its national law and is a more appropriate forum for the trial of the action.
 

CHAPTER III   RECOGNITION AND ENFORCEMENT
 

Article 25:  "Judgment" Defined

          For the purposes of this Convention, "judgment" means dispositive acts of a court in a Contracting State, whatever they may be called, in the nature of decrees, orders, decisions, or writs of execution, as well as determinations of costs or expenses by a court officer.
 

Article 26:  General Rules of Recognition

    (1)  Required Bases of Jurisdiction.  A judgment given in a Contracting State shall be recognized in another Contracting State without any special procedure if:

      (a)  it is final, conclusive, and enforceable where rendered, even though an appeal or other form of review is pending or is still available; and

      (b)  it was given by a court having jurisdiction under Articles 3 - [___].

    (2)  Prohibited Bases of Jurisdiction. A judgment given in a Contracting State shall not be recognized in another Contracting State if the only basis or bases of jurisdiction on which it can rest are prohibited under Article 20.  

    (3) Non-Convention Bases of Jurisdiction.  This Convention shall not affect the recognition of a judgment given in a Contracting State when the basis or bases of jurisdiction on which the judgment can rest are neither required nor prohibited by the provisions of Chapter II.
     

Article 27:  Grounds for Non-recognition

          Recognition of a judgment may be refused if the party resisting recognition establishes, or in the absence of an appearance by the respondent, the court on its own motion determines, that:

    (1)  the defendant in the original action received neither actual notice of the institution of the proceedings in sufficient time (not less than 60 days) to respond as provided by national law, nor constructive notice substantially equivalent to that accepted by the court addressed;

    (2)  proceedings between the same parties based on the same facts and having the same purpose are pending before a court of the State addressed and that court was first seised of the matter;

    (3)  the judgment is irreconcilable with another judgment given in the State addressed, or in another State, and the latter judgment is entitled to recognition in the State addressed;

    (4) the proceedings in the foreign court were contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in that court;

    (5)  the judgment was obtained by fraud in the procedural sense;
         
    (6)  the judgment resulted from proceedings that were incompatible with fundamental fairness or natural justice; or

    (7)  recognition of the judgment would be manifestly incompatible with the public policy of the State addressed.
         

Article 28:  Review of Jurisdictional Findings

          A court in a Contracting State, in determining whether to recognize a judgment from another Contracting State, shall be bound by the findings of fact on which the court of the State of origin based its jurisdiction, unless the judgment was rendered by default.
 

Article 28 bis:  No Review on the Merits

          A judgment given in another Contracting State shall not be reviewed on its merits.
 

Article 28 ter:  Stay of Recognition Proceedings

          A court in which recognition is sought of a judgment given in another Contracting State may stay the proceedings while an appeal or other form of review against the judgment is pending in the State of origin, and on such conditions as it considers appropriate.
 

Article 28 quat:  Effect of Recognition

          A judgment recognized under this Convention shall have the same binding effect as if it were a judgment of the court addressed.  However, the court addressed may, if the interests of justice so require, and shall, if the respondent so requests, give the judgment such binding effects as it would be given under the law of the State of origin, to the extent the law of the state addressed provides for comparable effects.
 

Article 29:  Documents to be filed

    (1) The party seeking recognition shall furnish, together with the completed Transmittal Form set out in Annex A:

      (a) a complete and certified copy of the judgment;

      (b) if the judgment issued by default, the original or a certified copy of the document or documents that were used to give notice of the proceedings to the defaulting party. 

    (2) For purposes of initiating proceedings seeking recognition, no legalization or similar formality may be required by the State addressed.

    (3)  If the terms of a judgment for which recognition is sought do not permit the court addressed to verify that the requirements of this Convention have been satisfied, the court may order the production of any other documents necessary for that purpose.

    (4) Documents furnished pursuant to paragraphs (1)-(3) shall be accompanied by a certified translation if the court addressed so requires.
     

Article 29 bis:  Enforcement

    (1) Upon the request of a party, a judgment recognizable under this Convention shall be enforced in so far as it grants or denies recovery of a sum of money.

    (2) A judgment granting other or additional forms of relief shall be enforced in accordance with the general law of the state addressed.
     

Article 29 ter:  Damages
 

    (1) In so far as a judgment awards exemplary damages, it shall be recognized and enforced at least to the extent that similar or comparable damages could have been awarded in the State addressed.

    (2) In exceptional cases, the court addressed may recognize and enforce the judgment in an amount less than that awarded by the court of origin, provided the debtor establishes, in proceedings in which the judgment creditor has an opportunity to be heard, that, after taking into account the standards and methods of compensation in the State of origin, the amount awarded is grossly excessive.

    (3) References in this Article to damages include, as appropriate, judicial costs and expenses.
     

Article 30:  Procedure

          The procedures for recognition or enforcement of a judgment of the court of a Contracting State shall be governed by the general law of the State addressed without discrimination or delay because the judgment is that of a foreign court.  
 

Article 31:  Costs of Proceedings

          No security, bond, or deposit to guarantee the payment of costs or expenses related to the proceedings shall be required solely by reason of the nationality, domicile, or habitual residence of the party seeking recognition.
 

Article 31 bis:  Legal Aid

          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:  Severability

          If the judgment for which recognition or enforcement is sought contains elements that are severable under the law of the State of the court addressed, one or more such elements may be separately recognized or enforced.
 

Chapter IV Authentic Instruments and Settlements

Article 33: Authentic Instruments

Article 34: Settlements
 

CHAPTER V  Judicial Cooperation

Article 35: Transfrontier Communication Between Judges

Article 36: Form
 

CHAPTER VI General Provisions

Article 37: Relations With Other Conventions

Article 38: Uniform Interpretation

Article 39: Minimum Provided by the Convention

CHAPTER VII Final Clauses

Article 40: Acceptance of Adherence