The Hague Conference Permanent Bureau has published this month (May 2019) a new preliminary document in anticipation of the 22nd Diplomatic Session from 18 June to 2 July 2019 (Judgments Convention): Prel. Doc. No 11 of May 2019 – Limitation period on the enforcement of foreign judgments in the context of the 2018 draft Convention.
Extract: “Conclusion 71. Based on the foregoing analysis, different solutions are proposed to address the two issues raised in Section I, where a shorter (Issue 1) or shorter and discriminatory (Issue 2) limitation period potentially applies to the enforcement of the foreign judgment in the requested State.
72. Issue 1: Whether, and, if so, how the draft Convention should permit the court addressed to refuse enforcement on the basis that a limitation period under the law of the requested State has lapsed, with particular attention to States which consider limitation periods to be a matter of substance.
73. Option A: introduce a specific “Limitation Periods” Article into the draft Convention. The Article would specify that the court addressed may refuse enforcement due to the expiration of a limitation period applicable to the enforcement of foreign judgments under the law of the requested State. Under this option, the applicable limitation period would be determined by the law of the requested State, and the lapse of the limitation period under its law would constitute a basis for refusal (consistent with Art. 4(1)). The legal certainty as to what the law of the requested State is in this regard could be further enhanced by requiring States, when joining the draft Convention, to submit a description of their laws and procedures concerning the limitation periods for enforcement of foreign judgments (a “Country Profile”). The approach of requiring the submission of a Country Profile was adopted in the 2007 Child Support Convention.
74. Option B: introduce a ground for refusal under Article 7(1) of the draft Convention based on the expiration of the limitation period in accordance with the law of the requested State. This Option has been proposed by several States in the Special Commission. It clearly identifies the lapse of a limitation period as a ground for refusal (consistent with Art. 4(1)) and the law which determines the applicable limitation period. It is neutral as to the nature of limitation periods, thereby providing a practical solution for States which consider limitation periods to be substantive (the limitation period will simply apply as determined by the law of the requested State). However, Article 7 addresses refusal for both recognition and enforcement. Since there was agreement in previous Special Commission meetings that recognition should not be subject to limitation periods, placing limitation periods under Article 7 (Refusal of recognition or enforcement) may not be appropriate.
75. Option C: change the title of Article 14 and identify limitation periods within Article 14(1), which could read: “Article 14 Procedure and Limitation Periods The procedure for recognition, declaration of enforceability or registration for enforcement, the enforcement of the judgement, and the time within which enforcement must be sought, are governed by the law of the requested State unless this Convention provides otherwise. The court addressed shall act expeditiously.” Identifying limitation periods within Article 14(1) clarifies that limitation periods are to be governed by the law of the requested State and the court addressed can refuse enforcement when the period has expired. This option is pragmatic in the sense that the solution is provided within the current text of the draft Convention instead of creating a new provision, as proposed in Option A. It also avoids introducing a new ground for refusal, as proposed in Option B, which could also complicate the use of the term “recognition”. Changing the title of Article 14 to “Procedure and Limitation Periods” also indicates that limitation periods are to be determined by the court addressed, whether or not they are applied as a matter of substance or procedure.
76. Since any Option proposed above may be seen as a departure from the approach under the 2005 Choice of Court Convention, and may prompt divergent interpretations on this regard, it may be advisable for the Explanatory Report to clarify the option and the intended policy consideration.
77. Issue 2: how to prevent the application of (shorter) limitation periods prescribed by the law of the requested State which discriminates against foreign judgments.
78. Option D: follow the current approach and further highlight in the Explanatory Report the importance of “non-discrimination” against foreign judgments, particularly in the context of limitation periods. The revised draft Explanatory Report broadly addresses the principle of nondiscrimination; however, it could further highlight that the limitation periods applicable to foreign judgments should not diverge from those applicable to domestic judgments.
79. Option E: alternative to Option D, introduce the principle of “non-discrimination” as a fundamental principle in the Preamble of the draft Convention. The Preamble could adopt similar language to Recital 26 of the Brussels I Recast Regulation and describe non-discrimination as an essential element to ensure the effectiveness of the draft Convention. The principle could encourage the court addressed to interpret the Convention in a manner that prevents it from applying a discriminatory limitation period to foreign judgments. Introducing this principle in the Preamble could also be useful in the interpretation and operation of the draft Convention in other aspects of recognition and enforcement. It should be noted, however, that some States’ law may not give effect to the Preamble nor rely on it for interpretation purposes.
80. Option F: introduce the principle of “non-discrimination” in the text of the draft Convention, either in Article 4, 14 or in a separate article. This seems to be a more effective solution in comparison with Option D or E above. The non-discrimination principle could be tailored specifically to address only the matter of limitation periods, prescribing equal treatment of foreign and domestic judgments. The main advantage of this option is that it establishes clear obligations for the requested State when dealing with the enforcement of foreign judgments, thus providing further legal certainty”.
The document may be accessed here