Choice of Law and Forum Clauses and the Recognition of Foreign Country Judgments Revisited Through the Lloyd's of London Cases

Louisiana Law Review, Dec 2000

By Courtland H. Peterson, Published on 08/01/00

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Choice of Law and Forum Clauses and the Recognition of Foreign Country Judgments Revisited Through the Lloyd's of London Cases

Choice of Law and Forum Clauses and the Recognition of Foreign Countr y Judgments Revisited Thr ough the Lloyd's of London Cases Courtland H. Peterson - Choice of Law and Forum Clauses and the Recognition of Foreign Country Judgments Revisited Through the Lloyd's of London Cases CourtlandH. Peterson* New interest in the recognition of foreign country judgments is now manifest, not only in attempts to deal with these matters by treaty, but also most recently in a new study of the subject undertaken by the American Law Institute. In earlier times I made some modest contributions to the investigation of this field, mainly characterized by the proposal that such recognition should be tested and governed by the principles of resjudicata,rather than by the ill-defined doctrine of comity of nations.' In the interim I have welcomed the development of several uniform laws in this area, as well as the work done in the Second Restatement of Conflict of Laws, and the growth of a substantial body of literature on the subject of recognition.2 In the case law, a substantial majority of courts in this country have now evidenced a willingness to recognize and enforce the judgments of foreign countries, primarily in terms of resjudicatatheory.' The policies embodied in resjudicata,ideally, represent a balance between judicial efficiency and fairness in the individual case. The core concept of due process of law is the proposition that everyone must have an opportunity for a full and fair hearing in a legal controversy. Its correlative is the proposition that relitigation of issues already fairly decided is not only wasteful ofjudicial resources, but also can be as unfair to the victor in the earlier proceeding as denial of a hearing would have been to the loser. In the domestic context, deciding whether a litigant has already had the opportunity for a full and fair hearing is a fairly straightforward matter. Even at the next level, decision as to whether a party should be precluded by prior litigation in another state of the United States is relatively easy. A common language and shared legal heritage help to assure that tests of fairness in the adequacy of a prior hearing will have a high degree of similarity if not identity. The Full Faith and Credit Clause of our Constitution operates as a unifying force, requiring states to give the same effect to judgments of sister states as those proceedings would have in the place of origin. Failure to do so invites reversal and Copyright 2000, by LOUISIANA LAW REVIEW. * Nicholas Doman Professor ofInternational Law Emeritus, University ofColorado School of Law. enforcement by the federal courts, as a clear expression of our concept of federalism. International recognition of judgments is obviously much more problematic. The absence of any cognate for the Full Faith and Credit Clause, except as provided by treaty,4 means that each nation is free to recognize and enforce foreign judgments according to its own law, or to refuse such recognition altogether.' In the United States, an additional element of diversity is added by the fact that conflict of laws is regarded as a matter of state law rather than federal, with the consequence that each state of the United States is free to make its own decision about recognition of foreign country judgments.6 Many countries have regulated recognition practice through either bilateral or multilateral treaties, and the United States has done so with respect to the recognition and enforcement of arbitral awards.7 With respect to the recognition of foreign countryjudgments, however, the United States has thus far not followed this route.8 A first attempt to establish a bilateral treaty occurred in 1977, when such a proposal governing recognition between the United States and the United Kingdom received preliminary approval.9 Despite numerous revisions and attempted compromises final adoption of this document has never occurred, probably because of British resistance to the implementation of American tort and anti-trust law.' ° Many observers, myself included, had assumed that such a treaty with the U.K. was a feasible project. A common language, shared legal traditions, and similar views of the prickly question of personal jurisdiction over transients made agreement between these two countries most promising. There even seems to be a high degree of similarity between the English and American views of res judicata. 4. Recognition between member states ofthe European Communities has been regulated by the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters since 1975, a document sometimes described as the "Full Faith and Credit Clause of the European Union." See Bartlett, Full Faith and Credit Comes to the Common Market, 24 Int. & Comp. L. Q. 44 (1975). The effects of this convention were extended to the members ofthe European Free Trade Association by the Lugano Convention of 1988. Somewhat s (...truncated)


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Courtland H. Peterson. Choice of Law and Forum Clauses and the Recognition of Foreign Country Judgments Revisited Through the Lloyd's of London Cases, Louisiana Law Review, 2000, Volume 60, Issue 4,