Recognition and Enforcement of Foreign Judgments.

The recognition and enforcement of foreign court judgments is a vital mechanism for legal certainty and cross-border cooperation, especially in the context of commercial transactions and civil disputes. Cyprus, as a member of the European Union and a common law jurisdiction, follows a multi-layered legal framework that includes EU regulations, bilateral treaties, international conventions, and principles of common law.

A variety of international treaties regulate the recognition and enforcement of judgments across different jurisdictions. Notable examples include the Lugano Convention 2007 and the Recast Brussels I Regulation 2012. Both instruments offer an extensive legal framework for recognizing and enforcing civil and commercial judgments between EU member states, Denmark, and the states of the European Free Trade Association (EFTA), as well as between EU member states and Denmark. However, the effectiveness of these agreements is geographically and politically constrained.

Cyprus is a signatory to the Hague Convention of 2 July 2019 on the recognition and enforcement of foreign judgments. The Convention aims to streamline the enforcement process for judgments between EU member states and third countries that have ratified the Convention. The Convention excludes certain matters, such as arbitration and intellectual property, and provides clear guidelines for the enforcement process. However, it also allows countries to limit the scope of its application, offering flexibility depending on the jurisdiction. The primary objective of the Hague Convention 2019 is to establish a unified legal framework for the mutual recognition and enforcement of foreign judgments in civil and commercial matters. This initiative aims to enhance judicial cooperation and provide greater legal certainty in cross-border commercial transactions.

For many years, the Hague Judgments Project has sought to establish a global framework for the recognition and enforcement of foreign court decisions in civil and commercial matters. The adoption of the 2005 Hague Choice of Court Convention was an important milestone towards this goal, focusing specifically on cases involving exclusive choice-of-court agreements. However, the Hague Convention 2005 has a narrower scope and does not address broader cross-border enforcement. The Hague Convention 2019 aims to build on the earlier treaty, offering a more expansive framework for cross-border enforcement of judgments.

When there are no applicable international treaties in place, the enforcement of foreign judgments generally relies on the domestic laws of the jurisdiction where enforcement is sought. This process can often be vague, lengthy, and unpredictable. The Hague Convention 2019 is designed to offer a solution to this uncertainty. For a judgment to be recognized and enforced under the Convention, it must meet certain criteria, including confirming that the person against whom the judgment is sought had ties to the state where the judgment was issued, and that the defendant agreed to the jurisdiction of the court in the state of origin. However, there are circumstances under which the Cypriot courts may refuse to recognize or enforce a foreign judgment. If the judgment was obtained through fraud or in a manner that violates natural justice, the court may refuse enforcement. Additionally, if the judgment is contrary to Cyprus’s public policy, such as conflicting with Cyprus's constitutional principles or fundamental legal values, the court may also decline to enforce it. Another ground for refusal is if the foreign court did not have proper jurisdiction under Cyprus’s conflict-of-laws rules. This typically applies to cases where the foreign court did not meet the conditions required for the recognition of its judgment according to international standards or Cyprus law.

Cyprus's participation in international conventions, such as the Hague Convention 2019, plays a significant role in enhancing legal cooperation on a global scale. The recognition and enforcement of foreign judgments are key components of international trade and business, as they provide assurance to businesses and individuals that court decisions can be enforced across borders. Cyprus’s alignment with international standards and its network of treaties ensures that its legal system remains flexible, efficient, and responsive to the needs of a globalized world. Cyprus has a comprehensive legal framework for the recognition and enforcement of foreign judgments, which combines EU regulations, international treaties, and common law principles.

The Hague Convention 2019 seeks to establish a more reliable and predictable system for the mutual recognition and enforcement of civil and commercial judgments across contracting states. A well-functioning enforcement mechanism is essential for facilitating international trade and fostering global business relationships. The treaty provides a framework that can offer certainty and legal clarity to parties seeking to enforce court decisions in foreign jurisdictions. While the Convention offers significant benefits, its success depends on how widely it is adopted and ratified by countries. The more states that join, the more effective it will be in achieving its objective of promoting efficient and equitable cross-border enforcement of judgments.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter and does not constitute legal advice. For legal support or advice, please contact JS LAW at Stylianou@lawyer.com or +357 26 947 482.