Recognising foreign judgments and the principle of exhaustion
By Michiel Teekens, TeekensKarstens advocaten notarissen
Based on private international law, a foreign decision from a nontreaty state is recognised in the Netherlands if, among other criteria, the recognition of the foreign decision is not contrary to Dutch public order. In such recognition proceedings it is often claimed by the defendant that the foreign legal proceedings and/or the foreign judgment violates its fundamental rights and is therefore contrary to the Dutch public order. The Dutch Supreme Court ruling of 05 April 2002 (ECLI:NL:HR:2002:AD9145) stipulated that a defendant that did not exhaust its legal remedies against the claimed violation of fundamental rights, cannot rely on the defence that recognition of the foreign judgment is contrary to the Dutch public order.
The Dutch Supreme Court recently altered this principle in its ruling of 16 July 2021 (ECLI:NL:HR:2021:1170), in which a recognition proceeding dealt with an Albanian judgment in which the defendant was ordered to pay a damages claim of EUR 433,091,870 based on loss revenue only, as it related to a cost consuming project for the building of a hydroelectric power station. The defendant argued the damages calculation was in violation of Albanian civil law because it should have been based on loss profit, and that therefore the Albanian judgment was arbitrary and manifestly unreasonable. The defendant issued a proceeding at the European Court for Human Rights (ECHR), which due to procedural faults was inadmissible.
The claimant in the recognition proceeding therefore argued that the principle of exhaustion of legal remedies implied that the defendant could not argue that recognition of the Albanian judgment was contrary to the Dutch public order. In its ruling the Supreme Court adapted its earlier principle, stating that under private international law, a Dutch court in recognition proceedings can attribute significance to the fact that all available legal remedies in the country of origin have not been exhausted. The inadmissibility of the proceeding before the ECHR does not limit the Dutch court in any way to conclude the foreign proceeding and/or consider that the judgment is contrary to the Dutch public order because of a violation of fundamental rights.
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TeekensKarstens advocaten notarissen (TK) is a full service Dutch law firm with extensive experience in the field of international law. TK has established specific international teams to provide international clients with tailor-made services and information.
Michiel Teekens is a Partner with the firm. He is an international corporate and commercial litigator and Chair of the International Law team of experts in TK.
Published: Litigation & Dispute Resolution Newsletter, No. 15, Autumn 2021 l Photo: olgaperevalova - stock.adobe.com