A post on China Law Blog entitled, Who Needs International/Foreign Law? Not Us, We're Americans, raises a number of transnational law issues and is well worth a read. Dan Harris, the author of the post, questions whether or not US courts have an obligation to abide by international treaties and whether they abide by that obligation, and he uses the Hague Convention Rules on International Service of Process as an example. I encourage you to read the entire article but here is a portion of it:
For at least the third time (two times is coincidence, three times is a trend), a US court has allowed a case to go forward against a defendant despite plaintiff's having clearly failed to abide by the Hague Convention Rules on international service of process. The most recent instance is in a still pending case so I cannot go into the specifics on that one.
Virtually every time we have sought to get the US courts to enforce the Hague Convention or even, in one instance, when we sought to get a US court to pretty much ignore the Hague Convention, the US court has seemed perfectly willing to rule as though the United States has no obligation to abide by a treaty it signed. I have a strong sense US Courts (both state courts and federal courts) will not enforce the Hague Convention's technical service requirements (including that the summons and complaint must usually be translated into the language of the country in which it is being served). Oh, and getting a US court to throw out or stay (delay) a case so that an already pending case in another country can be decided first -- forget it. My conclusion is that US courts are happy to ignore foreign/international law in favor of handling things under US law, whether US law should apply or not.
US court judgments usually are not enforceable outside the United States and one of the reasons given for this is the failure of American courts to recognize foreign law. My foreign clients (these are international businesspeople, not in any way anti-American) are complaining to me more and more about US courts and how "they think they can ignore the rest of the world." One particularly piqued client (from a country very friendly to the United States) pointedly told me this is one of the reasons why America is becoming more and more hated and why we are losing our power. He insisted that the courts in his country would have ruled differently on the same issue and I think he is correct.
If the United States is serious about globalization, it is time our courts start recognizing that ours is not the only law in the world and that it actually behooves US business to make our courts more international in the context of business disputes.
The comments that follow the post also address some interesting transnational law issues. One in particular, a comment posted by a person named Twofish, addresses the constitutional issue of whether the Hague Convention is a self-executing treaty or a non-self-executing treaty. A self-executing treaty becomes federal law (and therefore preempts state law) as soon as it is signed. A non-self-executing treaty requires Congress to pass additional laws implementing the terms of the treaty once it has been signed, which means the terms of the treaty are not federal law until Congress has made them federal law.
Whether or not a treaty is self-executing is a very important question when determining whether state law preempts the terms of a treaty. A good example of a self-executing treaty is the CISG. As we mentioned in a previous post, it is considered a self-executing treaty because of the specificity of its language; because of its apparent purpose to create rules that would bind individuals; and because of the apparent views of the political branches that no further action is necessary. As a self-executing treaty, the CISG preempts inconsistent state law under the Supremacy Clause.
Dan Harris of China Law Blog also touches upon the enforceability of foreign judgments in the USA. The enforceability of foreign judgments is determined by state law because the USA is not a party to any treaty. Although the USA has not adopted it, many states have adopted the Uniform Money Judgment Enforcement Act. This Act requires the enforcement of foreign money judgments but allows for a number of exceptions, including lack of notice; lack of subject matter or personal jurisdiction; the foreign court procedures are not compatible with due process; enforcement would violate public policy; or there is a conflict with another final judgment. Many other countries, particularly civil law countries, also require reciprocity.
I am curious as to why Dan Harris does not talk about international arbitration? He has had some very interesting posts about arbitration in the past (see here for example), but he does not discuss it as an alternative in this context. Arbitral awards are enforceable under the New York Convention while the enforceability of court judgments (at least when the US is involved) turns only on local law. His post is discussing these matters in the context of China, which is a party to the New York Convention. China also has its own arbitration body, the China International Economic and Trade Arbitration Commission (CIETAC), which was established to settle international commercial disputes. I would be very interested to know what Dan Harris thinks of CIETAC and arbitration in general as an alternative to a judicial forum.
And the matter is also open to other bloggers and blog readers: Arbitrate or litigate in a traditional judicial forum? Do you tell your clients to put in an arbitration clause? Is it truly easier to enforce an award from arbitration than a court judgment? This inquiring mind wants to know!