Submissions on 2018 Draft Convention on the Recognition and Enforcement of Foreign Judgments

1 April 2019
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  1. The Consumer Council (“the Council”) appreciates the opportunity to respond to the Consultation Paper No. 2 on 2018 Draft Convention on the Recognition and Enforcement of Foreign Judgments (“Consultation Paper”) issued by the International Law Division of the Department of Justice in February 2019. 

 

  1. Below are the Council’s comments on the issues raised in the Consultation Paper which have direct implications to the interests of consumers in Hong Kong.  Unless otherwise stated, we shall adopt the same abbreviations as in the Consultation Paper.

 

Comments on the Consultation Paper

 

Paragraph 13 – The proposals to exclude privacy matters

  1. The 2018 Draft Convention proposes to exclude “privacy” or “privacy, except where the proceedings were brought for breach of contract between the parties” from its scope.  The reason is that “privacy is a matter where judicial decisions are usually based on a delicate balance between constitutional rights, and is therefore a sensitive matter for many States”.

 

  1. With respect, the Council disagrees with the proposed exclusion.  The right to privacy is a key consumer right which warrants protection.  With increasing cross-border consumer activities such as those brought about by the rapid growth of online transactions and sharing economy, privacy infringement on a global scale is becoming more common and prevalent.  A blanket exclusion of “privacy” or “privacy, except where the proceedings were brought for breach of contract between the parties” is therefore undesirable.  The option to make a declaration not to apply the Convention to a specific matter under Article 19 should sufficiently address the problem of sensitivity envisaged by the Special Commission.

 

Paragraphs 14-17 – The proposals to exclude intellectual property matters

  1. The 2018 Draft Convention proposes to exclude “intellectual property” or “intellectual property and analogous matters” from its scope either entirely or partially.  The reasons for total exclusion are the “territoriality” nature of intellectual property matters and the concern of unforeseeable changes that may be brought to a Contracting State’s domestic laws.

 

  1. As consumer activities involving intellectual property issues are getting increasingly globalized, the Council considers that it is important to include intellectual property matters in the Draft Convention to enhance access to justice and protection of intellectual property rights in cross-border dealings. 

 

  1. To address the problem of territoriality, enforcement could be limited to monetary remedies only under Article 11, thereby compensating a claimant for the pecuniary loss s/he has suffered but at the same time minimizing the impact in the domestic context.  

 

  1. The Arrangement on the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial matters (the Arrangement), signed between the Courts of Mainland and of the Hong Kong Special Administrative Region (HKSAR) in January 2019 includes intellectual property matters.  Although the Council recognizes that HKSAR is not a Member State of the Hague Conference, the Council is of the view that reference can be made to the scope and exclusions contained in the Arrangement. 

 

Paragraph 19 – The proposals to exclude anti-trust (competition) matters

  1. The 2018 Draft Convention proposes to exclude “anti-trust (competition) matters” from its scope.  In our submissions of November 2016, the Council advocated for the application of the draft Convention to anti-trust (competition) matters on the ground that anti-competition acts of a corporation may be cross-border in nature.  The Council continues to urge for inclusion of anti-trust (competition) matters in the Draft Convention to better safeguard consumer interests by promoting market competition.

 

  1. If the proposed exclusion is due to the view that competition law matters are regulatory in nature hence falling outside the civil or commercial scope of the Draft Convention, the Council suggests that the Draft Convention should nevertheless cover matters falling within Part 7 of the Competition Ordinance (Cap. 619) which deals with private follow-on actions for loss and damages arising from acts in breach of the said Ordinance.

 

  1. Should there be exclusion of anti-trust (competition) matters from the Draft Convention, referencing proposals set out in Article 11 of the Draft Convention, the Council supports the suggestion that judgments ruling on monetary remedies in relation to harm suffered in the State of Origin should be recognized and enforced.

 

Definition of Consumer in Article 5(2)

  1. In our submissions of November 2016, we supported the exception to a defendant consumer by restricting the application of certain bases for recognition and enforcement of judgment stated in Article 5(1).  We continue to support the exception. 

 

  1.  The definition of consumer as stated in Article 5(2) is confined to “a natural person acting primarily for personal, family or household purposes”. In Hong Kong, the concept of “consumer” or “consumer dealings” extends beyond natural persons and could embrace legal entities (e.g. section 2A(1) of the Sale of Goods Ordinance (Cap. 26), section 4(1) of the Control of Exemption Clauses Ordinance (Cap. 71), section 4(1) of the Supply of Services (Implied Terms) Ordinance (Cap. 457) and section 3 of the Unconscionable Contracts Ordinance (Cap. 458)), so the scope of “consumer” in the Draft Convention should be expanded to cover not just natural persons but also legal entities dealing as consumers.

 

Consumer Council

March 2019