DAMAGES

Abstract

Article 11 of the Convention permits the court to refuse recognition or enforcement of a judgment by the original court if the judgment awards damages that are not intended to compensate a party for actual loss or harm suffered, including exemplary or punitive damages. The final draft of Article 11 was the product of a compromise that provides a basis for nonrecognition of damages in addition to the standard public policy defence in Article 9. Excessive awards and punitive damages awards were addressed by allowing nonrecognition of a portion of a judgment that includes non-compensatory damages but not allowing reconsideration of the amount of compensatory damages. Second, Article 11 requires consideration that the original award was intended to cover ‘costs and expenses’ of the litigation that might make compensatory damage awards appear larger. Article 11 should be read in conjunction with Article 15, which provides for severability of the non-enforceable portion of the judgment. Article 11 should be applied narrowly, and courts must only rely on the provision in ‘exceptional cases.’