Against Public Policy

Public Laws

At common law courts may refuse to recognise foreign judgements which are contrary to domestic public policy.  Public policy in this sense refers to the fundamental values of the legal system.

Generally, when a court refuses to recognise a foreign law on the basis of public policy it seeks to exclude the objectionable element and recognise the balance, if possible. For example, a confiscation or unilateral divorce may not be recognised.

The application of public policy may depend on the extent to which the impact has an effect within the jurisdiction. Some laws may need to be evaluated in their particular context. The connection with the home jurisdiction may be considered.

EU Rules Differ

The Brussels Regulation applies to civil and commercial matters whatever the nature of the court or tribunal. It does not extend, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of  State authority (acta iure imperii). The Brussels regulation allows for a denial of recognition of judgements if it would be manifestly contrary to public policy.

European Union law has provided, in certain instances, for mandatory rules of the forum. They are mandatory rules of the home state that can apply regardless of the law of another state. Foreign laws may not be used and will not be recognised in such a way as to circumvent these rules.

A judgment given in a Member State which orders payment by way of a penalty shall be enforceable in the Member State addressed, if the amount of the payment has been finally determined by the court of origin.

Public Policy Scope

At common law, a court will not give effect to a foreign law which is contrary to public policy. The power is a residuary power of the courts, exercised exceptionally with the greatest circumspection.

A domestic court will refuse to apply a law which outrages its sense of decency and justice. Before so doing, it must consider the law as a whole.

It applies only to laws that violate some fundamental principle of justice. They must be generally manifestly incompatible with public policy.

Difficult questions can arise where the public policy concerned is less controversial. For example, a contract may purport to prevent somebody from undertaking a trade anywhere in the world and be valid under the restraint of trade doctrine. Even though governed by a foreign law, it may be denied recognition on  the basis of common law restraint of trade doctrine.

International Comity & Contracts

Acts contrary to international law may be denied recognition. After the Iraqi invasion of Kuwait and the seizure of Kuwaiti assets, the courts refused to recognise the expropriation as manifestly contrary to public policy and in fundamental breach of international law.

Some contracts would be regarded as a breach of international comity and tend to injure friendly relations with the state. A contract against public policy may be denied enforcement. This may include contracts

• in a time of war with an alien enemy
• injure a friendly government
• importing liquor to a country with prohibition
• exporting a prohibited commodity

It is not enough that the contract is void by the law of the foreign-friendly state when the contract was made if it is not contrary to public policy. If the law was made in accordance with the law of the state concerned, the contract void under foreign law was made in the message jurisdiction unlawful.

It is not against public policy to enforce a contract between two countries even though the countries are enemies of each other.

Expropriation and Limits

Domestic courts will not enforce foreign expropriation legislation of another state in the home state. There are various types of confiscatory laws.

• Legislation may requisition private property, usually for a limited purpose, often in times of emergency, in return for compensation.
• Nationalisation is the permanent absorption of property into public ownership in furtherance of a public gain, usually for compensation.
• Compulsory acquisition is the seizure of property and fulfilment of an economic and social aim in exchange for compensation. Confiscation is the permanent seizure of property without payment of compensation.

Courts recognise that the ownership of property is determined by the terms of the foreign decree of expropriation if decided in that jurisdiction at the time. Foreign laws which purport to confiscate property situated in a foreign jurisdiction are recognised but cannot be enforced. The proprietary position cannot be unwound. The principle against recognition does not extend this far.

Where the property was outside the foreign jurisdiction at the time of confiscation the court considers whether the expropriation decree purported to be extraterritorial in character. If the property is not in the foreign state at the time of proceedings and if it is outside the territorial jurisdiction of the state at the time of the decree, it is not generally recognised.

Human Rights Breaches

The courts will not enforce a foreign law when to do so, would be contrary to the basic principles of justice and fairness which courts seek to apply in the administration of justice domestically. This may involve a breach of human rights or a fundamental breach of international law. A judgement given in breach of natural justice may fall into this category.

The courts will not recognise foreign laws that discriminate on grounds of race, religion, and the like, which may constitute a grave infringement of Human Rights that ought not to be recognised as laws at all. Laws that discriminate against nationals of a foreign state in times of war purporting to expropriate property may not be recognised.

A law may, for example, deny racial groups ownership of assets or invalidate marriage or civil status on discriminatory grounds. Some cases are extreme and patently contrary to public policy.

Genrally, a domestic court will generally recognise a person’s status in accordance with the foreign law of their domicile. However, it need not necessarily give effect to the results and incidents of this status. A foreign status incident may  be disregarded if it is contrary to public policy in the above sense.