Recognition and Enforcement of Foreign Judgments in Asia

Recognition and Enforcement of Foreign Judgments in Laos

Last updated: 1 December 2017

Xaynari Chanthala, Partner, LS Horizon (Lao) Sole Co Ltd

Kongphanh Santivong, Consultant, LS Horizon (Lao) Sole Co Ltd

 

Recognition and Enforcement of Foreign Judgments in Lao PDR
   This report was first published by Ms Xaynari CHANTHALA and Mr Kongphanh SANTIVONG in Recognition and Enforcement of Foreign Judgments in Asia (Adeline Chong ed, 2017, Asian Business Law Institute) at pp.117–122.

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Under Lao law, a court will only recognise and enforce a foreign court judgment or foreign arbitral award (hereinafter, collectively a “foreign judgment”) if the Lao People’s Democratic Republic (“Lao PDR”) and the country which issued the foreign judgment are parties to a bilateral or multiparty agreement for the recognition and enforcement of a foreign judgment.1 Absent such an agreement, a Lao court will refuse to recognise or enforce a foreign judgment.

Currently, the Lao PDR is party to three such agreements:

  • the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”);2

  • Agreement on Judicial Cooperation in Civil and Criminal Matters between Lao PDR and the Socialist Republic of Vietnam (“Vietnam–Lao treaty”);3 and

  • Agreement on Judicial Cooperation in Civil and Criminal Matters between Lao PDR and the People’s Republic of China (“China–Lao treaty”).4

Lao PDR is not a party to the Hague Convention of 30 June 2005 on Choice of Court Agreements.

Lao law does provide for the recognition and enforcement of a foreign judgment. There is no distinction specified under Lao law between in personam and in rem judgments.5 Specifically, the Amended Law on Civil Procedure6 (“LCP”) provides for the recognition and enforcement of a foreign judgment under certain conditions so long as both parties to the dispute are contracting members of the relevant multilateral or bilateral agreements.7 Additionally, the Amended Law on the Resolution of Economic Disputes8 (“LRED”) specifically provides for the recognition and enforcement of foreign arbitral awards under the New York Convention to which Lao PDR is a party.9 In addition to the conditions set out in the LCP and the LRED, the Vietnam–Lao treaty and the China–Lao treaty require that the foreign judgment is not barred by res judicata.10

These two laws provide for the recognition and enforcement of both monetary11 and non-monetary12 foreign judgments subject to certain conditions (see below). For recognition and enforcement purposes, the court neither reviews a foreign judgment on the merits nor provides a de novo hearing on the claims.13 The court does not examine the foreign judgment for errors of law or fact.14 Instead, the court examines whether the foreign judgment satisfies the following conditions:

  • the judgment is of a country which is a signatory to a treaty15 to which the Lao PDR is also a signatory or party;16

  • the judgment does not affect the sovereignty or does not violate the laws17 of the Lao PDR;18 and

  • the judgment does not affect the peace and social order of the Lao PDR.19

Additionally, the court is required to consider other conditions or criteria under the law. A court will not recognise or enforce a foreign judgment if:

  • the judgment is subject to continuing proceedings or appeals and is not a final decision;20

  • the losing party in the foreign judgment did not participate in the proceeding and the judgment was made in absentia;21

  • the matter considered by the foreign court should have been considered under the jurisdiction of the Lao PDR courts;22

  • the disputing party who has the obligation to pay the award debt does not have property, business operation, equity, bank deposits or other assets in the Lao PDR;23 or

  • there are other issues relating to the foreign judgment.24

At the time of writing, there are two foreign judgments before the Lao courts that are seeking recognition and enforcement.25 Cases pending in the courts are not normally published or easily accessible by non-parties. Due to the low number of cases and issues of inaccessibility — final decisions are not normally published — there is insufficient case law26 for understanding how the court applies any of the criteria for recognition and enforcement. Nonetheless, these reporters consider it fair to conclude that the court will strictly scrutinise the criteria for recognition and enforcement and the petitioner has the burden to demonstrate they have satisfied all the criteria. It is unclear whether the court has the discretion to refuse to recognise and enforce a foreign judgment when all the criteria has been satisfied. In theory, the court could exercise its discretion by raising a specific issue to refuse recognition and enforcement citing the catchall provision (there are other issues relating to the foreign judgment) as the legal basis.

The criteria themselves are a mixture of legal and public policy considerations. The Lao court requires that the foreign judgment be truly final, and these reporters consider it likely that the Lao court would not accept matters that have any pending procedural or substantive appeals, including a preliminary, provisional or interlocutory judgment.

Lao law clearly disfavours recognising and enforcing a default judgment entered by a foreign tribunal for concerns related to proper jurisdiction and fairness issues.27 Similarly, a Lao court will refuse to recognise or enforce a judgment that was decided by a foreign tribunal when the Lao court has jurisdiction to adjudicate the matter in the first place.28 A Lao court will refuse recognition or enforcement where there are no assets or property in the Lao PDR against which enforcement could be performed.29

Lastly, the LCP provides a catchall provision (there are other issues relating to the foreign judgment) to permit the court to consider other issues that do not fit neatly under the criteria when considering recognition and enforcement. In particular, the catchall could be interpreted to permit refusing recognition and enforcement for grounds of res judicata as specified under Article 45(3) of the Vietnam–Lao treaty and Article 21(1)(e) of the China–Lao treaty.

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References

  1. Law on Civil Procedure (No 13/NA) (4 July 2012) Art 362. 

  2. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958). The Lao People’s Democratic Republic acceded to this multilateral agreement on 17 June 1998, and the agreement was entered into force on 15 September 1998.  

  3. This bilateral agreement, signed on 6 July 1998, applies to foreign court judgments and foreign arbitral awards: see Arts 44–46 of the Agreement on Judicial Cooperation in Civil and Criminal Matters between Lao PDR and the Socialist Republic of Vietnam (6 July 1998) (“Vietnam–Lao treaty”).  

  4. This bilateral agreement, signed on 25 January 1999, applies to foreign court judgments and foreign arbitral awards: see Arts 20 and 26 of the Agreement on Judicial Cooperation in Civil and Criminal Matters between Lao PDR and the People’s Republic of China (25 January 1999) (“China–Lao treaty”).  

  5. In respect of foreign judgments relating to property, the law does require that such property be located within the Lao People’s Democratic Republic to enable enforcement. Apart from that, there are no special conditions relating to the recognition and enforcement of foreign judgments relating to property.  

  6. No 13/NA (4 July 2012).  

  7. Amended Law on Civil Procedure (No 13/NA) (4 July 2012 Arts 362–368.  

  8. No 06/NA (17 December 2010).  

  9. Amended Law on the Resolution of Economic Disputes (No 06/NA) (17 December 2010) Art 52.  

  10. Article 45(3) of the Vietnam–Lao treaty provides, in part, that “in the past the Party receiving the request has never received a request relating to this same case from a third country to enforce or at the time of receiving the request the court of the receiving Party has never resolved or adjudicated this case”. Article 21(1)(e) of the China–Lao treaty requires that the “case with the same parties and on the same matter has not been trialed by the court of the receiving party before the trial whereby the judgment was issued”. 

  11. This includes awards of money payable as debt or compensatory damages. Interest on damages is permitted; however, compound interest is not allowed in such calculations. See Art 56 of the Law on Contract and Tort (No 01/NA) (8 December 2008). 

  12. Non-monetary judgment could include final injunctions.  

  13. Interview with Bounkhouang Thavisack, the Chief of Cabinet of the Supreme Court, on 22 June 2017. See also Art 49(2) of the Vietnam–Lao treaty which specifies, in part, “[t]he competent authority to enforce the judgment will only enforce legally valid judgments without having to do a re-trial and a reexamination of the judgment” [emphasis added]. 

  14. Interview with Bounkhouang Thavisack, the Chief of Cabinet of the Supreme Court, on 22 June 2017. 

  15. According to Bounkhouang Thavisack, the Chief of Cabinet of the Supreme Court, the Lao court understands this provision of the Amended Law on Civil Procedure (No 13/NA) (4 July 2012) to apply to treaties related to judicial co-operation and concerning the recognition and enforcement of foreign judgments. 

  16. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 362.  

  17. These reporters consider that this could potentially include fraud. Further, Lao law does not recognise exemplary or punitive damages in civil matters.  

  18. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 362. In comparison, Art 52 of the Amended Law on the Resolution of Economic Disputes (No 06/NA) (17 December 2010), has a narrower construction. Art 52 provides that the court will not recognise the foreign judgment if it “contradicts Lao law related to stability, peace and the environment”. Given the choice between a narrow or broad reading of the two laws, a Lao court will likely adopt the broad reading to construe the intended meaning of the laws to require that no contradiction of any Lao laws exists for enforcement.  

  19. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 362.  

  20. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 366.  

  21. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 366.  

  22. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 366. This covers matters within the Lao court’s exclusive jurisdiction, such as, eg, when a provision of an agreement specifies only Lao courts are to adjudicate a dispute. It is unclear to what extent, if at all, a Lao court could assert exclusive jurisdiction in a case in which the parties and assets are located in Laos but the parties have selected another foreign court to adjudicate their dispute. 

  23. Amended Law on the Resolution of Economic Disputes (No 06/NA) (17 December 2010) Art 52.  

  24. Amended Law on Civil Procedure (No 13/NA) (4 July 2012) Art 366.  

  25. Interview with Bounkhouang Thavisack, the Chief of Cabinet of the Supreme Court, on 22 June 2017.  

  26. The code is the main source of law in the Lao People’s Democratic Republic; however, as a matter of court practice, the court may consult other cases as guidance where the text of the law is unclear. These reporters, however, would not go so far as to say such cases provide precedential value in the way common law jurisdictions understand it. 

  27. Interview with Bounkhouang Thavisack, the Chief of Cabinet of the Supreme Court, on 22 June 2017.  

  28. See criterion (f) and Art 366 of the Amended Law on Civil Procedure (No 13/NA) (4 July 2012). These reporters understand this criterion to mean the Lao court or tribunal has exclusive jurisdiction in the matter regardless of whether the matter has commenced or been completed. However, as noted above, it is unclear to what extent, if at all, a Lao court could assert exclusive jurisdiction in a case in which the parties and assets are located in Laos, but the parties have selected another foreign court to adjudicate their dispute. 

  29. Lao law is silent on foreign judgments which are non-monetary in nature and need not be enforced against the property/assets of the defendant. In theory, it appears to these reporters that the court could enforce a foreign non-monetary judgment against, eg, a person residing in Laos. 

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