Recognition and Enforcement of Foreign Judgments in Asia
Recognition and Enforcement of Foreign Judgments in Laos
Last updated: 1 December 2017
Partner, LS Horizon (Lao) Sole Co Ltd
Consultant, LS Horizon (Lao) Sole Co Ltd
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.
ABLI's other Jurisdictional Guides
See ABLI's Jurisdictional Guides for other Asian jurisdictions.