The Recognition Scene: Game Theoretical Issues in the Recognition of Foreign Judgments

Abstract

A standard feature of institutionalist approaches to international law and relations is modelling the interaction between states as an iterated prisoners' dilemma, in which states have incentives to act opportunistically, tempered by the advantages of cooperation where the shadow of the future is sufficiently long. This approach is also shared, either implicitly or explicitly, by private international law scholars modelling choice of law decisions.

It is instructive to consider this issue in the context of state incentives to recognize foreign judgments, as it is an area that arises in the crossover between both public and private international law. The Hague Conference on Private International Law is currently considering the adoption of a convention on jurisdiction and judgment recognition, primarily at the instigation of the United States, the world's perpetual Cinderella in recognition treaties. This paper contrasts a PD explanation of the incentives to recognize, in which states prefer not to recognize, with an explanation which holds that recognition may be a weakly dominant strategy for most states. The private international law on recognition, including the demise of recognition reciprocity, is used to evaluate these hypotheses.

Even if recognition is a weakly dominant strategy, state commitment to recognition creates the scope for opportunism and moral hazard, in the form of other states' expansion of their own jurisdictional competence. International conventions on recognition permit these issues to be addressed by agreement to permissible bases for civil jurisdiction and linkage of these to recognition. My specific claim is that verifiable, rule-like bases of jurisdiction, will be the preferred form of agreement, compared to the standard-like bases of jurisdiction prevalent in common law countries. On the other hand, such bases of jurisdiction create problems of contingent incompleteness in the allocation of jurisdiction.

JEL Classification: K33, K41