Did your customer flee the U.S. in the hopes of leaving you with no way to collect their debt? Or, have you done business with an overseas customer and need to start legal action to collect? The Hague Convention might be better known for helping to repatriate missing or abducted children, but it can also help you with your debt collection efforts both inside and outside of New York. On the other hand, if you’re an overseas company looking to collect from a U.S. resident, the Hague Convention can also work in your favor.
People equate the Hague Convention with child abduction and adoption cases. And, while they’re right, the international convention is much more than that. The Hague Convention extends its reach far beyond family issues — including by assisting creditors with a uniform justice system to facilitate. The goal is to support and increase international commerce. It makes sure the parties to a transaction have access to justice no matter where their location.
The Impact of The Hague Convention
The Hague Convention is revolutionizing litigation for international disputes, allowing creditors a way to have justice served by providing access to the parties and more.
To induce foreign trade, countries may participate in the Hague Convention. Members are referred to as “states.” Their participation is not mandated but those countries seeking an increase in trade with others that are members participate. The number of “states” participate have increased by over 40 percent in the past few years. To see if the country that you transact business with participates, you may search the convention’s website.
Just because the parties to a sale or service participate in the Hague Convention, does not mean you can’t sue in your own home town. For example, if you are a New York business doing business with a company from France or Italy, there’s no need to sue overseas. You can sue in New York, just as any French company doing business with a U.S. company can sue in France.
Suing a Foreign Debtor in the U.S.
In order to accomplish the goal of suing in your state or country, the place of any disputes, the venue of a dispute should be included in your contract.
Our suggestion is to also include a “choice of law” provision as well. This way, you can decide in advance not only where the litigation of a dispute should be but also which state or country’s law decides the dispute when engaging in all transactions.
How does the Hague Convention help you if you sue in your hometown when you’re involved in an international transaction? Giving parties proper notice of any legal action is of the highest importance in engaging in successful debt collection litigation.
The Hague Convention provides a means of accessing parties to a litigation, arbitration, or other tribunal by providing a process for serving those parties with legal papers. Proper service is a requirement to sustain a debt collection case and to achieve a judgment.
Commercial and consumer residents in participating “states” are subject to “service of process” in a pre-designated set of rules. In other words, you can serve the other party a notice of legal action without having to file overseas. By following the rules set forth for service of process as specified in the Hague Convention, you can serve your elusive customer with legal paperwork and move forward with your debt collection case.
If you need help with a debt collection matter, contact Frank, Frank, Goldstein and Nager for a consultation.