Why might a German court refuse to enforce an American punitive-damages judgment?

A German court may refuse to enforce an American judgment for punitive damages because such awards are considered to be in conflict with the fundamental public policy of the German legal system.1

In the context of conflict of laws, national legal systems generally recognize foreign judgments provided they do not offend the public policy of the recognizing state. German law views the purpose of tort law as strictly compensatory—intended to make the victim whole—rather than punitive. Because punitive damages are designed to punish the defendant and deter future misconduct rather than merely compensate for actual loss, they are seen as exceeding the proper purview of civil tort law in Germany. Consequently, a German court will reject the enforcement of such a judgment because it disapproves of the underlying substantive nature of the award.123