Enforcement of foreign judgments

In the Conflict of Laws, issues relevant to the enforcement of foreign judgments are frequently regulated by bilateral treaty or multilateral international convention to facilitate the reciprocal recognition and enforcement of judgments between states. This area of judicial process is growing in importance. For the private citizen enjoying the right to travel more freely between states, the development of the internet and e-commerce in an increasingly globalised set of markets means that individuals routinely buy goods, incur debts and suffer loss and injury across state borders. For consumer groups, human rights advocates, intellectual property rights holders, and multinational corporations, the continuing reliance on a fragmented system of territorial boundaries for establishing jurisdiction, is presenting a new range of problems that can only be resolved by harmonising laws and standardising remedies.

Definition of terms

The "recognition" of a foreign judgment occurs when the court of one state accepts a judicial decision made by the courts of another state as in rem and so precludes the relitigation of a claim on the same facts on the ground of res judicata and/or collateral estoppel. Once the judgment is recognised, the party who was successful in the original case can then seek its "enforcement". If it had been a money judgment and the debtor has assets in the second jurisdiction, the judgment creditor has access to all the enforcement remedies as if the case had originated in that second state. If some other form of judgment was obtained, e.g. affecting status, granting injunctive relief, etc., the second court will make whatever orders are appropriate to make the first judgment effective. In doing so, the states are relying on the principle of reciprocity which requires equal respect shown to judgments made by two different sets of courts, i.e. the courts of both states must treat the judgments as equally binding and enforceable in the two jurisdictions.

In general, between foreign countries, foreign judgments are enforced based on reciprocity or participation in a treaty. Between two different States in the United States, enforcement is based on "full faith and credit", a Constitutional concept which compels a State to give another State's Judgment an effect as if it were local. This usually requires some sort of an abbreviated application on notice, or docketing. Between one State in the United States, and a foreign country, Canada, for example, the prevailing concept is Comity. The Court in the United States, in most cases, will unilaterally enforce the foreign judgment, without proof of diplomatic reciprocity. Note that some exceptions apply.

Explanation

If the relevant states are not parties to the Hague Convention on Foreign Judgments in Civil and Commercial Matters (which, presently, only Cyprus, Kuwait, the Netherlands and Portugal have ratified)fn|1, the EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters fn|2 or a similar treaty or convention providing for the routine of registration and enforcement between states, the courts of most states will accept jurisdiction to hear cases for the recognition and enforcement of judgments awarded by the courts of another state if the defendant or relevant assets are physically located within their territorial boundaries. Whether recognition will be given is determined by the lex fori, i.e. the domestic law of the local court and the principles of comity. The following issues are considered:
*whether the foreign court properly accepted personal jurisdiction over the defendant;
*whether the defendant was properly served with notice of the proceedings and given a reasonable opportunity to be heard which raises general principles of natural justice and will frequently be judged by international standards (hence, the rules for service on a non-resident defendant outside the jurisdiction must match general standards and the fact that the first instance court's rules were followed will be irrelevant if the international view is that the local system is unjust);
*whether the proceedings were tainted with fraud; and
*whether the judgment offends the public policy of the local state.There is a general reluctance to enforce foreign judgments which involve multiple or punitive damages. In this context, it is noted that the U.S. is not a signatory to any treaty or convention and there are no proposals for this position to change. When it comes to seeking the enforcement of U.S. judgments in foreign courts, many states are uncomfortable with the amount of money damages awarded by U.S. courts which consistently exceed the compensation available in those states. Further, the fact that the U.S. courts sometimes claim extraterritorial jurisdiction offends other states' conceptions of sovereignty. Consequently, it can be difficult to persuade some courts to enforce some U.S. judgments.

Enforcement of foreign judgments in the U.S.

If the time to appeal in the Court of origin has lapsed, and the Judgment has become final, the holder of a foreign judgment, decree or order must file suit before a competent court in the U.S. which will determine whether to give effect to the foreign judgment. In most States, Courts rely on the local version of the Uniform Foreign Money-Judgments Recognition Act, 13 U.L.A. 149 (1986).

Arbitration awards enjoy the benefit of a special treaty. The U.S. is signatory to international conventions regulating the enforcement of arbitration awards, viz, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 UST 2517; TIAS 6997; 330 UNTS 3, and the Inter-American Convention on International Commercial Arbitration, 14 I.L.M. 336 (1975). Ratified treaties in the U.S. are considered "supreme law of the land".

Enforcement of a judgment rendered in one state or territory of the U.S. in a "sister" state of the U.S. is also, somewhat confusingly, referred to as enforcement of a "foreign judgment." However, 47 states, the District of Columbia and the Virgin Islands have adopted the Uniform Enforcement of Foreign Judgments Act, 13 U.L.A. 261 (1986), which requires states and territories which have adopted the Act to give effect to the judgments of other states and territories, if an exemplified copy of the foreign judgment is registered with the clerk of a court of competent jurisdiction. California adopted the UFMJR Act in 1967. In New York the procedure is to file a "Motion in Lieu of Complaint" based on the foreign judgment, properly authenticated, and served upon your adversary in advance. See, New York's CPLR (Civil Practice Law and Rules Article 53 [http://caselaw.lp.findlaw.com/nycodes/c16/a42.html] .

The only U.S. states which have not adopted the Act are Indiana, Massachusetts and Vermont. When seeking to enforce a judgment in or from a state that has not adopted the Uniform Act, the holder of the judgment files a suit known as a "domestication" action. The Full Faith and Credit Clause of the U.S. Constitution requires that states honor the judgments of other states, so normally the domestication of a judgment from another state is a procedural formality, even in the absence of the expedited UEFJA procedure.

Exceptions

Grounds for non-recognition can be predicated upon:
* Lack of conclusiveness: if the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law.
* the foreign court did not have personal jurisdiction over the defendant.
* The foreign court did not have jurisdiction over the subject matter;
* The defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient time to enable him to defend;
* The judgment was obtained by fraud;
* The cause of action on which the judgment is based is repugnant to the public policy of the state where enforcement is sought;
* The judgment conflicts with another final and conclusive judgment;
* The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in that court; or
* In the case of jurisdiction based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action; or
* The judgement seeks to enforce the revenue and taxation laws of a foreign jurisdiction.

References

External links

* [http://hcch.e-vision.nl/index_en.php?act=conventions.text&cid=78 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters]
* [http://europa.eu.int/comm/justice_home/judicialatlascivil/html/rc_information_en.htm Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters]
* NY CPLR Article 53 [http://caselaw.lp.findlaw.com/nycodes/c16/a42.html]