Answer ... All states recognise both mandatory and discretionary grounds for non-recognition. A few states have no applicable statute and instead look to the Restatement (Third) of Foreign Relations Law.
The New York recognition statute is representative. It provides two mandatory grounds for non-recognition:
- The judgment was “rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law”; or
- “the foreign court did not have personal jurisdiction over the defendant” (§ 5304of the Civil Practice Law and Rules (CPLR)).
New York law also provides eight discretionary grounds pursuant to which a New York court “need not” recognise a judgment (CPLR § 5304(b)):
- There is a lack of subject-matter jurisdiction;
- The defendant failed to receive notice of the proceedings in the foreign court in sufficient time to allow for defences;
- The judgment was obtained by fraud;
- The judgment (or the cause of action or claim for relief) is repugnant to the public policy of the state;
- The judgment conflicts with another final and conclusive judgment;
- The proceeding in the foreign country was in violation of an agreement between the parties establishing a process (eg, arbitration) other than a proceeding in a foreign court;
- In the case of jurisdiction based on personal service, the foreign court was a seriously inconvenient forum for the trial of the action; or
- The cause of action resulted in a defamation judgment obtained in a jurisdiction outside the United States, unless the US court determines that the defamation law applied in the foreign court “provided at least as much protection for freedom of speech and press” as would be provided by the US and New York Constitutions (CPLR § 5304(B)).
Answer ... A judgment debtor cannot file a challenge unless the creditor has filed an enforcement action. In Chevron Corp v Naranjo, 667 F 3d 232 (2d Cir 2012), the Second Circuit denied the judgment debtor’s attempt to have the foreign country judgment invalidated before any party sought to have the judgment enforced. The court held that the “Recognition Act nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor” (id at 240) (see Jill Stuart Asia LLC v LG Fashion Corp, No 18-CV-3786 (VSB), 2019 WL 4450631 (SDNY 17 September 2019), applying Chevron’s principles to an action seeking a global injunction)).
If the creditor has filed an action, the procedures and limitation periods for filing a challenge will be a matter of state law. In Florida, for instance, “[t]he judgment debtor shall have 30 days after service of the notice [of the recording of the out-of-country foreign judgment] to file a notice of objection with the clerk of the court specifying the grounds for non-recognition or non-enforceability under this act” (Fla Stat Ann § 55.604(2)).
Answer ... US courts differ on this issue. However, a landmark case, in very unusual circumstances, is In Chevron Corp v Donziger, 833 F 3d 74 (2d Cir 2016), cert denied, 137 S Ct 2268 (2017). In that case the Second Circuit, applying the Racketeer Influenced and Corrupt Organizations Act and New York common law, affirmed a lower court order enjoining the creditors from attempting to recognise and enforce, in any court in the United States, a $9.5 billion Ecuadorian judgment procured through fraud, and imposed a constructive trust on any funds that they managed to collect on the judgment. A defendant can always seek a stay of the domestic proceedings pending appeal in the foreign court.