1 Legal and judicial framework
1.1 Which legislative and regulatory provisions govern the recognition and enforcement of foreign judgments in your jurisdiction?
No uniform federal law governs the recognition and enforcement of foreign judgments. Rather, recognition and enforcement of judgments is generally governed by state law. State statutory law derives from two model recognition acts promulgated by the National Conference of Commissioners on Uniform State Laws: the 1962 Uniform Money-Judgments Recognition Act and the 2005 Uniform Foreign-Country Money Judgments Recognition Act. The majority of states and the District of Columbia have adopted some version of these model laws. For example, in New York, the recognition of foreign country money judgments is governed by Article 53 of the Civil Practice Law and Rules, which is New York's version of the Uniform Foreign Country Money Judgments Act. These statutes apply only to judgments that grant or deny recovery of a sum of money.
States without a recognition act rely on the common law and the Restatement (Third) of Foreign Relations Law of the United States. The common law follows the guidelines established by the leading Supreme Court case on recognition and enforcement of foreign judgments, Hilton v Guyot, 159 US 113 (1895). In Hilton, the Supreme Court held that the recognition and enforcement of foreign judgments is primarily based on principles of international comity. Accordingly, "where there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice, the merits of the case "should not, in an action brought in this country upon the judgment, be tried afresh" (id at 202–03).
1.2 Which bilateral and multilateral instruments on the recognition and enforcement of foreign judgments have effect in your jurisdiction?
The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the Inter-American Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Panama Convention), as implemented by Chapters 2 and 3 of the Federal Arbitration Act, require that US courts honour the agreement to arbitrate and the resulting award, with certain exceptions.
The United States is also a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID Convention), which establishes the legal framework for the settlement of investment disputes between foreign investors and sovereign states that have consented to international arbitration pursuant to the convention. Article 54 obliges contracting states to enforce an award issued in an ICSID arbitration "as if it were a final judgment of a court in that State". Judgments concerning domestic relations, including child custody, can be recognised and enforced pursuant to several statutes and treaties, including:
- the International Support Enforcement Act, 42 USC § 659a;
- the 1980 Hague Convention on the Civil Aspects of International Child Abduction;
- the 1993 Hague Convention on Protection of Children and Cooperation in Respect of Inter Country Adoption;
- the Uniform Child Custody Jurisdiction and Enforcement Act; and
- the Uniform Interstate Family Support Act.
1.3 Which courts have jurisdiction to hear applications for the recognition and enforcement of foreign judgments?
Both federal and state courts entertain applications for the recognition and enforcement of foreign judgments. State courts are courts of general jurisdiction and are presumed to have subject-matter jurisdiction to hear applications for recognition and enforcement. Personal jurisdiction over the judgment debtor or its property is also generally required, meaning that the non-resident judgment debtor must have "minimum contacts" with the state that satisfy due process (Daimler AG v Bauman, 571 US 117 (2014)).
Unlike state courts, federal courts are subject to constitutional limits on jurisdiction. They hear recognition and enforcement actions under either diversity of citizenship jurisdiction or federal question jurisdiction, with diversity of citizenship jurisdiction being the most common jurisdictional ground (28 USC § 1332) (district courts have jurisdiction over all civil actions where the matter in controversy exceeds $75,000 and the parties are diverse). In diversity cases, federal courts apply the recognition and enforcement rules of the state in which the federal court sits. Thus, removal of an enforcement action from state to federal court will ordinarily result in the federal court's application of the very same state statute that would have been applied in state court proceedings. When a federal court's subject-matter jurisdiction is based on a question of federal law, rather than diversity grounds, the courts apply the applicable federal statute (if there is one) or federal common law.
Actions against foreign sovereigns are governed by the Foreign Sovereign Immunities Act of 1976, 28 USC § 1608 (2012). That statute empowers federal courts to exercise personal jurisdiction over foreign sovereigns when one of its exceptions from jurisdictional immunity applies and the sovereign has been served with process in accordance with its provisions (eg, see Crystallex Int'l Corp v Bolivian Republic of Venezuela, 932 F 3d 126 (3d Cir 2019)).
2 Requirements for enforceability
2.1 What types of judgments may be recognised and enforced in your jurisdiction? Are any types of judgments specifically precluded from enforcement?
State statutes based on the Model Acts require that a judgment:
- grant or deny recovery of a sum of money;
- be final and conclusive between the parties; and
- be enforceable in the country in which the judgment was entered (see 2005 Recognition Act § 3(a) (2); 1962 Recognition Act § 3; Cal Civ Proc Code § 1715(a)–(b); NY CPLR § 5302).
Moreover, under many state statutes, the foreign judgment must relate to the same parties named as defendants in the US action (Kaupthing ehf v Bricklayers and Trowel Trades International Pension Fund Liquidation Portfolio, 291 F Supp 3d 21 (DDC 2017)).
Judgments for taxes, fines or other penalties are excluded from the recognition statutes. Under the 1962 Recognition Act, courts also will not recognise and enforce judgments "[in] support [of] matrimonial or family matters" (1962 Recognition Act § 1(2)). The 2005 Recognition Act expanded this exclusion to cover judgments "for divorce, support, or maintenance, or other judgments rendered in connection with domestic relations" (2005 Recognition Act § 3(b)(3)).
However, non-monetary judgments, including matrimonial matters, may be recognised under principles of comity or pursuant to specific statute law (eg, see Cal Civ Proc Code § 1715(B), providing that a judgment in connection with domestic relations may be recognised under a savings clause; Downs v Yuen, 748 NYS 2d 131 (App Div 2002), providing that the New York recognition statute does not bar recognition of a foreign support judgment as a matter of comity).
2.2 Must a foreign judgment be final and binding before it can be enforced?
Yes. Foreign judgments must be final, conclusive and enforceable in the country in which they are rendered (see 2005 Recognition Act 3(a)(2); 1962 Recognition Act 2). For example, a pre-judgment attachment issued by a foreign court while the merits of the case were being litigated in Spain was an interim order not enforceable in the United States (Maquinaria Cerezo, SA v Babson Bros Co, 1992 WL 18875 (ND Ill 1992)). In making finality determinations, US courts look to the law of the rendering country; mere assertions of finality will not suffice (Despotovic v Gavrilovic Holding Petrinja, 2018 WL 6016710 (Conn Super Ct 2018) – representations of counsel not evidence).
2.3 Is a foreign judgment enforceable if it is subject to appeal in the foreign jurisdiction?
The fact that a final judgment is on appeal will not prevent it from being recognised and enforced in the United States. If a party establishes that an appeal from a foreign country judgment is pending or will be taken, the court may, in its discretion, stay the US proceedings (eg, see Cal Civ Proc Code § 1720 (2019): "If a party establishes that an appeal from a foreign-country judgment is pending or will be taken in the foreign country, the court may stay any proceedings with regard to the foreign-country judgment until the appeal is concluded, the time for appeal expires, or the appellant has had sufficient time to prosecute the appeal and has failed to do so". See also PJSC Credit-Moscow Bank v Khairoulline, No CV 15-6604, 2016 WL 4454208 (ED Pa 24 August 2016), issuing stay pending resolution of appeals that had already been argued).
2.4 What is the limitation period for making an application for recognition and enforcement?
Neither the Restatement nor the 1962 Recognition Act addresses the statute of limitations question. The 2005 Recognition Act, however, includes a statute of limitations; it provides that "[a]n action to recognize a foreign-country judgment must be commenced within the earlier of (i) the time during which the foreign-country judgment is effective in the foreign country, or (ii) 15 years from the date that the foreign-country judgment became effective in the foreign country." Some courts have applied the state's general statute of limitations, while some states have their own application limitations period (see Cal Civ Proc Code § 1721: "An action to recognize a foreign-country judgment shall be commenced within the earlier of the time during which the foreign-country judgment is effective in the foreign country or 10 years from the date that the foreign-country judgment became effective in the foreign country"). The New York Convention does not contain a statute of limitations for enforcement of arbitral awards or restrictions with respect to foreign judgments; accordingly, parties are free to incorporate time limits into their arbitration agreements.
3 Recognition and enforcement process
3.1 Is recognition of a foreign judgment a separate process from enforcement and does it have separate legal effects?
Yes. A plaintiff seeking to enforce a foreign judgment within the United States must first have the judgment recognised by a domestic court. Recognition of a foreign judgment means that "the forum court accepts the determination of legal rights and obligations made by the rendering court in the foreign country" (2005 Recognition Act § 4 cmt. 2; Midbrook Flowerbulbs Holland BV v Holland Am Bulb Farms, Inc, 874 F 3d 604, 613 and n 9 (9th Cir 2017) (see Servaas Incorporated v Republic of Iraq, 686 F Supp 2d 346 (SDNY 2010): "The question of whether the award would be enforced under New York law…and whether the judgment would be recognized…are entirely separate and distinct questions").
Enforcement of a foreign judgment means "application of the legal procedures of the state to ensure that the judgment debtor obeys the foreign country judgment" (Millbrook Flowerbulbs, 874 F 3d at 613 n 9). A recognised judgment is generally enforceable in any US court under the Constitution's full faith and credit clause (see Cal Civ Proc Code § 1719(a) and (b)). Once recognised, the judgment has res judicata effect (see Hurst v Socialist People's Libyan Arab Jamahiriya, 474 F Supp 2d 19, 32–33 (DDC 2007): "Ordinarily, a federal court applies federal law on claim and issue preclusion in non-diversity cases").
3.2 What is the formal process for recognition and enforcement?
In most states, the judgment holder must bring an action against the debtor in a US court, obtaining jurisdiction over the debtor and/or the debtor's property. The judgment holder may bring a plenary action or raise the matter as a counterclaim, cross-claim or affirmative defence in a pending proceeding (eg, see Tex Code Prac & Rem Ann § 36A.006: recognition can be sought as an original matter by filing an action seeking recognition, or may be raised in a pending action by counterclaim, cross-claim or affirmative defence).
Very often, the foreign judgment is recognised and enforced by filing a motion for summary judgment, without the need to first file a complaint. Under this procedure, the foreign judgment holder need only present evidence that:
- a final foreign judgment has been issued (eg, by affidavit); and
- the judgment was entered against the US defendant in a proceeding that meets the standards set out by the law of the state of the recognising court.
3.3 What documents are required in support of an application for recognition and enforcement?
In New York, the foreign judgment must be authenticated in accordance with an act of Congress or the statutes of New York and filed within 90 days of the date of authentication. When the holder of a foreign country judgment seeks summary relief under § 3213 of the Civil Practice Law and Rules, the holder must:
- provide a certified copy of the actual judgment;
- if the judgment is in a foreign language, provide a certified English translation of it;
- unless obvious from the face of the judgment, submit the affidavit of an expert in the law of the jurisdiction that rendered the judgment establishing that the judgment is final, conclusive and enforceable in that jurisdiction;
- if the expert's affidavit is in a foreign language, provide a certified English translation of it; and
- if the expert cites a particular foreign law authority, provide the court with copies of those authorities and translated copies (see Sea Trade Mar Corp v Coutsodontis, 978 NYS 2d 115, 117–18 (App Div 2013); John R Higgitt, Supplementary Practice Commentaries, CPLR § 3213, at 713–19 (Supp 2019)).
In addition, the judgment creditor must file a second affidavit:
- stating the names and last known addresses of the judgment debtors;
- confirming that the judgment was not obtained by default or confession of judgment; and
- confirming that the judgment has not been stayed in whole or in part (see CPLR § 5403).
Other states have similar requirements (eg, see Fla Stat Ann § 55.604).
3.4 What fees are payable for recognition and enforcement?
In many state courts, fees must be paid when filing an authenticated copy of the foreign country judgment or award with the court. If the creditor files an original proceeding, filing fees for new petitions or complaints are generally required. In Florida, for example, there are:
- filing fees based on the size of the judgment;
- recording fees based on the number of pages in each document; and
- miscellaneous fees such as postage (eg, see Fla Stat Ann § 55.503 (requiring payment of filing fee)).
3.5 Is the applicant required to provide security for costs?
Security for costs can be required when the court stays the domestic proceeding while an appeal is taken in the foreign court. Under § 5404(b) of the Civil Practice Law and Rules (CPLR), for instance, the court "shall stay" enforcement of the foreign judgment for an appropriate period, "upon requiring the same security for satisfaction of the judgment which is required in this state".
Enforcing a judgment may require a bond. In New York, pursuant to CPLR § 6212(b), the plaintiff must post a bond as fixed by the court, so that "the plaintiff shall pay to the defendant all costs and damages, including reasonable attorney's fees, which may be sustained by reason of the attachment if the defendant recovers judgment or if it is finally decided that the plaintiff was not entitled to an attachment of the defendant's property".
3.6 How long does it usually take to obtain a declaration of enforceability?
Each state has its own statutes and rules that establish the conditions under which a judgment can be recognised and enforced. Additionally, courts have discretion to grant additional time to allow the parties to conduct discovery or schedule adversarial hearings. In some cases, a trial may be necessary. Therefore, the time to obtain a declaration of enforceability will vary with the nature of the proceedings and the complexity of the case. Actions brought under a summary procedure in lieu of complaint are intended to be expeditious: there are no pleadings and no discovery. However, the summary action must concern an instrument for the payment of money.
3.7 Can the applicant seek injunctive relief while the process is ongoing?
If the judgment debtor has assets in the state where the court sits, the commencement of an action may enable the creditor to secure provisional remedies, including temporary injunctive relief and a pre-judgment attachment or garnishment order (eg, see CPLR § 6201(5)). Under CPLR § 6213, the attachment can be made before service occurs in a New York action, so long as service follows within a specified period of time. However, "[a]ttachment is a drastic remedy, and ‘CPLR 6201 is strictly construed in favor of those against whom it may be employed'" (Northeast United Corp v Lewis, 137 AD 3d 1387, 1388 (3d Dept 2016) (citation omitted)).
4.1 On what grounds can the defendant challenge recognition and enforcement of a foreign judgment?
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)).
4.2 What is the limitation period for filing a challenge?
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)).
4.3 Can the defendant seek injunctive relief to prevent enforcement while a challenge is pending?
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.
5 Court analysis and decision
5.1 Will the court review service of process in the initial proceedings?
The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention) is a multinational treaty providing specific procedures for service of process. When the foreign court sits in a nation that is a party to the convention, the US court will determine whether the foreign service of process complied with the convention's terms (see Ackerman v Levine, 788 F 2d 830, 838 (2d Cir 1986): "As a ratified treaty, the [Hague] Convention is of course ‘the supreme law of the land'"). Service must also comply with the due process clause of the US Constitution (see Hilton v Guyot, 159 US 113, 202 (US 1895)). Where the foreign country is not a party to the Hague Convention, the US court will ask whether service complied with the foreign country's laws and with US due process standards.
5.2 Will the court review the jurisdiction of the foreign court in the initial proceedings?
A foreign judgment is not entitled to recognition if the rendering court did not have jurisdiction under the laws of its own state (see Restatement (Third) of Foreign Relations Section 482, cmt (c)). Accordingly, factors favouring non-recognition include the following:
- 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;
- There was a lack of subject-matter jurisdiction; or
- Notice of the proceedings was inadequate (see § 5304 of the Civil Practice Law and Rules (CPLR); Md Code Ann, Cts & Jud Proc § 10-704).
In determining whether there was personal jurisdiction over the defendant, some courts look to the law of the rendering court; some look to the law of the enforcing court; and some look to both the foreign jurisdiction and the United States (see Monks Own Ltd v Monastery of Christ in Desert, 168 P 3d 121 (NM 2007), examining the law of both jurisdictions. See generally, Tanya J Monestier, ‘Whose Law of Personal Jurisdiction? The Choice of Law Problem in the Recognition of Foreign Judgments', 96 BU L Rev 1788 (2016)). In most states, the foreign judgment will not be refused recognition for lack of personal jurisdiction where, among other things:
- the defendant was served personally in the foreign state;
- the defendant voluntarily appeared in the proceedings; and
- the defendant, prior to commencement of the proceedings, had agreed to submit to the jurisdiction of the foreign court with respect to the subject matter involved (Fla Stat Ann § 55.606).
5.3 Will the court review the foreign judgment for compliance with applicable law and public policy?
US courts may decline to recognise a foreign judgment that is contrary to state or US public policy, which includes both substantive and procedural law (see In re Carmona, 580 BR at 712 – Mexican judgments repugnant to Texas public policy; Derr v Swarek, 766 F 3d 430, 437–38 (5th Cir 2014) – failure of German court to respect purchasers' dismissal with prejudice of their breach of contract claims against seller violated Mississippi public policy). However, the public policy defence is narrowly construed; it "measures not simply whether the foreign judgment or cause of action is contrary to our public policy, but whether either is so offensive to our public policy as to be prejudicial to recognized standards of morality and to the general interests of the citizens" (Naoko Ohno v Yuko Yasuma, 723 F 3d 984, 1002 (9th Cir 2013) (emphasis and internal quotation marks omitted. See also SARL Louis Feraud Int'l v Viewfinder, 489 F 3d 474, 479–80 (2d Cir 2007): "The public policy inquiry rarely results in refusal to enforce a judgment unless it is inherently vicious, wicked or immoral, and shocking to the prevailing moral sense").
5.4 Will the court review the merits of the foreign judgment?
Enforcement will not be denied merely because the foreign law on which the judgment or award is based differs from US law or is more favourable to judgment creditors than US law (eg, see Java Oil Ltd v Sullivan (2008) 168 Cal App 4th 1178, 1192 (Cal App 4th 2008): "The fact that a foreign judgment is based on laws different from, or in conflict with, California law is not a basis for refusing to enforce the foreign judgment"). That said, when the foreign court's judgment conflicts with US law, a court may, in the proper circumstances, refuse to recognise the foreign judgment on public policy grounds. For example, in Telnikoff v Matusevitch, 702 A 2d 230 (Md 1997), the court refused to enforce an English libel judgment because English defamation law was "contrary… to the policy of freedom of the press underlying Maryland law" (id at 249).
5.5 How will the court proceed if the foreign judgment conflicts with a previous judgment in relation to the same dispute between the same parties?
The Model Acts provide that "[a] foreign judgment need not be recognized if the judgment conflicts with another final and conclusive judgment" (see 1962 Model Act, § 4(b)(4); 2005 Model Act, § 4(c)(4)). Many state statutes incorporate this language (see CPLR § 5304(b); Byblos Bank Eur, SA v Sekerbank Turk Anonym Syrketi, 885 NE 2d 191 (NY 2008), affirming non-recognition of a Belgium judgment which conflicted with an earlier judgment of a Turkish court). There is no fixed rule, however, concerning which judgment gets recognised (see Restatement (Third) of Foreign Relations Law, § 482(2)(e) and cmt g (Am Law Inst 1987): "Courts are likely to recognize the later of two inconsistent foreign judgments, but under Subsection 2(e) the court may recognize the earlier judgment or neither of them").
5.6 Are there any other grounds on which the court may refuse to recognise and enforce the foreign judgment?
In Florida, Idaho, Maine, North Carolina, Ohio and Texas, lack of reciprocity is a discretionary ground for non-recognition (eg, see Banque Libanaise Pour Le Commerce v Khreich, 915 F 2d 1000, 1002–04 (5th Cir 1990), refusing to recognise an Abu Dhabi judgment because the Texas Recognition Act treats non-reciprocity as a discretionary ground for non-recognition; Fla Stat Ann § 55.605(2)(g)). In Georgia and Massachusetts, lack of reciprocity is a mandatory ground for non-recognition.
A court will also refuse to enforce a judgment where the parties had agreed to arbitrate, although the parties can waive such provisions (see Iraq Middle Market Development Foundation v Harmoosh, 848 F 3d 235 (4th Cir 2017)).
5.7 Is partial recognition and enforcement possible?
Yes. As the Second Circuit observed in Ackermann v Levine, 788 F 2d 830 (2d Cir 1986), "courts are not limited to recognizing a judgment entirely or not at all. Where a foreign judgment contains discrete components, the enforcing court should [attempt] to discern the appropriate ‘extent of recognition'" (see De Fontbrune v Wofsy, No 5:13-cv-05957-EJD, 2019 WL 4345967 (ND Calf 12 September 2019) (granting partial summary judgment on some defences).
5.8 How will the court deal with cost issues (eg, interest, court costs, currency issues)?
Where damages are sustained in a foreign currency, the conversion depends on the rule used in the particular jurisdiction. Under the ‘breach-day rule', the exchange rate is fixed on the day the foreign judgment was rendered. Under the ‘judgment-day rule', the date of conversion is the day of the US judgment. New York appears to follow both rules, although in different situations. Under the common law, New York courts invoke the breach-day rule when damages sustained in a foreign currency are converted to US dollars. But under New York Judiciary Law § 27, the state invokes the judgment-day rule where the cause of action is based upon an obligation "denominated" in a currency other than that of the United States (see also Restatement (Third) Foreign Relations Law § 423 (1987): courts should award payment in the way that will best make the prevailing party whole).
Interest is also a matter of state law. For example, under California law, "a foreign-country money judgment entered in this state bears post-judgment interest at the California rate of 10% from the date of the judgment recognizing the foreign judgment" (Hyundai Sec, 232 Cal App 4th at 1392).
6.1 Can decisions in relation to the recognition and enforcement of foreign judgments be appealed?
Yes, an appeal can be taken from a ruling recognising or enforcing a foreign judgment, or a ruling denying recognition and enforcement. For example, in DeJoria v Maghreb Petroleum Exploration, 804 F 3d 373 (5th Cir 2015), the appellate court heard an appeal from an order denying recognition under the Texas Recognition Act.
6.2 Can the applicant seek injunctive relief while the appeal is pending?
The party taking the appeal can seek a stay pending appeal to preserve the status quo. A stay turns on factors that include irreparable injury, likelihood of success on the merits and where the public interest lies.
7 Enforcing the foreign judgment
7.1 Once a declaration of enforceability has been granted, how can the foreign judgment be enforced?
Federal Rule of Civil Procedure 69(a)(1) provides that: "A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution – and in proceedings supplementary to and in aid of judgment or execution – must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies."
State law remedies available to enforce foreign judgments generally include injunctions, notices of pendency, orders of attachment and receivership. In New York, § 6201(5) of the Civil Practice Law and Rules (CPLR), governing attachment procedures, is often the vehicle of choice for enforcing a foreign judgment. After the action is brought, the court will rule on whether the foreign judgment can be recognised in New York. New York also permits ‘turnover actions' under CPLR § 5225(b) (see question 7.2).
7.2 Can the foreign judgment be enforced against third parties?
Many states, such as New York, permit ‘turnover actions' (see CPLR § 5225(b)). A turnover action is a special proceeding brought by creditors when the person with possession or control of the money or property is not the judgment debtor, but a third person - for example, a financial institution with branches in New York. Upon a sufficient showing, courts "shall require such person to pay the money, or so much of it as is sufficient to satisfy the judgment, to the judgment creditor and, if the amount to be so paid is insufficient to satisfy the judgment, to deliver any other personal property, or so much of it as is of sufficient value to satisfy the judgment, to a designated sheriff" (CPLR § 5225(b)). The "burden of proof in a turnover proceeding rests with the judgment creditor", but the creditor "is entitled to broad discovery to assist in prosecuting the claims" (Petrocelli v Petrocelli Elec Co, 995 NYS 2d 552, 553 (App Div 2014). Additionally, a court sitting in New York with personal jurisdiction over a non-sovereign third party can recall to New York extraterritorial assets owned by a foreign sovereign (Peterson v Islamic Republic of Iran, 876 F 3d 63 (2d Cir 2017)), petition for cert filed (US 7 May 2018) No 17-1534).
8 Trends and predictions
8.1 How would you describe the current enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The US Supreme Court has agreed to review the decision of the Eleventh Circuit in GE Energy Power Conversion France SAS Corp v Outokumpu Stainless USA, LLC, 902 F 3d 1316 (2018), holding that a non-signatory to a contract cannot compel arbitration under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as incorporated in Chapter 2 of the Federal Arbitration Act, through the doctrine of equitable estoppel. The court held that: "Private parties… cannot contract around the Convention's requirement that the parties actually sign an agreement to arbitrate their disputes in order to compel arbitration." There is a conflict in the circuit courts on this issue. The case presents an important issue for corporations engaging in cross-border commercial transactions, which often require performance by parties that are not actual signatories, including sureties and subcontractors.
9 Tips and traps
9.1 What are your top tips for smooth recognition and enforcement of foreign judgments, and what potential sticking points would you highlight?
Section 1312(a) of the New York Business Corporation Law provides that, without a certificate of authority from the New York secretary of state, a foreign corporation (meaning a business formed under the laws of another state or foreign government) "shall not maintain any action or special proceeding in this state unless and until such corporation has been authorized" (NY Bus Corp Law § 1312(a)). There is a presumption that, in an action brought by a foreign corporation lacking a certificate of authority, the corporation is doing business in its state of incorporation, rather than in New York. To be doing business in New York means having a regular and continuous course of conduct in the state.
When a company is doing business in New York, without a certificate of authority, it risks dismissal of its enforcement action. However, it can register with the state and pay all fees, taxes, penalties and interest charges during the pendency of the action, thereby avoiding dismissal (see Horizon Bancorp v Pompee, 82 A D 3d 935 (2d Dep't 2011); Showcase Limousine, Inc v Carey, 703 NYS 3d 22, 23 (App Div 2000)).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.