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International Money Judgments

New York has traditionally been a generous forum in which to enforce judgments for money damages rendered by foreign courts. In 1970, New York enacted the Uniform Foreign Country Money Judgments Recognition Act (the “UFMJRA”), found in Article 53 of the CPLR, to “promote the efficient enforcement of New York judgments abroad by assuring foreign jurisdictions that their judgments would receive streamlined enforcement here.”

Article 53 of the CPLR provides for the recognition of “any foreign country judgment…which is final, conclusive and enforceable. A foreign country judgment is considered “conclusive between the parties to the extent that it grants or denies recovery of a sum of money” unless “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.” 

Jurisdiction

The lack of jurisdiction is the most commonly used defense to oppose the enforcement of a foreign monetary judgment. Under CPLR § 5304(a), New York courts will not recognize foreign country judgment if “the foreign court did not have personal jurisdiction over the defendant.”

New York courts have found that a foreign country judgment may not be refused recognition for lack of personal jurisdiction if: 

  • The defendant was served personally in the foreign state;
  • The defendant voluntarily appeared in the proceedings;
  • The defendant prior to the commencement of the proceedings had agreed to submit to the jurisdiction of the foreign court with respect to the subject matter involved; 
  • The defendant was domiciled in the foreign state when the proceedings were instituted or, being a body corporate, had its principal place of business, was incorporated, or had otherwise acquired corporate status in the foreign state;
  • The defendant had a business office in the foreign state and the proceedings in the foreign court involved a cause of action arising out of business done by the defendant through that office in the foreign state; or
  • The defendant operated a motor vehicle or airplane in the foreign state and the proceedings involved a cause of action arising out of such operation. 

In addition to those listed above, New York courts may recognize other bases of jurisdiction when a foreign judgment is predicated on any jurisdictional basis that it recognizes in its internal law.

Service of Process

Courts have required proper notice, generally in the form of proper service of process, as a prerequisite to granting recognition or enforcement of a foreign judgment. Proper service has been given two possible definitions. The first definition is focused on procedure, and defines proper service as compliance with the foreign country’s statutory notice provisions. The second definition is focused on constitutional concerns, and defines proper service as that which gives adequate notice of the proceedings.

Courts are unlikely to find inadequate notice of the proceedings where service was proper and the defendant is represented by council. In one leading case, a D.C. district court went so far as to enforce an Israeli default judgment after finding that service of process was effective after the defendant was (i) personally served; and (ii) was represented by counsel – despite the fact that neither the defendant nor the attorney claimed to be able to read Hebrew. See Tahan v. Hodgson 662 F.2d 862 (1981). 

The judgment’s creditor must review the requirements of the service of process established by the foreign country where the debtor is located, and/or the requirements of the Hague Convention related to notification or transfer abroad of judicial and extrajudicial documents in civil or trade matters, where such treaties or conventions are in force.

Public Policy & Finality 

The defendant opposing enforcement of a foreign judgment under CPLR 5304(b)(4) bears the burden of proving that the foreign judgment violates New York public policy. A public policy argument for non-recognition applies only in rare circumstances where the foreign judgment is “inherently vicious, wicked or immoral, and shocking to the prevailing moral sense.” Accordingly, New York Courts have recognized foreign judgments even if a New York court would have resolved the legal issue differently than the foreign court had. 

However, this principle has limits, and courts in this state have refused to recognize foreign judgments that clearly affect the health and public morals, as well as the confidence in the administration of law and respect for individual rights, personal freedoms, and private property. 

Finally, New York requires a final and conclusive foreign monetary judgment. The validity of the judgment is determined under the law of the country of origin. The foreign judgment is conclusive where it grants or denies recovery of a sum of money, and is definitive if under the legislation of the country of origin there are no available legal remedies or pending appeals.

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