To make it absolutely certain that judgments from the courts of other countries are recognized in U.S. courts, the Uniform law commissioners promulgated the Uniform Foreign Money Judgments Recognition Acts (UFM-JRA). Article 53 of the New York Civil Practice Law and Rules (“CPLR”), which codifies the New York version of the UFM-JRA, provides that a foreign judgment that is final, conclusive and enforceable in the country were rendered shall be enforceable in New York.
One way to enforce the foreign judgment is by filing a motion for summary judgment in lieu of a complaint. CPLR §3213. This procedural method is commonly used by major financial entities as it offers them the means to obtain a judgment expeditiously. For a court to be able to hear a case, a court must have personal jurisdiction over defendant (i.e., assets in the state).
As a matter of first impression, the New York State Court was asked to decide whether in personam jurisdiction is a necessary predicate to recognition of a foreign country judgment. In Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting & Fin. Services Co., 36 Misc. 3d 389, 948 N.Y.S.2d 533 (Sup. Ct. 2012), the court held that personal jurisdiction was not essential to recognition and enforcement of a foreign country money judgment. As a result, the court granted summary judgment in favor of Abu Dhabi Commercial Bank to recognize and enforce an English court judgment.
Abu Dhabi Commercial Bank PJSC, incorporated under the laws of the UAE, sued Saad Trading, a Saudi limited partnership, for breach of contract in the English Commercial Court and won a judgment of $33 million. Subsequently, the bank sought recognition and enforcement of the judgment in New York State despite the fact that Saad Trading does not have any contacts or assets there.
The court rejected Saad Trading’s argument that since the court lacked personal jurisdiction over Saad, it would violate due process if the court were to grant plaintiff’s motion to recognize the foreign judgment. The court noted that the recognition of a foreign money judgment is a ministerial function; namely the judgment creditor is not arguing the case on the merits or seeking new relief. The court further noted that a ministerial function does not trigger due process, hence, there is no need for personal jurisdiction.
At first reading, one might wonder why a plaintiff would go to the trouble to enforce a foreign country judgment in New York when a defendant has no assets in New York. However, as noted in our Firm’s January 2010 Middle East Update, a foreign country judgment recognized and enforced in New York allows the judgment creditor to pull assets into New York for execution. A court sitting in New York may order a bank over which it has personal jurisdiction to turn over assets (or cash equivalent to their value) owned by a judgment debtor to satisfy a judgment even when those assets are located outside New York. (See Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533, 911 N.E.2d 825 (2009)). As a result, there can be benefits of having a foreign judgment recognized in New York even when a party or their assets are not located in New York.
For further information, please contact: Nicholas P. Connon, Managing Partner and Chair of the Middle East Practice Group; Tel: +1.626.638.1757; e-mail: firstname.lastname@example.org
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