New York Court Enforces $33 Million English Judgment

31-May-2012

In a recent decision, New York Supreme Court Justice Shirley Werner Kornreich granted summary judgment in lieu of a complaint (pursuant to CPLR § 3213) in connection with a foreign plaintiff’s efforts to collect on a July 2010 judgment rendered by the Queen’s Bench Division of the English High Court of Justice.  The English court had issued a default judgment – totaling more than $33 million – following a trial at which the defendant had purposefully failed to appear.  The New York court’s decision in Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting & Financial Services Company, 2012 WL 1813098 (N.Y. Sup. May 15, 2012) underscores and reinforces the relative ease at which certain foreign judgments may be recognized and enforced in New York.

In Abu Dhabi Commercial Bank, the plaintiff, an entity incorporated under the laws of the United Arab Emirates doing business in Abu Dhabi, argued that, although there was no evidence that the defendant had any contact with New York, “personal jurisdiction is not necessary to enforce a foreign money judgment.”  The defendant, a limited partnership under the laws of Saudi Arabia and doing business there, argued, by contrast, that:  (i) the New York court had no personal over the defendant; (ii) granting the plaintiff’s motion would violate due-process principles; and (iii) the action should be dismissed on forum-non-conveniens grounds.

First, with respect to the defendant’s arguments regarding in-personam jurisdiction, Justice Kornreich held that such jurisdiction is not “a necessary predicate to recognition of a foreign country money judgment.”  Citing what she identified as “[t]he only New York State appellate court which has addressed the issue,” Lenchyshyn v. Pelko Elec., Inc., 281 A.D.2d 42 (4th Dep’t 2001), accord, Milan Indus. v. Wilson (Index No. 101242/2010) (May 26, 2011) (Tingling, J.), Justice Kornreich observed that the Appellate Division found that “neither due process nor article 53 of the CPLR [i.e., the New York procedural law addressing the recognition of foreign money judgments] “requires a jurisdictional predicate for recognition of a foreign country money judgment so long as the requirements of article 53 are met.” 

As the Court in Lenchyshyn explained, “[i]n proceeding under article 53, the judgment creditor does not seek any new relief against the judgment debtor, but instead merely asks the court to perform its ministerial function of recognizing the foreign money judgment.”  See also CIBC Mellon Trust Co. v. Mora Hotel Corp. N.V., 100 N.Y.2d 215 (2003).

Second, the defendant further argued that a footnote in the U.S. Supreme Court’s decision in Shaffer v. Heitner, 433 U.S. 186, 210 n.36 (1977) (explaining that, once it is established that a defendant is a debtor, it would not be unfair to allow a plaintiff creditor to realize on the debt in a State where the defendant has property, “whether or not that State would have jurisdiction to determine the existence of the debt as an original matter”) should be interpreted “as recognizing that personal jurisdiction is unnecessary [and unnecessary solely] where quasi-in-rem jurisdiction exists.”

Justice Kornreich, however, rejected this interpretation, noting that the better interpretation of this aspect of the Supreme Court’s due-process jurisprudence was given by the Appellate Division in Lenchyshyn; namely, that “no jurisdictional basis is required as a predicate to the recognition or enforcement of a foreign judgment.”  Accordingly, Justice Kornreich explained that “this court does not find personal jurisdiction essential to recognition and enforcement of a foreign country money judgment.”

Finally, the defendant argued that the case should be dismissed on forum-non-conveniens grounds.  Noting that “the decision as to forum non conveniens is a matter of discretion,” see Islamic Republic of Iran v. Pahlevi, 62 N.Y.2d 474 (1984), Justice Kornreich identified “the factors traditionally considered in determining the issue” (i.e., the hardship faced by the defendant in defending in New York; the availability of an alternate forum; the residence of the parties; and the jurisdiction in which the transaction occurred), observing that “the rule of forum non conveniens is flexible and has as its goal, fairness, justice and convenience” see id.

Rejecting the defendant’s forum-non-conveniens arguments, Justice Kornreich concluded that, under the circumstances, “[t]he doctrine of forum non conveniens, if applied here, would undermine rather than support fairness, justice and convenience.”  As she further explained, “defendant bears no hardship, since there is nothing to defend.  The merits were decided in England, and plaintiff seeks no new relief.  There are no witnesses to be inconvenienced or necessary evidence beyond the court’s jurisdiction.  An alternate forum, the parties’ residences, and the venue of the transaction are beside the point.  Plaintiff is seeking recognition of a foreign judgment as a matter of international comity in order to collect on the judgment it has already obtained.”

In the end, what appears to have influenced the Court’s jurisdictional analysis was the plaintiff’s specific, limited context and purpose (i.e., merely to domesticate a foreign judgment).  After all, as Justice Kornreich correctly noted, “once enforcement of the recognized judgment is sought as against the judgment debtor’s property, jurisdiction in-rem or quasi-in-rem is present.”

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