Contesting Judgments From Abroad

Imagine that your long time international business client calls you one day, in a panic, to tell you that a foreign court has entered a judgment against his company.  Now, some local lawyer is attempting to “domesticate” that judgment and enforce it against your client in the United States.  The judgment is for a large dollar amount and the stakes are high.  But the case is already over, isn’t it?  Your client has already lost, hasn’t it?

Of course not.

This is because foreign legal systems do not always comport with our notions of “due process” and substantial justice.  Look carefully at the foreign judgment and the proceedings and circumstances which gave rise to it.  There may be ample reason/opportunity for you to poke holes in it and, ultimately, defeat the entry of the judgment.

Foreign country judgments in Florida are governed by F.S. § 55.605.  That Statute provides several reasons upon which you can contest the entry of a foreign judgment.  A sampling of those reasons are set forth below.

  1. A.           The Foreign Legal System Where The Judgment Was Entered Was Not Impartial And Did Not Have Procedures Reflecting Due Process.

 

As Dorothy said in the Wizard of Oz, “there is no place like home.”  American lawyers sometimes take for granted the wonderful procedures that we have for notice, an opportunity to be heard and other due process provisions.  The best thing that ever happened to the American legal system was the United States Constitution.  Remember, however, that the United States Constitution applies only in the United States.  Foreign countries do not usually have such a document.  Accordingly, foreign legal systems tend to work differently and do not have built in protections which ensure fairness.

You should research the mechanics of the foreign civil procedure system when your client is contesting the entry of a foreign judgment.  You can do this by consulting Martindale-Hubbell or by contacting counsel abroad and questioning them about how their system operates.  You would be surprised how different foreign legal systems can be from the American system sometimes dispensing with the concept of service of process, notices of hearings and even allowing trials to proceed based only upon publication notices.  Countries which employ these procedures open up their judgments to collateral attack in the United States.

  1. B.   Jurisdiction Over The Defendant

You should evaluate whether the foreign court had jurisdiction over your client by making the same type of due process/minimum contacts analysis you would perform in the United States.  Did your client actually do business in the foreign jurisdiction?  Did your client maintain an office, have a bank account or employees in the foreign jurisdiction?  What gave rise to the basis for the judgment?  All of these things are issues which can be attacked, based upon section 55.605, in the event that recognition is sought for a foreign judgment in the United States.

  1. C.   Notice Of The Foreign Proceedings

It is amazing how many jurisdictions allow notice by publication or through letters sent in the mail.  American-style process service is the exception rather than the rule.  Accordingly, ask your client how he learned about the foreign proceeding.  Did he read about it in the newspaper?  Did a notice appear in the mail?  Did a process server serve the notice?

Just like any litigation, these are important questions to ask when dealing with the domestication of a foreign judgment against your client.  American courts will re-visit the manner in which service of process was made when the issue is whether a foreign judgment should be domesticated.

  1. D.   The Judgment Was Obtained By Fraud

Not every country in the world has a fair legal system.  Many countries operate under concepts of patronage, baksheesh[1] and outright bribery.  Moreover, a plaintiff who sues in a foreign country often misdescribes or omits certain key facts.  This can also give rise to a fraudulent judgment which may not recognized in the United States.  Thus, look carefully into the foreign judgment and how it was obtained in order to determine whether it was obtained by fraud.

  1. E.   The Judgment Violates Public Policy

There are all sorts of reasons why a foreign judgment might violate public policy of the State where domestication and enforcement is sought.  In divorce cases, the rights of women are often overlooked in foreign countries.  Some foreign countries do not have statutes providing for equitable distribution or alimony.  Sometimes, everything goes to the husband.

In business cases, in certain instances, liquidated damages penalties, which might not be enforceable in the United States, have been found enforceable in foreign countries.  Foreign courts also sometimes ignore the terms of the parties’ contract and, instead, enter a judgment based upon the court’s perception of “fairness.”

The courts have denied recognition to foreign judgments where a wrongdoer seeks to enforce a judgment for damages which is related to the wrongdoing.  For example, a bail jumper, who is later captured, cannot sue for injuries relating to his capture.

Foreign libel judgments are particularly susceptible to attack.  The libel laws in foreign countries differ vastly from those in the United States.  England is one such country which has completely different libel laws insofar as a defendant in an English libel proceeding may be held responsible based upon “strict liability” theories without any regard to the First Amendment or other due process concepts (remember that England does not have our Constitution).  Freedom of speech and of the press is a uniquely American concept which many countries ignore.  Foreign judgments which do not take these factors into account can also be subject to collateral attack.

  1. F.    Forum Non Conveniens

Foreign judgments may also be attacked on the grounds that the country in which the lawsuit was brought originally is not a convenient forum in cases where jurisdiction is based only upon personal service.  Courts in these circumstances may engage in a typical forum non conveniens analysis – determining where the witnesses, documents and the transaction took place.  It is unlikely that a Florida court will uphold a foreign judgment where only one of several witnesses is located in the foreign country and the majority of the witnesses and documents are located in the United States.  These types of tactics are usually frowned upon by American courts and, as a result, foreign judgments obtained under these circumstances can be highly suspect.

In sum, be wary of foreign judgments when representing individuals and/or companies who may want to defend against those judgments. There are plenty of reasons that such judgments may be subject to collateral attack.


[1] Baksheesh (from Persian: بخشش‎ bakhshesh[1]) is a term used to describe tippingcharitable giving, and certain forms of political corruption and bribery in the Middle East and South Asia. Leo Deuel[who?] sardonically described baksheesh as “lavish remuneration and bribes, rudely demanded but ever so graciously accepted by the natives in return for little or no services rendered.”[2] http://en.wikipedia.org/wiki/Baksheesh.

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