As the world becomes increasingly interconnected, legal disputes that involve multiple jurisdictions are becoming more common. When such conflicts occur, questions about jurisdiction become paramount. Deciding which court has jurisdiction in a foreign jurisdiction case can be very difficult, but doing so is essential for any litigant wanting to resolve their dispute successfully. This article will provide an overview of fundamental legal principles and practical considerations litigants should consider when dealing with foreign jurisdiction cases.
To render a valid judgment in foreign jurisdiction cases, a court must have subject matter jurisdiction (i.e., the authority to hear a particular case) and personal jurisdiction (i.e., the rule over the parties involved). While subject matter jurisdiction is usually easy to determine, personal jurisdiction in foreign jurisdiction cases can be particularly complex.
A single federal statute does not govern foreign judgment recognition and execution. Instead, state law typically governs the registration and execution of decisions. The Uniform Money-Judgments Recognition Act of 1962 and the Uniform Foreign-Country Money Judgments Recognition Act of 2005 are two examples of recognition acts published by the National Conference of Commissioners on Uniform State Laws.
These model statutes have been implemented in some form by most states and the District of Columbia. For instance, Article 53 of the Civil Practice Law and Rules, New York’s interpretation of the Uniform Foreign Country Money verdicts Act, governs the acceptance of foreign country money verdicts in that state. These laws cover only decisions that permit or prohibit the recovery of a monetary amount.
States that lack recognition legislation depend on common law and the Restatement (Third) of United States Foreign Relations legislation. The common law adheres to the rules set by the landmark Supreme Court decision Hilton v. Guyot, 159 US 113, on recognising and upholding foreign decisions. (1895). The Supreme Court ruled in Hilton that international comity principles serve as the foundation for the recognition and execution of foreign judgments.
As a result, “where there has been an 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 action brought in this country upon the judgment, be tried afresh” by the law of the country in which the trial shall be conducted.
Foreign jurisdiction is the authority over people in a foreign country or region. It is a form of territorial jurisdiction, a type of authority determined by location rather than the type of people involved or activities being regulated. When legal decisions are made or crimes are committed in an area with foreign jurisdiction cases, they are not subject to rulings or decisions made by domestic courts. The matter of jurisdiction can become very important in some foreign jurisdiction cases.
In foreign jurisdiction cases, determining whether a court has personal jurisdiction over a defendant can be particularly complex. In the United States, for example, courts typically rely on a two-part test to determine whether they have personal jurisdiction over a non-resident defendant: (1) whether the defendant has sufficient minimum contacts with the forum state such that asserting jurisdiction would not offend traditional notions of fair play and substantial justice; and (2) whether the claim arises out of or relates to those contacts. Other countries may apply different tests, making navigating foreign jurisdiction issues even more difficult.
For instance, a British national who commits a crime in China is said to have done so in a distant country. Because the individual was in China then, the Chinese courts and judicial system had jurisdiction over them even though they were British citizens and, therefore, subject to British law. A judgment rendered by a Chinese court cannot be overturned or avoided by a British court or British officials. The problem might, nonetheless, be resolved amicably.
Bilateral and multilateral instruments
With some exceptions regarding foreign jurisdiction cases, US courts must uphold the arbitration agreement and the award under 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.
The ICSID Convention establishes the legal framework for resolving investment disputes between foreign investors and sovereign states that have agreed to international arbitration following the convention, another agreement to which the United States is a party. According to Article 54, contracting states must uphold an ICSID arbitration decision “as if it were a final judgment of a court in that State.” According to several laws and treaties, judgments about domestic relations, including child custody, can be recognised and implemented.
• International Support Enforcement Act, 42 USC § 659a;
• 1980 Hague Convention on the Civil Aspects of International Child Abduction;
• 1993 Hague Convention on Protection of Children and Cooperation in Respect of Inter-Country Adoption;
• Uniform Child Custody Jurisdiction and Enforcement Act; and
• Uniform Interstate Family Support Act.
Enforcement of foreign judgments
Assuming that a party successfully obtains a judgment from a foreign court in foreign jurisdiction cases, the next question is how to enforce that judgment in another jurisdiction. The process for enforcing foreign judgments varies widely depending on the countries involved and the case’s specific facts.
In many instances, international treaties or conventions provide a framework for recognising and enforcing foreign judgments. For example, the United States is a party to the Hague Convention on the Recognition and Enforcement of Foreign Judgments, which provides a mechanism for recognising and enforcing judgments rendered in other signatory countries.
Federal Rule of Civil Procedure 69(a)(1) provides that: “A writ of execution enforces a money judgment 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. Still, a federal statute governs to the extent it applies.”
Injunctions, notifications of pendency, orders of attachment, and receivership are typically stated law remedies available to execute foreign verdicts. The Civil Practice Law and Rules (CPLR) section 6201(5) governs attachment processes and is frequently used in New York to enforce international judgments. After filing the case, the court will decide whether the overseas decision can be recognised in New York. Under CPLR 5225, “turnover actions” are also permitted in New York. (b).
Bilateral or multilateral accords may govern the acceptance and execution of decisions rendered in other nations. Based on comity or reciprocity, some countries may still acknowledge and uphold foreign decisions even without a treaty or agreement. The judgment was definitive and decisive if the foreign court had authority over the offender. There was no public policy reason to object, so the foreign judgment could be acknowledged and implemented.
Can foreign judgment be enforced against third parties?
Many jurisdictions, including New York, allow for “turnover actions” in foreign jurisdiction cases. A turnover case is a type of creditor proceeding in which the individual in custody or control of the money or property is not the judgment debtor but a third party, such as a financial organisation with branches in New York.
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” if a sufficient showing is made.
The judgment creditor bears the “burden of proof in a turnover proceeding.” Still, the creditor “is entitled to broad discovery to assist in prosecuting the claims.” Furthermore, a New York court with personal authority over a non-sovereign third party can summon extraterritorial assets held by a foreign sovereign and submit a motion for cert.
Which courts have jurisdiction for the enforcement of foreign judgments?
Federal and local courts hear requests to recognise and enforce foreign decisions in foreign jurisdiction cases. State courts have broad authority and are assumed to have subject-matter jurisdiction to hear registration and enforcement petitions. Personal control over the judgment debtor or its property is also usually needed, which means that the non-resident judgment debtor must have “minimum contact” with the state to comply with due process.
Federal courts, unlike state courts, are bound by constitutional restrictions on authority. They hear recognition and enforcement actions under either diversity of citizenship jurisdiction or federal question jurisdiction, with an assortment of citizenship jurisdiction being the most common jurisdictional ground (district courts have jurisdiction over all civil actions involving $75,000 or more and various parties). In multiple instances, federal courts follow the standards of registration and execution of the state where the federal court is located.
Thus, transferring an enforcement case from state to federal court will usually result in the federal court applying the same state law used in state court proceedings. When the subject-matter jurisdiction of a federal court is founded on an issue of federal law rather than diversity principles, the courts follow the relevant federal statute (if one exists) or federal common law.
In addition to these legal principles, there are several practical considerations that litigants should keep in mind when dealing with foreign jurisdiction cases. These include:
Hire Local Counsel: When dealing with foreign jurisdictions, it is essential to work with local counsel familiar with the legal system and culture of the country involved. Suppose you, as an individual or your business, have faced issues in a foreign jurisdiction case. In that case, the LegaMart team of experienced lawyers is here to help you with all your queries and to ensure legal compliance. You can learn about LegaMart services on our homepage.
Obtain translations: If any documents or evidence involved in the case are in a foreign language, they must be translated before they can be admitted as evidence.
Be prepared for cultural differences: Countries have different legal systems and cultural norms. Litigants should be aware of these differences and be ready to adapt their strategies accordingly.
Budget for additional costs: Cross-border disputes can be more expensive than domestic cases due to the need for travel, translation, and other logistical expenses.
Consider alternative dispute resolution: In some cases, alternative dispute resolution methods such as mediation or arbitration may be a faster and more cost-effective way of resolving a cross-border dispute.
Foreign jurisdiction cases can present complex legal and practical challenges for litigants. Whether negotiating a choice-of-forum clause, invoking the doctrine of forum non conveniens, or seeking to enforce a foreign judgment, parties should be mindful of the relevant legal principles and the particularities of the countries involved. However, careful planning and strategic decision-making can navigate these issues successfully and achieve a favorable outcome in a cross-border dispute.