In today’s globalized world, with international markets becoming a stage for events to take place, how would you enforce a judgment in a foreign jurisdiction? After going through a lengthy process, it may seem unfair to go through the same procedure again without a guaranteed result. So, simply because you obtained a judgment in your favor, if the court decision isn’t enforceable in a foreign jurisdiction, then how can you ensure you can collect? How can you ensure that things will end in your favor, and that the other side will not get away because he/she retreated to another country?
What needs to be in place to enforce my judgment?
You need the following items to enforce your judgment in a foreign jurisdiction: (1) a treaty with the foreign country agreeing to enforce the judgment; and (2) a domestic judgment in your favor that was issued within the United States. What makes this difficult is how the United States does not have treaties with other countries regarding the enforcement of judgments. While there is a treaty in place through the Hague Conventions on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, only a few select countries are part of it, including, but not limited to, Kuwait and the Netherlands. Unfortunately, beyond that there is little else you could do to enforce a judgment. While we will discuss this in the next blog, arbitration agreements can bind those in other countries, and there is an effective convention that applies in those cases.
How can I attempt to have my judgment enforced abroad?
In general, enforcement abroad involves a rehearing, wherein the judge, under local law, approves the judgment. The first step will be a filing of a formal document in the foreign court. Furthermore, when filing, it is necessary to state why that court would have jurisdiction there, namely if the assets are within the foreign country, or if it is against an individual who resides within that jurisdiction. For assets, this is slightly easier, as courts are more willing to sign off. However, in cases where a foreign citizen is a party, there may be questions as to the judge’s impartiality for the United States. China seems to have issues here, as it is reluctant to enforce foreign judgments. China’s Article 282 of its civil procedure code, for instance, would deny judgments if they were contrary to its local laws or social policies. Other countries have similar policies, where they determine if the original court had jurisdiction over the matter, if the defendant was notified, if the judgment was not due to fraud, and that it does not contradict its policy.
So, how else could you obtain and enforce a binding judgment? While it certainly isn’t a solution in every case, yet arbitration, as we will discuss in the near future, is one option. Other solutions include refraining further business contact, or arguing that the matter be heard in a court within that jurisdiction. However, this may present other issues, as it may solve the issue of enforcement, but it means a person must find a foreign attorney who is familiar with the legal system of that country.
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