New York Court Recognizes English Judgment Where No Personal Jurisdiction Over Defendant Exists

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This month a New York State court granted summary judgment in favor of Abu Dhabi Commercial Bank (ADCB) to recognize and enforce an English court judgment, despite acknowledging that the court has no personal jurisdiction over the defendant/judgment- debtor.

ADCB filed an action known in New York State as a motion for summary judgment in lieu of complaint, seeking to collect on its judgment of USD 33 million rendered by the High Court of Justice Queen’s Bench Division Commercial Court, against Saudi Arabian-based Saad Trading, Contracting & Financial Services Company. A motion for summary judgment in lieu of complaint is used in New York State to domesticate and enforce judgments rendered in other U.S. and foreign jurisdictions.

The English court action was for breach of contract and the underlying contract called for the parties to submit to the non-exclusive jurisdiction of the English courts. Saad did not challenge jurisdiction in England, failed to appear for trial, and did not appeal the judgment. In New York State Supreme Court (trial level court), however, Saad opposed the motion for summary judgment in lieu of complaint based on lack of personal jurisdiction over it and forum non conveniens.

In rendering its decision, the court acknowledged that there was no evidence indicating that Saad has any contact with New York State. The court noted that the key issue in the case was whether personal jurisdiction is a requirement to recognizing a foreign country money judgment. It turned to the only New York State appellate court decision that addressed the issue previously. In that case, the plaintiffs obtained a judgment in Ontario, Canada and filed a motion for summary judgment in lieu of complaint seeking to have the Ontario court judgment recognized in New York State, where the defendants/judgment-debtors had assets. The appellate court held that personal jurisdiction over the defendants/judgment-debtors was not a requirement before the Ontario judgment would be recognized and enforced. The court expressly found that neither due process nor the New York Civil Practice Law and Rules (CPLR) requires personal jurisdiction as a condition to recognizing a foreign country money judgment. The appellate court explained that the judgment-creditor was not seeking new relief against the judgment-debtor, but was merely requesting the court to perform a ministerial function by recognizing the foreign money judgment.

In ADCB, the court agreed with the appellate court’s reasoning and finding that once

enforcement of a recognized foreign court money judgment is sought, the court acquires in rem or quasi-in-rem jurisdiction over the judgment-debtor’s property. The court also summarily dismissed Saad’s forum non conveniens argument, finding there was no hardship to Saad since there was nothing to defend, the merits were decided in England, and ADCB sought no new relief.

This recent case reaffirms that New York courts will recognize and enforce a foreign court money judgment where they would otherwise not have personal jurisdiction over a defendant. For plaintiffs/judgment-creditors, this principle can be used successfully to collect on a foreign judgment when assets are located in New York State. Defendants/ judgment-debtors must be aware that their assets in New York State are at risk even when a judgment arises from proceedings in a foreign country or sister state.

For assistance with enforcement of foreign money judgments and arbitral awards in U.S. courts, please contact Jon P. Yormick, [email protected], or by calling toll free (Canada & U.S.) +1.866.967.6425 or T: +1.216.928.3474.

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