Enforcement of Foreign Judgments and Arbitral Awards

It is usually not possible to enforce a court judgment or arbitral award obtained in another country without the approval of the destination state. In such cases, one would have to apply to a court in the destination state for the recognition and enforcement of the judgment or award obtained in a foreign state.

In many countries, the recognition and enforcement of foreign judgments is governed by local domestic law as well as legal principles of comity, reciprocity and res judicata (meaning that the questions at issue have previously been decided). In rare cases, international treaty obligations will affect the destination state's decision.

A general principle of international law that applies to these kinds of cases is that a destination state has the right to decide regarding foreign judgments whether:

• The court that issued the foreign judgment had proper jurisdiction in the first place.

• The defendant was properly notified of the foreign action.

• The foreign proceedings were tainted by fraud.

• The foreign judgment is not contrary to the public policy of the destination state.

The destination state will conduct a detailed analysis based on its laws to determine, among other things, whether the foreign state had properly assumed jurisdiction. Often, it is enough to meet this part of the destination state’s criteria that a “real and substantial connection with the litigants or with the subject matter in dispute” existed or the traditional bases of jurisdiction were otherwise satisfied.

Sometimes, a client will want to oppose an application for enforcement of a judgment based on certain factors considered by the court in the destination state. Further, a client may wish to oppose steps taken to collect on a foreign judgment.

Multiple laws apply to enforcing foreign judgments, so it is highly recommended to have skilled and knowledgeable legal counsel by your side.

Under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), which governs the enforcement of foreign arbitral awards in most countries worldwide, the test for refusing enforcement of arbitral awards obtained in other signatory countries is generally narrow.