Uniform Foreign-Country Money Judgments Recognition Act

Uniform Foreign-Country Money Judgments Recognition Act  SSL Draft

Summary:

International trade creates litigation between countries and judgments that must be enforced from country to country. There is a strong need for uniformity between states with respect to the law governing foreign country money-judgments. If foreign country judgments are not enforced appropriately and uniformly, it may make enforcement of the judgments of American courts more difficult in foreign country courts.

The first step towards enforcement is recognition of the foreign country judgment. The recognition occurs in a state court when an appropriate action is filed for the purpose. If the judgment meets the statutory standards, the state court will recognize it. It then may be enforced as if it is a judgment of another state of the United States. Enforcement may then proceed, which means the judgment creditor may proceed against the property of the judgment debtor to satisfy the judgment amount. First, it must be shown that the judgment is conclusive, final and enforceable in the country of origin. Certain money judgments are excluded, such as judgments on taxes, fines or criminal-like penalties and judgments relating to domestic relations. Domestic relations judgments are enforced under other statutes, already existing in every state. A foreign-country judgment must not be recognized if it comes from a court system that is not impartial or that dishonors due process, or there is no personal jurisdiction over the defendant or over the subject matter of the litigation. There are a number of grounds that may make a U.S. court deny recognition, i.e., the defendant did not receive notice of the proceeding or the claim is repugnant to American public policy. A final, conclusive judgment enforceable in the country of origin, if it is not excluded for one of the enumerated reasons, must be recognized and enforced.

In 1962, the Uniform Law Commission (ULC) promulgated its Uniform Act Foreign-Country Money Judgments Recognition Act, which codified the most prevalent common law rules with regard to the recognition and enforcement of money judgments rendered in other countries. Under the 1962 Act, a state was required to recognize a foreign-country money judgment if the judgment satisfied the standards for recognition set out in the Act. Since its promulgation more than 40 years ago, the 1962 Act has been adopted in a majority of the states and has been in large part successful in carrying out its purpose of establishing clear and uniform standards under which state courts will enforce the foreign-country money judgments that come within its scope.

New Mexico HB 690 enacts a revised version of the Uniform Foreign Money Judgments Recognition Act of 1962. The revised version, which was first promulgated by the ULC in 2005, generally provides simple court procedures for the enforcement of foreign-country money judgments. It corrects and clarifies gaps in the 1962 Act revealed in the case law over the last 40 years. The revision addresses burdens of proof for the first time, providing that a petitioner for recognition has the burden of proving a judgment is entitled to recognition under the standards of the Act, and that any respondent resisting recognition and enforcement has the burden of proof respecting denial of recognition. It revises the grounds for denying recognition of foreign-country money judgments and establishes a statute of limitations for recognition actions. Finally, the revised Act generally updates and clarifies both the definitions and the scope section of the 1962 edition.

Specifically, the 2005 revised Act makes it clear that a judgment entitled to full faith and credit under the U.S. Constitution is not enforceable under this Act. This clarifies the relationship between the ULC‘s Foreign-Country Money Judgments Act and the Enforcement of Foreign Judgments Act. Recognition by a court is a different procedure than enforcement of a sister state judgment from within the United States.

The 2005 revision expressly provides that a party seeking recognition of a foreign judgment has the burden to prove that the judgment is subject to the Uniform Act. Burden of proof was not addressed in the 1962 Act.

Conversely, the 2005 Act imposes the burden of proof for establishing a specific ground for non-recognition upon the party raising it. Again, burden of proof is not addressed in the 1962 Act.

The 2005 Act addresses the specific procedure for seeking enforcement. If recognition is sought as an original matter, the party seeking recognition must file an action in the court to obtain recognition. If recognition is sought in a pending action, it may be filed as a counter-claim, cross-claim or affirmative defense in the pending action. The 1962 Act does not address the procedure to obtain recognition at all, leaving that to other state law.

The 2005 Act provides a statute of limitations on enforcement of a foreign-country judgment. If the judgment cannot be enforced any longer in the country of origin, it may not be enforced in a court of an enacting state. If there is no limitation on enforcement in the country of origin, the judgment becomes unenforceable in an enacting state after 15 years from the time the judgment is effective in the country of origin.

Thirteen states had enacted the revised Uniform Foreign-Country Money Judgments Recognition Act as of June 2010: California, Colorado, Hawaii, Idaho, Michigan, Minnesota, Montana, New Mexico, Nevada, North Carolina, Oklahoma, Oregon, and Washington. Interested readers can download the approved text of the Uniform Foreign-Country Money Judgments Recognition Act at www.nccusl.org.

Submitted as:
New Mexico
HB 690

Status: Enacted into law in 2009.

 Download the 2011 SSL Volume

AttachmentSize
foreigncountrymoneyjudgements2011.pdf127.26 KB