The Practice of International Litigation - 2nd Edition - Looseleaf
The Practice of International Litigation - 2nd Edition - Electronic
Passing Judgment on Other Countries' Courts
Lawrence W. Newman and Michael Burrows
Cases recently decided within the Second Circuit have had the effect of
increasing awareness of the issues surrounding the adequacy of foreign
courts as alternatives to courts of the United States. Two of the procedural
contexts in which United States courts must address these issues are
motions to dismiss on the basis of forum non conveniens and proceedings for
the recognition and enforcement of foreign judgments. In such
proceedings, U.S. courts are afforded the opportunity to make
determinations as to the adequacy of courts outside the United States. In a
judgment enforcement action decided on January 3, 2000, Bridgeway
Corporation v. Citibank, 201 F.3d 134 (2d Cir. 2000), the United States Court
of Appeals for the Second Circuit undertook an analysis of a foreign
judgment in a way that is seldom followed by Unites States courts, one that
highlights the challenges involved in passing judgment on other countries'
The United States is not a party to any bilateral treaties or international
conventions governing the enforcement of judgments of courts outside the
United States, nor do the Federal Rules of Civil Procedure, or federal law
generally, contain any provision concerning the enforcement of foreign
judgments. Courts are therefore obliged to look to state law. In Bridgeway,
the plaintiff-appellant Bridgeway, a Liberian corporation with its principal
place of business in Liberia, had an account at a branch of Citibank in
Liberia. In November 1992, it brought suit in Liberia against Citibank
seeking a declaration that Citibank was obligated to pay Bridgeway the
balance of its account in United States, rather than Liberian, dollars. An
appellate court in Liberia ruled in favor of Bridgeway, holding that, under
Liberian law, Bridgeway had the right to be paid in American dollars.
Bridgeway sought enforcement of this Liberian judgment in the United
States District Court for the Southern District of New York. Citibank
opposed enforcement of the judgment on the ground that Liberia did not
provide a judicial system affording impartial tribunals or due process.
Although the Circuit Court's opinion does not specifically so state, the
standard that Citibank sought to have applied was that of CPLR §
5304(a)(1), under which a foreign judgment is "not conclusive" (and
therefore not enforceable) if the court finds that the judgment was rendered
under "a system which does not provide impartial tribunals or procedures
compatible with the requirements of due process of law." CPLR § 304(a)(1).
The district court, in response to Citibank's position, undertook an
analysis of the condition of the judiciary in the Liberia at or about the time
when the decisions were rendered there. The district court's analysis, which
was approved by the Second Circuit, focused on the state of disarray of the
courts in Liberia as a result of the revolution there, placing particular
emphasis on Country Reports of the United States State Department for
Liberia for the years 1994 through 1997. See Bridgeway, 201 F.3d at 138; id. at
142. and 1996. Those reports referred to "corruption and incompetent
handling of cases" (1994 report), id. at 138, and the judicial system's being
"already hampered by inefficiency and corruption." (1996 report). Id.
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.