The Practice of International Litigation - 2nd Edition - Looseleaf
The Practice of International Litigation - 2nd Edition - Electronic
Forum Non Conveniens and Enforcement of Foreign Arbitral Awards
Lawrence W. Newman and Michael Burrows
Does one have to worry about jurisdiction and forum non conveniens
when enforcing a foreign arbitral award in the United States under the New
York Convention? Does the doctrine of forum non conveniens apply
under such circumstances? Does it matter if the Foreign Sovereign
Immunities Act is implicated because a foreign state is a defendant? A
recently decided case in the Southern District of New York dealt with
issues implicated by these questions.
Judgments and Arbitral Awards
As discussed in an earlier column,1 courts have ruled that personal
jurisdiction over the defendant in the traditional sense is irrelevant to the
enforcement of judgments. What matters is that the merits have already
been finally decided in another forum that had jurisdiction over the
defendant. The proceeding to enforce the judgment of the foreign court is
therefore solely for the purpose of obtaining recognition and enforcement
through execution against assets within the jurisdiction of the domestic
Arbitral awards are similar to judgments in that they are also the
embodiments of final determinations of controversies on the merits. But
unlike judgments — concerning which the United States has entered into
no treaties or conventions — foreign arbitral awards have been made easier
to enforce because of the adoption, in 127 countries (as of October 15,
2001), of the United Nations Convention for the Recognition and
Enforcement of Foreign Arbitral Awards of 1958 (the “New York
Convention”), 21 U.S.T. 2517 (1970).
Proceedings to enforce foreign judgments or arbitral awards generally
involve two phases or elements: first, recognition as a locally enforceable
judgment; and second, the enforcement of the judgment against assets of
the judgment debtor. Recognition proceedings — “exequatur” proceedings
in civil law countries — seldom involve a review of the merits of the
dispute underlying the dispute. In the United States, the Uniform Foreign
Money Judgments Recognition Act (e.g., CPLR §§ 5301 - 5309) mandates
non-recognition of foreign judgments in only two kinds of situations:
where there was, under local U.S. standards, no jurisdiction over the
defendant in the foreign court and when the judgment was rendered in a
judicial or legal system that does not provide impartial tribunals or tribunals
that accord procedures compatible with due process of law. Neither of
these grounds implicates the merits of the underlying case — although the
court may accept a description of the circumstances underlying the
judgment as background for its obtaining an understanding of the
procedural (and jurisdictional) side of the case or of the relationship of the
process by which the foreign judgment was obtained to the foreign
country’s judicial system.
The discretionary grounds for denying recognition of a foreign
judgment are also generally procedurally related. Failure to notify the
defendant is one example. A judgment obtained by fraud may be a basis
for non-recognition, but courts have held that the kind of fraud that would
give rise to non-recognition is that which is extrinsic to the presentation of
the merits of the case – bribery of a judge, for example. See Altman v.
Altman, 150 A.D.2d 304, 542 N.Y.S.2d (1st Dept. 1989).
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.