The “recognition” of a foreign judgment occurs when the court of one state accepts a judicial decision made by the courts of another state. Thus, it precludes the relitigation of a claim on the same facts on the ground of res judicata and/or collateral estoppel. Once the judgment is recognised, the party who was successful in the original case can seek its “enforcement”. If it had been a money judgment and the debtor has assets in the second jurisdiction, the judgment creditor has access to all the enforcement remedies as if the case had originated in that second state. If some other form of judgment was obtained, the second court will make whatever orders are appropriate to make the first judgment effective. Thus, the states are relying on the principle of reciprocity which requires equal respect shown to judgments made by two different sets of courts. The courts of both states must treat the judgments as equally binding and enforceable in the two jurisdictions.
Generally, foreign judgments are enforced based on reciprocity or participation in a treaty. Between two different states, enforcement is based on “full faith and credit”, a Constitutional concept which compels a state to give another state’s judgment the same effect as if it were local. This requires some sort of an abbreviated application on notice, or docketing. Between nations, the prevailing concept is comity.
In most cases, a United States court will unilaterally enforce the foreign judgment, without proof of diplomatic reciprocity. There are some exceptions to this. If the relevant nation states are not parties to the Hague Convention on Foreign Judgments in Civil and Commercial Matters, the EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters or a similar treaty or convention providing for the routine of registration and enforcement between nations, the courts of most nations will accept jurisdiction to hear cases for the recognition and enforcement of judgments awarded by the courts of another nation if the defendant or relevant assets are physically located within their territorial boundaries. The lex fori, i.e. the domestic law of the local court and the principles of comity determines whether recognition will be given. The following issues are considered in making the determination:
- Whether the defendant was properly served with notice of the proceedings and given a reasonable opportunity to be heard which raises general principles of natural justice and will frequently be judged by international standards;
- Whether the foreign court properly accepted personal jurisdiction over the defendant;
- Whether the proceedings were tainted with fraud; and
- Whether the judgment offends the public policy of the local state.