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N.Y. Amends Law on Recognition of Foreign Judgments

By Fox Rothschild LLP, Sarah B. Biser, Erika Levin & Craig R. Tractenberg on June 15, 2021
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Governor Andrew Cuomo signed into law on June 14 legislation that amended Article 53 of the New York Civil Practice Law and Rules (“CPLR”), changing the rules regarding the state’s recognition of foreign money judgments.

The bill updates state law, making it consistent with the revised Uniform Foreign-Country Money Judgments Recognition Act (the “2005 Uniform Act”) already enacted in at least 26 states. The purpose of the amendments is to clarify provisions of Article 53, resolve inconsistent case treatment and avoid forum shopping. The new law takes effect immediately and applies to all actions commenced on or after its effective date. The most notable amendments include:

  • Definition of “Foreign Country.” The legislation changed Section 5301, replacing “foreign state” with the newly defined term, “foreign country.” It makes it clear that a judgment of a foreign country does not include any judgment of a sister state or other judgment subject to the Full Faith and Credit Clause of the U.S. Constitution.
  • Definition of “Foreign Country Judgment.” The amended law excludes “a judgment for divorce, support or maintenance, or other judgment rendered in connection with domestic relations” from the definition of a Foreign Country Judgment, which is subject to Article 53 recognition proceedings. The previous version of Article 53 contained a more narrow exclusion with respect to family law matters: “a judgment for support in matrimonial or family matters.” Tax judgments, fines and penalties continue to be excluded from the “Foreign Country Judgment” definition.
  • Burdens of Proof. The new law codifies the burdens of proof. Section 5302(c) provides that a party seeking recognition of a foreign country judgment has the burden of establishing that Article 53 applies to its foreign country judgment. In defamation matters, a party seeking recognition also has the burden to establish that the foreign defamation law provided at least as much protection for freedom of speech and press in the foreign proceeding as would be provided by both the United States and New York constitutions. Section 5304(c) provides that a party resisting recognition of a foreign country judgment has the burden of establishing that a ground for non-recognition exists.
  • Grounds for Non-Recognition. The new law includes additional grounds for mandatory and discretionary non-recognition of a foreign judgment. The new Section 5304(a)(3) requires non-recognition when the foreign court lacked subject matter jurisdiction. Previously, contrary to the 2005 Uniform Act, lack of subject matter jurisdiction was a discretionary ground for non-recognition in New York, creating opportunities for forum shopping.

The new Section 5304(b)(7) provides that New York courts have discretion to deny recognition where the foreign country judgment “was rendered in circumstances that raise substantial doubt about the integrity of the rendering courts with respect to the judgment.” The new Section 5304(b)(8), similarly, provides New York courts discretion to deny recognition where “the specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law.”

  • Statute of Limitations. The new Section 5303(d) provides that an “action to recognize a foreign country judgment must be commenced within the earlier of the time during which the foreign country judgment is effective in the foreign country” or 20 years from the judgment’s original effective date. The previous Article 53 did not contain the statute of limitations and the case law primarily applied New York’s 20 year statute. Under the amendment, the applicable statute of limitations may now be shorter than 20 years.
  • Posted in:
    International
  • Blog:
    Global Dispute Resolution Insights
  • Organization:
    Fox Rothschild LLP
  • Article: View Original Source

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