International Judgment Enforcement -- Thinking Outside the Box - Part 4 Chapter 12 - The Practice of International Litigation - 2nd Edition
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.
Many litigation lawyers are more accustomed to dealing with issues arising at the outset of civil litigation than with issues relating to judgments at the end of such suits. There are far more reported cases on jurisdictional issues than there are on the enforcement of judgments. In addition, many lawyers are more accustomed to defending against suits seeking damages than in prosecuting such cases — exceptions, of course, are counsel for banks and others who pursue judgments on unpaid debts. Moreover, when judgments involve assets located or secreted outside the United States, even lawyers accustomed to pursuing debtors may lack the expertise to enable them to turn their clients’ judgments into cash.
Thus, there are oftentimes judgments obtained that cannot effectively be enforced without recourse to methods and procedures that may be nontraditional and non-domestic — outside lawyers’ usual problem-solving “box.” Such methods and procedures are especially apropos when enforcement of U.S. judgments may be carried out outside the United States, where it is easier for defendants to hide stolen or other assets, or to make them unavailable through fraudulent conveyances to controlled trusts and nominees.
A plaintiff with a provably reasonable expectation of a judgment for damages in the United States can take steps in anticipation of enforcement of the judgment by obtaining an attachment of the defendant’s assets, not only those within the jurisdiction of the court where the lawsuit is brought, but also outside the United States. Many countries, in Europe and elsewhere, permit separate proceedings to be brought in their courts for prejudgment attachments (or the functional equivalent thereof) of assets for the purpose of holding them as security for proceedings in courts or arbitration proceedings in other countries, such as the United States. One country permitting such proceedings is England, which also affords opportunities to creditors in obtaining information for enforcement of judgments.
Asset-freezing injunctions, sometimes also known as Mareva injunctions, are available in England and other English-law-based countries before a judgment and in support of judgment-enforcement proceedings. These injunctions restrain a defendant from removing assets from the jurisdiction or otherwise restrain it from dealing with its assets. They commonly contain an order requiring the defendant to provide information about its assets.
“Worldwide Mareva” injunctions may also be granted, under which an English court orders a defendant subject to its jurisdiction not to dissipate its assets anywhere in the world. Violations of those injunctions result in sanctions, including fines and imprisonment. The worldwide Mareva orders the defendant to hold its assets, wherever located, for creditors in the lawsuit. Worldwide Mareva injunctions are often supplemented by orders of courts in countries where further enforcement is sought.