Jurisdiction to Enforce Arbitral Awards - Part 1 Chapter 28 - 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.
In seeking to enforce an award or judgment rendered abroad, is it necessary to establish minimum contacts between the judgment debtor and the forum? An article published in this column some two years ago discussed a Fourth Department case that answered this question in the negative in the context of a foreign judgment.
Should the answer to that question depend on whether one is enforcing a foreign arbitral award as distinguished from a foreign judgment? A number of decisions since that time have held that, at least as far as arbitration awards are concerned, there is a need to satisfy constitutional due process requirements in order to enforce a foreign arbitral award. Moreover, at least one circuit has held that even the presence of property in the jurisdiction is not necessarily a sufficient basis for asserting personal jurisdiction for enforcement of a foreign arbitral award.
New York Decision
First, a recapitulation. The article referred to above discussed the Fourth Department’s decision in Lenchyshyn v. Pelko Electric, Inc., 723 N.Y.S. 2d 285 (4th Dept. 2001), an action brought under New York’s version of the Uniform Foreign Money-Judgments Recognition Act, 13 U.L.A. 261, which is codified in New York as CPLR Article 53. The court explained that the United States Constitution does not require that there be present traditional minimum contacts supporting original personal jurisdiction for a New York court to assert jurisdiction over a defendant for purposes of enforcing a foreign judgment against it. The court specifically held that a foreign judgment could be enforced even if the defendant had neither minimum contacts with, nor assets in, New York. In this manner, the court adopted an approach different from the traditional quasi-in-rem enforcement jurisdiction, under which a prerequisite to the enforcement of a judgment is a showing by the plaintiff that assets of the judgment debtor have been attached or could be levied on in execution of the judgment. See, e.g., Shaffer v. Heitner, 433 U.S. 186, 210 n.36 (1977) (discussed herein).