Passing Judgment on Other Countries' Courts - Part 4 Chapter 11 - 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.
Cases recently decided within the Second Circuit have had the effect of increasing awareness of the issues surrounding the adequacy of foreign courts as alternatives to courts of the United States. Two of the procedural contexts in which United States courts must address these issues are motions to dismiss on the basis of forum non conveniens and proceedings for the recognition and enforcement of foreign judgments. In such proceedings, U.S. courts are afforded the opportunity to make determinations as to the adequacy of courts outside the United States. In a judgment enforcement action decided on January 3, 2000, Bridgeway Corporation v. Citibank, 201 F.3d 134 (2d Cir. 2000), the United States Court of Appeals for the Second Circuit undertook an analysis of a foreign judgment in a way that is seldom followed by Unites States courts, one that highlights the challenges involved in passing judgment on other countries' courts.
The United States is not a party to any bilateral treaties or international conventions governing the enforcement of judgments of courts outside the United States, nor do the Federal Rules of Civil Procedure, or federal law generally, contain any provision concerning the enforcement of foreign judgments. Courts are therefore obliged to look to state law. In Bridgeway, the plaintiff-appellant Bridgeway, a Liberian corporation with its principal place of business in Liberia, had an account at a branch of Citibank in Liberia. In November 1992, it brought suit in Liberia against Citibank seeking a declaration that Citibank was obligated to pay Bridgeway the balance of its account in United States, rather than Liberian, dollars. An appellate court in Liberia ruled in favor of Bridgeway, holding that, under Liberian law, Bridgeway had the right to be paid in American dollars.
Bridgeway sought enforcement of this Liberian judgment in the United States District Court for the Southern District of New York. Citibank opposed enforcement of the judgment on the ground that Liberia did not provide a judicial system affording impartial tribunals or due process. Although the Circuit Court's opinion does not specifically so state, the standard that Citibank sought to have applied was that of CPLR § 5304(a)(1), under which a foreign judgment is "not conclusive" (and therefore not enforceable) if the court finds that the judgment was rendered under "a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law." CPLR § 304(a)(1).
The district court, in response to Citibank's position, undertook an analysis of the condition of the judiciary in the Liberia at or about the time when the decisions were rendered there. The district court's analysis, which was approved by the Second Circuit, focused on the state of disarray of the courts in Liberia as a result of the revolution there, placing particular emphasis on Country Reports of the United States State Department for Liberia for the years 1994 through 1997. See Bridgeway, 201 F.3d at 138; id. at 142. and 1996. Those reports referred to "corruption and incompetent handling of cases" (1994 report), id. at 138, and the judicial system's being "already hampered by inefficiency and corruption." (1996 report). Id.