Prejudgment Attachments in Aid of Foreign Proceedings - Part 2 Chapter 10 - 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.
Creditors of foreign defendants have often encountered a situation where a defendant has assets in the United States but insufficient contacts to warrant the initiation of a lawsuit against him in the United States. To what extent may a claimant obtain an attachment in the United States for the exclusive or primary purpose of securing a prospective judgment or arbitral award in another country?
Many civil law countries have procedures by which a plaintiff in a foreign proceeding or arbitration may attach the property of a defendant that is found in the civil law jurisdiction as security for the expected foreign judgment or arbitral award, without regard to whether the civil law jurisdiction has personal jurisdiction over the defendant with respect to the underlying claims asserted in the foreign proceeding or arbitration and without regard to whether the defendant’s property is related to the underlying dispute. In contrast, the House of Lords in England, in the 1977 Siskina decision, expressly declined to countenance such a procedure.
Thus, may a litigant in a foreign (or sister) state proceeding or arbitration obtain a prejudgment attachment in a United States jurisdiction that could not, consistent with due process, assert personal jurisdiction over the defendant in the foreign proceeding?
After the U.S Supreme Court’s decision in Shaffer v. Heitner, most practitioners would answer that question with a resounding “no.” Prior to that decision, under the doctrine of quasi in rem jurisdiction, it was possible to obtain an attachment of a defendant’s property and thus obtain jurisdiction over the defendant to the extent of his interest in the property attached, regardless of the lack of any other contacts between the defendant and the forum state. The attachment gave the forum court quasi in rem jurisdiction to determine the merits of any underlying controversy between the plaintiff and the defendant.