USA – NEW YORK Trends and Developments Contributed by: Christopher Harris and Leah Friedman, Latham & Watkins
Fraud Recognition may be denied where the judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case. See CPLR Section 5304 (b)(2). “This affirmative defence requires a showing of extrinsic fraud, which is fraud that has deprived a party of the opportunity to make a full and fair defence”. Shanghai Yongrun Inv . Mgt . Co . Ltd . v Kashi Galaxy Venture Capital Co ., Ltd ., 242 N.Y.S.3d 647, 647–48 (App. Div. 2025) (mem.) (inter - nal citations omitted). Extrinsic fraud could be found where the plaintiff “deliberately had the initiating pro - cess served on the defendant at the wrong address”, intentionally misled the defendant about the “time and place of the hearing”, or “obtained a default judgment against the defendant based on a forged confession of judgment”. See Uniform Foreign-Country Money Judgments Recognition Act, Section 4 CMT 7 (Unif. L. Comm’n 2005) (“2005 Act Commentary”); see also Shanghai Yongrun Inv . Mgt . Co . Ltd ., 242 N.Y.S.3d at 647–48 (lower court erred in dismissing fraud defence to recognition of Chinese judgment where judgment debtor was threatened with detention and could not raise coercion defence in Chinese proceeding for fear A court may refuse recognition if the cause of action or the judgment itself is repugnant to New York public policy. See CPLR Section 5304 (b)(3). This defence is subject to a very high threshold; even significant differences in legal rules or procedures will not gener - ally be sufficient. Rather, the foreign judgment must be fundamentally offensive to New York’s “sense of justice”. See Ackermann v Levine , 788 F.2d 830, 841 (2d Cir. 1986) (enforcing German judgment over pub - lic policy objections, and noting that “the standard is high, and infrequently met”). “In the classic formula - tion, a judgment that tends clearly to undermine the public interest, the public confidence in the adminis - tration of the law, or security for individual rights of personal liberty or of private property is against public policy”. Id . (internal quotations and citations omitted). For example, prior to the enactment of the SPEECH Act, discussed higher up, courts commonly declined recognition of foreign defamation judgments on public policy grounds. See, for example, Bachchan v India of retaliation). Public policy
sufficient include personal service of process, volun - tary appearance, consent, domicile, the conduct of business activities in the foreign jurisdiction, and the commission of a tortious act within the foreign juris - diction. See Id . (“Notwithstanding defendant’s claim that service on his attorney in Israel of pleadings in the Swiss proceeding was inadequate because he did not reside in Israel at the time … the attorney appeared in the proceeding … defendant had notice of the claims against him sufficient to satisfy due process”). Lack of subject matter jurisdiction Recognition must also be denied if the foreign court lacked subject matter jurisdiction over the underlying action – ie, if the court lacked the authority to hear the case before it. See CPLR Section 5304 (a)(3). Courts assess subject matter jurisdiction with reference to the law of the foreign jurisdiction. Wimmer Can ., Inc . v Abele Tractor & Equip . Co ., 750 N.Y.S.2d 331, 334 (App. Div. 2002) (crediting affidavit of Canadian coun - sel “establishing that, under the laws of Canada, the Canadian court had subject matter jurisdiction over plaintiff’s action”). Discretionary Grounds for Non-Recognition In addition to the mandatory grounds, Article 53 enu - merates several permissive grounds upon which a court may decline to recognise a foreign judgment. These grounds are discretionary and their application will generally turn on the specific procedural history. Inadequate notice A court may refuse recognition if the party against whom the foreign judgment was entered did not receive notice of the foreign proceeding in sufficient time to permit a defence. See CPLR Section 5304 (b)(1); Tianzhu Coal Co ., Ltd . Under Yaojie Coal & Elec . Grp . v Ma Ju , No 620508/2023, 2024 N.Y. Misc. LEXIS 5172, at *20 (Sup. Ct. 12 Aug. 2024) (defend - ant’s “claim that he lacked sufficient notice is contra - dicted by his participation in the legal proceedings brought before the Intermediate Court and, on appeal, before the High Court”); Batbrothers LLC v Paushok , No 653787/2017, 2018 N.Y. Misc. LEXIS 5720, at *14 (Sup. Ct. 28 Nov. 2018) (rejecting the argument that the defendant did not receive proper notice of the Russian proceeding).
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