USA – ILLINOIS Law and Practice Contributed by: Carmen D. Caruso, Bill Whitner and Gage Meyers, Carmen D. Caruso Law Firm
Enforcement of Foreign Country Judgments Judgments from foreign countries are governed by the Uniform Foreign-Country Money Judgments Rec - ognition Act (UFCMJRA), 735 ILCS 5/12-661 et seq, which applies to foreign-country judgments that are final, conclusive and enforceable under the render - ing country’s laws and that grant or deny recovery of money. See 735 ILCS 5/12-661, 735 ILCS 5/12-663. The UFCMJRA does not apply to judgments for taxes, fines, divorce, support, maintenance or other domes - tic-relations matters. See 735 ILCS 5/12-661-663. Unlike a judgment from another US state, a foreign- country judgment must first be recognised by an Illi - nois court, after which it is enforceable in the same manner and to the same extent as an Illinois judgment. See 735 ILCS 5/12-666-667. An Illinois court must refuse recognition if the foreign judicial system lacks impartial tribunals or due-pro - cess-compatible procedures, or if the foreign court lacked personal or subject-matter jurisdiction, and has discretion to refuse recognition on other specified grounds, including inadequate notice, certain fraud, conflict with another final judgment, serious concerns about the foreign court’s integrity, or incompatibility with Illinois or US public policy. See 735 ILCS 5/12- 664. Enforcement of International Arbitration Awards in Illinois Foreign arbitration awards are enforceable under the Federal Arbitration Act (FAA) and the New York Con - vention on the Recognition and Enforcement of For - eign Arbitral Awards. The FAA allows a party to apply for confirmation of an arbitral award within three years of the award, and the court must confirm it unless grounds for refusal under the New York Convention are established. See 9 USCS Section 207. To enforce a foreign arbitration award: • the party seeking enforcement must provide the court with the original arbitration agreement and award, as required by Article IV of the New York Convention; • Illinois courts, like federal courts, are generally pro- enforcement of arbitration awards but may refuse
recognition if the award violates public policy, was procured by fraud or followed a process that lacked due process; and • under Illinois law, arbitration awards may also be enforced through the Illinois Uniform Arbitration Act (710 ILCS 5/1 et seq), which provides state courts with jurisdiction to confirm awards unless a differ - ent forum is contractually specified – see Anderson v Golf Mill Ford , Inc , 383 Ill App 3d 474, 475, 890 NE2d 1023, 1026 (2008). 10. Payment and Taxes 10.1 Restrictions or Limits on Franchisee Fees and Royalties Illinois law imposes no statutory cap on an initial fran - chise fee, ongoing royalty or other franchise-related fee, and no maximum royalty percentage or annual payment – in foreign currency or otherwise – under the IFDA or any other Illinois statute of general applica - tion. Fee and royalty levels are instead set by ordinary commercial negotiation and system-wide franchisor policy, unlike jurisdictions that impose statutory or central-bank-administered payment ceilings. The relevant Illinois-law constraint is disclosure rather than a cap: the disclosure document must accurately state all initial and recurring fees and the basis for calculating them. See 815 ILCS 705/16; 16 CFR Sec - tion 436.5 (e)–(f). Certain indirect payments – including required payments for goods, equipment or services above a bona fide market price – may also constitute a disclosable franchise fee. See 815 ILCS 705/3 (14). Section 18 also prohibits a franchisor from unrea - sonably and materially discriminating between Illi - nois franchisees in the fees, royalties or charges it imposes where the discrimination causes competitive harm, though the IFDA permits distinctions – not dis - crimination – based on enumerated grounds, includ - ing franchises granted at different times and regional pricing variation. 10.2 Withholding Tax Illinois does not require a franchisee to withhold state income tax from ordinary franchise fees, royalties or service fees paid to a US franchisor; those payments
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