USA Law and Practice Contributed by: Stelios G Saffos, Dan Seale, Peter Sluka and Alfred Xue, Latham & Watkins LLP
Subject to limitations and qualifications, courts in New York generally permit parties to choose the substan - tive laws of another jurisdiction to govern a contract, including the substantive laws of other states and/ or jurisdictions outside the United States. A few oth - er states permit the choice of their law to govern a contract even in the absence of any contacts if the contract satisfies certain dollar thresholds. However, some US states may not respect this choice of law if litigated in such US states in the absence of a reason - able relationship to the chosen governing law. 6.3 Foreign Court Judgments The United States is a party to the New York Con - vention on the Recognition and Enforcement of For - eign Arbitral Awards, which has been incorporated as Chapter 2 of the Federal Arbitration Act, 9 USC. § 200 et seq. The United States is not a party to any treaties for reciprocal recognition of foreign judgments; hence, foreign judgments are enforced pursuant to applicable state statutes, which generally follow the Uniform For - eign Money-Judgments Recognition Act, the Uniform Foreign-Country Money Judgments Recognition Act, or common law principles of international comity. Final and binding money judgments that are enforceable in the country where they were rendered are generally enforceable. Subject again to limitations and qualifications, courts in the state of New York generally recognise both (a) judgments from other states in the United States, under Article 54 of the New York Civil Practice Law and Rules, and (b) some international money judg - ments from outside the United States, under Article 53 of the New York Civil Practice Law and Rules. In the latter case, there are fraud and public policy excep - tions, and New York courts will reject a foreign country judgment rendered under a judicial system that does not provide impartial tribunals or procedures compat - ible with the requirements of due process of law, or where the foreign court did not have personal juris - diction over the defendant, or where it did not have jurisdiction over the subject matter. 6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights Special rules may apply depending on the specific industry and asset in question, but typical areas of
regulatory approval for acquisitions (or financings thereof) include US antitrust regulations, foreign direct investment laws applicable to such industry and asset (for example, Committee on Foreign Investment in the United States (CFIUS) approvals), along with custom - ary sanctions and anti-money laundering and know- your-customer (KYC) rules that apply to lenders and persons acting in the US market generally. Cross-border lending is generally common, subject mainly to customary sanctions, anti-money laundering and KYC rules that apply to lenders generally. 6.5 Timing and Cost of Enforcement Enforcement can take many forms and therefore it is difficult to generalise. In the case of a foreclosure sale, among other requirements, notices must be sent to debtors and other parties with an interest in the collat - eral, in most cases at least ten days prior to such sale. In the case of a public sale, the secured party will also need to publish public notice in appropriate newspa - pers and periodicals. However, every aspect of the foreclosure process must be commercially reasonable and, especially where the collateral is of high value, unique and/or complex, a commercially reasonable process may take much longer than ten days. In the most likely case of enforcement on the equity interests of a borrower and its subsidiaries, a commercially rea - sonable enforcement process in the form of a public sale may take around six to eight weeks (although this can be significantly faster or slower depending on the facts). Typical costs include attorney costs in conduct - ing the enforcement process, costs for advertising in periodicals or other publications (in the case of a pub - lic sale), and possibly hiring professional advisers in connection with finding potential buyers. 6.6 Practical Considerations/Limitations on Enforcement For personal property, secured creditors generally must proceed in a commercially reasonable manner or risk losing their deficiency and potentially being liable for damages. This vague standard is generally left to courts to resolve, and an antagonistic debtor or holder of a competing interest may raise any number of plau - sible arguments that a foreclosing secured creditor’s enforcement process was commercially unreasonable in one way or another. A secured lender pursuing a
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