DOMESTICATION OF FOREIGN COUNTRY MONEY JUDGMENTS

Unfortunately, the United States has no reciprocal treaty with any country requiring that it recognize judgments rendered abroad. Foreign country money judgments may be enforceable in California if they meet the requirements of the requirements of the UFMJRA -- the "Uniform Foreign Money Judgments Recognition Act", codified in California, beginning at Civil Code section 1713. To do this, the creditor brings an action in California to establish a domestic judgment. But keep in mind that California courts have broad discretion to deny enforcement of foreign money judgments.

A foreign country money judgment may be recognized in California only if the judgment is final, conclusive and enforceable where rendered (even if an appeal if pending). Such a judgment is not conclusive if it was rendered under a system which does not provide impartial tribunals or afford due process of law. In such a case, the California court would not permit enforcement of the judgment locally.

In addition, a foreign money judgment may not be recognized in California if the foreign court did not have personal jurisdiction over the defendants or subject matter jurisdiction over the matter. The facts in the underlying case will dictate whether the California court will exercise its discretion and grant, or deny, enforcement of the judgment.

Even if the judgment meets these requirements, the California court can exercise its discretion to deny enforcement and refuse to recognize the judgment if (1) the defendants did not have adequate notice of the proceeding, (2) the judgment was obtained by fraud, (3) the judgment violates public policy, (4) the judgment conflicts with another conclusive judgment, (5) the judgment was obtained in violation of an agreement between the parties, or (6) the foreign court was such an inconvenient forum that due process is offended.

A foreign money judgment is not enforced the same way that a sister state judgment is enforced. Rather, the creditor must literally file a new lawsuit in California, seeking to obtain a domestic judgment based upon the foreign judgment. There is generally no re-litigation of any of the underlying issues; the creditor merely asks the court to enter a judgment in California based upon the judgment that was entered in the foreign country. The debtor may not respond at all, or he may challenge the judgment on due process grounds. But either way, the court has broad discretion to grant, or deny, enforcement. In our experience, if the debtor participated in the litigation giving rise to the judgment, due process concerns are generally satisfied.

Note that absent a contrary agreement between the parties, the California court enforcing the foreign country money judgment will generally convert the foreign currency to U.S. dollars using the exchange rate in effect at the time of entry of the foreign judgment.

Also note that the action to obtain the judgment must be commenced within four years from the date that the foreign country judgment is entered.

The judgment, once registered in California, accrues interest at 10% per annum.

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