On his last day in office, Governor Christie enacted new legislation that will change the way foreign-country judgments are recognized in New Jersey. The Foreign Country Money-Judgments Recognition Act of 2015 (the “FCMJRA”) amends the statutory basis for enforcing judgments of other nations in New Jersey. Under the prior version of the FCMJRA, a copy of any authenticated foreign judgment could be filed in the office of the clerk along with an affidavit from the judgment creditor, and the clerk would be required to “treat the foreign judgment in the same manner as a judgment of the Superior Court of this State.” See Enron (Thrace) Expl. & Prod. BV v. Clapp, 378 N.J. Super. 8, 15 (App. Div. 2005). Although the judgment debtor would receive notice of the domestication, this would not occur until after the judgment was filed, and there was no provision requiring courts to approve the foreign-country judgment beforehand. Additionally, the burden of establishing grounds for a judgment’s non-enforceability was on the judgment debtor. SeeKam-Tech Sys. Ltd. v. Yardeni, 340 N.J. Super. 414, 423 (App. Div. 2001). Thus, in Enron, the Appellate Division suggested that the New Jersey Legislature amend the FCMJRA:
We note that concerns about the constitutionality of the filing . . . of judgments from nations that do not adhere to basic principles of due process of law may be addressed by amending the FCMJRA to require prior judicial approval of judgments of foreign countries by way of motion or a separate enforcement proceeding. We suggest that the Legislature consider such a change to avoid potential claims that the filing of judgments of certain foreign nations, without prior notice and the opportunity to be heard, may result in an unconstitutional taking of property without due process of law.
Enron, 378 N.J. Super. at 20. The Appellate Division’s suggestions were incorporated into this recently-passed amendment.
In the newly-amended version of the FCMJRA, the judgment creditor seeking to have the foreign-country judgment recognized may no longer simply file it with the clerk, but must file a complaint seeking recognition. In the event the creditor already is engaged in a pending action with the judgment debtor, the creditor may seek recognition of the judgment by counterclaim, cross-claim, or affirmative defense. The creditor also now carries the burden of establishing that the judgment is final, conclusive and enforceable under the foreign country’s laws, and that it is not a judgment for taxes, fines, or rendered in connection with a domestic relations action. Additionally, if the judgment was entered by default, the creditor has the burden of establishing the foreign court’s jurisdiction.
Because the judgment creditor must now bring an action to domesticate the judgment, the judgment debtor will have the opportunity to argue at that time that the judgment should not be recognized based on number of possible objections, most of which existed under the prior version of the FCMJRA. The FCMJRA provides that New Jersey courts “shall not” recognize a foreign-country judgment if: (i) the judgment is “rendered under a judicial system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law, as determined by the court using standards developed by the American Law Institute and the International Institute for the Unification of Private Law to govern resolution of transnational disputes;” (ii) the foreign court lacked personal jurisdiction over the defendant; or (iii) the foreign court lacked jurisdiction over the subject matter. Moreover, the law gives courts the discretion not to recognize a foreign judgment in certain situations, including if the foreign court failed to give adequate notice to the debtor, the judgment was obtained by fraud that deprived the losing part of an adequate opportunity to present its case, or if the judgment or cause of action on which the judgment is based is repugnant to the public policy of New Jersey or the United States. Additionally, the amended version of the FCMJRA now allows the court the discretion to deny recognition when “the judgment was rendered in circumstances that raise substantial doubt about the integrity of the rendering court with respect to the judgment,” an unquestionably ambiguous standard. The burden shifts to the debtor to prove one of these exceptions applies.
The newly-amended version of the FCMJRA will have a dramatic effect on the domestication of foreign-country judgments in New Jersey. Parties can no longer file the judgment and affidavit with the clerk, and will now be required to initiate new actions seeking recognition and deal with adversaries potentially intent on relitigating issues from foreign courts here in New Jersey. This could result in protracted litigations focusing on foreign court procedures and whether they, for example, “raise substantial doubt about the integrity of the rendering court with respect to the judgment.” Additionally, although many of the provisions remain the same, the creditor now has the burden of proving its prima facie entitlement to the judgment before the judgment can be recognized. Accordingly, parties seeking recognition of foreign-country judgments must be mindful of these new provisions.