U.S. Bank Nat. Assoc. v. APP Int’l Fin. Co., No. 600405/04 (NY App. Div. 1st Dept, Oct. 16, 2012)

Appellants appealed an order of the New York Supreme Court denying their motion to quash subpoenas seeking information relating to the enforcement of a New York judgment against appellants in favor of appellee.  Appellants argued that the court should quash the subpoenas in deference to an order of an Indonesian court enjoining Appellants from disclosing the information.  The Appellate Division, First Department, affirmed the decision of the Supreme Court refusing to quash the subpoenas.

Appellants argued that the principle of comity should be applied to accord recognition to a provisional injunction of the Indonesian court issued in 2008 that ordered Appellants to produce information relating to their assets to a third-party and enjoining it from producing such information to any other party.  Compliance with the subpoenas at issue would violate that injunction.

The Court recognized that under normal circumstances New York courts recognize foreign judgments under the doctrine of comity, but that they are not required to do so, and will not do so if recognition would be contrary to New York public policy.  It then found that New York public policy “is to put no obstacle in the path of those seeking to enforce a judgment.”  Therefore, deference to the Indonesian injunction was not appropriate in this case.

Furthermore, the court  noted that comity was not appropriate where the litigants who would benefit from that principle have “deliberately courted legal impediments.”  In this case, the Court found that Appellants had done so, namely by failing to inform the Indonesian court of the New York judgment before the injunction was granted.

Finally, the Court noted that the United States District Court for the Southern District of New York had, in an unrelated case, chosen not to grant comity to a similar injunction based on an expert opinion that this kind of injunction is unusual under Indonesian law, and susceptible to abuse in situations such as that presented in the instant case.  This finding also militated for refusing to apply the principle of comity in this case.