The role of the reciprocity requirement in the harmonization of standards for the recognition and enforcement of foreign judgments

Paragraph B - Refusal Due to the Complexity of the American System of Recognition and Enforcement of Foreign Judgments

In addition to the lack of uniformity of the recognition and enforcement system in the United States, another reason of complexity comes to make the recognition and enforcement landscape in the United States more difficult to understand. In fact, same as the lack of uniformity, the question complexity provides a lot of difficulties not only for foreign scholars and lawyers who want to understand the American system of recognition, but it is also difficult for the Americans lawyers and scholars themselves when they are called to explain their own system of recognition and enforcement of foreign judgments^322(*). The situation becomes more complicated when it comes to the question of reciprocity giving the fact that the modern position of the reciprocity rule is far from certain^323(*). According to one scholar «any attempt to approach the history of the [reciprocity] rule results in multiplication of caveats and asides pertaining to numerous important but somewhat dissimilar reactions to the rule»^324(*).

The complexity stems from the holding in Erie which requires federal courts to apply state law when they sit on diversity actions. It is also a direct consequence to the lack of uniformity in the United States^325(*). This situation makes things more difficult for both American judgments holders and foreign enforcing courts especially those required to prove reciprocity as a ground for recognition.

In this case, the American judgment holder who wants to enforce his judgment in a foreign court will be required to prove that a similar judgment from the American court would be enforced in the United States^326(*). This is not an easy matter especially in the states where the Uniform Act was not enacted^327(*). With this respect, two possible problems may face the foreign enforcing court, especially when the foreign court has a reciprocity requirement and when the foreign court will check whether or not the law of the enforcing foreign court requires the proof of reciprocity as a precondition for recognition.

The first source of complication comes from the sources of judgments recognition law of the state where the judgment was rendered. In this case, several questions need to be solved by the enforcing foreign court. In fact, the enforcing court will have to determine whether federal or state law is applicable to the case. Once this question is answered, the foreign court will have to see whether the Uniform Act was enacted or whether there is a similar statute regulating the recognition and enforcement of foreign judgments. If the judgment is rendered in state where the judgment recognition is governed only by common law, the foreign court will have to check prior state court decisions. Where such decisions do not exist, the foreign enforcing court will have to see whether or not there is prior federal court decision determining the law of the state law, and whether the state would apply it if it is faced with the same issue. Where no state statute, state court decision, or federal court decision on the point exist, the foreign court may look to the sources outside that state from surrounding state and try to guess whether the law of the rendering court will recognize foreign judgments.

The second source of complexity that a foreign court will face is the American judicial system itself. The existence of fifty different systems of enforcement in the United States, with states courts adhering to the pre-Erie federal common law and other state courts granting foreign judgments full faith and credit on the basis of comity, and the interaction between state and federal courts make it difficult for a foreign court to understand the law and the judgment recognition system in the United States. The issue becomes more complicated when the law of the enforcing court requires the proof of reciprocity as a precondition of enforcement of foreign judgments. The U.S judgment holder who is seeking enforcement of his judgment in a country requiring reciprocity will be required to prove that a similar judgment from the enforcing court would be enforced in the American court from which his judgment originated. This would not be easy especially when the judgment is issued from a federal court^328(*).

In this case the judgment creditor will be required to demonstrate to the enforcing court at first that the federal courts are not required to follow the Hilton ruling on reciprocity. He has to explain the change in the judgments recognition system that happened after Erie and that federal courts are required to follow states' law and that the applicable rule is found in state, but not federal, law. He may be asked to show that state law may be found in a state statute, a case decided by a state court, or a case decided by a federal district court sitting in the state and addressing an issue of first impression in the state^329(*). In all cases, the possibility of over fifty separate and different rules will continue to make matters difficult in explaining the law to a foreign court.

* ³²². Violeta I. Balan, Recognition and Enforcement of Foreign Judgments in the United States: the Ness For Federal Legislation, John Marshall Law Review, 2003 available at www.westlaw.com

* ³²³. William G. Southard, Reciprocity Rule and Enforcement of Foreign Judgments, Columbia Journal of Transnational Law, 1977, p,328.

* ³²⁴. Id.p.335

* ³²⁵. Ronald A. Brand, Enforcement of Judgments in the United States and Europe, Journal of Law and Commerce, spring 1994, www.westlaw.com

* ³²⁶. Id.

* ³²⁷. Id.

* ³²⁸. Ronald B. Brand, Enforcement of Judgments In the United States and Europe, Journal of Law and Commerce, 1994 available at www.westlaw.com.

* ³²⁹. Id.