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Kam-Tech Systems Limited v. Yardeni

340 N.J. Super. 414, 774 A.2d 644 (App. Div. 2001)

FOREIGN JUDGMENTS—The court analyzes the applicability of the Foreign Country Money-Judgments Recognition Act.

A seller of military and technical equipment obtained a judgment from an Israeli court against a company that did not pay for such equipment. It then filed a complaint against the judgment debtor in the Superior Court of New Jersey seeking a judgment under the Foreign Country Money-Judgments Recognition Act adopted in New Jersey in 1997. The lower court found, as a matter of law, that the seller had established its right to prevail with the exception of two issues, namely, whether the debtor had received sufficient notice of the Israeli judicial proceeding, and whether it had voluntarily submitted to the jurisdiction of the court in Israel. An evidentiary hearing was held, and the lower court, based on evidence received on those specified issues, entered an order of final judgment in favor of the seller. New Jersey, and other states, recognized judgments of foreign nations as a matter of “comity.” “‘Comity,’ in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.” The Act expressly includes the United States Constitution’s concept of full faith and credit, providing that “a judgment enforceable under the Act will be ‘enforceable in the same manner as the judgment of a court of a sister state which is entitled to full faith and credit.’” Nonetheless, a foreign country money-judgment is not conclusive if: “(1) the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law; (2) the foreign country court did not have personal jurisdiction over the judgment debtor; or (3) the foreign country court did not have jurisdiction over the subject matter.” Also, a foreign country money-judgment need not be recognized if: “(1) the judgment debtor in the proceedings in the foreign country court did not receive notice of the proceedings in sufficient time to enable the judgment debtor to defend; [or] (2) the judgment was obtained by fraud ... .” The judgment debtor challenged the Israeli judgment on four grounds: due process, personal jurisdiction, notice, and fraud. The Court held, absent a fundamental fairness that would warrant shifting the burden, the party objecting the judgment had the burden of proving that the foreign court does not provide impartial tribunals and procedures comparable to the requirements of due process of law. Under New Jersey law, it is not necessary that procedures of a foreign court be identical to those used in the courts of the United States. “What counts is not whether the procedures used are similar or dissimilar to ours, but ‘only the basic fairness of the foreign procedures.’” The Appellate Division reviewed the Israeli legal system and held that there was no basis for concluding that it could in any way be considered lacking the attributes of due process. The judgment debtor also alleged that the Israeli court “did not have personal jurisdiction over [it] ... .” The Court noted that the judgment debtor, through his authorized counsel, entered an appearance and consented to the relief contained in the judgment that was now sought to be enforced. Even beyond the proofs of the judgment debtor’s voluntary appearance, “there was also persuasive evidence that there were significant general contacts between [the judgment debtor] and Israel, as well as specific contacts between [the judgment creditor] and the business transactions in Israel that [were] in dispute.” Consequently, “[i]t is beyond legitimate dispute that a fair basis existed for the Israeli court to exercise specific jurisdiction over [the judgment debtor].” With respect to the issue of notice, “[e]ven accepting [the judgment debtor’s] contention that [it] did not receive the summons, the evidence presented show[ed] that [it] mounted a defense ... .” The lower court had found that in the Israeli proceeding, the judgment debtor “had a fair opportunity to contest the claims.” Finally, although the judgment debtor asserted that the issuance of detention orders by the courts of Israel was fraudulent, it provided no authorities and no facts that supported that proposition or justified the denial of that enforcement. “[It] does not even approach a showing that the judgment itself was obtained by fraud or by any impropriety in the Israeli courts.”

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