The opinion of the court was delivered by: LEVAL
PIERRE N. LEVAL, U.S.D.J.
Plaintiff Colonial Bank commenced this action on March 25, 1982, to enforce a judgment rendered against defendant Martijn L. Worms by the High Court of Justice, Queens Bench Division, Commercial Court (1981 C. No. 7741), on February 5, 1982, for the sum of $541,331.63 together with interest from the date of judgment at the rate of 15% per annum. Defendant alleges that the judgment should not be enforced because the procedure followed by the English court was so unfair to defendant as to amount to a denial of due process and because the English court was a seriously inconvenient forum for trial of the action.
Plaintiff moves for summary judgment and defendant moves for leave to amend his answer to assert as a third affirmative defense that the judgment should not be enforced because it is based upon a contract entered into by plaintiff in violation of the Trading With the Enemy Act, 50 U.S.C. App. § 1, et seq., and the Rules and Regulations promulgated thereunder. For the reasons set forth below, defendant's motion is granted and plaintiff's motion will be granted unless defendant submits sufficient evidence by October 22, 1982 to raise a substantial question of fact as to the viability of his third affirmative defense.
Colonial Bank entered into a loan agreement with Global Navigation Corporation ("Global") and Mutiny Shipping Corporation ("Mutiny") in November, 1979. In connection with the loan agreement, the Bank entered into a mortgage agreement and a deed of assignment with one or more of the companies. It also entered into an agreement with Worms, pursuant to which Worms agreed personally to guarantee payment of the loan.
The personal guarantee provides that it is governed by the laws of England and that, in the event it becomes necessary for the Bank to initiate legal proceedings against Worms, the Bank could do so in the courts of England. The guarantee further provides that Worms "will instruct lawyers to accept service of legal proceedings in [England] . . . and will not contest the validity of such proceedings so far as the court or courts involved is concerned." The companies agreed to similar provisions in each of the other agreements.
Worms is a Dutch national and in November, 1979, lived in London, England. He now resides in New York. Global and Mutiny are each Liberian corporations. Colonial Bank is a Connecticut corporation and maintains an office in London. The negotiations leading to the execution of the agreements were conducted on the part of the Bank from its London office and the agreements were executed in London.
After making certain payments on the loan, Global defaulted. Colonial Bank then demanded that Worms make payment of the outstanding balance. Upon Worms' failure to do so, the Bank commenced the English action in accordance with the terms of the personal guarantee by service of process on Worms' designated agent. On October 29, 1981, Worms' solicitors acknowledged service on their client's behalf. They later caused a summons to be issued, seeking to have the action stayed pending the determination of a separate foreclosure action brought by the Bank in the Cayman Islands against Global and a ship, "Ulysses I," that was subject to the mortgage agreement. Worms' solicitors also sought and obtained an extension of time in which to answer.
The solicitors frequently complained in written and telegraphic communications with Worms that they would be unable to continue to represent him unless they received his instructions and payment for services rendered. They advised Worms that they would take no action in the case and would seek to withdraw as counsel unless payment was received. They also warned Worms in a communication dated January 29, 1982 that failure to answer by February 3, 1982 would result in the entrance of a default judgment. Despite these warnings, Worms did not pay his solicitors and did not make alternative arrangements to answer. True to their word, the solicitors did not take any further action in the case and, on February 1, 1982, sought an order pursuant to English rules of procedure allowing them to withdraw as Worms' counsel.
The court granted their request on February 4, 1982 and entered default judgment in the amount of $541,331.63 on February 5, 1982. At some point after February 9, 1982, Worms sent an undated telex to the English court asking that the judgment be set aside. He did not formally move to have the case reopened and did not appeal from the judgment.
This is a diversity action. Accordingly, the New York Uniform Foreign Country Money-Judgments Recognition Act, N.Y. Civ. Prac. Law and Rules §§ 5301-5309 (McKinney 1978), applies. The Act provides that a money judgment obtained in a foreign country is conclusive between the parties and enforceable in New York except in certain very limited circumstances. Id. § 5303. Significantly, New York case law has been "so liberal . . . in the recognition of the judgments of foreign nations that the occasion for the use of Article 53 has been rare. It has received 'scant judicial attention' as a result." Siegel, Practice Commentary to N.Y. Civ. Prac. Law and Rules § 5301 (McKinney 1978).
Worms alleges in each of his affirmative defenses that one of the conditions exists which either precludes a New York court from recognizing a foreign judgment or enables a New York court to ...