United States District Court, S.D. New York
October 7, 2004.
V. CORP LTD., Plaintiff,
REDI CORPORATION (USA) a/k/a REDI CORPORATION of White Plains, New York, USA; a/k/a REDI CORP., Defendant.
The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge, District
OPINION AND ORDER
This case arises on a motion by defendant Redi Corporation
U.S.A. ("Redi Corp.") to vacate an ex parte Order of Attachment
issued by this court on March 1, 2004. The pre-judgment
attachment sought to enforce an Order of the English High Court
of Justice, Queen's Bench Division ("High Court Order"), that had
confirmed an arbitral award granted plaintiff V. Corp. Ltd. ("V.
Corp.") by an arbitrator based in London. Under the New York
Uniform Foreign Country Money-Judgments Recognition Act, located
in Article 53 of the New York Civil Practice Law and Rules, New
York extends judicial recognition to a "foreign country judgment
which is final, conclusive and enforceable where rendered." N.Y.
Civ. Prac. L. & R. 5302 (McKinney 1997) ("CPLR"). The central
issue in this case is whether the underlying High Court Order on
which the attachment was based qualifies as a "judgment" under
the terms of CPLR Article 53. As explained below, because the
High Court Order in this case was the "functional equivalent" of
a foreign country money judgment, Seetransport Wiking Trader
Schiffahrtsgesellschaft MBH & Co., Kommanditgesellschaft v.
Navimpex Centrala Navala, 29 F.3d 79, 81 (2d Cir. 1994)
("Seetransport"), defendant's motion to vacate the Order of
attachment is denied and plaintiff's motion to confirm the
attachment is granted. I.
V. Corp., a shipping company based in Liberia, contracted with
Redi Corp., a New York corporation, to transport frozen poultry
from the United States to Russia on the vessel Ref Star during
April to June 2002. A dispute arose regarding the demurrage
charges accrued by V. Corp. when its ship was held at port eight
days beyond the contracted-for unloading period. In accordance
with the shipping contract, V. Corp. initiated an arbitration
proceeding in London to resolve the dispute. Redi Corp. declined
to participate in the arbitration, citing a dispute over personal
jurisdiction. The arbitrator, after hearing evidence presented by
V. Corp., issued an award and costs to V. Corp. totaling
$78,577.31. (Mavroghenis Affirmation, Mar. 22, 2004, Exs. 2, 4)
V. Corp. then applied to the English High Court of Justice,
Queen's Bench Division, for permission to enforce the arbitral
award. The High Court, per Justice Gross, issued an Order on Jan.
22, 2004 permitting V. Corp. to enforce the arbitral award "in
the same manner as a judgment or order to the same effect" and
authorizing plaintiff "to enter judgment in terms of the said
award." (Mavroghenis Affirmation, Feb. 25, 2004, Ex. H) The High
Court Order was subject to a 22-day notice period during which
Redi Corp. could object. V. Corp. served the High Court Order on
the New York Secretary of State pursuant to New York Business Corporation Law § 306(b)(1) (McKinney 2003).
The Secretary of State, however, had an incorrect address on file
for Redi Corp., which had moved its offices from White Plains,
New York to New York City. The Postal Service subsequently
returned the papers as undeliverable with the notation "attempted
unknown." (Lyons Reply Affirmation at 3, Ex. C) Redi Corp., thus
having not received the High Court Order, did not object during
the notice period.
V. Corp. then applied to this court for an ex parte order of
attachment under New York CPLR 6201(5), which authorizes the
attachment of assets to satisfy a foreign country judgment under
CPLR Article 53. This court issued an Order of Attachment on
March 1, 2004. After V. Corp. moved to confirm the Order of
Attachment, Redi Corp. moved to vacate the attachment, arguing
that (i) the High Court Order did not qualify as a "judgment"
because it was a mere "order" granting permission to enforce the
arbitral award as a judgment, and (ii) V. Corp. did not serve the
High Court Order in an appropriate manner because the Order was
not "process" deliverable to the New York Secretary of
State.*fn1 V. Corp. responds that the High Court Order was
in fact a judgment because it was "final, conclusive and enforceable" in
England and that plaintiffs appropriately served the Order on
Redi Corp. through the Secretary of State. For the reasons stated
below, defendant's claims are rejected.
New York law governs actions brought in New York to enforce
foreign judgments. S.C. Chimexim S.A. v. Velco Enterprises
Ltd., 36 F. Supp. 2d 206, 211 (S.D.N.Y. 1999). New York Civil
Practice Law and Rule 6201(5) permits pre-judgment attachment of
a debtor's assets where an action has been brought for
recognition of a foreign judgment under CPLR Article 53, the New
York Uniform Foreign Country Money-Judgments Recognition Act.
Article 53 in turn grants judicial recognition to "any judgment
of a foreign state granting or denying recovery of a sum of
money," subject to a few exceptions not applicable here. N.Y.
CPLR 5301(b). This statutory grant of recognition is limited to
foreign decrees that are "final, conclusive and enforceable where
rendered even though an appeal therefrom is pending or it is
subject to appeal." N.Y. CPLR 5302.
The provision that a foreign judgment be enforceable "where
rendered" requires the court to focus on the law of the foreign
country where the decree was issued. Guinness PLC v. Ward,
955 F.2d 875, 888-89 (4th Cir. 1992). The parties, therefore, have each presented declarations of lawyers versed in
the English Civil Procedure Rules and the English Arbitration Act
of 1996. In Lynda Conroy's Declaration in Opposition to
Plaintiff's Motion for Attachment ("Conroy Declaration"),
defendant's London solicitor outlines the English procedure for
obtaining a court judgment after publication of an arbitral
award. Section 66 of the Arbitration Act of 1996 provides the
statutory basis on which an arbitral award can be enforced,
(1) An award made by the [arbitral] tribunal pursuant
to an arbitration agreement may, by leave of the
court, be enforced in the same manner as a judgment
or order of the court to the same effect.
(2) Where leave is so given, judgment may be entered
in terms of the award.
Arbitration Act, 1996, c. 23, pt. I, § 66 (Eng.).
The practice notes accompanying section 66 state that there are
"two methods" for enforcing an arbitral award: 1) by obtaining a
court "order" granting leave to enforce the award "in the same
manner as a judgment," or 2) by entering a formal "judgment" in
terms of the award. (Conroy Decl. at 3 (quoting The White Book
from Sweet and Maxwell, § 2E-232 (2002) ("Sweet & Maxwell")))
These two methods "are not alternative, but successive" that
is, a party must first obtain an order before seeking a judgment.
(Id.) However, a party that has completed step one of the
procedure (obtaining an order) need not proceed to step two
(obtaining a judgment). Once armed with an order confirming its arbitral award, a party may proceed directly to
enforcing the award "as a judgment" without any "need for a
further application" to the Court. (Id.) Nevertheless, the
practice notes advise, it may be advantageous for a party to
obtain a formal judgment in certain cases, such as when the party
seeks to secure "the recognition of the judgment in a foreign
In this case, plaintiff obtained an order of the English High
Court of Justice permitting it to enforce the arbitral award "in
the same manner as a Judgment or order" and authorizing it "to
enter judgment in terms of the said award." (Mavroghenis
Affirmation, Feb. 25, 2004, Ex. H) After obtaining the High Court
Order, however, plaintiff did not obtain a formal judgment on the
arbitral award from the High Court. Defendant relies on the
two-step procedure outlined in the Conroy Declaration to argue
that "plaintiff took only the first step in a two-step process."
(Def.'s Reply Mem. of Law at 4) According to Redi Corp., the High
Court Order was not itself a "judgment," but an "order" that
"merely gave plaintiff a procedural basis to seek entry of a
`judgment,' which is a separate and distinct document."
(Dannenberg Decl. at 3-4) This distinction between an "order" and
a "judgment" is consequential, defendant continues, "because CPLR
Article 53 applies only to foreign judgments, and not to foreign
orders." (Def.'s Mem. of Law at 7) As a result, the High Court Order would not be "a legitimate
basis for a pre-judgment attachment under CPLR 6201." (Id.)
Defendant's argument, however, elevates form over substance. It
may well be that New York would refuse to recognize as a judgment
in and of itself an arbitral award that had no confirming High
Court Order. See Seetransport, 29 F.3d 79, 82 (2d Cir. 1994);
11 Jack B. Weinstein et al., New York Civil Practice ¶ 5301.03
(2004) (noting that Article 53 is "applicable only to recognition
of foreign judgments which confirm foreign arbitral awards," not
to arbitral awards alone). The High Court, however, did issue an
order here, and after the expiration of the 22-day notice period
during which defendant was allowed to object to enforcement of
the arbitral award, the High Court Order qualified as "final,
conclusive and enforceable" in the English courts. See N.Y.
CPLR 5302. The High Court Order thus served as the "functional
equivalent" of an English judgment. Seetransport,
29 F.3d at 81.
New York has a "long-standing" tradition of recognizing and
enforcing foreign country judgments. S.C. Chimexim S.A. v.
Velco Enterprises Ltd., 36 F. Supp. 2d 206, 211 (S.D.N.Y. 1999)
(citations omitted); Seetransport, 29 F.3d at 81 ("New York is
`relatively generous' in recognizing foreign judgments.")
(citation omitted). In Seetransport, the Second Circuit
examined whether a decree by the Paris Court of Appeals that had
rejected the defendant's application to annul an arbitral award "was
itself an enforceable judgment" under Article 53. 29 F.3d at 81.
Under French law, the Paris Court of Appeals' dismissal had
conferred "exequatur" on the arbitral award, rendering the
award enforceable in France. Id. The Second Circuit held that
although exequatur "seem[ed] to presuppose" the existence of an
executable judgment,*fn2 the arbitral award-with-exequatur
was the "functional equivalent" of a French judgment granting the
sums specified in the arbitral award. Id. at 81-82. The "decree
accomplishing that result," therefore, was subject to recognition
under New York's Article 53 as an enforceable judgment in its own
right. Id. at 82.
Several other cases have demonstrated the functional, as
opposed to formalistic, approach that courts have taken when
deciding which judicial acts qualify for recognition as foreign
country judgments. See, e.g., Island Territory of Curacao v.
Solitron Devices, Inc., 489 F.2d 1313, 1317, 1323 (2d Cir.
1973) (Curacao court's issuance of "writ of execution" on local
arbitral award functioned as final judgment under Curacao law,
even though award left it open to either party to demand further arbitration and obtain more extensive damages); J.G. Mailaender
Druckmaschinenfabrik GmbH & Co. K.G. v. Otto Isenschmid Corp.,
88 A.D.2d 654, 450 N.Y.S.2d 533 (2d Dep't 1982) (judicial
settlement concluded in German court was equivalent of consent
judgment and thus constituted foreign country judgment under
Article 53); Overseas Development Bank in Liquidation v.
Nothmann, 115 A.D.2d 719, 720-21, 496 N.Y.S.2d 534, 535-36 (2d
Dep't 1985) (two English default money judgments recognized as
enforceable in English pursuant to special order of High Court of
Justice, Queen's Bench Division, even though enforcement of
judgments was otherwise time-barred). Defendant protests that
plaintiff cannot make the High Court Order a "judgment" simply by
calling it a "judgment." (Def.'s Reply Mem. of Law at 5) The
decisions discussed above, however, turn not on whether a foreign
court decree is formally titled a "judgment," but rather whether
the decree is "final, conclusive and enforceable where rendered,"
as required by CPLR 5302.
Of particular importance here is the statutory requirement that
the foreign decree be enforceable "where rendered" that is, in
the English courts. See, e.g., Seetransport, 989 F.2d 572,
583 (2d Cir. 1993) (remanding to determine "whether the decision
of the Court of Appeals of Paris is enforceable in France")
(emphasis added); Island Territory of Curacao v. Solitron
Devices, Inc., 489 F.2d 1313, 1323 (2d Cir. 1973) (holding that decree "was conclusive and enforceable in
Curacao"). In this case, defendant was given 22 days after
service of the High Court Order to raise its objections to
enforcement of the arbitral award, which it failed to do. In the
absence of an objection by defendant, plaintiff was not required
to take any additional action to secure a formal judgment even if
it would in fact have been allowed to do so under English law. As
the practice notes to the English Civil Procedure Rules
explicitly state, plaintiff had "no need" to submit any "further
application for permission" to enforce the High Court Order in
England; once the notice period expired, plaintiff could enforce
the Order "in the same manner as a judgment or order to the same
effect." (Conroy Decl. at 3 (quoting Sweet & Maxwell, § 2E-232
(2002)); see also Def.'s Reply Mem. of Law at 3 (conceding that
"if enforcement of the award is sought locally, there may be
little advantage in going through the exercise of having a
judgment entered in Court, inasmuch as the award may be enforced
in the same manner as a judgment could be enforced") (emphasis
The High Court Order, upon the completion of the 22-day notice
period, thus bore all the indicia of a judgment: final,
conclusive, and enforceable "where rendered." See Island
Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313,
1317, 1323 (2d Cir. 1973) (writ of execution on local arbitral award rendered a final, conclusive, and enforceable judgment in
Curacao where neither party availed itself of three-month
opportunity to seek review of award before it became final); 11
Jack B. Weinstein et al., New York Civil Practice ¶ 5302.01
(2004) ("The judgment is considered final when the litigation has
been disposed of and no issues remain for determination.").
Although it may indeed have been, in defendant's word,
"preferable" for plaintiff to have taken the second step of
obtaining a more formal judgment from the High Court (Def.'s
Reply Mem. of Law at 3), the absence of a more formal English
judgment here is not fatal.
Defendant attributes its failure to enter a timely objection to
the High Court Order to a deliberate effort by plaintiff to
"prevent defendant from invoking its right to seek relief from
the [arbitral] Award" within 22 days of service of the Order.
(Def.'s Mem. of Law at 9) Specifically, defendant argues that
plaintiff should have delivered the High Court Order to Redi
Corp.'s New York City office rather than serving the Order on the
New York Secretary of State in Albany, which had an incorrect
address on file for Redi Corp. Defendant alleges that such
service was "not only designed to avoid giv[ing] defendant timely
notice of the 22-day notice period," but was also "procedurally improper" under the New York Business Corporation
Law. (Id. at 10) For the reasons stated below, this claim is
Under sections 304(a) and 306(b)(1) of the New York Business
Corporation Law, service of "process" may be made on a domestic
corporation by delivery to the Secretary of State's office, which
then will forward the process to the defendant corporation by
certified mail. The statute broadly defines "process" as
judicial process and all orders, demands, notices or
other papers required or permitted by law to be
personally served on a domestic or foreign
corporation, for the purpose of acquiring
jurisdiction of such corporation in any action or
proceeding, civil or criminal, whether judicial,
administrative, arbitrative or otherwise, in this
state or in the federal courts sitting in or for this
N.Y. Bus. Corp. L. § 102(11) (McKinney 2003). Such service is
complete upon delivery to the Secretary of State, not receipt of
the process by defendant. N.Y. Bus. Corp. L. § 306(b)(1);
Associated Imports, Inc. v. Leon Amiel Publisher, Inc.,
168 A.D.2d 354, 562 N.Y.S.2d 678, 679 (1st Dep't 1990).
Defendant argues that there is a distinction between service of
"process" under section 306(b)(1) and service of a court "order"
such as the High Court Order here. Relying on the language of
section 102(11), defendant contends that the High Court Order was
not required "by law" to be personally served on Redi Corp.
"Instead," defendant posits, "service of notice of the High Court Order was specifically required by the High Court,
itself" in its Order. (Def.'s Mem. of Law at 10)
This line of argument is unpersuasive for two reasons. First,
personal service of the High Court Order on Redi Corp. was
"required or permitted," § 306(b)(1) (emphasis added), not only
by the High Court Order, but also by the English Civil Procedure
Rules. See, e.g., Civil Procedure Rules, (1998) SI 1998/3132,
pt. 6 (III), R. 6.24(1)(a) (order giving permission to enforce an
arbitral award may be served by "any method . . . permitted by
the law of the country in which it is to be served"); Id., pt.
40 (I), R. 40.4 ("[A]ny [court] order made otherwise than at
trial must be served on . . . the applicant and the respondent");
Id., pt. 6 (I), R. 6.2 ("A document may be served by . . .
personal service. . . ."). Second, the High Court Order was
served "for the purpose of acquiring jurisdiction" in New York
over Redi Corp. N.Y. Bus. Corp. L. § 102(11). Such service of the
document was necessary to make the High Court Order a "final,
conclusive and enforceable" judgment in England, as required by
New York CPLR 5302. Absent this finality in the English courts,
plaintiff would not have been able to obtain an order of
attachment from this court.
The only case that defendant cites for its technical
construction of "process" served "by law" is Everest
Enterprises, Inc. v. Alphatape Sales Co., 243 N.Y.S.2d 322
(Sup. Ct. N.Y. County 1963). There, the Court ruled that service of an order to
show cause on the Secretary of State was improper where such
service, due to a two-day return date, "inevitably meant a
default." Id. at 323. The Court found it "highly inequitable"
to impose the "drastic relief" requested by plaintiff without
allowing defendant an extension of time. Id. at 322, 323. By
contrast, no such equities are present here. Redi Corp. would
have received actual, timely notice of the High Court Order had
it notified the Secretary of State of its new address when it
moved from White Plains, New York to New York City. The risks of
such mistakes or oversights are to be borne by defendant, not by
plaintiff. See, e.g., Ameritek Const. Corp. v. Gas, Wash &
Go, Inc., 247 A.D.2d 418, 419, 668 N.Y.S.2d 663, 664 (2d Dep't
1998); Associated Imports, Inc. v. Leon Amiel Publisher,
Inc., 168 A.D.2d 354, 562 N.Y.S.2d 678, 679 (1st Dep't 1990);
Colonial Sand & Stone Co. v. Enrico & Sons Contractors, Inc.,
66 A.D.2d 705, 411 N.Y.S.2d 244, 245 (1st Dep't 1978). * * *
For the reasons stated above, defendant's motion to vacate the
Order of Attachment of March 1, 2004 is denied and plaintiff's
motion to confirm the Order of Attachment is granted.