The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge, District
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