SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-3106-99T1
KAM-TECH SYSTEMS LIMITED and
DURATION SYSTEMS LIMITED,
Plaintiffs-Respondents,
v.
RAFAEL YARDENI, a/k/a RAFAEL
YARDENY, a/k/a RAFI YARDENY,
a/k/a RAFI YARDENI
Defendant-Appellant.
Submitted May 8, 2001 - Decided May 24, 2001
Before Judges Pressler, Kestin and Alley.
On appeal from the Superior Court of New
Jersey, Law Division, Hudson County, HUD-L-
3395-98.
Oury & Mizdol, attorneys for appellant
(Robert E. Laux on the brief).
Sharkey & Campisi, attorneys for respondents
(Jeffrey Campisi, on the brief).
The opinion of the court was delivered by
ALLEY, J.A.D.
Defendant appeals from an order of the Law Division which
enforced a civil money judgment rendered by an Israeli court by
entering judgment in favor of plaintiffs for $218,039.73, plus
interest, pursuant to N.J.S.A. 2A:49A-16 to -24, the Foreign
Country Money-Judgments Recognition Act (Act), adopted in New
Jersey in 1997. We affirm.
The underlying basis of the dispute involved sales by
plaintiff to defendant of military and technical equipment, for
which defendant allegedly did not pay. Plaintiff Kam-Tech
Systems Limited is a company registered under the laws of Israel,
and plaintiff Duration Systems Limited is a subsidiary of Kam-
Tech. On July 10, 1995, the Magistrate's Court in Tel Aviv,
Israel, by Judge David Geldstein, awarded plaintiffs a monetary
judgment against defendant. On April 22, 1998, plaintiffs filed
a complaint against defendant in the Superior Court of New Jersey
seeking a judgment under the Act enforcing the Israeli court's
money judgment. On plaintiffs' motion for summary judgment,
defendant interposed several provisions of the Act in arguing
against enforcement of the Israeli judgment.
Judge Joseph T. Ryan found as a matter of law that
plaintiffs had established their right to prevail with the
exception of two issues, namely, whether defendant had received
sufficient notice of the Israeli judicial proceeding, and whether
he had voluntarily submitted to the jurisdiction of the court in
Israel. With respect to those issues the court decided that an
evidentiary hearing should be held. Accordingly, the summary
judgment motion was denied without prejudice and a plenary
hearing was held on September 30, 1999, in which evidence was
received on the specified issues. In a brief written opinion and
an order entering a final judgment dated January 5, 2000, Judge
Ryan rejected defendant's contentions and enforced the Israeli
judgment in favor of plaintiffs by entering judgment pursuant to
the Act for $218,039.73, plus interest from February 24, 1998.
I
The Act supplies a useful remedy for recognizing and
enforcing foreign judgments. When New Jersey and the other
twelve former British colonies originally subscribed to the
United States Constitution, they did so as sovereign states
accepting the unifying force of the Constitution's Full Faith and
Credit clause.See footnote 11 The Constitution, however, made no specific
provision for recognizing or enforcing judgments entered by the
courts of other nations. As a result, and in the absence of an
implementing treaty or statute, the subject was deemed a matter
of "comity," as explained in the leading case of Hilton v. Guyot,
159 U.S. 113, 164,
16 S.Ct. 139, 143,
40 L. Ed. 95, 108 (1895).
The Supreme Court in Hilton set forth principles governing the
enforcement of foreign judgments in the United States:
The most certain guide, no doubt, for the
decision of such questions is a treaty or a
statute of this country. But when, as is the
case here, there is no written law upon the
subject, the duty still rests upon the
judicial tribunals of ascertaining and
declaring what the law is, whenever it
becomes necessary to do so, in order to
determine the rights of parties to suits
regularly brought before them ....
No law has any effect, of its own force,
beyond the limits of the sovereignty from
which its authority is derived. The extent
to which the law of one nation, as put in
force within its territory, whether by
executive order, by legislative act, or by
judicial decree, shall be allowed to operate
within the dominion of another nation,
depends upon what our greatest jurists have
been content to call 'the comity of nations.'
Although the phrase has been often
criticized, no satisfactory substitute has
been suggested.
'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.
[Hilton, supra, 159 U.S. at 163-64, 16 S.Ct. at 143, 40
L. Ed. at 108]
The Supreme Court concluded
[W]e are satisfied that where there has been
opportunity for a full and fair trial abroad
before a court of competent jurisdiction,
conducting the trial upon regular proceed-
ings, after due citation or voluntary
appearance of the defendant, and under a
system of jurisprudence likely to secure an
impartial administration of justice between
the citizens of its own country and those of
other countries, and there is nothing to show
either prejudice in the court, or in the
system of laws under which it was sitting, or
fraud in procuring the judgment, or any other
special reason why the comity of this nation
should not allow it full effect, the merits
of the case should not, in an action brought
in this country upon the judgment, be tried
afresh, as on a new trial or an appeal, upon
the mere assertion of the party that the
judgment was erroneous in law or in fact.
[Id. at 202-03, 16 S.Ct. at 158, 40 L. Ed. at
112]
See also, Mercandino v. DeVoe & Reynolds, Inc., 181 N.J. Super.
105, 107 (App. Div. 1981).
The Act supplies a statutory basis for enforcing foreign
judgments, a basis that was missing in Hilton, and represents an
important progressive step in the recognition and enforcement in
this country of money judgments of the courts of other nations.See footnote 22
Its text, with minor variations, is that of the Uniform Foreign
Money-Judgments Recognition Act approved by the National
Conference of Commissioners on Uniform State Laws. See
13 U.L.A. 261 (1986). The original 1962 Prefatory Note to the uniform
draft includes the following reasons for proposing this
legislation:
In most states of the Union, the law on
recognition of judgments from foreign
countries is not codified. In a large number
of civil law countries, grant of conclusive
effect to money-judgments from foreign courts
is made dependent upon reciprocity.
Judgments rendered in the United States have
in many instances been refused recognition
abroad either because the foreign court was
not satisfied that local judgments would be
recognized in the American jurisdiction
involved or because no certification of
existence of reciprocity could be obtained
from the foreign government in countries
where existence of reciprocity must be
certified to the courts by the government.
Codification by a state of its rules on the
recognition of money-judgments rendered in a
foreign court will make it more likely that
judgments rendered in the state will be
recognized abroad.
The uniform act is now in effect, with local variations, in over
thirty states, and thus is a fairly widespread mechanism for
recognizing and enforcing money judgments awarded in the courts
of foreign countries.See footnote 33
Footnote: 1 1U.S. Const., Art. IV, § 1, which provides: "Full Faith and
Credit shall be given in each State to the public Acts, Records,
and judicial Proceedings of every other State. And the Congress
may by general Laws prescribe the Manner in which such Acts,
Records and Proceedings shall be proved, and the Effect thereof."
Footnote: 2 2See generally, with respect to the enforcement of foreign
judgments, Restatement (Third) of the Foreign Relations Law of
the United States §481, comments a and b (1987); Gary B. Born,
International Civil Litigation in the United States Courts (3d
ed. 1996); Andreas F. Lowenfeld, International Litigation and
Arbitration §3 (1993); Linda J. Silberman, Enforcement and
Recognition of Foreign Country Judgments in the United States,
Practicing Law Institute: International Business Litigation and
Arbitration (Course Handbook Series) at 257 (2001); David
Epstein, Jeffrey L. Snyder & Charles Baldwin, International
Litigation: A Guide to Jurisdiction, Practice and Strategy §11.09
(3rd ed. 1998).
Footnote: 3 3Despite the passage of more than one hundred years since
Hilton, supra, which noted the absence of a treaty for the
enforcement of foreign judgments, a multilateral treaty on the
subject still does not exist. A possible treaty on the
recognition and enforcement of foreign judgments is, however, in
the process of current high-level discussions under the auspices
of the Hague Conference on Private International Law. This draft
is provisionally entitled Hague Convention on Jurisdiction and
the Enforcement of Foreign Judgments, and its text is available
at www.hcch.net/e/workprog/jdgm.html. See, for example, Arthur
T. von Mehren, American Conflicts Law at the Dawn of the 21st
Century,
37 Willamette L. Rev. 133, 142 (Winter 2001). Although
the draft Convention is the subject of continuing negotiation and
discussion, there is no assurance that it will be adopted. It is
noteworthy, however, that other conventions sponsored by the
Hague Conference with respect to private international laws
matters have been adopted by the United States and numerous other
nations. These include the Hague Convention on the Taking of
Evidence Abroad in Civil or Commercial Matters (
23 U.S.T. 2555,
T.I.A.S. No. 7444,
847 U.N.T.S. 231); Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents in Civil
or Commercial Matters (
20 U.S.T. 361, T.I.A.S No. 6638,
658 U.N.T.S. 163); Hague Convention on the Civil Aspects of
International Child Abduction Oct. 25, 1980, T.I.A.S. No. 11,670,
1
343 U.N.T.S. 89, implemented in the United States by the
International Child Abduction Remedies Act, 42 U.S.C. §§11601 to
11610). The United States Department of State is participating
in the negotiations and discussions on the draft Hague Convention
on Jurisdiction and the Enforcement of Foreign Judgments. See
Linda J. Silberman & Andreas F. Lowenfeld, A Different Challenge
For The ALI: Herein of Foreign Country Judgments, an
International Treaty, and an American Statute,
75 Ind.L.J. 635,
638 (2000). By contrast to the absence of a multilateral treaty
with respect to the international enforcement of court judgments,
the enforcement of international arbitral awards enjoys
relatively widespread acceptance under the United Nations
Convention on the Recognition and Enforcement of Arbitral Awards,
21 U.S.T. 2517; T.I.A.S. 6997;
330 U.N.T.S. 3) ("New York
Convention"), as implemented in the United States by 9 U.S.C. §§
201- 208.
Footnote: 4 4The law on this issue with respect to the uniform act is
somewhat sparse, but we note this discussion by the court in Bank
Melli Iran v. Pahlavi,
58 F.3d 1406, 1409 (9th Cir.), cert.
denied,
516 U.S. 989, 116 S.Ct., 519,
133 L. Ed.2d 427 (1995),
which recognized that
[A] strong argument can be made that a claimed
lack of due process should be treated as a defense.
So doing would be consistent with the view of a leading
commentary that "[t]here is much sense in making the
party who claims the unusual occurrence plead it
affirmatively so that the usual assumptions may be
indulged in as a matter of course wherever there is no
such claim." 5 Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure § 1271, at 445 (1990)
....
A number of courts have so treated it. See Banque
Libanaise Pour Le Commerce v. Khreich,
915 F.2d 1000,
1005 (5th Cir.1990) ("Section five of the Texas
Recognition Act provides that a 'foreign country
judgment need not be recognized' if certain conditions
exist. These conditions are phrased as affirmative
defenses. Therefore, the burden of non-recognition
rested with Khreich.") ...; McCord v. Jet Spray Int'l
Corp.,
874 F.Supp. 436, 440 (D.Mass 1994) (two
exceptions to the inclusive nature of foreign judgments
were raised, and the court determined that the "act
specifically limits the defenses that may be raised in
an action to enforce a foreign judgment."); Fiske,
Emery & Assocs. v. Ajello,
577 A.2d 1139, 1141-43,
41 Conn.Sup. 376, 378-381 (Conn.Super.Ct. 1989) (the court
noted that under the Foreign Money-Judgments Act, a
foreign judgment will be recognized unless "one of the
grounds for nonrecognition of the foreign judgment" is
made out; the nonrecognition conditions were
characterized as "defense[s]"). Contra, Ackermann v.
Levine,
788 F.2d 830, 842 n. 12 (2d Cir. 1986)
(plaintiff sought enforcement of a foreign judgment
under the Act and had to show prima facie that there
was subject matter jurisdiction, personal jurisdiction,
and that there were regular proceedings conducted by
tribunals with procedures that are compatible with due
process).
While the issue is extremely interesting, we need
not resolve it at this time because ..., whether ...
[the deposed Shah's sister] had to put in sufficient
evidence to sustain a defense or whether she had only
to point to weaknesses in the Banks' case, she carried
her burden.
Footnote: 5 5See 3 Thomas H. Reynolds & Arturo A. Flores, Foreign Law,
III Israel 1-9 (1998); Yuval Levy, Pre-Trial and Pre-Hearing
Procedures Worldwide 167-179 (Charles Platto ed., 1990); Israel
Law Digest, in Martindale-Hubbell International Law Digest at
ISR-4-5 (2001). See also, (1) a U.S. Department of State 1999
Country Commercial Guide for Israel, (2) a U.S. Library of
Congress Country Study of Israel, and (3) an article by the
Israeli Judiciary.
Footnote: 6 6See also, Burnham v. Superior Court of California,
495 U.S. 604,
110 S.Ct 2105,
109 L. Ed 2d 631 (1990); World-Wide
Volkswagen Corp. v. Woodson,
444 U.S. 286,
100 S.Ct 559,
62 L.
Ed 2d 490 (1980); Shaffer v. Heitner,
433 U.S. 186, 97, S.Ct.
2569,
53 L. Ed 2d 683 (1977); Hanson v. Denckla,
357 U.S. 235,
78 S.Ct 1228,
2 L. Ed 2d 1283 (1958), reh'g denied,
358 U.S. 858,
79 S.Ct 10,
3 L. Ed 2d 92; McGee v. Int'l Life Ins. Co.,
355 U.S. 220,
78 S.Ct 199,
2 L. Ed 2d 223 (1957).
Footnote: 7 7If a cause of action arises directly out of a defendant's
contacts with the forum state, the court's jurisdiction is
"specific." Waste Management, Inc. v. Admiral Ins. Co., supra,
138 N.J. at 119 (citing Lebel v. Everglades Marina, Inc.,
115 N.J. 317, 322 (1989)). If, however, the suit is not related
directly to the defendant's contacts with the forum state, but is
predicated instead on the defendant's continuous and systematic
activities in the forum state, the state's exercise of
jurisdiction is "general." Ibid.; see also Helicopteros
Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414 n. 9,
104 S.Ct 1868, 1872 n. 9,
80 L. Ed 2d 404, 411 n. 9 (1984).
Footnote: 8 8Under N.J.S.A. 2A:49A-20b, "A foreign country judgment need
not be recognized if: (1) the defendant in the proceedings in the
foreign country court did not receive notice of the proceedings
in sufficient time to defend."
Footnote: 9 9Plaintiffs represented that Israel's judicial procedure
allows for a "detention" order mechanism that prevents a
defendant from leaving Israel until a bond has been posted or the
order is vacated.