Enforcing or Challenging a Foreign Judgment in the United States

Home | China Law Blog | Enforcing or Challenging a Foreign Judgment in the United States Table of Contents Toggle Enforcing or Challenging a Foreign Judgment in the United States A multimillion-dollar judgment from a foreign court does not, by itself, allow the creditor to seize a debtor’s assets in the United States. The judgment must first be recognized by a U.S. court. A foreign supplier, for example, may obtain a substantial judgment against an American company whose bank accounts and property are in the United States. Until a U.S. court recognizes that judgment, however, the supplier generally cannot use ordinary U.S. collection procedures. The reverse can be equally serious. A U.S. company may learn that a foreign creditor is seeking to enforce a judgment entered after questionable service, a default the company did not anticipate, or proceedings in which it had little meaningful opportunity to defend itself. Foreign-country judgments do not receive the automatic full faith and credit afforded judgments from other U.S. states. Recognition is governed primarily by state law. Most states have enacted some version of the Uniform Foreign-Country Money Judgments Recognition Act or its predecessor. The remaining states generally rely, in whole or in part, on common-law principles of international comity. Arkansas, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, South Carolina, South Dakota, Vermont, West Virginia, Wisconsin, and Wyoming have not enacted either version of the Act. The rules vary by state, but the central questions are largely the same: whether the judgment qualifies for recognition, where the debtor’s assets are located, and whether the foreign-court record supports enforcement or provides a legitimate basis for resisting it. Which Foreign Judgments Qualify? State recognition statutes generally apply to foreign-country judgments that grant or deny the recovery of money and are final, conclusive, and enforceable where rendered. Not every foreign ruling qualifies. These statutes commonly exclude judgments involving taxes, fines, penalties, and certain domestic-relations matters. Injunctions and other nonmonetary orders may also fall outside the statutory framework, though courts may consider them under other legal principles. Foreign arbitration awards follow a different path. They are enforced under the New York Convention, the Federal Arbitration Act, or another applicable arbitration regime, not under state foreign-judgment recognition statutes. Recognition Comes First. Collection Comes Next. Once the judgment is recognized, the creditor may use the forum state’s collection procedures, including bank garnishments, judgment liens, and post-judgment discovery. But a creditor can win recognition and still recover nothing. The debtor may have no reachable assets. Another creditor may have priority. Property the creditor expects to seize may belong to a parent company, subsidiary, shareholder, or other legally separate entity. Too many creditors spend heavily proving that a foreign judgment is enforceable before determining whether the debtor owns anything they can reach. That is backwards. Before taking on a foreign judgment enforcement matter, our lawyers typically assess whether collection is realistically possible. What a Judgment Creditor Should Do Before Filing Find the Assets First Start with the assets. A company may be incorporated in one state but keep its bank accounts and most valuable property elsewhere. Some apparent assets may also belong to an affiliate rather than the judgment debtor itself. Early asset tracing can reveal transfers, dissolved entities, ownership changes, competing liens, or plans to move property. Those facts may determine where to file, whether emergency relief is available, and whether the likely recovery justifies the cost of enforcement. Choose the Right Forum The most obvious state is not always the best forum. Begin with the debtor and its assets, then determine whether banks, customers, or others holding the debtor’s property are subject to process there. State law can affect the outcome. Recognition procedures, filing deadlines, burdens of proof, available defenses, and provisional remedies vary. Some states also impose reciprocity requirements. Federal court requires an independent basis for federal jurisdiction, most commonly diversity jurisdiction. The federal court will then apply the relevant state recognition law. We prefer federal court. In our experience, it provides a more predictable and efficient forum for these cases. Build the Record Before Filing Do not begin a recognition action with only a copy of the judgment and an assumption that the debtor will surrender. At a minimum, gather: An authenticated or certified copy of the judgment and a reliable translation. Proof that the judgment is final and enforceable where it was issued. The pleadings, service records, hearing notices, and material procedural orders. Information about any pending or still-available appeal. The governing contract, including any forum-selection or arbitration clause. A current calculation of the amount due, including interest, currency conversion, prior payments, and recoveries elsewhere. The amount owed is not always straightforward. The proper currency, conversion date, exchange rate, and post-judgment interest can materially increase or reduce the recovery. Those issues should be analyzed before filing. Default judgments require particular care. They can be recognized in the United States, but courts will closely examine jurisdiction, service, notice, and the defendant’s opportunity to participate. Foreign counsel can make the process far more efficient by providing the complete record at the outset and identifying the objections the debtor is likely to raise. U.S. counsel needs to know immediately whether the case ended in default after disputed service or the withdrawal of local counsel. Those facts can determine whether recognition succeeds or fails. How a Judgment Debtor Can Resist Recognition A company resisting recognition often begins with the argument that matters most to it: the foreign court got the case wrong. But that attacks the merits of the foreign decision, which a U.S. court generally will not revisit. Differences in law, procedure, available remedies, or outcome do not, by themselves, justify nonrecognition. The debtor must instead rely on the defenses permitted by the law of the state where recognition is sought. The details vary, but the following grounds are among the most important. Lack of Jurisdiction Corporate identity can decide the case. A judgment against a subsidiary does not automatically bind its parent, owners, or affiliates. The foreign court also must have had a valid basis for exercising jurisdiction over the defendant and the dispute. A judgment imposing personal liability on an owner who was never named, served, or given an opportunity to defend would raise serious jurisdictional and due-process concerns. A company that agreed to litigate in the foreign country, appeared in the case, and failed to object to jurisdiction will face an uphill battle. The challenge is much stronger when the company had little connection to the country, never agreed to litigate there, and did not voluntarily appear. A creditor also cannot simply extend a judgment to an entity that was never named, served, or subject to the foreign court’s jurisdiction. Inadequate Notice In default cases, the service record often determines the outcome. The U.S. court will examine how, where, and when service occurred; who received the documents; whether the method complied with applicable law and any governing service convention; and whether the defendant had enough time to respond. A technical defect may matter little if the defendant received the papers, appeared, and litigated without preserving an objection. It matters far more when the documents were sent to the wrong company, delivered only to former counsel, or received too late to permit a meaningful defense. Both sides should reconstruct the service history at the outset. Waiting until the recognition hearing is a serious mistake. When the Proceeding Itself Was Unfair This defense is difficult to prove. General allegations of corruption, political influence, or an unfamiliar legal system will rarely suffice. A challenge to the foreign judicial system generally requires evidence that it does not provide impartial tribunals or procedures compatible with basic due process. Some states also permit a narrower challenge based on unfairness in the particular proceeding, even when the country’s courts are generally adequate. That defense may apply when local counsel withdrew without effective notice, a critical hearing was unexpectedly advanced, or judgment was entered on a theory the defendant had no fair opportunity to address. Fraud That Prevented a Defense Most fraud arguments belong in the original case. A claim that a witness lied or that the foreign court accepted false evidence concerns fraud within the litigation and ordinarily should have been raised before the foreign court or on appeal. Recognition presents a different issue when fraud prevented the defendant from participating at all. Examples include concealing the lawsuit, blocking the defendant from appearing, falsely representing that the dispute had settled, or engineering a default before the defendant could respond. Violation of a Forum-Selection or Arbitration Clause An enforceable forum-selection or arbitration clause may provide a strong defense when the foreign lawsuit violated the parties’ agreement. The result will depend on the clause’s wording, scope, and enforceability, as well as whether the defendant preserved the issue or waived it by participating in the foreign case without timely objection. Fundamental Public Policy The public-policy defense is narrow. A foreign judgment does not violate U.S. public policy merely because the foreign court applied different law, used a different veil-piercing standard, or awarded relief unavailable in the United States. The judgment or the claim on which it is based must conflict with a genuinely fundamental policy of the forum state or the United States. Responding to a Foreign-Judgment Recognition Action A company served with a recognition action should immediately preserve the complete foreign case file and collect all communications with foreign counsel. The initial review should address how and when service occurred, whether the company appeared or objected to jurisdiction, what happened after local counsel withdrew, and whether an appeal or other remedy remains available abroad. The company should also verify the amount claimed and examine any applicable insurance coverage, indemnity rights, or related proceedings. The response must be built from the foreign-court record and admissible evidence, not from the company’s belief that the underlying decision was wrong. What Experience Has Taught Us Harris Sliwoski’s international dispute resolution lawyers represent both judgment creditors and judgment debtors. We advise creditors on recognition strategy, forum selection, asset tracing, and collection. We also defend U.S. companies and business owners when foreign proceedings raise serious questions about jurisdiction, service, personal liability, or procedural fairness. Our broader enforcement work has taken us across jurisdictions and asset classes. In South Korea, we obtained a court order freezing nearly $100 million in assets for U.S. creditors. We have seized assets in Canada, Japan, Thailand, and Russia. We secured a large seafood shipment in China belonging to a Danish company, and we used the threat of enforcement to recover helicopters in Papua New Guinea. Our recent matters have included efforts to enforce judgments in China and Spain, the successful enforcement of a Chinese judgment in the United States, and the defense of a Canadian judgment enforcement action in a U.S. court. That experience has taught us that obtaining the right court order is only part of the job. The harder questions are often where the assets are, how quickly they can move, which courts can reach them, and what pressure is most likely to produce payment. One opportunity I still regret missing involved a Russian company that owed money to several businesses and then sent its vessels to North Korea to avoid enforcement. We urged the creditors to retain us to pursue the vessels there, but they decided not to proceed. How cool would it have been to say we had seized vessels in North Korea? Do Not Wait Assets move, records become harder to reconstruct, and filing deadlines expire. If you have a foreign judgment to enforce in the United States, act before the debtor has time to rearrange its affairs. If your company has been served with a recognition action, move just as quickly: response deadlines are short, and reconstructing the foreign-court record can take time. If you are seeking to enforce a U.S. judgment in China, see Enforcing U.S. Judgments in China: What Judgment Creditors Need to Know. If you hold a foreign judgment against a person or company with U.S. assets, or if your company has been served with an action seeking recognition of a foreign judgment, contact Harris Sliwoski’s International Dispute Resolution Team to discuss the most practical next step. Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Dan Harris Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog. Harris Sliwoski Attorney Read more posts [email protected] Read More Litigation and Arbitration Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? August 24, 2026 International IP Protection for Startups: What to Protect and Where August 19, 2026 The Documents Are the International Deal August 19, 2026 China Supplier Fraud in Yiwu: Why We Recommended the Police, Not a Lawsuit August 17, 2026 China Trademark Registration: Why U.S. Companies Need More Than a Filing Agent August 10, 2026 Buying Expensive Equipment from China: Seven Questions to Answer Before You Pay August 7, 2026 DDP Shipping Risks: What Boise Cascade’s Guilty Plea Means for U.S. Buyers August 6, 2026 Protecting Your Artwork Internationally: What Artists Need to Do Before the Work Travels August 5, 2026 Your China Employee Signed the Vacation Policy. You Can Still Lose. July 29, 2026 The RedNote Contract Lesson for Companies Doing Business in China Leave a comment Cancel reply