An extraterritorial judgment comes from another country outside of the US. Domesticating foreign country judgments is more difficult and expensive than domesticating US-based sister-state judgments.
One of many judgment articles: I am a judgment broker, not a lawyer, and this article is my opinion based on my experience, please consult with a lawyer if you need legal advice.
Most states have full faith and credit procedures and laws allowing creditors to enforce out of state (sister state) and in certain states, foreign country judgments. Besides sister-state court judgments, not covered in this article, there are three types of foreign judgment domestications, that change a judgment’s jurisdiction: federal, foreign, and the confirmation of foreign arbitration awards.
Federal court types include district courts, bankruptcy, circuit courts of appeal, and the US court of international trade.
As long as enforcement has not been stayed by a judge and the debtor has not avoided the judgment with bankruptcy, final federal money judgments in any state can be easily registered in any other federal court. District courts are the most popular type of federal courts.
Non-final state judgments (lawsuits) cannot usually be registered in federal courts unless good cause is shown, or upon an order from a federal judge.
To register a final federal judgment where the debtor lives, file a certified copy of the judgment with the clerk of the court in the new federal district court.
Unlike state court judgments, federal judgment domestications do not require a notice to be served on the debtor. After a federal judgment is registered in the local district, it can be enforced, see 28 USC 1963.
When it comes to the domestication of foreign judgments, the US has no reciprocal treaty with any country requiring that it recognize foreign judgments. If you domesticate a judgment into another state, be sure to both keep the judgment renewed in both states, and do your main judgment enforcing in the new state.
In California, there is the UFMJRA (Uniform Foreign Money Judgments Recognition Act), beginning at Civil Code 1713. Foreign country judgments may be enforceable in California, if they meet the UFMJRA’s requirements.
To register a foreign judgment, the creditor starts an action to get a domestic judgment. However, courts have broad discretion to deny the domestication or enforcement of foreign judgments.
When a creditor files a lawsuit to domesticate a foreign judgment, there is usually no re-litigation of any of the underlying issues. The creditor simply asks the court to enter a judgment based on the foreign country judgment.
A foreign country judgment will be accepted by a US court only if the judgment is final, conclusive, and enforceable where it is rendered. Off limits are judgments rendered in countries that do not provide due process of law. Also, off limits are judgments where the foreign court did not have personal jurisdiction over the defendant(s).
Even if the foreign judgment passes the tests above, the court can refuse to recognize the foreign judgment for several other reasons. Much depends on the underlying case.
In California, the creditor has 4 years to get their foreign judgment domesticated. California judgments earn 10 percent simple interest a year.
If the US court allows the foreign judgment to be entered, and there is no pre-existing agreement between the parties, the US court domesticating the foreign country money judgment will usually convert the foreign currency to US dollars, using the exchange rate at the time of entry of the judgment.
A foreign arbitration award can sometimes be confirmed as a judgment in the US federal court closest to where the debtor resides. The US has signed the Convention on Recognition and Enforcement of Foreign Arbitral Awards, which covers enforcement of arbitration agreements between citizens or entities of different countries, and awards in foreign arbitration proceedings; except where the arbitration agreements are null, void, or inoperative.
To enforce a foreign arbitration award, a petition to confirm the award as a judgment is filed as a lawsuit at the appropriate federal district court within 3 years from the date of issuance of the arbitration award. If the award is not in English, a certified translation must accompany the petition. If the court agrees and a federal judgment is obtained, it can be enforced.