The same also generally holds true for the enforcement of U.S. judgments in a foreign country. While the process is straight forward, the individual laws of each country will govern the enforceability of the U.S. judgment.

Enforcement of Foreign Judgment in the U.S.

In the U.S., recognition and enforcement of foreign judgments is usually a matter of state law.  More than half of the states have adopted some version of the Uniform foreign Money-Judgments Recognition Act (“UFMJRA”). Other states generally apply factors that are similar to those set out in the UFMJRA.  Under the UFMJRA, recognition of a foreign judment will be denied if:

• The judgment was rendered under a system that does not provide impartial tribunals or procedures compatible with the requirement of due process of law;
• The foreign court did not have personal jurisdiction over the defendant; or
• The foreign court did not have subject matter jurisdiction.

Enforcement of a foreign judgment is generally accomplished by filing a new lawsuit based on the original foreign judgment and obtaining a U.S. judgment that can then be enforced in the same way as any other judgment.

Recognition of U.S. Judgment in Foreign Country

The recognition of a U.S. judgment in a foreign country will be determined by the domestic laws of the foreign country.  As a general rule, a U.S. judgment will only be enforced if there is a showing that the debtor received proper notice of the proceeding and the court that rendered the judgment possessed jurisdiction over both the debtor and the subject matter of the dispute.

An additional requirement that is often included as a condition of recognition and enforcement of a judgment is that the country where the judgment was rendered also grants reciprocity to the foreign couintry by recognizing its judgments.

We are thrilled to present this guest post by Gregory S. Barnett, who is a foreign legal consultant with Angelico Advogados in Sao Paulo, Brazil.

International investment in Brazil is on the rise. As economic struggles persist in the United States, anxious US investors are looking south for new opportunities. And while most countries are struggling, Brazil has weathered the storm with prospects for continued growth in the years to come.

With the World Cup in 2014 and the Olympic Games in 2016, all eyes are now turning to Brazil.

An expected consequence of the increase in international investment in Brazil is an increase in multijurisdictional disputes. Where a legal process commenced in the United States involves a party domiciled in Brazil, service of process on the Brazilian party must be made using a letter rogatory.

The procedure is extremely formal, time consuming and expensive. But in most cases it is the only way that US courts will deem service of process as being properly given.  

The US Department of State’s website provides an overview on preparing letters rogatory as does Santiago Cueto’s post titled “Service of Process in Brazil. The Basics.”

Once a letter rogatory is filed in the United States, it is sent by Process Forwarding International, the US Department of Justice’s contractor, to the appropriate Brazilian authorities. Upon receipt in Brazil, the documents are filed with the Superior Court of Justice. It is the Superior Court of Justice, Brazil’s highest federal court, that will review the letter rogatory and initiate service of process.

In Brazil, service of process is the responsibility of the judiciary. Process servers hired to serve process do not exist as they do in the United States. Rather the Brazilian court authorizes the service of process and orders a court official to serve the party in Brazil. Without a pending matter in front of the court, a party cannot be served.

As service of process can only be given through a judicial proceeding, it is generally advisable to engage legal counsel in Brazil. While the letter rogatory process will commence with an action filed in the United States, local counsel can help accompany the process in Brazil.

In addition to filing documents with the court and coordinating with the proper Brazilian authorities, local counsel may be able to speed up the process, saving the client some time.

Prior to engaging in international business transactions, it is important to consult legal counsel capable of advising on cross-border deals. With a bit of careful planning, it is possible to avoid some of the frustrations that result from unexpected disputes.

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Gregory S. Barnett is a foreign legal consultant with Angélico Advogados in São Paulo, Brazil (www.angelicolaw.com). Prior to joining the firm, Mr. Barnett was a member of the global practice group at Greenberg Traurig, P.A. in Miami, Florida. Mr. Barnett has a Juris Doctor from Georgetown University Law Center in Washington, DC and a Master of Arts in International Law and the Settlement of Disputes from the Universidad para la Paz in Costa Rica.

The Agreements, the biggest trade deals since 1994,  promise to result in the export of billions of dollars of U.S. goods and boost hundreds of thousands of American jobs.

Whichever side of the political fence you sit, speaker of the House John Boehner issued a poignant statement about the passage of the trade agreements:

“With passage in the House and Senate today, a key component of the Republican jobs plan will be sent to the President for his signature. These significant trade pacts will provide new opportunities for American small businesses, farmers, and manufacturers to expand and hire more workers.

And frankly, it shouldn’t have taken this long for it to happen. While a Democrat-controlled House sat idle, other nations expanded their trading ties, and American competitiveness suffered. These common-sense agreements reverse that trend, level the playing field, and provide American job creators access to new customers and markets to sell their products.”

The U.S. Chamber of Commerce also praised the deals and urged policymakers to pursue a more aggressive trade agenda. The Chamber’s CEO, Tom Donohue, said in a statement:

Passing these trade agreements represents a victory for American workers, American competitiveness, and American leadership. It means we will immediately stop losing jobs to our competitors who have cut their own deals and we can start creating hundreds of thousands of new jobs for Americans.”

It’s great to see at least one area where centrist Democrats and Republicans can agree to take action that could benefit the American economy in the long run.

These long-overdue trade deals will improve the American economy and signal to these three trading partners that the United States is open for business.

What do you think?

Source: China Today

For all the exuberant talk about China being among the world’s greatest economic powers, with western marketers clamoring to get their products in front of China’s skyrocketing middle-class, the reputation of its legal systems has lagged behind considerably.

Whether China’s legal system is adequate or not, the arguments are all over the place. For example, contrast the recent Epoch Times post, Five Unspoken Rules of China’s Legal System with the South China Morning Post article, Legal System Less Arbitrary but Still a Work in Progress.

I mention this because I just read an excellent post on the Drug and Device Blog about a U.S. 4^th Circuit decision issued just days ago finding that China is an adequate legal forum.

The post, Chinese Litigation Returned to Sender, breaks down the decision reached in Tang v. Syntura International, Inc., No. 10-1487, slip op. (4th Cir. Sept. 6, 2011). The case is notable because it involves a well-publicized scandal concerning tainted infant formula manufactured by Chinese companies

As with the China drywall litigation, a group of enterprising lawyers tried to make the infant formula litigation the latest Chinese export to the United States. The case was filed in the United States based on the fact that one of the 22 companies whose products had been contaminated was a sub- subsidiary of an American holding company located in Maryland.

The defendant filed a forum non conveniens motion to send the case back to China. The question raised was whether the Chinese legal system had modernized sufficiently that it can now be considered an “adequate forum.”

The court held that China is an adequate forum because its courts are available to hear contaminated formula cases. The court was swayed by the sufficiency of evidence presented by the Chinese defendant to back up this finding.

First, the defendant presented evidence showing that at least two provincial courts accepted contaminated formula cases prior to the district court’s decision.

Also supporting defendant’s forum non conveniens argument, was the affidavit of an officer from China’s highest court exalting the court’s readiness “to accept and hear these cases according to law at any time.”

Finally, the Chinese defendant presented evidence explaining that any inaction or delay by Chinese courts might be attributable to formal defects in the complaints and not the courts’ resistance to the subject matter of the cases.

One of the interesting points of the Tang decision is its holding that more than just litigation opportunities factor into whether an overseas forum is adequate. The existence of the Chinese government’s fund for contamination victims (similar to our own BP Oil Spill fund) must also be considered  as a possible remedy– litigation is not the only mechanism available.

Adequate court system (although different). Check

Adequate remedy (although not similar). Check

China. It’s an adequate forum.

Or is it?

With Brazil-South Florida annual trade exceeding $13 billion and Brazilian visitors spending $1 billion annually in Miami, it’s really not all that surprising.

From exporting products, registering intellectual property or resolving business disputes, there’s been great interest in many areas of law that concern Brazil.

Increase in Disputes Between Parties Located in Brazil and U.S.

Also not surprising, with the surge of economic activity there’s also been a dramatic increase in the number of lawsuits filed between parties located both in the U.S. and Brazil.

Invariably, one party wants to serve the other party with legal documents located outside their jurisdiction.  Whether a Brazilian is suing someone in the U.S. or the other way around, service of process issues can get complicated.

For purposes of this post, I’ll focus on the U.S side of service of process,that is, where a party has initiated litigation in the U.S. and seeks to serve a party in Brazil.  For the Brazil side of things, look for an upcoming guest post in the near future.

Preparing the Documents

It’s important to note that Brazil is not a party to the Hague Service Convention, but is a party to the Inter-American Convention on Letters Rogatory and Additional Protocol.

Pursuant to the Convention, a plaintiff makes a request for service by completing U.S. Marshall Form USM-272/272A. Note that USM-272-272A will suffice as the formal request for purposes of the Inter-American Convention’s Letters Rogatory form.

The request is made up of an original and two copies of the Forms, and three copies of the summons and complaint or other documents to be served.

All documents served with the Form USM 272/272A for service in Brazil must be translated into Portuguese.

Although USM 272/272A is not itself required to be translated into Portuguese, it’s good practice to do so for the convenience of the Brazilian authorities.

Also note that the Inter-American Service Convention requires that the Form bear the seal and signature of the clerk of the court from which the process issues, as well as the signature and stamp of the Central Authority of the state in which the court sits.

The Procedure

Once USM272/272A is prepared, and translated along with the accompanying documents, the next step is for the request to be sent by the court to the U.S. Central Authority (the U.S. Department of Justice).

The U.S. Central Authority will then forward the request (duly notarized and consularized by the Brazilian Consulate) to the Central Authority in Brazil, the Ministry of Justice.

From there, the request will be delivered to the Federal Supreme Court for exequatur, whereupon the plaintiff may submit it to the court for service upon the defendant.

Once served, the request is returned to the Federal Supreme Court and then returned to the court of origin by the reverse procedure.

How Long Does it Take?

Service of process pursuant to the Inter-American Convention upon defendants located in Brazil generally takes between six months and one year. However, by staying on top of the request (which requires more attention from the attorney, and thus, costs a bit more), it can get done in about  six to eight months.

Be sure to factor in preparation time, getting the documents prepared to meet Brazil’s strict legalization and procedural requirements can take several months.

Conclusion

Follow the basic steps outlined above and you’ll be well on your way to effecting serving process Brazil.

It was obvious he had done his research. Mr. X discussed whether it was best to form a Wholly Foreign Owned Entity (WFOE), Representative Office (RO), Joint Venture (JV) or other foreign invested enterprise (FIE). (For unsurpassed detail into these and other China business forms, run, don’t walk to my friend Dan Harris’ China Law Blog).

I explained to Mr. X that, while all the formalities are important, it was crucial that he understood that success in China means a lot more than simply setting up a business and hoping that your widgets will sell in Guangzhou, Shenzhen or Tianjin.

I touched on this concept in an earlier post, How to Avoid International Disputes. First Be Good to Your Suppliers. The central idea was that you needed to build solid relationships to achieve any level of success in China.

I mention this because I just read a great piece in the Wall Street Journal written by Edward Niedermeyer. The piece, Good for GM, Good for China, was a review of the book American Wheels Chinese Roads by Michael J. Dunne.

The article takes a fascinating look at how one of America’s largest companies, General Motors, successfully rode the tidal wave of China’s market growth and stayed ahead of the competition in the auto industry’s new source of critical mass.

As the article points out, simply, having a presence in China is no guarantee of ultimate success.

Success in China is built on relationships.”

For some companies, success means entering into a 50-50 strategic alliance with a local partner. For others, it means working out a different arrangement with a group of local entities..

For GM, success meant ceding control to its Chinese partner and allowing them to take the wheel of  the China  venture. While viewed as a risky or even fatal strategy, GM understood the long-term value of relationships and the attendant sacrifices that oftentimes must be made.

GM’s decision proved to be its saving grace.

Giving top priority to its partner relationship allowed GM to take on a $400 million line of credit from Chinese banks thanks to the backing of its partner. The financing also allowed GM to rescue its Korean Daewoo division, which  provides critical components for its products in China.

Because the supplies were being financed locally,  GM avoided having to ship U.S. bailout money overseas allowing it to keep the funds at home in the U.S. where it was most needed.

GM now has the option to regain its 50% stake in the venture that  made the business so successful.

Had GM chosen to sacrifice its partner relationship for short-term gain, things would have probably turned out much worse for GM in China.

Success. It’s built on relationships.

These foreign defendants were generally subjected to the jurisdiction of U.S. courts under the “stream of commerce” theory articulated in the seminal case Asahi Metal industry.

This theory generally holds that a court could exercise jurisdiction over a foreign manufacturer of a product so long as the manufacturer knows or reasonably should know that its products are distributed through a “stream of commerce” or national distribution system that might lead to those products being sold in any of the fifty states.

Until recently, all a plaintiff needed to allege to gain personal jurisdiction was show that a foreign manufacturer knew or should have known that its product(s) could reach the forum state.

A recently decided U.S. Supreme Court case significantly limited this analysis. In McIntyre Machinery, the Court held that the exercise of stream-of-commerce personal jurisdiction was not proper unless a party purposefully avails itself of conducting activities within the specific forum State.  It generally isn’t enough that the foreign manufacturer might have predicted that its goods would reach the forum state.

Significantly, the Court took issue with the “stream of commerce” metaphor itself.

The imprecision arising from Asahi , for the most part, results from its statement of the relation between jurisdiction and the “stream of commerce.” The stream of commerce, like other metaphors, has its deficiencies as well as its utility. It refers to the movement of goods from manufacturers through distributors to consumers, yet beyond that descriptive purpose its meaning is far from exact.

McIntyre Machinery is an important case because it will likely lead lower courts to dismiss certain cases which would otherwise have remained in court.

The case will also force plaintiffs’ attorneys to examine the jurisdictional basis of their cases more closely. Unless, they can establish that a foreign manufacturer specifically targeted the forum state in this context, it now becomes far less likely that a court would assert personal jurisdiction over the foreign manufacturer.

From the manufacturers’ standpoint, McIntyre Machinery provides foreign corporations with a better understanding of the U.S. legal landscape allowing them to more accurately assess their litigation risk. For example, foreign corporations may choose to limit their sales activities to specific U.S. states to limit their exposure to products liability lawsuits.

What do you think–did the Supreme Court get it right?

In the post, I presented a general overview of registering your intellectual property overseas. While registering your patent, trademark or copyright in a foreign country is a relatively straight forward process, problems can and do often arise.

U.S. online retail giant Amazon.com’s experience in the European Union presents an excellent example of problems that can arise in applying for intellectual property protection overseas.

As reported in the PC World article Europe Rejects One-click-to-buy Amazon Patent Application,  the European Patent Office (EPO) last month rejected Amazon.com’s appeal to be granted a patent for its “one-click” ordering system.

Amazon started using the one-click feature in September 1997, and it was granted a patent for it in the U.S. in 1999. Amazon had hoped to patent the one-click feature in the European Union.

In rejecting Amazon.com’s patent application, the EPO ruled that the one-click method was too obvious and relied on existing inventions, called ‘prior art’ in patent law. A copy of the EPO Appeal Board’s decision (T1244/07) can be found here.

The lesson here: Don’t assume that because your patent application was granted in the U.S. or your home country that it will be granted elsewhere.

If patent savvy technology giants like Amazon.com can run into trouble, chances are smaller enterprises can too. It pays to do your homework. The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements.

I recently read Santiago Cueto’s entry on this blog titled How to File a Lawsuit Against a Foreign Government. The Basics, on which I commented on LinkedIn. Santiago kindly offered me to write this contribution on the Swiss perspective to this issue.

Like the United States of America, Switzerland respects the sovereignty of foreign States, of which immunity is a part under public international law.

Contrary to the United States, though, Switzerland does not have a specific statute governing this issue, and Swiss courts apply both customary international law and internal law. In 1982, Switzerland ratified the 1972 European Convention on State Immunity and in 2010, it also ratified the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which is not yet in force.

In accordance with the case law of the Federal Court, Switzerland’s highest court, under certain conditions a foreign State can be summoned before a Swiss court. A distinction must be draw, depending on whether the foreign State:

(1)   acted in the exercise of sovereign authority (sovereign act or act of State, “acta iure imperii“); or

(2)   acted as a subject of private law equal to a private person (commercial transactions, “acta iure gestionis“).

Only in the first case can the foreign State claim jurisdictional immunity. In the second case, by contrast, the foreign State can be summoned before a Swiss court, but only on the condition that there exists a sufficient nexus between the claim and Swiss territory. This additional condition does not derive from international public law but from precedents developed by Swiss courts, which implied justification is the safeguard of the international relations of Switzerland, as proceedings against a foreign State inevitably create diplomatic tensions.

Swiss courts can also impose measures of constraint on a foreign State’s assets. What holds for jurisdictional immunity also holds in principle for immunity from measures of constraint: such measures may not be taken if the underlying claim was a sovereign act or had no connection with Switzerland. In addition, measures of constraint may not be taken against assets and property intended for the performance of public functions.

The particularity of Swiss law in respect of immunity of foreign States and their assets from jurisdiction and execution concerns thus mainly the requirement of a sufficient nexus of the underlying claim with Switzerland (Binnenbeziehung in German).

Such connection has been deemed to exist when: the agreement or its addendums were concluded in Switzerland; the claim was born in Switzerland; the claim or payment ought to have been executed in Switzerland; the claimant resided in Switzerland when the claim was born; Swiss courts were designated by the parties. It was denied when: a foreign resident assigned its claim to a Swiss resident; the place of execution in Switzerland was chosen by the claimant in his discretion; the place of arbitration was in Switzerland.

It should finally be mentioned that Swiss courts give effect to a contractual renunciation to immunity from jurisdiction or execution.

Several months ago, I received a call from the general counsel of a multinational corporation concerned about new anti-corruption laws that are now part of the international business law landscape.

He was particularly concerned with the recently enacted UK Bribery Act, which he characterized as the FCPA “on steroids.” While the UK’s Bribery Act certainly has quite a bite, I explained that anti-corruption enforcement is tightening all over the world—particularly in Asia.

It’s not unusual for me to get a call like this. For multinational corporations, managing liability risks under varying anti-corruption laws is a highly complicated process.

This is particularly true for companies with business operations in developing economies where history, customs and culture influence day-to-day business.

I mention this because White & Case recently released an excellent report on new anti-corruption rules and the implications for multinational corporations operating in Asia. The emphasis of the report is on new anti-corruption laws in China and the United Kingdom.

The Report “explores the challenges for multinationals doing business in the developing markets of Asia. It looks specifically at the new rules in play, it examines the extraterritorial cross-over of enforcement and penalties, and it discusses some of the tactics multinationals are using to address the challenges of doing business in Asia.”

To illustrate the challenges faced by multinational corporations operating in Asia, the Report highlights two recent cases:

• In early May, Avon Products Inc. fired four executives over bribes to Chinese officials according to a regulatory filing. The four individuals, who were initially suspended in April 2010 during an internal investigation, included a general manager and former head of finance of the company’s China unit. As part of its internal probe, Avon has reportedly discovered millions of dollars in questionable payments in India, Japan, Argentina, Brazil and Mexico. In February of this year, the company conceded that it could face substantial fines, civil and criminal penalties and other sanctions, depending on how the Foreign Corrupt Practices Act (FCPA) matter is resolved. The investigation is reportedly ongoing.
• Citigroup faces lengthy bans on its credit card and wealth management businesses in Indonesia over a case of alleged embezzlement and the death of a client following questioning by debt collectors. Citigroup has said it is working closely with Indonesia’s central bank to address its concerns.

These two cases are far from unique. In my own practice I’ve seen, a significant increase in the number of companies that find themselves in the cross-hairs of anti-corruption enforcement agencies.

As the Report points out,  there is some overlap among the laws of the United States, United Kingdom, and China in terms of the types of conduct that are prohibited by the statutes.

However the laws contain significant differences that may have far-reaching implications for businesses.

For more details, you should absolutely take a look at the Report.

What do you think?

-Santiago