SC Lawyer, March 2005, #8. Overseas enforcement of judgments and arbitral awards.

• Author: By James L. Rogers

South Carolina Lawyer

2005.

SC Lawyer, March 2005, #8.

Overseas enforcement of judgments and arbitral awards

South Carolina LawyerMarch 2005Overseas enforcement of judgments and arbitral awardsBy James L. RogersAs any litigator knows, prevailing on the merits either in a courtroom or before an arbitration panel is only half the battle. Collecting on the judgment or enforcing the award can be every bit as challenging as prosecuting the underlying action. Enforcement challenges are magnified where the defendant or, more importantly, the defendant's assets, reside in a jurisdiction other than the one rendering judgment or with the power to enforce an arbitral award.

This is the third and final installment in a series of articles addressing the South Carolina practitioner's role in international business disputes. The first article in the series dealt with "opening moves" in the dispute resolution process (e.g. serving process, asserting jurisdiction over the foreign national, etc.); the second dealt with discovery issues. This final installment addresses enforcement of a judgment or arbitral award in the international context.

As was noted in the first of this series of articles on international dispute resolution, South Carolina lawyers should consider enforcement issues well before initiating a lawsuit or arbitration proceeding against a foreign national. In fact, the issue should be considered thoroughly as early as the drafting stage of any written agreement that may be entered into with foreign nationals.

Litigation v. arbitration

in the international context

One significant reason dispute resolution considerations should be paramount early in an international business relationship arises from the very different manner in which court judgments and arbitration awards are enforced in the international context. South Carolina attorneys may instinctively feel that, in drafting a contract with foreign nationals, it is to their client's advantage to require that dispute resolution take place in South Carolina courts, their "home turf." Enforcement of South Carolina court judgments abroad, however, can be very problematic.

The United States is not a party to a single multilateral treaty for the enforcement of its court judgments in foreign courts. Hence, American court judgments cannot be enforced abroad as a matter of right. Generally, other countries' positions toward enforcing American court judgments range from outright refusal to a conditional willingness to do so. Certainly, a South Carolina judgment does not receive, in other countries, the "full faith and credit" to which it is constitutionally entitled in sister American states.

Attempts to enforce American court judgments overseas inevitably raise concerns in the foreign court about incursions into national sovereignty. As...