Overview
First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement.
In previous First Tuesday Updates, we have written about ways to strategically identify and collect assets located in the United States to satisfy a judgment. The Federal Rules of Civil Procedure allow judgment creditors to pursue broad post-judgment asset discovery to aid in execution of the judgment. This is a relatively straightforward exercise when the judgment debtor’s assets are located in the United States. But, how can a US judgment creditor identify a judgment debtor’s assets when the judgment debtor is located outside the US? Luckily, judgment creditors are not out of luck if the judgment debtor is located abroad.
Many countries, including the United States, are party to international treaties, such as the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters which is a multilateral treaty signed in The Hague on 18 March 1970 (Hague Evidence Convention). It establishes methods for obtaining testimony and documents in one signatory state for use in a judicial proceeding in another signatory state. Judgment creditors can rely on these treaties to identify assets located outside the United States, which can ultimately aid in collection of an outstanding US judgment.
Steptoe’s judgment enforcement practice is among the best in enforcing and collecting on judgments. While collection of post-judgment discovery on international individuals and entities is rarely discussed, we have used it with great success. Being able to access information about assets located abroad is an extremely powerful tool in judgment enforcement.
The Procedure
The Hague Evidence Convention outlines the process for obtaining testimony and documents from international individuals and entities. First, a judgment creditor must determine whether the country in which the assets may be located is a party to the treaty. If the country is a party to the treaty, the judgment creditor will file a Letter of Request with the court in which it received the order and judgment. The court will forward to the Central Authority of the country the letter of request along with the discovery request (or other document to be served on the international entity). Article 3 of the Hague Evidence Convention requires the Letter of Request specify the relevant authority, the names and addresses of the parties and the parties’ counsel, if applicable, a description of the proceedings, and the evidence requested or “other judicial act to be performed.” Depending on the request, Article 3 may require additional information in the Letter of Request such as the identification of persons, documents, or other property to be examined and the specific questions to be answered, among other requirements.
Article 4 requires that the Letter of Request be prepared in the language of the country in which the request will be executed. For US judgment creditors seeking evidence in another country, the Letter of Request may be submitted in English with a copy in the language of the country in which the request will be executed. If a judgment creditor submits a translation to accompany the Letter of Request, the translation must be “certified as correct,” and the treaty outlines whom may provide the required certification.
In addition to the Letter of Request process, the Hague Evidence Convention allows collection of evidence through diplomatic channels.
It is worth noting that various countries may have different local requirements for Letters of Request. For example, the country may have unique language requirements. It is important to check what the country requires before initiating this process. Moreover, the process to serve cross-border discovery and receive the responsive information can be a lengthy endeavor, and judgment creditors should not expect immediate results. Consulting with Steptoe's judgment enforcement team early in this execution process can be immensely helpful. Let us know how we can help you get ahead of the debtor and stay that way.
If you have any questions about these issues or require assistance with cross-border judgment enforcement, please reach out to us.
