Galliano v. Stallion, Inc., 16 N.Y.3d 78 (2010)

A New York court will generally recognize a foreign money judgment when the defendant had previously agreed to submit to the jurisdiction of the foreign court, provided that the exercise of jurisdiction by the foreign court comports with New York’s concept of personal jurisdiction and notions of fairness.

Summary

Galliano, S.A. sought to enforce a French court judgment against Stallion, Inc. in New York. The dispute arose from a licensing agreement between the parties, which contained a forum selection clause designating Paris courts for dispute resolution. Stallion argued the French court lacked personal jurisdiction due to inadequate service, as the documents were in French without English translation. The New York Court of Appeals held that Stallion’s prior agreement to the forum selection clause in the licensing agreement was sufficient to confer jurisdiction on the French court. Further, Stallion had sufficient notice of the proceedings. Therefore, the French judgment was enforceable in New York.

Facts

In 1998, Stallion entered a licensing agreement with Les Jardins D’Avron (later replaced by Galliano) to use the “John Galliano” trademark. The agreement stipulated that French law governed and designated the Paris Court of Appeals’ jurisdiction for disputes. Disputes arose over royalty payments and expenses. Galliano sued Stallion in Paris in 2002. Service was attempted three times under the Hague Convention, delivering French documents to Stallion. Stallion did not appear, and a judgment was entered against it in 2004. Galliano then sought to enforce the judgment in New York in 2007.

Procedural History

The Commercial Court in Paris entered a judgment in favor of Galliano. Galliano commenced a proceeding in New York to enforce the judgment. The Supreme Court initially ruled in favor of Galliano. The Appellate Division affirmed. Stallion appealed to the New York Court of Appeals, which granted leave to appeal.

Issue(s)

1. Whether a New York court should recognize a foreign money judgment when the defendant had agreed to submit to the jurisdiction of the foreign court via a forum selection clause, but claims inadequate notice because the service documents were not in English.

Holding

1. Yes, because Stallion agreed to submit to the jurisdiction of the French courts through the forum selection clause, and had sufficient notice of the proceedings, the French judgment should be recognized.

Court’s Reasoning

The Court of Appeals emphasized New York’s tradition of generously enforcing foreign money judgments under CPLR Article 53. While CPLR 5304 allows non-recognition based on lack of personal jurisdiction or insufficient notice, CPLR 5305 stipulates that a foreign judgment should not be refused recognition if the defendant previously agreed to submit to the foreign court’s jurisdiction. The court reasoned that Stallion knowingly agreed to French jurisdiction via the licensing agreement’s forum selection clause. The court acknowledged the importance of notice, stating, “if recognition of a foreign money judgment were sought in New York and the defendant had received no meaningful notice of the foreign proceeding, that lack of notice would serve as a legitimate basis for not enforcing the judgment in our state.” However, Stallion was aware of the ongoing disputes and the agreement’s stipulation for French adjudication. The court emphasized that “the inquiry turns on whether exercise of jurisdiction by the foreign court comports with New York’s concept of personal jurisdiction, and if so, whether that foreign jurisdiction shares our notions of procedure and due process of law.” Since Stallion received the court papers, even in French, and the Paris Commercial Court presumably satisfied itself that service was proper under the Hague Convention, the enforcement of the French judgment did not offend New York’s notions of fairness. The Court noted that under the Hague Convention, the French court was required to consider whether service was properly made and in sufficient time for Stallion to defend itself. Thus, the judgment was enforceable.