Foreign-Country Money Judgments Are Generally Enforceable in NC

Foreign-Country Money Judgments Are Generally Enforceable in NC

North Carolina is home to a dozen Fortune 500 companies’ headquarters and more than two dozen Fortune 1000 companies’ headquarters. But with so many corporations, including international ones, calling NC home, what happens when business disputes arise overseas? Can you enforce foreign-country money judgments here in NC?

An opinion issued by the North Carolina Court of Appeals earlier this week illustrates how the North Carolina Foreign-Country Money Judgments Recognition Act impacts business disputes that work their way to the Tar Heel state.

North Carolina is considered one of the best states in the country for corporations to call home.

North Carolina is home to many international businesses
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According to the Economic Development Partnership of North Carolina, “North Carolina’s consistently top-ranked business climate, low cost of living, access to four international airports and highly educated workforce all create an incomparable environment for corporate success.”

Corporations and their headquarters come to North Carolina for many reasons. It could be the low corporate-tax rate. At just 2.5%, NC’s corporate-tax rate is the lowest in the nation.

It could also be the strong pool of business-minded students. Between Duke University’s Fuqua School of Business, UNC at Chapel Hill’s Kenan-Flagler Business School, Wake Forest University, and NC State, North Carolina is home to some of the most qualified MBA graduates in the nation.

And corporations also prefer the state’s accessibility. With four international airports, North Carolina is literally just a flight away from countries all over the world.

Enforcing foreign-country money judgments in NC
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Under North Carolina law, foreign-country money judgments are generally enforceable here in NC.

But, with more and more international corporations calling NC home, international business disputes are bound to arise. It’s why NC has the North Carolina Foreign-Country Money Judgments Recognition Act (N.C. Gen. Stat. § 1C-1850 et seq.).

The Foreign-Country Money Judgments Recognition Act permits North Carolina courts to enforce foreign-country money judgments under certain conditions. In general, the statute assumes that a foreign-country judgment is enforceable. As a result, a party challenging a foreign-country money judgment must show that NC courts shouldn’t enforce it.

In an unanimous opinion issued last week, the NC Court of Appeals ruled that a defendant hadn’t met that burden with respect to a London money judgment. An English court ordered the defendant to pay the other party’s attorney’s fees and costs.

The NC Court of Appeals enforced a foreign-country money judgment
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In that appeal, the defendant argued that the London judgment was unenforceable under NC’s Foreign-Country Money Judgment Recognition Act because it constituted a “penalty or fine.” The Court of Appeals, however, disagreed.

With respect his argument that the judgment constituted a penalty or fine, the defendant implicated the Act’s rule that it “does not apply to a foreign-country judgment … to the extent that the judgment is … a fine or other penalty.” While that is a valid exception, the Court of Appeals explained, it did not apply to “an award of attorney’s fees or costs….”

For international businesses that call North Carolina home, this decision reinforces the business protections afforded to corporations under NC law. The North Carolina Foreign-Country Money Judgment Recognition Acts helps companies enforce those overseas judgments here. And NC companies can rely on NC courts to do exactly that.

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