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Introduction

The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly called the New York Convention, requires the United States and other state parties to recognize and enforce foreign and nondomestic arbitral awards, with limited exceptions. There are currently 172 state parties to the convention. An award-creditor (the winning party in the arbitration) can take a New York Convention award and have it recognized and enforced as a domestic judgment around the world, in order to reach the award-debtor's assets wherever located. Under Article III of the New York Convention, "Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon …" In the U.S., one of those rules of procedure is the requirement of, and process to obtain, jurisdiction over an award-debtor (the party that lost the arbitration). Given that personal jurisdiction is a constitutional requirement, a U.S. court could not recognize and enforce an arbitral award when it lacks jurisdiction over the award-debtor or its property.

But courts have recognized that due-process requirements operate differently in cases concerning enforcement of judgments than in cases adjudicating a claim in the first instance: A court can assert quasi-in-rem jurisdiction—that is, jurisdiction over a person based on that person's interest in property located within the court's territory—in a proceeding to enforce a judgment when the debtor has assets in the state where the proceeding is filed. Indeed, a judgment-debtor should reasonably expect to be haled into court to satisfy a judgment where it has assets. And the property sufficient to support quasi-in-rem jurisdiction includes intangible rights. That reasoning should equally apply to enforcement of arbitral awards.

In Simplot India v. Himalaya Food International, Civ. A. No. 23-1612 (RK) (TJB) (D.N.J. Mar. 15, 2024), however, the court appeared to take a narrower approach. It held that it lacked personal jurisdiction in a case seeking recognition and enforcement of a foreign arbitral award because, among other reasons, the award-creditor failed to show that the award-debtor had a clear right to money in a New Jersey bank account belonging to the debtor's subsidiary to which the debtor sold goods. As explained below, I respectfully suggest that the court's approach to quasi-in-rem jurisdiction was unduly restrictive because it did not consider the award-debtor's intangible right to payment, which likely should have been deemed located in New Jersey.