On February 8, 2018, the New York Appellate Division, First Department (the “Appellate Division”), granted dismissal of a judgment enforcement action following an appeal brought by Davis Polk on behalf of Defendants Enel S.p.A. (“Enel”)—Italy’s leading energy company—and its subsidiary Enelpower S.p.A. (“Enelpower”). Plaintiff Albaniabeg Sh.p.k. (“Albaniabeg”) had brought the action pursuant to Article 53 of the CPLR to recognize and enforce a judgment, purportedly valued at €433 million, issued by the Tirana District Court in Albania.
Albaniabeg initiated the action in New York Supreme Court in March 2014 pursuant to Article 53, which governs the enforcement of foreign country judgments in New York. In April 2014, Davis Polk, on behalf of Defendants, filed a motion to dismiss on the basis of, inter alia, lack of personal jurisdiction. In October 2014, the Supreme Court denied Defendants’ motion and held that, in an Article 53 action, the defendant does not need to be subject to personal jurisdiction in New York.
Davis Polk appealed the decision to the Appellate Division. On appeal, Davis Polk argued, inter alia, that when a defendant in an Article 53 action contests the enforceability of the foreign country judgment—such as Defendants had in raising numerous grounds to contest the Albanian judgment—constitutional Due Process required some jurisdictional basis to support the action.
On February 8, 2018, the Appellate Division issued an unanimous decision reversing the lower court’s ruling and granted Defendants’ motion to dismiss. The Appellate Division held that, in a contested Article 53 action, constitutional Due Process requires jurisdiction over Defendants, distinguishing prior Appellate Division cases in which recognition had not been contested. Because Albaniabeg had failed to demonstrate a basis to assert jurisdiction over Defendants, the Appellate Division dismissed the action.
The Davis Polk team included partner Antonio J. Perez-Marques (who argued the appeal), senior counsel Karen E. Wagner, counsel David B. Toscano, associates Gina Cora, David J. Robles and Benjamin Zhu.