Anwar et al v. Fairfield Greenwich Limited et al

Filing 780

DECLARATION of Michael Wallace Gordon in Support re: #775 FIRST MOTION to Certify Class.. Document filed by Pasha S. Anwar. (Barrett, David)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
PASHA S. ANWAR, et al.,
Plaintiffs,
v.
Master File No. 09-cv-118 (VM)
FAIRFIELD GREENWICH LIMITED, et al.,
Defendant.
This Document Relates To: All Actions

EXPERT DECLARATION OF MICHAEL WALLACE GORDON

I, MICHAEL WALLACE GORDON, declare the following:
A. Introduction
1. I am the John H. & Mary Lou Dasburg Professor of Law Emeritus at the University of
Florida, College of Law, Gainesville, Florida, where I have jointly served as an Affiliate
Professor at the Center for Latin American Studies.
2. My education, included in the curriculum vitae attached and incorporated by reference in this
declaration, includes a B.S. in Industrial Administration and a J.D. from the University of
Connecticut, an M.A. in Economics from Trinity College, a Maestria en Derecho (Master's
Degree in Law) from the Universidad Iberoamericana, Mexico City, and a Diplome de Droit
Compare (Comparative Law) from Strasbourg, France.
3. I served on the Board of Directors of the American Society of Comparative Law from 1980
until 2007, and served a term on its executive council and on the editorial board. In 2004, I
received the annual Law & Policy in Latin America award for contributions to Latin America
at a ceremony in San Jose, Costa Rica, and was later that same year named Distinguished
International Educator at the University of Florida.
4. Over the past 45 years, I taught various courses relating to international litigation,
international business transactions, comparative law, and Latin American legal systems.
5. I have been a visiting professor in Latin America at the law faculties of the Universidad
Francisco Marroquin (Guatemala), Universidad de Costa Rica, and the Escuela Libre de
Derecho (Mexico City).

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6.

I have been a Senior Fulbright Professor in Guatemala, Mexico and Germany, and held the
inaugural Fulbright Distinguished Chair in International Commercial and International
Litigation Law at the Universidade Catolica Portuguesa (Lisbon) in April 2007.

7. I have been a visiting professor at Duke, George Washington (Alverson chair), LSE
(Centennial Professor in Law), Alabama (Stone chair), Konstance and Frankfurt (Germany),
and King’s College (England).
8. I have lectured at law faculties and bar associations in this hemisphere in Brazil, Colombia,
Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama,
Paraguay and Venezuela; in other nations including The United Kingdom, France, Germany,
the Netherlands, Belgium, Spain, Italy, Russia, Hungary, Ukraine, Georgia, Armenia,
Azerbaijan, Sudan, Kenya, Serbia, Croatia, Montenegro, Macedonia, Oman, India, China and
Hong Kong. I lectured throughout the United States on Latin American law for the Council
on Foreign Relations.
9.

Among my publications is a West casebook on International Civil Dispute Resolution (2d
ed. 2009), which includes chapters on proof of foreign law and the enforcement of foreign
judgments. I also translated the Mexican Civil Code from Spanish to English (this civil code
is typical of civil codes of various Latin American nations). I am a co-author of the West
casebook International Business Transactions (10th ed. 2009), which includes materials I
wrote on proof of foreign law and the enforcement of foreign judgments.

10. I have spent 45 years doing research, writing and consulting on numerous aspects of foreign
law and legal systems, and international litigation. I have prepared affidavits on various
issues of international litigation for cases in courts in the United States (principally

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California, Illinois, Mississippi, New York, Tennessee, Texas, Washington and Florida), and
abroad, including Bermuda, Canada and Spain.
11. I have provided affidavits as an expert on the civil and/or commercial laws of Colombia,
Costa Rica, Cuba, Ecuador, Guatemala, Mexico, Panama and Venezuela, for courts in
California, Florida, Illinois, New York, Tennessee, Texas, Bermuda and Ontario. I have
additionally provided opinions on issues in cross-border civil litigation involving China,
France, Germany, Haiti, Honduras, Monaco, the Netherlands, Nicaragua, and Spain.
12. I was a Scholar in Residence at Bellagio, Italy, and have been elected to the Académie
Internationale do Droit Comparé (Paris) and the Academia Mexicana de Derecho
Internacional Privado y Comparado.
13. I have been asked to provide a declaration on whether a U.S. judgment, in favor of either the
plaintiffs or the defendants, in a class action judgment or court-approved settlement
precluding absent class members who fail to opt-out from bringing individual actions, would
be recognized in Mexico, El Salvador, Panama, Colombia, Venezuela, Ecuador, Peru, Chile,
Bolivia, Uruguay, Argentina, Brazil and the Dominican Republic. In the preparation of this
declaration I have read the following materials provided to me by counsel for the plaintiffs.
a. Second Consolidated Amended Complaint dated September 29, 2009;
b. Anwar v. Fairfield Greenwich Ltd. 2010 U.S.Dist.LEXIS 86716 (S.D.N.Y.
August 18, 2010) (granting in part and denying in part defendants’ motions to
dismiss);
c. Declaration of Alexis Mourre dated February 28, 2011;
d. Declaration of Dr. Fernando Gascon, dated February 28, 2011;

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e. Subscription Agreement (Non-United States of America Subscribers Only)
Fairfield Sigma Limited;
f. Subscription Agreement of Fairfield Sentry Limited.
B. The Recognition Of Class Action Judgments In Latin America
14. Class actions are relatively new to Latin American nations. Generally, civil litigation is
limited in use because contingent fees are disallowed or discouraged and damages are
comparatively low largely due to the near absence of punitive damages and restrictions on
granting moral damages.

However, unlike the highly contentious specific issues of

contingent fees and punitive damages, there is no general dislike or mistrust of the nature of
class actions. I believe that each of the nations in question allows several forms of action
where parties are bound by a decision even though they were not named, but if named were
not allowed to opt out. For example, most if not all, Latin American nations allow a form of
shareholders’ derivative suit which possesses characteristics of a class action. Thus, the
concept of a class action is not rejected. There is less known, however, about the acceptance
of a class action judgment or court approved settlement where there is an opt-out provision
such that failure to opt-out binds those parties.

I believe that Latin American courts

confronting such a procedure would emphasize whether parties have received adequate
notice and opportunity to opt-out. It is my opinion that each of the Latin American nations
involved permits recognition and enforcement of foreign class actions, in accordance with
the discussion below. It is also my opinion that the recognition and enforcement of class
action opt-out judgments and settlements will, in general, with the exception of Brazil, follow

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the development explained in the Declaration of Dr. Fernando Gascon on Spanish Law filed
in this litigation.
C. General Theory of The Recognition Of Foreign Judgments in Latin America
a. The Bustamante Code as the Foundation for Private International Law Rules of
Judgment Recognition and Enforcement
15. The Sixth International Conference of American States, on 25 November, 1928, in Havana,
Cuba, promulgated a code of private international law rules named for its principal architect,
Antonio Sanchez de Bustamante, a Cuban jurist and former magistrate of the Permanent
Court of International Justice. The Code addressed judgment recognition, jurisdiction and
choice of law. It was intended to provide a uniform law that would be adopted throughout
the hemisphere, replacing the earlier Montevideo Treaty of 1889 which had been ratified
only by a few South American countries. All of Central America ultimately adopted the
Bustamante Code. Mexico did not, nor did the United States.1
16. The Bustamante Code was applicable only among the nations that adopted the Code, but it
influenced all Latin American nations in adopting general judgment enforcement rules that
were applicable to non-Code nations. Some nations that adhered to the Code adopted nearly
mirror image provisions that were applicable to judgments from all foreign nations whether
or not they were Bustamante Code members.

Of those nations I discuss below, the

Bustamante Code was adopted in Panama, Brazil, Venezuela, Chile, Ecuador, Peru, El
Salvador, and Bolivia. It was not adopted in Argentina, Colombia, Mexico or Uruguay, the
laws of which nevertheless reflect Bustamante concepts.

1 The Bustamante Code is included in an English version as an Appendix in Robert C. Casad, Civil Judgment
Recognition and the Integration of Multiple-State Associations: Central America, the United States of America, and
the European Economic Community 183 (1981 Regents Press of Kansas).

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17. The fundamental provisions establishing the conditions for enforcing a foreign judgment are
contained in Art. 423 of the Bustamante Code. These provisions established at an early date
a strong acceptance of the principle that foreign judgments should be accepted when the
conditions are met. Art. 423 provides:
Art. 423. Every civil . . . judgment rendered in one of the contracting states shall
have force and may be executed in the others if it combines the following
conditions:
1. That the court which has rendered it has competence to take cognizance of the
matter and to pass judgment upon it, in accordance with the rules of this Code.
2. That the parties have been summoned for the trial either personally or through
their legal representative.
3. That the judgment does not conflict with the public policy or the public laws of
the country in which its execution is sought.
4. That it is executory [final] in the State in which it was rendered.
5. That it be authoritatively translated by an official functionary or interpreter of
the State in which it is to be executed, if the language employed in the latter is
different.
6. That the document in which it is contained fulfills the requirements necessary
in order to be considered as authentic in the State from which it proceeds, and
those which the legislation of the State in which the execution of the judgment is
sought requires for authenticity.
18. Article 424 of the Code addresses the procedure for enforcement. Article 424 states:
Article 424. The execution of the judgment should be requested from a competent
judge or tribunal in order to carry it into effect, after complying with the
formalities required by the internal legislation.
19. Further provisions provide additional procedural requirements.

The first stage of

enforcement was the initiation of a preliminary proceeding, usually before the nation’s
Supreme Court, before the judgment was presented to the proper lower court for
enforcement. That is the process called exequatur and is present in most civil law tradition
nations.

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20. The Bustamante Code became the basis for judgment enforcement in most of Latin America.
Countries that adopted it as part of their private international law often did so only with
specific reservations. Countries that did not adopt it were often influenced by its principles
in the development of their judgment enforcement laws that applied to Code or non-Code
nations.
b. The Inter-American Convention
21. Adopted in 1979 in Montevideo, Uruguay, the 1979 Inter-American Convention on
Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Inter-American
Convention) built upon the Bustamante Code in adopting a generally accepted universal
principle throughout Latin America that foreign judgments would be recognized and
enforced when such judgments fulfilled certain conditions. The Inter-American Convention
was not adopted by the United States and thus is not the applicable law for those nations in
this litigation that have signed and ratified the Convention, which includes eight of the
thirteen nations - Mexico, Colombia, Venezuela, Ecuador, Peru, Bolivia, Uruguay and Brazil.
It is not in force in Argentina, Panama, Chile, El Salvador and Dominican Republic.2
Nonetheless, I briefly outline its requirements as it has impacted Latin American legal
principles.
22. Provisions for enforcement of foreign judgments in the subject nations are generally found in
each nation’s code of civil procedure and are essentially consistent with the Inter-American
Convention, even in those nations where the Convention has been signed but not ratified.
The principles are similar to those of many other civil law tradition nations, especially Spain,

2 The Inter-American Convention on Extraterritorial Validity of Judgments and Arbitral Awards of 1979 is available
at www.oas.org.

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Portugal (for Brazil), and France. I believe that these principles are drawn more from those
of France than Germany.
23. The basic principles of the Convention are found in Article 2, which states as follows:

Article 2: The foreign judgments, awards and decisions referred to in Article 1
shall have extraterritorial validity in the States Parties if they meet the following
conditions.
a) They fulfill all the formal requirements necessary for them to be deemed
authentic in the State of origin;
b) The judgment, award or decision and the documents attached thereto that are
required under this Convention are duly translated into the official language of the
State where they are to take effect;
c) They are presented duly legalized in accordance with the law of the State in
which they are to take effect;
d) The judge or tribunal rendering the judgment is competent in the international
sphere to try the matter and to pass judgment on it in accordance with the law of
the State in which the judgment, award, or decision is to take effect;
e) The defendant has been summoned or subpoenaed in due legal form
substantially equivalent to that accepted by the law of the State where the
judgment, award or decision is to take effect;
f) The parties had an opportunity to present their defense;
g) They are final or, where appropriate, have the force of res judicata in the State
in which they were rendered;
h) They are not manifestly contrary to the principles and laws of the public policy
(order public) of the State in which recognition or execution is sought.
24. It is my opinion that if a class action similar to the present case were to be tested under the
Convention, it could be recognized and enforced. The only provisions that would warrant
discussion would be e) and f), notification, and part h), the often difficult to define concept of
public order, but I do not believe that they would prevent recognition or enforcement.
25. The Convention is not directly applicable to the present case because the United States is
not a party to the Convention. Nor is it directly applicable in Argentina, Panama, Chile, El
Salvador or Dominican Republic. However, as with the case of the Bustamante Code, the

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principles of the Convention have an effect on the development and interpretation of the
judgment enforcement provisions that would apply to a judgment from the United States.
D. Recognition of Class Actions in the Latin American Nations
26. It is reasonable to begin with the assumption that in none of the subject Latin American
nations is there specific legislation or judicial precedent that specifically addresses the class
action with all notified class members bound by a judgment or settlement except those who
have opted out. That assumption should not be the basis for acceptance of the position that
any such class action brought in the United States or other foreign nation should not be
recognized and enforced. The assumption should rather raise the question as to what such
Latin American nation faced with a request to recognize and enforce such a judgment would
do.
27. The issue raises a further consideration. The above assumes that a judgment was rendered in
favor of the plaintiffs, or a settlement was approved by the court, and the judgment is taken
to one or more of the Latin American nations for enforcement. But the judgment may favor
the defendant. If the defendant wishes to have a judgment in its favor recognized and
enforced by one of the Latin American nations should the result be any different? I believe
the answer is “no,” because the recognition and enforcement rules are not specifically limited
to judgments in favor of the plaintiff. One difference would be that the defendant would not
challenge its own acceptance of service.
28. While I will comment on each of the specific Latin American nations that apparently have
residents in the lawsuit, I believe that there is good reason to assume that every Latin
American nation will enforce a class action as long as the conditions for enforcement in the

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nation’s private international law are met. I further believe that such conditions are met
where the class action has provided reasonable notice to each member of the class to opt out
of the litigation.
29. A principal reason that supports the above position is that the litigation does not involve a
suit by a U.S. party against Latin American defendants. The Latin American parties in this
litigation are plaintiffs who are likely to benefit from a judgment or settlement in which they
have been parties who received reasonable notice, decided not to opt out and remained in as
class members who expended few if any personal funds to pursue the litigation. Were they
to have opted out, they would have faced initiating separate litigation at their expense.
Because there is little if any experience with class action litigation of this nature in the
subject Latin American nations, and because the contingent fee is not recognized, the
litigation in the United States offers not merely an effective alternative to opting out and
initiating litigation at home, but the only probable method to receive some recovery. Coming
to the United States to bring an action after opting-out is further unlikely to be successful
because there may not be enough plaintiffs choosing such path to interest most plaintiffs’
trial attorneys.
30. This action differs from the typical class action where most of the plaintiffs cannot be
identified, such as product liability litigation.

Plaintiffs’ attorneys have the books and

records of the two offshore funds and therefore know the identities and addresses of the
something less than 1,000 foreign registered shareholders.

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E. Exequatur or Homologacion – The Procedure for Enforcement
31. In each of the subject nations there is a procedure for enforcement of a judgment which often
draws on the Bustamante Code or on European practice. A judgment or settlement that is
approved by the court will have to go through the following procedure, with generally minor
variations in some nations.
32. The judgment or approved settlement would be filed with the appropriate court in the foreign
nation. That would usually be the Supreme Court for initial approval, followed by execution
by a designated lower court. The papers must be authenticated, legalized at a consulate of
the foreign nation and translated by an officially recognized translator. Jurisdiction over the
judgment debtor may have to be obtained in the foreign nation. The court of the foreign
nation will be competent to serve notice and summons.
33. The foreign court may be required to convert the judgment into local currency, usually
applying the time the payment is made in determining the conversion rate. Increasingly,
nations are allowing judgments to be enforced in the foreign currency.
34. Interest may or may not be allowed, usually not, unless the judgment provided for interest.
35. Attorneys’ fees and costs may be allowed, the attorneys’ fees are sometimes regulated by an
official schedule similar to schedules used until about the 1960s in many states in the United
States.
36. The losing party in the process may appeal, sometimes by an ordinary appeal, sometimes
(e.g., Mexico’s amparo), by a constitutional appeal.
37. In my opinion the exequatur/homologacion process is not an obstacle to the recognition and
enforcement of a judgment or settlement in the present case.

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F. Discussion of the Individual Countries
38. Determining the status of class actions with opt-out rights in many nations requires
discussion of indicators from legislation, precedent and literature that class actions are treated
in a specific manner. The countries are addressed in order of the number of investors of the
Fairfield Sentry Fund, and Fairfield Sigma Fund, residing therein, who had registered
addresses in said funds.
a. Panama
39. Panama adopted the Bustamante Code without reservation, and signed, but has not ratified,
the Inter-American Convention. Panamanian law applicable to non-treaty countries reflects
the principles of the Code as updated. Article 582 of the earlier Panamanian Judicial Code
stated that “If there shall be no special treaty with the nation in which the judgment was
rendered, it will have the same force as is given to judgments rendered in Panama.”
Furthermore, Article 584 provided that where no treaties provided otherwise, a foreign
judgment would not be recognized unless (1) it was a personal action that (2) was not granted
by default, that (3) the underlying obligation was lawful in Panama and (4) a copy of the
judgment met requirements of authenticity. A subsequent Judicial Code adopted in 1984
incorporated the essence of the old, including conditions similar to those first stated in the
Bustamante Code and updated. They are consistent with those of other Latin American
nations and include the following:
a. The foreign court was competent.
b. The defendants received personal service of process.
c. The judgment did not violate public policy or provisions of public interest.

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d. The judgment was final.
e. The judgment was translated.
f. The documents are authentic
40. The procedure is that of an exequatur in common with other nations. It is essentially an
acknowledgement of the action and does not include any review on the merits.
41. Because of Panama’s uniqueness in that it was created by the United States and long
contained the Panama Canal within its boundaries, a reasonably well developed set of laws
involving commerce and commercial litigation developed. It is to Panama’s benefit that
class actions are recognized and enforced even though it has yet to develop legislation
providing for class actions with opt-out provisions. As in other Latin American nations,
because most class actions involve liability of products and mass torts, the lack of contingent
fees and punitive damages has curtailed such development. But that does not mean that the
recognition and enforcement of class action judgments or settlements with opt-out provisions
will not be allowed.

In the present case, Panama appears to clearly benefit from the

participation by its residents in the action.
42. It is my opinion that foreign money judgments from U.S. courts are enforceable in Panama
without reexamination of the merits. It is also my opinion that Panama will recognize and
enforce a judgment or settlement in the present class action opt-out litigation.
b. Columbia
43. Colombia did not adopt the Bustamante Code, but signed and ratified the Inter-American
Convention. The principles of the Convention are carried over to the provisions applicable to

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non-treaty nations. Article 693 of the Code of Civil Procedure grants to foreign judgments
that are not subject to a treaty the force of a domestic judgment.
44. Requisites for the enforcement are contained in Article 694, including the following:
a. The judgment does not affect rights in real property.
b. It is not opposed to Colombian laws or public order.
c. It was obtained in conformity with the laws of the foreign country and is
authenticated.
d. It was not within the exclusive jurisdiction of Colombia.
e. No conflicting process is pending in Colombia, nor a final judgment granted.
f. The defendant was duly served and given an opportunity to be heard.
45. The procedure for enforcement, outlined in Article 695, is that of an exequatur proceeding
similar to other countries using the same procedure.
46. It is my opinion that foreign money judgments from U.S. courts are enforceable in Colombia
without reexamination of the merits. It is also my opinion that Colombia will recognize and
enforce a judgment or settlement in the present class action case.
c. Brazil
47. Brazil adopted the Bustamante Code and also signed and ratified the Inter-American
Convention. Brazilian legislation provides for the enforcement of judgments by the federal
courts, without making any distinction whether the foreign party is from a nation with which
Brazil has an enforcement treaty or convention. The conditions are similar to those discussed
above, and include non-contravention of Brazilian public order. The Brazilian Supreme
Court has established that rules of public order include: (1) proper service by a rogatory

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letter, (2) the foreign judgment must be well-founded, (3) interest may not be more than
twelve per cent annually, and (4) enforcement may not aid the evasion of foreign exchange
provisions. The Supreme Court denied recognition in 19863 to a New York Supreme Court
judgment because of a lack of evidence of service of process to the defendant and a lack of
specific description of the grounds on which the judgment was based. This case is important
because it shows both concerns for assuring that the parties to the suit were provided
reasonable notice and, thus, given an opportunity to make a choice. In the class action, that
choice is to participate or opt-out. I have no reason to doubt that Brazil, one of the two or
three most important commercial nations in the group of thirteen considered in this
declaration, will recognize and enforce a judgment or settlement in this case. Brazil’s Public
Civil Action Law, consistent with a Portuguese law that allows opt-out class actions, gives
res judicata effect to absent class members in a judgment favorable to the class members.
48. In 1988, under a new constitution, some of the process was shifted from the Brazilian
Supreme Court to lower federal courts, but without a change in the conditions for
enforcement.
49. The procedure in Brazil is that of homologation or exequatur as similarly found in other
Latin American and European civil law tradition nations.
50. Given the pattern of Brazilian jurisprudence recognizing foreign judgments, it seems
doubtful that any Brazilians would choose to opt-out of the litigation if they perceive that
Brazil is likely to recognize and enforce a judgment in this case. That view may apply to
each of the other subject Latin Americans.

3 Supreme Court of Brazil, Foreign Judgment No. 3.262 (Sept. 3, 1986).

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51. It is my opinion that foreign money judgments from U.S. courts are enforceable in Brazil
without reexamination of the merits. It is also my opinion that Brazil will recognize and
enforce a judgment or settlement in the present case.
d. Venezuela
52. Venezuela has ratified the Inter-American Convention. Furthermore, its rules of private
international law involving the recognition and enforcement of foreign judgments are
influenced by and consistent with the Convention’s principles. The laws applicable to a nontreaty party are contained in the Venezuelan Code of Civil Procedure and the Bill of Rules of
Private International Law.
53. Venezuela also participates in the Acuerdo Boliviano, which is an Agreement on the
Execution of Foreign Judgments. Under that Agreement, the issuing court must have been
competent, the judgment must be final, there must have been lawful service and the judgment
must not contravene Venezuelan public order.
54. Where no treaty is present, the Bill of Rights of Private International Law provides the
conditions for enforcement. They include:
a.

The foreign judgment must concern only matters of private law.

b. It must be res judicata under the foreign laws.
c. It may not relate to real property in Venezuela or a matter that is within the
exclusive jurisdiction of Venezuela.
d. It must have been rendered by a court of competent jurisdiction.
e. Proper service must have been made giving sufficient time for the defendants to
defend the case.

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f. It may not be contrary to Venezuelan public order or a final decision of a
Venezuelan court.
g. It may not conflict with a matter involving the same parties currently before
Venezuelan courts.
55. There is little jurisprudence on the meaning of public order, but it is generally agreed that a
judgment does not violate public order if the main claim could not have been brought in
Venezuela.4 That appears to mean the substantive nature of the claim, not the form of action
such as a class action.
56. The Supreme Court of Venezuela in 1997 granted exequatur to a Florida Circuit Court
judgment.5 There were four co-defendants. The judgment was rendered against only one,
but all four asked for enforcement. The Venezuelan court enforced only that rendered
against the one defendant. The court held that even though there had been a choice of law
designating Venezuelan courts in the original agreement, the judgment did not violate the
public order of Venezuela.
57. The process used in the above case was that of exequatur, the rules of which were in the
Venezuelan Bill of Rules of Private International Law and the Code of Civil Procedure.
58. It is my opinion that foreign money judgments from U.S. courts are enforceable in Venezuela
without reexamination of the merits. It is also my opinion that Venezuela will recognize and
enforce a judgment or settlement in the present case.
e. Uruguay

4 Joaquin Sanchez Covisa, Orden Publico Internacional y Divorcio Vincular, in Obra Juridica de Joaquin Sanchez
Covisa, p. 487-494, and the Supreme Court opinions cited therein.
5 FCIA v. Inversiones Fielsa, C.A., (DCA 1993).

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59. Uruguay has ratified the Inter-American Convention.

Furthermore, its general rules of

private international law involving the recognition and enforcement of foreign judgments are
consistent with the Convention’s principles.
60. The enforcement of judgments involving non-treaty nations is governed by the Uruguay
General Procedure Code. The conditions are as follows:
a. The foreign judgment must not be contrary to Uruguay’s public order.
b. The judgment debtor must have been informed of the claim and have had a
reasonable period of time to present his arguments.
c. The foreign court must have had subject matter jurisdiction.
d. The judgment must have been final.
e. The party requesting enforcement must produce (1) a complete copy of the
judgment, (2) evidence of service, (3) an authentication of the judgment, and (4)
authenticated copies of the regulation upon which such order is based.
Uruguay will also require assurance that Uruguayan judgments are enforced in the foreign
nation.
61. The procedure for enforcement is that of exequatur to the Supreme Court, followed by
execution before the proper court of first instance.
62. It is my opinion that foreign money judgments from U.S. courts are enforceable in Uruguay
without reexamination of the merits. It is also my opinion that Uruguay will recognize and
enforce a judgment or settlement in the present class action litigation.
f. Chile

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63. Chile has signed, but not ratified, the Inter-American Convention, but its rules of private
international law involving the recognition and enforcement of foreign judgments are
consistent with the Convention’s principles. Chile used the principles of the Bustamante
Code to form the basis of its recognition and enforcement laws.
64. The conditions for recognition and enforcement are included in the Code of Civil Procedure
and include the following:
a.

The foreign nation must recognize and enforce Chilean judgments.

b. The foreign judgment may not be contrary to the laws of Chile, including Chilean
public order.
c. The judgment may not be contrary to Chilean jurisdiction.
d. There must have been valid notice.
e. The judgment must be final.
The Chilean requirement of reciprocity seems stronger than other nations and usually must
be met before the other conditions are considered.
65. The procedure for enforcement is that of exequatur to the Supreme Court. In the last few
years, Chile has retreated from a very strict practice of denying judgments in the exequatur
process for public policy reasons.
66. It is my opinion that foreign money judgments from U.S. courts are enforceable in Chile
without reexamination of the merits. It is also my opinion that Chile will recognize and
enforce a judgment or settlement in the present class action litigation.
g. Mexico

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67. Mexico has ratified the Inter-American Convention.

Furthermore, its rules of private

international law involving the recognition and enforcement of foreign judgments are
influenced by and consistent with the Convention’s principles.
68. Mexico‘s Federal Code of Civil Procedure includes provisions for the enforcement of foreign
judgments. Article 569 states:
Article 569. Judgments and private arbitral awards of a non-commercial nature
and other foreign judicial resolutions shall be enforceable and be recognized in
the Republic in everything that is not contrary to the domestic public order
pursuant to the terms of this Code and other applicable laws, for what is
prescribed by the treaties and conventions to which Mexico is a party.
Regarding judgments, awards and judicial resolutions that are only going to be
used as evidence in Mexican courts, it shall suffice if said documents comply with
the necessary requirements to be considered as authentic.
The effects that foreign judgments, private arbitral awards of a non-commercial
nature, and judicial resolutions produce in the national territory shall be governed
by what is provided in the Civil Code, by this Code [of Civil Procedure] and other
applicable laws.
This is the basic provision by which a judgment or settlement in the present case would be
enforced in Mexico.
69. The procedure for such enforcement is stated in Article 570.
Article 570. Foreign judgments, private arbitral awards of a non-commercial
nature, and judicial resolutions shall be enforced in a coactive manner in the
Republic through homologacion pursuant to the terms of this Code and other
applicable laws, save for what is prescribed by the treaties and conventions to
which Mexico is a party.
Homologacion is a specific process similar to exequatur in France and other civil law
nations, and may be compared to a mini-trial where a judge, usually on the Supreme Court,
decides to grant or deny the foreign request.

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70. As noted in the general discussion above, two provisions of the Mexican law that would be
addressed are whether the parties had reasonable notice and whether enforcement would
violate the public order in Mexico. It is my opinion that a Mexican judge would find the
decision favorable to the Mexican parties and not in violation of the Mexican public order.
71. The above provisions of the Mexican Code of Civil Procedure are consistent with Mexico’s
obligations under the Inter-American Convention.

The Convention’s provisions do not

directly affect the relationships between Mexico and the United States because the United
States is not a party to the Convention, but the Mexican procedural code is consistent with
the Convention.
72. It is my opinion that foreign money judgments from U.S. courts are enforceable in Mexico
without reexamination of the merits. It is also my opinion that Mexico will recognize and
enforce a judgment or settlement in the present class action litigation.
h. Ecuador
73. Ecuador has ratified the Inter-American Convention. Ecuador had previously adopted the
Bustamante Code, the rules of which are generally consistent with the Inter-American
Convention. Article 423 of the Ecuadorian Code of Civil Procedure provides the conditions
for enforcement as noted in the above discussion of the Bustamante Code.
74. Article 424 of the Ecuadorian Code of Civil Procedure adopted the private international law
of the Bustamante Code that allows the recognition and enforcement of foreign judgments.
Article 424 states:
Article 424. The execution of the judgment should be requested from a
competent judge or tribunal in order to carry it into effect, after complying with
the formalities required by the internal legislation.

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This provision is taken directly from Article 424 of the Bustamante Code.
75. The procedure for enforcement differs depending on whether five years have elapsed since
the obligation became due. Within the first five years, the process is by executive action.
After that it is done by judicial process.
76. The Ecuadorian procedure is essentially that of an exequator whereby the judgment is taken
before an Ecuadorian court to assure it complies with principles of Ecuadorian enforcement.
77. Ecuador is one of the least experienced of the nations discussed in enforcing foreign
judgments, lacking judicial experience in such matters. But it is my opinion that Ecuador’s
participation in the Inter-American Treaty, and its earlier adoption of the Bustamante Code,
provide a basis whereby Ecuador is prepared to recognize and enforce foreign judgments or
settlements such as one in this case. It is my opinion that foreign money judgments from
U.S. courts are enforceable in Ecuador without reexamination of the merits. It is also my
opinion that Ecuador will recognize and enforce a judgment or settlement in the present class
action litigation.

i. Peru
78. Peru has ratified the Inter-American Convention. Furthermore, its general rules of private
international law involving the recognition and enforcement of foreign judgments are
consistent with the Convention’s principles.

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79. Peru includes enforcement of foreign judgment provisions applicable to all foreign
judgments, treaty or non-treaty nations, in both the Peruvian Code of Civil Procedure and the
Civil Code. The Civil Code contains the requirement of reciprocity – that the foreign court
enforce Peruvian judgments.

There is a statutory assumption of reciprocity unless the

absence of reciprocity is proven. The Civil Code contains the conditions for enforcement,
including:
a.

The judgment may not deal with matters that are the exclusive jurisdiction of
Peru.

b. The foreign court must have had subject matter jurisdiction.
c. Proper notice must have been given.
d. The matter must be final.
e. The matter must not be pending before a Peruvian court.
f. It may not be incompatible with a Peruvian judgment.
g. It may not contravene moral rules or public order.
80. The procedure is in the Code of Civil Procedure and is a typical exequatur proceeding.
81. It is my opinion that foreign money judgments from U.S. courts are enforceable in Peru
without reexamination of the merits. It is also my opinion that Peru will recognize and
enforce a judgment or settlement in the present case.
j. El Salvador
82. El Salvador adopted the Bustamante Code and has signed, but not ratified, the InterAmerican Convention. Its rules of private international law involving the recognition and

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enforcement of foreign judgments for non-treaty nations are influenced by and consistent
with the Convention’s principles.
83. The Code of Civil Procedure for El Salvador, consistent with the Bustamante Code, governs
the enforcement of foreign judgments. Article 451 provides that foreign judgments “will
have in El Salvador the force that the respective treaties establish.” Article 452 governs
enforcement in non-treaty states and states:
Article 452. If there should be no special treaties with the nation in which [the
judgment] was pronounced, it will have force in El Salvador if it meets the
following circumstances:
1. That the order shall have been issued as a result of a personal action;
2. That it shall not have been issued in default;
3. That the obligation with which the action sought compliance is lawful in El Salvador;
4. That the order meets the requirements necessary to be considered authentic in the
nation in which it was pronounced, and those that Salvador’s laws require for it to be
given credence in El Salvador.
84. Provision 452(3) above includes the matter of public order within the concept that the foreign
judgment must be one that would be lawful in El Salvador. That does not mean El Salvador
must have the same form of action.
85. The procedure for enforcement is contained in Article 453. It draws upon Spanish law. One
characteristic of El Salvador is the inclusion of a pareatis procedure to what is largely the
familiar exequatur. Pareatis allows a petition to the Supreme Court invariably presented by
the winning party. Notice is given to the other party to contest the request for enforcement.
It is somewhat like the exequatur process from the Bustamante Code.
86. It is my opinion that foreign money judgments from U.S. courts are enforceable in El
Salvador without reexamination of the merits. It is also my opinion that El Salvador will
recognize and enforce a judgment or settlement in the present case.

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k. Bolivia
87. Bolivia signed the Bustamante Code and signed and ratified the Inter-American Convention.
The Bolivian Code of Civil procedure governs judgment enforcement for treaty and nontreaty nations.
88. A judgment may be refused recognition in Bolivia on reciprocity. Additional conditions
include the following:
a. The judgment may not be in violation of public order.
b. It may not impose any obligations not permitted under Bolivian law.
c. Service of process must be made properly.
d. It must not conflict with a prior or simultaneous ruling in Bolivia.
e. The judgment must be res judicata in the foreign nation.
89. The judgment must be processed in Bolivia in a proceeding that is similar to an exequatur,
but Bolivia may be inclined to re-examine the foreign judgment based on an evaluation by
the Bolivian Attorney General.
90. I believe that foreign money judgments from U.S. courts are enforceable in Bolivia without
full reexamination of the merits, including a judgment or settlement in a class action such as
the present case.

l. Dominican Republic

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91. The Dominican Republic has signed, but not ratified, the Inter-American Convention. Its
rules of private international law involving the recognition and enforcement of foreign
judgments involving non-treaty countries are consistent with the Convention’s principles.
92. Because the Dominican Republic was more strongly under French influence during part of
the 19th century, its laws are more directly related to French law and the Napoleonic Code
than other Latin American nations. The Code of Civil procedure governs the enforcement of
foreign judgments and has changed little since its adoption. Without access to the specific
laws, however, I can only assume that the country will recognize and enforce foreign money
judgments from U.S. courts without reexamination of the merits using a form of exequator.
It is also my opinion that the Dominican Republic will recognize and enforce a judgment or
settlement in the present case.
m. Argentina
93. Argentina has signed the Inter-American Convention. Its rules of private international law
involving the recognition and enforcement of foreign judgments for non-treaty nations such
as the United States are consistent with the Convention’s principles.
94. The conditions that must be fulfilled are as follows:
a.

The decision is res judicata in the foreign nation.

b. The court rendering the decision was competent.
c. The judgment was the result of a personal action.
d. Notice was personally served.
e. The decision was authentic.
f. The judgment does not violate Argentine public policy.

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g. The judgment is not incompatible with any Argentine judgment.
95. Argentina has enforced two foreign judgments from courts in New York.6 They were
rendered against two Argentine parties.
96. The enforcement process is a typical exequatur procedure as it exists in other civil law
nations.
97. It is my opinion that foreign money judgments from U.S. courts are enforceable in Argentina
without reexamination of the merits. It is also my opinion that Argentina will recognize and
enforce a judgment or settlement in the present case.
G. Conclusions
98. The above references to the specific nations evidence a consistent set of principles for
enforcing foreign judgments, regardless of whether the nation has adopted the Bustamante
Code and/or the Inter-American Convention. Brazilian law specifically addresses the class
action, and it is reasonable to assume that acceptance of the class action will develop in
jurisprudence in other nations because there is nothing in the rules expressed above that
precludes recognition or enforcement of foreign class actions. It is thus reasonable to believe
that the laws of these nations provide a very appropriate framework to recognize and enforce
class actions.
99. The issue of reciprocity, recognition in the foreign nation only if recognized in the United
States, should not adversely affect the recognition and enforcement of any judgment or
settlement in this case. Judgment is a matter of state law in the United States and New York

6 Textile Banking Company v. Manulana S.A., et al, National Commercial Court of Appeals, Chamber A,
November 30, 1996, Revista Juridica “Le Ley,” Vol. 26 at 108.

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adopted the Uniform Foreign-Money Judgments Recognition Act,7 which is generally
considered sufficient to establish in any of the subject Latin Americans that the State of New
York would recognize a judgment from the Latin American nation. Furthermore, the
participants in both the Fairfield Sigma Fund and the Fairfield Sentry Fund agreed in the
subscription agreement in paragraphs 22 and 19, respectively, that New York courts were the
proper courts and agreed to the jurisdiction thereof, consenting to service by certified or
registered mail.
100.

It is my opinion that none of the thirteen Latin American nations discussed in this

declaration has a legal system that will reject the recognition and enforcement based on their
current legislation or precedent, notwithstanding the fact that none have specifically adopted
class actions with opt-out provisions as a means of settling large class disputes. Each
nation’s nationals and residents would be benefitted by recognition and enforcement of any
judgment or settlement that provided a means by which they could participate in a class
action in the United States where the defendants are principally located and receive the
benefits of both the class action form and the presence of contingent fees. This case is
distinguishable from cases involving these countries where one or more of their residents or
companies are sued in the United States, often based on tag jurisdiction, and judgments are
taken to their countries for enforcement. These cases are rarely enforced because of the
rejection of tag jurisdiction and for reasons of public order.
101.

It is also my opinion that recognition and enforcement of a U.S. judgment or settlement

is compatible with the many instances in these nations where individuals, such as union
members and shareholders, are bound by judgments notwithstanding that they individually
7 National Conference of Commissioners on Uniform State Laws.

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did not participate in the case and in many cases did not receive direct notice. Persons often
are bound by notice unless they opt-out, such as where banks change credit card rules that are
made a part of the agreement unless the card holder formally rejects. Silence after reasonable
notice is not interpreted as opting-out.
102.

Many refusals to recognize and enforce foreign judgments are based on unexplained

notions of public policy or public order. I do not believe that any of the subject Latin
American nations would find the opt-out class action to either violate the nation’s specific
public order or violate any principles of universal justice. The fact that opt-out class actions
have not been universally adopted does not mean they have been universally rejected.
103.

I have read the declaration of Alexis Mourre and his opinion that class actions are not

inconsistent with the French legal tradition. I believe that the same may be said of the Latin
American nations involved in this case – that the class action is not incompatible with the
legal systems within Latin America. Latin American legal systems are part of the civil law
tradition and pay great respect to French law, as shown by the close relation between the civil
law of Latin American legal systems and the French civil law as first expressed in the 1804
Napoleonic Code.
104.

The U.S. court before which this case is being litigated is uniquely qualified to hear this

matter. None of the Latin Americans nations would have exclusive jurisdiction over this
matter.
105.

The issue of notice of the action will not be contested by those named plaintiffs and

defendants, nor by parties who have specifically opted-out. A court asked to recognize and
enforce a judgment or settlement will give serious consideration to how parties who claim

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never to have learned of the action are to be treated. Personal service in the form of handing
actual notice of the suit to a person is not universally mandated. Civil law tradition nations,
including Latin American nations, have procedures where notice is considered adequate if it
is posted conspicuously in some location, such as at the courthouse. I am of the opinion that
fair notice procedures as developed in class action litigation will insulate this case from
rejection by the subject Latin American nations of any request for recognition or
enforcement.
106.

I have prepared this affidavit freely and without influence, upon request of Boies,

Schiller & Flexner.
107.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on March 1, 2011

_____________________________
Michael Wallace Gordon

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