SOUTH CAROLINA NAT. BANK v. Westpac Banking Corp., Civ. A. No. 3:86-1688-16.

• Decision Date: 12 November 1987
• Docket Number: Civ. A. No. 3:86-1688-16.
• Citation: 678 F. Supp. 596
• Parties: SOUTH CAROLINA NATIONAL BANK, Plaintiff, v. WESTPAC BANKING CORPORATION, Defendant.
• Court: U.S. District Court — District of South Carolina

678 F. Supp. 596

SOUTH CAROLINA NATIONAL BANK, Plaintiff, v. WESTPAC BANKING CORPORATION, Defendant.

Civ. A. No. 3:86-1688-16.

United States District Court, D. South Carolina, Columbia Division.

November 12, 1987.

Manton M. Grier, Belton T. Zeigler, Boyd Knowlton Tate & Finlay, P.A., Columbia, S.C., for plaintiff.

David W. Robinson, II, Columbia, S.C., for defendant.

ORDER

HENDERSON, District Judge.

This matter comes before the Court on cross motions for summary judgment. For the reasons stated below, the Court grants the defendant's motion and denies the plaintiff's motion. Accordingly, final judgment is entered in favor of the defendant.

The material facts giving rise to this action are not in dispute. On November 21, 1979, South Carolina National Bank ("SCN") issued an irrevocable letter of credit in favor of National Railroad Utilization Corp. ("NURC") for $429,000.00. The letter of credit was issued to pay Commonwealth Steel Company ("Commonwealth"), an Australian corporation, for products Commonwealth was to ship to NURC. By its terms, the letter of credit was subject to the Uniform Customs and Practices for Documentary Credit ("UCP"). To receive payment under the letter of credit, the holder was required to present to SCN a full set of clean "on board" ocean bills of lading before January 31, 1980.

Commonwealth negotiated the letter of credit, along with bills of lading, to defendant Westpac Banking Corp. ("Westpac") (formerly "Bank of New South Wales") and Westpac presented the documents to SCN on January 30, 1980. On the same day, SCN sent Westpac a telex rejecting the demand for payment because the bills of lading allegedly failed to satisfy the UCP requirements for "on board" bills of lading.¹

Westpac then instituted an action against Commonwealth in the Supreme Court of New South Wales, Australia, to recover its advances. SCN was subsequently joined as a defendant to that action and appeared specially to contest the Australian court's jurisdiction. When the Court ruled jurisdiction was proper, SCN, without appealing that ruling, participated in a trial on the merits. At the conclusion of the trial, the judge held the bills of lading conformed to the requirements in the letter of credit and awarded Westpac $665,226.12.

SCN appealed the judgment to the Court of Appeals of New South Wales, contesting the trial court's decision on the merits but not on the jurisdictional issue. The Court of Appeals found the bill of lading "internally inconsistent" and reversed the trial court. Westpac then appealed to the Judicial Committee of the Privy Council in London, which reversed the decision of the Australian appellate court and reinstated the trial court's judgment.

On June 26, 1986, SCN commenced the present action seeking a declaratory judgment that the Australian judgment is unenforceable in South Carolina. Westpac responded by counterclaiming for enforcement of the Australian judgment or, in the alternative, for a new judgment on the merits. This Court concludes the Australian judgment is enforceable in South Carolina and, therefore, grants summary judgment in the defendant's favor. Because the Court finds the judgment is enforceable, it need not consider the parties' arguments on the merits.

The enforceability of judgments rendered by the courts of foreign nations is to be determined under the law of the state in which enforcement is sought. Sangiovanni Hernandez v. Dominicana de Aviacion, C. Por. A., 556 F.2d 611, 614 (1st Cir.1977); Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 440 (3rd Cir.1971), cert. denied, 405 U.S. 1017, 92 S.Ct. 1294, 31 L.Ed.2d 479 (1972). The courts of South Carolina have apparently not considered the enforceability of foreign judgments,² but the Court assumes South Carolina would adopt the principles of comity generally applied by courts in this country to determine the effect of foreign judgments. In Hilton v. Guyot, 159 U.S. 113, 202-03, 16 S.Ct. 139, 158-59, 40 L.Ed. 95 (1895), the United States Supreme Court formulated the following test for recognition and enforcement of foreign judgments:

Where there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries, and there is nothing to show either prejudice in the court or in the system of laws under which it was sitting, or fraud in procuring the judgment, or any other special reason why the comity of this nation should not allow it full effect, the merits of the case should not, in an action brought in this country upon the judgment, be tried afresh, as on a new trial or an appeal, upon the mere assertion of the party that the judgment was erroneous in law or in fact.

The test enunciated in Hilton remains the standard applied by most American courts to determine the enforceability of foreign judgments. Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 440-41 (3rd Cir.1971), cert. denied, 405 U.S. 1017, 92 S.Ct. 1294, 31 L.Ed.2d 479 (1972); Hunt v. BP Exploration Co., 492 F.Supp. 885, 892-95 (N.D.Tex.1980); Toronto-Dominion Bank v. Hall, 367 F.Supp. 1009, 1012-13 (E.D.Ark.1973); Bishop, United States Practice Concerning the Recognition of Foreign Judgments, 16 Int'l Law. 425, 429-33 (1982); von Mehren, Enforcement of Foreign Awards in the United States, 17 Va.J.Int'l L. 401, 402-03 (1977). Following these principles, courts will generally recognize and enforce the judgments of foreign courts if (1) the foreign court had personal and subject matter jurisdiction; (2) the defendant in the foreign action had adequate notice and opportunity to be heard; (3) the judgment was not obtained by fraud; and (4) enforcement will not contravene important public policy. Id. at 403. Both parties to the present action agree these principles should govern this Court's determination. They disagree, however, on the result the Court should reach after applying those principles.

The plaintiff asserts the Court should find the Australian judgment unenforceable because (1) the Australian courts lacked in personam jurisdiction and (2) enforcement of the judgment would violate the public policy of South Carolina.

I.

First, the plaintiff contends the Australian courts lacked personal jurisdiction because SCN did not have sufficient contacts with Australia, under American due process standards, to warrant exercise of jurisdiction by the Australian courts. Defendant Westpac concedes the Australian courts' jurisdiction failed to satisfy the requirements of due process, but argues the existence of minimum contacts is irrelevant because SCN voluntarily submitted to the Australian courts' jurisdiction and thereby waived its right to personal jurisdiction.

It is well established that a party can waive its right to personal jurisdiction:

The requirement of personal jurisdiction may be intentionally waived, or for various reasons a defendant may be estopped from raising the issue. These characteristics portray it for what it is — a legal right protecting the individual. The plaintiff's demonstration of certain historical facts may make clear to the court that it has personal jurisdiction over the defendant as a matter of law — i.e., certain factual showings will have legal consequences — but this is not the only way in which the personal jurisdiction of the court may arise. The actions of the defendant may amount to a legal submission to the jurisdiction of the court, whether voluntary or not.

Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 704-05, 102 S.Ct. 2099, 2105, 72 L.Ed.2d 492 (1982). This Court concludes that under South Carolina law, SCN has waived its right to challenge the jurisdiction of the Australian courts.

Waiver is the intentional relinquishment of a known right and may be implied from circumstances indicating an intent to waive. Bonnette v. State, 277 S.C. 17, 18, 282 S.E.2d 597, 598 (1981). Acts inconsistent with the continued assertion of a right, such as the failure to insist upon the right, may constitute waiver. Id., 282 S.E.2d at 598. Thus, a party who objects to a court's jurisdiction, but takes action inconsistent with that objection, waives the objection and becomes subject to the court's jurisdiction. See Security Management, Inc. v. Schoolfield Furniture Indus., Inc., 275 S.C. 466, 272 S.E.2d 638 (1980); Nocher v. Nocher, 268 S.C. 503, 234 S.E.2d 884 (1977); Southeastern Equipment Co. v. One 1954 Autocar Diesel Tractor, 234 S.C. 213, 107 S.E.2d 340 (1959); H.S. Chisholm, Inc. v. Klinger, 229 S.C. 8, 91 S.E.2d 538 (1956); South Carolina State Highway Dept. v. Isthmian S.S. Co., 210 S.C. 408, 43 S.E.2d 132 (1947). In the present action, SCN's conduct as a matter of law implied a waiver of its prior objection to the Australian courts' jurisdiction.

Initially, SCN clearly asserted its jurisdictional right by contesting the trial court's jurisdiction. When that jurisdictional challenge was rejected, however, SCN took no further actions to assert its right, but, to all appearances, acquiesced in the court's decision. SCN's subsequent conduct was inconsistent with the continued assertion of its right to personal jurisdiction. SCN participated fully in the trial on the merits. It made no effort to pursue an interlocutory appeal, although it does not dispute that it could have sought leave to appeal the jurisdictional ruling.³ Nor did SCN reassert its jurisdictional objection at any time during the trial on the merits or during the two subsequent appeals.⁴ Instead SCN appeared to voluntarily submit to the Australian courts' jurisdiction throughout the litigation process.⁵ It was not until the last appeal terminated in Westpac's favor that SCN...