Hon. Mark C. Dillon is a Justice of the Appellate Division, Second Department, an Adjunct Professor of New York Practice at Fordham Law School, and a contributing author of CPLR Practice Commentaries in McKinney’s.

Judiciary Law Section 27(b) provides in its first sentence that “[i]n any case in which the cause of action is based upon an obligation denominated in a currency other than currency of the United States, a court shall render or enter a judgment or decree in the foreign currency of the underlying obligation.” That seems straightforward enough, that disputes denominated in a foreign currency result in a money judgment in that same currency. A yen for a yen, a euro for a euro.

Yet, a competing subdivision of the same statute, Judiciary Law Section 27(a), says that in state actions, the judgment must be recorded in U.S. dollars as well as in the foreign currency. In other words, having established that the foreign currency amount is what ultimately controls the judgment, state law requires that the equivalent dollar amount also be stated anyway.

A complicating factor for the bench and bar in drawing judgments in both foreign currency (when applicable) and U.S. dollars involves the issue of what date should be used for calculating the currency conversion. In contract actions, should the conversion be calculated based on the relative value of the U.S. dollar against the foreign currency as of the date of the breach? Or, should it be calculated as of the date of the judgment for which a New York conversion is sought? Or should it be the date of the actual conversion in New York? The answer matters.

Currency values fluctuate against each other from day to day. The value of the U.S. dollar relative to other currencies constantly adjusts up and down, and differently from currency to currency. Over time, currency fluctuations may be meaningful and may reflect longer-term trends. For high-value judgments, even a minor fluctuation in the relative currency values may translate into a significant sum of money. For this reason, use of either the “daybreach rule” or the “judgment-day rule” matters to the parties, whether one party wishes to maximize the dollar value of its recovery or another party wishes to minimize the dollar value of its upcoming payment.

This is where the statute kicks in again. Judiciary Law Sections 27(a) and (b), when read together, require that the dollar amount of a judgment be based on the prevailing exchange rate in effect as of the date of the New York judgment. More specifically, the operative conversion date is the date the New York judgment is executed by the court, and not the later date that the judgment may be entered with the clerk. This is particularly true where the action is based on an obligation denominated in a currency other than the U.S. dollar (Petersen Energia Inversora, S.A.U. v. Argentine Republic, 2023 WL 2746022 (S.D.N.Y. Mar. 31, 2023] [Preska, J.]). The reference to the “judgment” in Judiciary Law Section 27(b) has not been interpreted by the New York Court of Appeals and is the subject of some ambiguity, as the Second Circuit interprets it as referring to the interlocutory or final determination of the rights of a party, such as the date a WESTCHESTER LAWYER | JULY 2025 | 7 party is awarded summary judgment on its claim (Rienzi & Sons, Inc. v. Puglisi, 638 Fed.Appx. 87 [2d Cir. 2016] [applying the language of Section 5011 of the New York Civil Practice Lase and Rules (“CPLR”)]).

In any event, the conversion itself is a simple mathematical computation, taking the foreign currency amount that is determined first, and applying the exchange rate to determine its equivalent value in U.S. dollars as of the operative date. The price of bitcoin, gold, silver, or oil per barrel is not relevant. The applicable exchange rate is easily obtained from reliable public sources that are published on a daily basis. Those exchange rates are subject, in effect, to judicial notice by the court (Nature’s Plus Nordic A/S v. Natural Organics, Inc., 78 F.Supp.3d 556 [E.D.N.Y. 2015] [applying New York law]; CPLR 4511[b]).

New York State’s judgment-day rule is different from the day-breach rule used in some, but not all, of the cases seen in the federal courts. In federal courts, use of the day-breach rule or the judgmentday rule is affected by whether an action is or is not based upon the diversity of the parties’ citizenship. The Second Circuit has explained that where there is diversity of citizenship, the federal courts must apply the rule of the state in which the federal court sits (Vishipco Line v. Chase Manhattan Bank, N.A., 660 F.2d 854 [2d Cir. 1981]), which in New York is the judgment-day rule of Judiciary Law Section 27. But in non-diversity actions, such as those involving federal securities laws or treaties, or where pendant jurisdiction is asserted, federal law takes control of the issue (Id.).

The federal approach is the breach-day rule for foreign currencydenominated claims which arise within the United States, but the judgment-day rule for foreign currency-denominated claims that arise within the foreign country (Shaw, Savill, Albion, & Co., Ltd. v. The Fredericksburg, 189 F.2d 952 [2d Cir. 1951]; Mitsui & Co., Ltd. v Oceantrawl Corp., 906 F.Supp. 202 [S.D.N.Y. 1995]). Yes, the federal court approach is multi-layered and complicated. In instances in which the breach-day rule is applied, and where the breach might have occurred many years earlier, the difference in currency values from a present-day conversion might be palpable, whether in favor of the plaintiff or the defendant. Chips fall where they may.

On this issue, the value of the Benjamins matters.