Part III Jurisdiction, Foreign Judgments and Awards, 16 Recognition and Enforcement of Foreign Judgments—The Traditional Rules
Uglješa Grušić, Christian Heinze, Louise Merrett, Alex Mills, Carmen Otero García-Castrillón, Zheng Sophia Tang, Katarina Trimmings, Lara WalkerEdited By: Paul Torremans, James J. Fawcett
- Jurisdiction under the Brussels-Lugano Regime — Common law recognition — Recognition and enforcement of foreign judgments – traditional rules
(a) The theory underlying recognition and enforcement at common law1
The attitude adopted by English law from the earliest days has been to permit the successful litigant to rely on the foreign judgment in England as res judicata or to bring an action in England on the foreign judgment. But over the years the courts have changed their view as to the ground upon which this privilege is based. The older cases put it solely on the ground of comity.2 It is unnecessary, however, to consider this historical theory further, for it has been supplanted by a far more defensible principle that has been called “the doctrine of obligation”.3 This doctrine, which was laid down in 1842, is that, where a foreign court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, the liability to pay that sum becomes a legal obligation that may be enforced in this country by an action of debt.4 Once the judgment is proved the burden lies on the defendant to show why he should not perform the obligation.
The judgment of a court of competent jurisdiction over the defendant imposes a duty or obligation on the defendant to pay the sum for which judgment is given, which the courts in this country are bound to enforce; and consequently that anything which negatives that duty, or forms a legal excuse for not performing it, is a defence to the action.5
In other words, a new right6 has been vested in the creditor and a new obligation imposed on the debtor at the instance of the foreign court, which right supersedes the underlying cause of action and may be directly enforced in England. Lord Esher once said that “the liability of the defendant arises upon an implied contract to pay the amount of the foreign judgment”.7 This does not mean that the justification for the enforcement of the obligation is an implied contract, but that for procedural purposes the debtor is regarded as having implicitly promised to pay.8
The doctrine of obligation has in turn come in for criticism in that it fails to reveal the policy considerations underlying the rules on recognition and enforcement.9 It is more concerned with explaining in theoretical terms why we recognise and enforce foreign judgments than with explaining in theoretical terms which foreign judgements should be recognised and enforced. The Supreme Court of Canada has considered the latter. It has referred to a modern and more clearly defined concept of comity which is concerned with “justice, necessity and convenience”.10
Comity in the legal sense is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.11
This allows for the adoption of rules in the light of modern conditions. Old common law rules that were based on an outmoded view of the world that emphasised sovereignty and independence often at the cost of fairness have been rejected.12 “Greater comity is required in our modern era when international transactions involve a constant flow of products, wealth and people across the globe.”13 The end result is a new Canadian rule which provides for recognition and enforcement when the judgment granting state has properly or appropriately exercised jurisdiction,14 a test which is near to one of jurisdictional reciprocity.
References(p. 527) (b) Enforcement under statute
The doctrine of obligation provides the theoretical and historical basis for giving effect to foreign judgments at common law. It does not apply to enforcement under statute.15 In the United Kingdom, there are several statutes under which the enforcement of a foreign judgment occurs by way of registration of the judgment. These statutes either implement a recognition and enforcement treaty that the United Kingdom (or the European Union on behalf of its Member States) has entered into with a foreign country or countries or apply where reciprocity has been considered to in fact exist between the United Kingdom and a foreign country in the area of enforcement of judgments. There is also a statute that governs the recognition and enforcement of judgments within the United Kingdom.
One very important recent development is the adoption and entry into force of the Recast of the Brussels I Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The Recast has introduced a system of automatic recognition and enforcement of judgments within the European Union. According to Recital 26 of the Recast, a judgment given by the courts of one Member State is treated as if it had been given in the Member State where the recognition and enforcement of the judgment is sought. As far as the United Kingdom is concerned, this is achieved by eliminating the requirement that a judgment from another European Union Member State can be enforced only after it has been registered for enforcement. If a foreign judgment falls within the scope of the Recast, the judgment creditor can request directly enforcement measures in the Member State addressed. While the place of the Recast within the existing framework of rules on recognition and enforcement of foreign judgments is considered briefly later on in this chapter, the relevant rules of the Recast are considered in detail in the next chapter.
This chapter firstly sets out the common law rules on recognition and enforcement, after which direct enforcement of foreign judgments by statute is examined, as well as the inter-relation of the common law and statutes.16
We must now consider the principles on which the successful litigant may take advantage of a foreign judgment at common law.17 A foreign judgment creditor has an alternative. He may either sue on the obligation created by the judgment, or he may plead the judgment as res judicata in proceedings which involve the same cause of action or raise the same issue. It is important to emphasise that it is never a foreign judgment as such which is enforced in England under the common law rules. What is enforceable is an English judgment given on References(p. 528) an action on the foreign judgment. The expression “enforcement of foreign judgments” is thus somewhat misleading but will nevertheless be adopted for the sake of convenience. We start by setting out the two requirements that every foreign judgment—be it in personam or in rem—has to meet in order to be recognised or enforced in England (jurisdiction of the foreign court; finality and conclusiveness). This is followed by the description of the method of, and requirements for, enforcement of foreign judgments in personam in England and how the common law recognises foreign judgments by regarding them as res judicata. The defences to recognition and enforcement are then set out.
(a) Jurisdiction of the foreign court:18 judgments in personam
A judgment in personam determines the existence of rights against a person.19 The first and overriding essential for the effectiveness of a foreign judgment in personam in England is that the adjudicating court should have had jurisdiction in the international sense over the defendant. A foreign court may give a judgment which, according to the system of law under which it sits, is conclusively binding on the defendant, but unless the circumstances are such as in the eyes of English law to justify the court in having assumed jurisdiction, the judgment does not create a cause of action that is actionable in England.20 In other words, in the view of English law, the foreign court must have been entitled to summon the defendant and subject him to judgment.21
Since a foreign judgment is effective only because it imposes an obligation on the defendant, it follows that any fact which negatives the existence of that obligation is a bar to the recognition and enforcement of the judgment. One of the negative facts must necessarily be that the defendant owes no duty to obey the command of the tribunal which has purported to create the obligation. There must be a correlation between the legal obligation of the defendant and the right of the tribunal to issue its command. The tests that determine whether obedience is due to an English court should, on grounds of reciprocity, also be adopted when the inquiry relates to the competence of a foreign court. Personal jurisdiction in this country under the traditional rules depends on the right of a court to summon the defendant. Apart from special powers conferred by statute,22 it is obvious that, since the right to summon depends on the power to summon, jurisdiction is in general exercisable only against those persons who are present in England.23 If the defendant is absent from a country, then, whether he be a citizen or an alien, he would appear to be immune from the jurisdiction, unless he has voluntarily submitted to the decision of the court.24 The burden of proof is on the person invoking the judgment of a foreign court to establish that the court had jurisdiction in the international sense over the defendant.25
Let us now consider, in more detail, what are the criteria of jurisdiction in the international sense.
References(p. 529) (i) Residence and presence of defendant in the foreign country at the time of the suit
(a) An individual defendant
The residence of the defendant within the foreign country is sufficient for jurisdiction.26 What is more debatable is whether the mere presence of the defendant in the foreign country for a short time will suffice.27 The argument in favour of jurisdiction on such a basis is that persons who happen to be within a territorial dominion owe obedience to its sovereign power—obedience, that is to say, to the jurisdiction of its courts and in certain respects to its laws. “By making himself present he contracts-in to a network of obligations, created by the local law and by the local courts.”28 This duty of obedience results from mere presence in the territory, and therefore the length of time for which the presence continues is immaterial.29 Furthermore, the jurisdiction of the English court may be based on the mere presence of the defendant within the jurisdiction.30
This view is supported by Carrick v Hancock:31
A domiciled Englishman appeared after a writ was served on him in Sweden while he was on a short visit to that country. It was held that despite his fleeting stay in Sweden an action on the judgment lay against him in this country.
It has been endorsed, obiter, by the Court of Appeal in Adams v Cape Industries plc.32 The temporary presence must be voluntary, ie not induced by compulsion, fraud or duress.33 The date of service of process in the foreign country is probably the relevant one for examining whether the defendant is present abroad, rather than the date of issue of proceedings.34 It is not the date of the cause of action arising.35
There is, however, much to be said for the view that casual presence, as distinct from residence, is not a desirable basis of jurisdiction. Where, for instance, both parties are foreigners and the cause of action is based entirely on facts occurring abroad and subject to foreign law, it is strange that the defendant should be bound by the decision of a court in whose jurisdiction he may by chance have been temporarily present. “The court is not a convenient one for either of the parties, nor is it in a favourable position to deal intelligently either with the facts or with the law.”36 Furthermore, any analogy based on the jurisdiction of the English courts is not particularly convincing, since the rules on jurisdiction are operated in conjunction with References(p. 530) a discretion to stay the proceedings, and the exercise of the discretion is likely to be an issue when jurisdiction is founded on mere presence.
(b) A corporate defendant
A company cannot literally be resident or present in a foreign country. It may, though, carry on business abroad. The circumstances in which this can amount to an artificial residence or presence in a foreign country were set out by the Court of Appeal in Adams v Cape Industries plc.37 It has to be shown that: (i) the corporation has its own fixed place of business (a branch office) there, from which it has carried on its own business for more than a minimal time, or a representative has carried on the corporation’s business for more than a minimal time from a fixed place of business;38 and (ii) the corporation’s business is transacted from that fixed place of business. This second requirement is unlikely to cause any difficulties if a branch office is established.39 However, if business is carried on abroad by a representative the question will arise of whether this person is carrying on the corporation’s business or no more than his own. It will then be necessary to look into the functions which this representative has been performing and his relationship with the overseas corporation. This will involve looking at such things as acquisition of business premises, payment of the representative, reimbursement of expenses, the degree of control by the corporation, and display of the corporation’s name. The representative’s power to bind the corporation contractually is of particular importance. If the representative lacks this power this is a powerful factor counting against the presence or residence of the overseas corporation.
In the Adams case these principles were applied to the situation where the corporation carried on business abroad by means of a subsidiary company.
The defendants, an English company concerned with mining asbestos, and its world-wide marketing subsidiary, another English company, carried on business in the USA through its US marketing subsidiary, NAAC and its successor CPC, companies incorporated in Illinois. Asbestos mined by the defendants was sold for use in an asbestos factory in Texas. The 206 plaintiffs, who were mainly employees injured whilst working at this factory, commenced proceedings for damages in the US Federal District Court at Tyler, Texas. The defendants took no part in these proceedings (the Tyler 2 actions), although they had taken part in earlier asbestos-related proceedings involving different plaintiffs (the Tyler 1 actions),40 and a default judgment was awarded against them by the US court.
Scott J dismissed the action to enforce the default judgment in England, and this was affirmed by the Court of Appeal. It was held that the defendants were not present in Illinois, since NAAC and CPC, the representatives of the defendants, were carrying on exclusively their own business and not that of the defendants.41 Relevant to this was the fact that, inter alia, NAAC leased premises itself, bought and stored asbestos, paid taxes on its profits and had its References(p. 531) own creditors/debtors. The position of CPC was even weaker since it was an independently owned company and not even a subsidiary of either of the defendants. Moreover, whilst NAAC and CPC performed valuable services for the defendants as intermediaries, neither had power to, and never did, bind the defendants contractually.
A subsidiary will normally act just for itself and not for the overseas parent.42 Counsel for the plaintiffs tried to get round this difficulty by arguing that the defendants and NAAC were all part of a single economic unit.43 This radical idea, which is based on the economic reality of the situation and has found favour in the USA,44 was rejected by the Court of Appeal, who emphasised the traditional company law notion that parent and subsidiary are separate legal entities. This means that an English company can set up its business abroad in such a way that it is not present or resident there. Provided that the company does not submit to the jurisdiction of the foreign court and that the subsidiary is not a “mere façade concealing the true facts”,45 judgments against it in that country will not be enforced in England. The principles in the Adams case apply equally to the situation where a defendant company carries on business abroad by means of companies in the same group, which are not subsidiaries, and by means of companies in which it has a shareholding.46 Normally, these associated companies will act for themselves and not for the defendant company.
(c) Residence and presence and non-unitary states
The trial in the Adams case took place in Texas. One of the questions that arose was whether the relevant territorial connection had to exist between the defendant and the state in which the trial took place or whether it would have been enough if the defendant had been present or resident in another US state, eg Illinois? Without expressing a final decision on this issue, there are some surprising suggestions, albeit rather hesitant ones, from the Court of Appeal that the existence of the relevant connection with Illinois would have been sufficient.47 This was on the basis that the trial took place in a federal district court (ie a US court) rather than a state of Texas court. This was despite the fact that a federal court judge sitting in Texas has to apply that state’s rules on both jurisdiction in personam and choice of law, and a federal judgment is itself a foreign judgment when it comes to its enforcement within the USA. This rule applies mutatis mutandis where the jurisdiction of the foreign court is said to derive from a submission of the defendant.
(ii) Submission to the foreign court
(a) Submission by virtue of being the claimant or counterclaimant in the foreign action
It is perfectly clear that, if a person voluntarily and unsuccessfully submits his case as claimant or counterclaimant to the decision of a foreign tribunal, he cannot afterwards, if the judgment is invoked against him in England, aver that he was not subject to the jurisdiction of that tribunal.48
References(p. 532) (b) Agreements to submit
What may be regarded as a particular example of submission arises where the defendant has previously contracted to submit himself to the foreign jurisdiction,49 as, for instance, in Feyerick v Hubbard,50 where a domiciled British subject resident in London agreed to sell his patent rights to a Belgian, the contract of sale containing a provision that all disputes should be submitted to the jurisdiction of the Belgian courts.51 A less explicit agreement was held to be sufficient in Copin v Adamson,52 where it was held that the articles of association of a company, which provided that all disputes that might arise during liquidation should be submitted to the jurisdiction of a French court, constituted a contract on the part of every shareholder that he should be bound by a judgment so obtained. “It appears to me”, said Lord Cairns, “that, to all intents and purposes, it is as if there had been an actual and absolute agreement by the defendant [shareholder].”53 If the agreement was entered into under undue influence it will not constitute submission, but the defendant cannot raise in England the issue of undue influence if this defence was available to him in the foreign proceedings and he failed to raise it there.54
In Copin v Adamson and other cases55 the agreement to accept the foreign jurisdiction was express and the weight of authority was in favour of the view that an agreement to submit cannot be implied.56 Despite this body of opinion, DiplockJ held in Blohn v Desser57 that a partner in an Austrian firm who was resident in England and took no part in the conduct of the business would be held impliedly to have agreed to submit to the jurisdiction of the Austrian courts.58 This conclusion has been strongly criticised, extra-judicially,59 and was rejected by Ashworth J in Vogel v R and A Kohnstamm Ltd,60 who refused to countenance an implied agreement to submit. The Court of Appeal in New Hampshire Insurance Co Ltd v Strabag Bau AG61 expressed a preference for this view rather than that of Diplock J in Blohn v Desser.
In Adams v Cape Industries plc62 it was argued that the defendants, by their conduct in participating in the earlier asbestos-related actions (the Tyler 1 actions) in the same court, had References(p. 533) represented that they would similarly participate in future claims (ie the Tyler 2 actions) brought in that court, and in that sense had impliedly agreed to submit to the jurisdiction. Scott J, speaking obiter, seemed to accept that an implied agreement to submit might suffice. However, a clear indication of consent to the exercise of the foreign court’s jurisdiction was needed. Furthermore, in the case of a representation, as opposed to a contractual agreement, this would have to be acted upon by the claimants in some way. The possibility of implied submission was thus uncertain until the Privy Council cast away any doubts in Vizcaya Partners Ltd v Picard.63 The background to the dispute was the fraudulent Ponzi scheme operated by one Mr Madoff in New York. The trustee in the liquidation of the scheme commenced proceedings in New York under the anti-avoidance provisions of the US Bankruptcy Code against investors who had been repaid before the fraud was discovered. The trustee obtained a default judgment against the absent judgment debtor and sought to enforce the judgment in Gibraltar. The question was whether the judgment debtor impliedly agreed to submit to the jurisdiction of the New York court on the basis that the contract with Mr Madoff’s company contained a New York choice of law clause and some other factors. Lord Collins, who gave the judgment for the Board, stated that the real question is whether the judgment debtor actually contractually agreed or consented in advance to the jurisdiction of the foreign court. Such contractual agreement or consent may be implied or inferred, either as a matter of fact from the circumstances in order to give effect to the intention of the parties or as a matter of law as a necessary incident of the contractual relationship. However, the mere fact of being a shareholder in a foreign company or a member of a foreign partnership,64 or that the contract which was the subject of the foreign proceedings was governed by a foreign law or was made or was to be performed in a foreign country, or that the foreign governing law conferred jurisdiction on the foreign court under its own law, was not sufficient. Whether there is an implied or inferred agreement to submit depends on the governing law, which governs questions of interpretation and construction and supplies the relevant background of implied statutory and other terms. On the facts of Vizcaya Partners Ltd v Picard, no such agreement existed.
(c) Submission by voluntary appearance65
(i) An appearance to fight on the merits
The defendant submits to the jurisdiction of the foreign court by voluntary appearance if he has fought the action on its merits, and so taken his chance of obtaining a judgment in his own favour.66 A person’s submission in respect of a claim against him can also be taken as a submission, first, in respect of claims concerning the same subject matter, and, secondly, in respect of related claims which might properly be brought against him under the foreign court’s rules of procedure, either by the original claimant or by others who were parties to the proceedings (eg co-defendants who subsequently brought a cross-claim) at the time he submitted.67 It is suggested that if the defendant is represented by a lawyer who has no authority References(p. 534) to act for him this should not be regarded as a submission.68 The finding of a foreign court that the defendant had authorised a lawyer to act on his behalf, and had accordingly submitted to the jurisdiction, may create an issue estoppel preventing this issue of authority being relitigated in England.69
(ii) An appearance to protest against jurisdiction
The case that for many years caused difficulty was where a defendant entered an appearance with the sole object of protesting against the jurisdiction of the foreign court.
At common law an illogical distinction was drawn between a protest as to the existence of jurisdiction and as to the exercise of a discretion in relation to jurisdiction. In Henry v Geoprosco International Ltd:70
The defendant, a company registered in Jersey, appeared before a court in Alberta and argued, unsuccessfully, that service out of the jurisdiction should be set aside, on the ground, inter alia, that the court was not the forum conveniens.
When it came to enforcement of the Alberta judgment in England, the Court of Appeal held that an appearance, such as this, to ask the court to use its discretion not to exercise its jurisdiction constituted submission. However, the court left open the question of whether an appearance solely to protest against the existence of the jurisdiction of a foreign court constituted submission. Not only was the above distinction unjustifiable, but also its application led to the absurd result that, in certain circumstances, a defendant who appeared before a foreign court to protest that it had no jurisdiction over him would be deemed to have submitted to that court’s jurisdiction.
The old law has been replaced by section 33 of the Civil Jurisdiction and Judgments Act 1982,71 which is designed to get rid of this absurdity; but, as will be seen, there are still some problems which are caused by the wording of this section.
Section 33(1) provides that:
For the purposes of determining whether a judgment given by a court of an overseas country should be recognised or enforced in England and Wales or Northern Ireland, the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally or otherwise) in the proceedings for all or any one or more of the following purposes, namely:
(a) to contest the jurisdiction of the court;
(b) to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country;
(c) to protect, or obtain the release of, property seized or threatened with seizure in the proceedings.
References(p. 535) Section 33 only applies to a judgment given by a court of an “overseas country”, ie “any country or territory outside the United Kingdom”.72 It does not distinguish between recognition and enforcement at common law and by statute73 and can, therefore, apply to both, except in so far as section 33(2) applies.
Section 33(2)74 provides that:
Nothing in this section shall affect the recognition or enforcement in England and Wales or Northern Ireland of a judgment which is required to be recognised or enforced there under the 1968 Convention or the Lugano Convention or the [Brussels I] Regulation or the Maintenance Regulation or the 2007 Hague Convention or the 2005 Hague Convention.
This means that, although, in principle, section 33 applies to judgments covered by the Brussels/Lugano system and other legal instruments mentioned in section 33(2), it remains subject to this system and these other instruments.75
Section 33(1) is a negative provision; it does not define what amounts to submission to the jurisdiction of a foreign court, but merely states that an appearance for one or more specified purposes does not amount to submission. Henry v Geoprosco76 shows that a defendant may, in fact, put in an appearance to argue:
(1) that the foreign court has no jurisdiction because no basis of jurisdiction is applicable;
(2) that the foreign court should use its discretionary powers to set aside service out of the jurisdiction on the basis that it is not the forum conveniens;
(3) that the foreign court should use its discretionary powers to stay the proceedings on the basis of forum non conveniens;
(6) that the foreign court should dismiss or stay the proceedings because of a Scott v Avery77 arbitration clause, ie one which provides not merely for arbitration but that an action cannot be maintained until the matter in dispute has first been referred to and decided by arbitrators.
If a defendant puts in an appearance for any one of these purposes, how is this treated under section 33? The answer is to be found by looking at the six categories above and considering them in relation to the three sub-sections under section 33(1).
The three purposes of appearance, specified under section 33(1), which do not amount to submission are as follows:
Section 33(1)(a) an appearance “to contest the jurisdiction of the court”
References(p. 536) Section 33(1)(a) is of the same effect as, and virtually identical in wording to, the end part of section 4(2)(a)(i) of the Foreign Judgments (Reciprocal Enforcement) Act 1933, which it replaces.78 It follows that, although section 33(1)(a) will be significant in relation to both recognition and enforcement at common law and under the 1933 Act, it only introduces a major change in the law in respect of common law.
Section 33(1)(a) follows the 1933 Act in not defining what is meant by contesting the jurisdiction. Given the history of this area of law it is to be regretted that this concept was not clearly spelled out in the 1982 Act. Category (1), of the six categories set out above, clearly comes within section 33(1)(a).79 There is more difficulty with category (2). A narrow interpretation of section 33(1)(a) would be that only arguments as to the bases of jurisdiction (category (1)) come within it. The distinction drawn in Henry v Geoprosco between the existence of jurisdiction and the exercise of a discretion, with category (2) coming within the latter, could still be followed under section 33(1)(a), due to the imprecise wording of this provision. However, it would be better to give a wide interpretation to section 33(1)(a) so that it encompasses any argument in relation to jurisdiction, whether as to the existence of jurisdiction or as to the exercise of a discretion. The wording of the provision allows this interpretation. Moreover, the distinction drawn in Henry v Geoprosco was strongly criticised at the time80 and section 33(1) was intended to overrule that decision.81 If this wide interpretation of section 33(1)(a) is accepted, it would also encompass category (3).
Section 33(1)(b) an appearance “to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country”
It was necessary to have a separate provision in section 33(1) to deal with the situation set out in section 33(1)(b) because of a line of reasoning adopted by the Court of Appeal in Henry v Geoprosco.82 There, the defendant appeared and sought a stay of proceedings abroad on the basis, inter alia, that there was a Scott v Avery type of arbitration clause in the contract between the parties. According to the Court of Appeal,83 this defence involved an assertion that the plaintiff had no accrued cause of action, and this meant that the defendants were voluntarily asking the court to adjudicate on the merits of that part of the defence. The defendants had, therefore, submitted to the jurisdiction of the court. Section 33(1)(b) makes it clear that there is no submission in this situation (ie category 6).84
It was not entirely clear whether section 33(1)(b) could also be said to cover category (5).85 In the first reported decision on section 33, Tracomin SA v Sudan Oil Seeds Co Ltd,86 Staughton J held that Sudanese sellers who appeared before the Swiss courts to ask for a stay of proceedings because of an arbitration clause, which provided that disputes should References(p. 537) be submitted to arbitration in London, had not submitted to the jurisdiction of the Swiss courts. The judge did not say whether this situation came within section 33(1)(a) or (1)(b). But in a recent case, in which the defendant in proceedings in Morocco had asked the Moroccan court to dismiss or stay the proceedings in favour of arbitration, the court treated this as falling within section 33(1)(b).87 Section 33(1)(b) does not just deal with agreements on arbitration; it also appears from the context to be designed to deal with agreements on the choice of court (category 4).
Section 33(1)(c) an appearance “to protect, or obtain the release of, property seized or threatened with seizure in the proceedings”
Under the common law rules, a defendant who possessed property abroad was placed in a particularly awkward situation. If he ignored the foreign proceedings, he stood to lose his property in the event of a default judgment being granted. On the other hand, if he put in an appearance in order to safeguard his foreign property he stood to lose not only his foreign property but also his English property as well because his appearance would, in some circumstances, amount to a submission to the foreign court and that court’s judgment would accordingly be enforceable in England. Section 33(1)(c) enables the defendant to appear abroad to safeguard his property without running this risk.
Like section 33(1)(a), this provision is closely modelled on the end part of section 4(2)(a)(i) of the Foreign Judgments (Reciprocal Enforcement) Act 1933 which it replaces.88 Although section 33(1)(c) applies to both recognition and enforcement at common law and under the 1933 Act, it will only effect a major change in the law in respect of common law, and is a development to be welcomed as bringing uniformity to these two different types of recognition and enforcement.
Section 33(1)(c) follows section 4(2)(a)(i) of the 1933 Act in applying regardless of whether the defendant is seeking to protect property that has already been seized in the proceedings, or whether he is acting with foresight to protect property that is merely threatened with seizure.89 It thus gets rid of the distinction under the common law between the situation where property had already been seized (an appearance to protect this property would not amount to submission)90 and where the property was merely threatened with seizure (an appearance to protect this property would amount to submission).91 Now, in neither case is there submission to the foreign court.
(iii) Arguing in the alternative
There is no submission if the defendant merely raises an initial plea on the merits at the same time as his defence that the foreign court lacks jurisdiction, but does not go on actually to fight on the merits.92 A defendant may do this because he is required under some legal References(p. 538) systems to plead a defence on the merits at the outset if he is to raise this defence later on, and he may wish to keep alive this possibility.93 After the defence as to lack of jurisdiction fails, the defendant may then decide to take no further part in the proceedings. The defendant should not be regarded as having submitted in this situation. According to the Court of Appeal in The Atlantic Emperor (No 2),94 section 33 should not be construed too narrowly. Even if the defendant is not required to plead a defence on the merits at the outset, where he does so he will not be regarded as having submitted in the situation where he makes it abundantly clear that his primary purpose is to challenge the foreign court’s jurisdiction and takes no further part in the proceedings after the defence of lack of jurisdiction fails.
Where the defendant’s plea that the foreign court lacked jurisdiction fails and he then goes on to fight the action on its merits, he will have usually submitted to the foreign court’s jurisdiction.95 The courts have, however, recently adopted a more flexible approach to submission and held that the party concerned must not be put in the position of having to choose between losing his right to challenge the jurisdiction of the foreign court and losing the right to defend himself. If he has no option but to participate in the hearing of the substance of the dispute, under protest, and to wait to appeal a decision on jurisdiction only after the decision on the merits has been reached, his appearance at the substantive hearing will not, without more, be characterised as voluntary.96 In AES Ust-Kamenogorsk Hydropower Plant LLP v AES Ust-Kamenogorsk Hydropower Plant JSC,97 a case concerning a challenge to the jurisdiction of the foreign court on the basis of an arbitration agreement, the Court of Appeal held that the defendant in the original proceedings, otherwise within the jurisdiction of the foreign court, had no other choice than to defend the merits of the case. This was because, unless it had done so, the defendant would have been precluded, under the law of the foreign court, from appealing against the court’s decision on jurisdiction. But a foreign judgment will be recognised and enforced where a party who unsuccessfully defended the merits in the hope of getting a judgment in his favour then challenges the validity of the judgment on the basis that the foreign court was not one of competent jurisdiction.98
(iv) Appeals against judgments in default
A foreign judgment that is given against an absent defendant in default of his appearance is clearly not effective in England, but is this so if he later moves to have the default judgment set aside and is unsuccessful? The answer would seem to depend on the grounds for the appeal. If the appeal is as to the merits of the claim, then this will constitute References(p. 539) submission,99 and will normally amount to submission to the judgment of the court of first instance.100 However, an appeal, or application for leave to appeal, merely as to a jurisdictional issue would not constitute submission.101
(v) Taking procedural steps in the foreign country102
In Adams v Cape Industries plc103 Scott J held that the defendants’ participation in a consent order given by the Federal District judge extinguishing the cause of action against them as part of a settlement of the litigation in the Tyler 1 actions amounted to submission to the jurisdiction of the Federal District Court in Texas, in relation to those proceedings. In the opinion of Scott J, the defendants had thereby waived the jurisdictional objections that they had raised earlier. However, for such a waiver the defendants must have “taken some step which is only necessary or only useful if the objection has been actually waived, or if the objection has never been entertained at all”.104 There was no such step where a defendant entered a conditional appearance and sought to set aside leave to serve out of the jurisdiction.105 In the Adams case, the argument that submission to the Tyler 1 actions was also submission to the Tyler 2 actions (in respect of which the enforcement proceedings were brought), on the ground that there was just one unit of litigation, was rejected. The basis of submission is consent and participation in the order in relation to the Tyler 1 actions was no evidence of consent to the trial of future actions not yet started (the Tyler 2 actions). More generally, it was said106 that:
If the [procedural] steps would not have been regarded by the domestic law of the foreign court as a submission to the jurisdiction, they ought not, in my view, to be so regarded here.
In Rubin v Eurofinance SA107 Lord Collins revisited the principles and the approach to be taken. When determining whether there has been a submission in the context of recognition and enforcement of a foreign judgment in England, the court will not simply consider whether the steps taken abroad would have amounted to a submission in English proceedings. The international context requires a broader approach. Nor does it follow from the fact that the foreign court would have regarded steps taken in the foreign proceedings as a References(p. 540) submission that the English court will so regard them. The question whether there has been a submission is to be inferred from all the facts. Lord Collins approved the following statement of Thomas J in Akai Pty Ltd v People’s Insurance Co Ltd:108
The court must consider the matter objectively; it must have regard to the general framework of its own procedural rules, but also to the domestic law of the court where the steps were taken. This is because the significance of those steps can only be understood by reference to that law. If a step taken by a person in a foreign jurisdiction, such as making a counterclaim, might well be regarded by English law as amounting to a submission to its jurisdiction, but would not be regarded by that foreign court as a submission to its jurisdiction, an English court will take into account the position under foreign law.
It is on this basis that the Supreme Court found in Rubin that submitting proofs of debt in a liquidation in Australia and attending and participating in creditors’ meetings amounted to submission to the insolvency jurisdiction of the Australian court for the purposes of the enforcement of the judgment of that court in England.109 This was notwithstanding that these procedural steps would not be regarded either by the Australian court or by the English court as a submission and that, under Australian law, the defendant was not to be taken to have waived its right to object to the court’s jurisdiction. According to Lord Collins, the defendant “should not be allowed to benefit from the insolvency proceedings without the burden of complying with the orders made in that proceeding”.110
(iii) Nothing else founds jurisdiction
The results so far of our inquiry into the international competence of foreign courts is that jurisdiction sufficient to render a judgment effective in England exists in two cases, namely, where the defendant was resident or present in the country of the forum at the time of the action, or where he submitted to the jurisdiction. The question now is whether there are any other grounds of competency.111
(a) Political nationality
Is the fact that the defendant is a national of the foreign country where the judgment has been obtained sufficient to render him amenable to the jurisdiction of the local courts? There is no English authority that contains an actual decision to this effect, but the suggestion that this is enough has been affirmed obiter in several cases.112 It is also adopted by certain textbook writers.113 It has been rejected by the Irish High Court.114
References(p. 541) It is submitted that nationality per se is not, and has been rejected as, a reason which, on any principle of private international law, can justify the exercise of jurisdiction.115 The argument advanced in its favour, namely that “a subject is bound to obey the commands of his Sovereign, and, therefore, the judgments of his sovereign courts”,116 is no doubt true, but, as Wolff pointed out, it is not the duty of another sovereign to aid the enforcement of the obligation.117 Indeed the undesirability of such a rule becomes abundantly clear when it is remembered that it is essentially within the competence of a state to decide who are and who are not its nationals. The granting or withholding of nationality is sometimes an instrument of political policy. Even if this is not the case, the legal tie of nationality may have an extremely slender factual basis. If a Japanese court were to give judgment in personam against a person who, though born in Japan, had left that country in his infancy and acquired a domicile in England without taking out letters of naturalisation, it is difficult to appreciate the justification for holding the judgment effective in England. Again, to make nationality the basis of jurisdiction is scarcely practicable in the case of states, such as the United Kingdom,118 the USA,119 Canada or Australia, which contain several separate law districts. Finally, there is no question of reciprocal recognition, for the British nationality of a defendant does not suffice to found the jurisdiction of the English court.
If mere allegiance suffices to give jurisdiction, so also, it might be presumed, does domicile. The connection between a person and the country in which he is domiciled is generally a very real one, but the tie of allegiance may be of the loosest description. An ineffective exercise of jurisdiction ought not to be tolerated, and it is undeniable that a judgment based on domicile is superior on the score of effectiveness to one based merely on allegiance. Yet the curious thing is that those writers who are content to make political allegiance a ground of jurisdiction deny without hesitation the sufficiency of domicile. It is suggested that on this point at least they must be right and that domicile alone will not suffice as a ground of jurisdiction.120
(c) Locality of cause of action
According to the decisions that have dealt with the matter up to the present, it is undoubted that the various circumstances considered above exhaust the possible cases in which a foreign court possesses international competence. Thus it is not sufficient that the cause of action, as, for instance, a breach of contract or the commission of a tort,121 occurred in a foreign country.122
References(p. 542) (d) Choice of governing law
It has been held that an agreement to submit to the jurisdiction of the Florida’s courts is not to be inferred from an agreement to make Florida law the governing law of a contract.123
(e) Possession of property
It was once thought, on the authority of Becquet v MacCarthy,124 that the possession of immovable property within the foreign country was sufficient to found jurisdiction. It is safe to conclude that this decision would not be followed now for it has since been decided by the Court of Appeal in Emanuel v Symon125 that neither the fact of possessing property in a foreign country nor the fact of making a partnership contract there relating to the property is sufficient to render the possessor amenable to the local jurisdiction.
(f) Foreign judgment based on service out of the jurisdiction
The practice, illustrated by rule 6.36 of the Civil Procedure Rules and para 3.1 of the Civil Procedure Rules Practice Direction 6B,126 under which the courts of a country assume jurisdiction over absentees, raises the question whether a foreign judgment given in these circumstances will be recognised in England.127 The authorities, so far as they go, are against recognition. The question arose in Buchanan v Rucker128 where it was disclosed that, by the law of Tobago, service of process might be effected on an absent defendant by nailing a copy of the summons on the door of the court house. It was held that a judgment given against an absentee after service in this manner was an international nullity having no extra-territorial effect. Indeed, the suggestion that it should be actionable in England prompted Lord Ellenborough to ask with some disdain: “Can the island of Tobago pass a law to bind the rights of the whole world? Would the world submit to such an assumed jurisdiction?”129
A less fanciful process again raised the question in Schibsby v Westenholz,130 where a judgment had been given by a French court against Danish subjects resident in England. The defendants were notified of the proceedings in the customary manner, which involved forwarding the summons to the consulate of the country where the defendant resided, with instructions to deliver it to him if practicable. The defendants failed to appear and judgment was given against them. It was held that no action lay on the judgment. Had the principle on which judgments are enforceable been comity, the Court of Queen’s Bench intimated that having regard to the English practice of service out of the jurisdiction it would have reached a different conclusion. Since, however, the basis of enforcement is that a judgment imposes an obligation on the defendant, it followed that there must be a connection between him and the forum sufficiently close to make it his duty to perform that obligation. No such duty could be spelt out of the inactivity of the defendants, who were aliens resident in a foreign country. Wright J reached the same conclusion in a later case where a New Zealand judgment References(p. 543) had been given against an absentee under an assumed jurisdiction substantially similar to that countenanced by the English rules on service out of the jurisdiction.131
It is not without significance, however, that in this general context the Court of Appeal in Travers v Holley132 acted on the basis of reciprocity and held that what entitles an English court to assume divorce jurisdiction is equally effective in the case of a foreign court. In a later case, however, Hodson LJ observed that Travers v Holley was: “a decision limited to a judgment in rem in a matter affecting matrimonial status, and it has not been followed, so far as I am aware, in any case except a matrimonial case”.133 Thus, any suggestion that the advance towards “internationalism”134 made by that decision should be extended to jurisdiction assumed under provisions substantially similar to those contained in the English rules on service out of the jurisdiction has so far not been accepted, and the present position is that the rules set out above remain intact.135
(iv) The real and substantial connection test
The Supreme Court of Canada in Morguard Investments Ltd v De Savoye136 has adopted a radically different approach towards the recognition and enforcement of foreign judgments at common law in inter-provincial cases. The concern is to produce a greater degree of recognition and enforcement within the Canadian federation than has hitherto been the case under the English-based common law rules. A judgment granted in another province is entitled to recognition and enforcement provided that the judgment granting court “properly, or appropriately, exercised jurisdiction in the action”. This requirement is satisfied where the forum that had assumed jurisdiction and given judgment has “a real and substantial connection with the action”.137 This is a more flexible test than that under the English common law and may be satisfied in the situation where the defendant was neither present in the judgment granting state nor submitted to its courts.138 This approach is not concerned solely with Canadian federalism but also more widely with “the need in modern times to facilitate the flow of wealth, skills and people across state lines in a fair and orderly manner”.139 It is not surprising therefore that the Supreme Court of Canada in Beals v Saldanha has extended this approach to the recognition and enforcement at common law of judgments granted outside Canada.140 It is for the recognising and enforcing court to decide whether there is the References(p. 544) requisite real and substantial connection. However, it would be “odd indeed if a Canadian court would refuse to recognise and enforce a judgment of a foreign court in a situation where the foreign court assumed jurisdiction on the same basis on which Canadian courts assume jurisdiction”.141 There is much to be said for adopting the real and substantial connection test, or something similar, in England.142 Indeed, its origin is to be found in a decision of the House of Lords on the recognition of foreign divorces at common law.143 However, the introduction of any such wider test for the international jurisdiction of a foreign court for recognition and enforcement purposes would need to be accompanied by a re-examination of the natural justice and public policy defences so as to protect defendants who have been subject to injustice abroad.144
(b) Judgments in rem
(i) The definition of a judgment in rem
The jurisdictional elements that must exist before a foreign judgment in rem can be given effect in England are not difficult to specify, but it is first necessary to appreciate the correct meaning of this species of judgment. It has been defined as:
a judgment of a court of competent jurisdiction determining the status of a person or thing (as distinct from the particular interest in it of a party to the litigation); and such a judgment is conclusive evidence for and against all persons whether parties, privies or strangers of the matters actually decided.145
More recently, a judgment in rem has been defined as the judicial determination of the existence of rights over property.146 In contrast, a judgment in personam determines the existence of rights against a person.147 There is no reason why a judgment should be characterised as either wholly in rem or wholly in personam.148 This is not a matter of severance, rather it is a matter of analysis of the extent to which a judgment operates in part in rem and in part in References(p. 545) personam. An order of a bankruptcy court in the USA during bankruptcy proceedings there has been held to be neither a judgment in rem nor one in personam since such proceedings are not concerned with the determination of the existence of rights.149 In order for a foreign judgment to be given effect in England as a judgment in rem, it should be characterised as such by the foreign court.150 The two parts of the above-quoted definition will now be considered.
(a) The subject matter of a judgment in rem
The res which may form the subject matter of a judgment in rem is not confined to physical things. If the essence of such a judgment is that it constitutes an adjudication on status, it follows that certain decrees declaring the status of persons must also be classed as operating in rem.151 Thus, the word res as used in this context includes those human relationships, such as marriage, which do not originate merely in contract, but which constitute what may be called institutions recognised by the state.152 A foreign court which issues, for instance, a decree of divorce or nullity of marriage will, if competent in respect of jurisdiction, be deemed to have pronounced a judgment in rem that is conclusive in England and binding on all persons.153
There is some authority for the view that judgments in personam that are ancillary to such judgments in rem are equally conclusive and binding in England. An illustration of this is afforded by Phillips v Batho154 where the facts were as follows:
The plaintiff, domiciled in India, obtained a divorce from his wife in an Indian court, and was awarded damages against the defendant, as co-respondent. The defendant was not present in India at the time of the suit, nor did he submit to the jurisdiction. The plaintiff then sued him in England to recover the damages awarded by the Indian judgment.
This judgment, if treated as one in personam, was not actionable in England, since the Indian court had no jurisdiction in personam over the defendant. Neither, in the opinion of the judge, could the plaintiff sue in England on the original cause of action, for the English court had divorce jurisdiction, at that time, only where the parties were domiciled in England. Scrutton J avoided the difficulties by holding that the judgment awarding damages was ancillary to the judgment in rem dissolving the marriage and, as such, was probably conclusive everywhere, and at any rate was conclusive in another part of the Commonwealth.155 This decision has been subjected to devastating criticism;156 it has been disapproved in New References(p. 546) Zealand,157 ignored in Canada158 and is probably wrong. The judgment should be treated as one in personam whose recognition should be denied on the ground of lack of jurisdiction.
(b) The effect of a judgment in rem
The effect, for instance, of a condemnation in the Admiralty court in prize proceedings is to vest the ship in the captors and thus to alter its status. Such a judgment differs fundamentally from one in personam. A judgment in rem settles the destiny of the res itself “and binds all persons claiming an interest in the property inconsistent with the judgment even though pronounced in their absence”;159 a judgment in personam, although it may concern a res, merely determines the rights of the litigants inter se to the res. The former looks beyond the individual rights of the parties, the latter is directed solely to those rights.160 Thus a judgment of a Kenyan court that two defendants “do transfer all the 100% shares in the 3rd defendant [World Duty] to the plaintiff as per the said sale and purchase agreement . . .” was held to be a judgment in personam, rather than one in rem.161 It did not constitute or involve any form of adjudication or purported adjudication in rem relating to the shares in World Duty. Nor did it even purport actually to transfer or deal with the shares. Rather, what it did was to determine the parties’ rights and duties relating to them.
(ii) Recognition of judgments in rem: the jurisdictional requirements
A foreign judgment which purports to operate in rem will not attract extra-territorial recognition unless it has been given by a court internationally competent in this respect. In the eyes of English law, the adjudicating court must have jurisdiction to give a judgment binding all persons generally.
(a) Judgments relating to immovables
If the judgment relates to immovables, it is clear that only the court of the situs is competent.162 So English courts will not recognise foreign judgments concerning title under a will to land in England,163 even though our courts might take jurisdiction to determine the validity of wills as to foreign land.164 Similarly, though jurisdiction is taken here over actions in personam concerning foreign land,165 foreign judgments in personam concerning English land are unlikely to be recognised here.166
(b) Judgments relating to movables
In the case of movables, however, the question of competence is not so simple, since there would appear to be at least three classes of judgments in rem.167
References(p. 547) (i) Judgments that immediately vest the property in a certain person as against the whole world
These occur, for instance, where a foreign court of Admiralty condemns a vessel in prize proceedings. The Privy Council has said, obiter, that a judgment in rem of a Kenyan court transferring Isle of Man shares (as required by a sale and purchase agreement) cannot be recognised as having in rem effect.168 However, it will not be ignored for all purposes. It could arguably operate to create an issue estoppel abroad preventing the defendants from arguing they were not in breach of the sale and purchase agreement.169 In United States of America v Abacha170 the Court of Appeal held that a judgment in rem in proceedings brought by the US authorities in the USA to forfeit assets located abroad which had allegedly been involved in money laundering offences within its jurisdiction would not be enforceable in England.
(ii) Judgments that decree the sale of a thing in satisfaction of a claim against the thing itself
A judgment which orders a chattel to be sold is a judgment in rem if the object of the sale is to afford a remedy, not by execution against the general estate of the defendant, but by appropriating the chattel in satisfaction of the claimant’s claim. Such a judgment is not the same as the sentence of an Admiralty court in a prize case which immediately vests the property in the claimant, but it is analogous thereto if the money demand of the claimant in respect of which it is given is a demand against the chattel and not against the owner personally.171 In all cases, therefore, the nature of a foreign judgment that has ordered the sale of some chattel must be determined by ascertaining whether, according to the foreign law, the original action was a suit against the chattel. The subject was elaborately considered by fourteen judges in the leading case of Castrique v Imrie:172
The owner of a British ship mortgaged her to X while she was on a voyage. During the voyage the master drew a bill of exchange on the owner for the cost of certain repairs and indorsed it to a Frenchman at Le Havre. The indorsee brought an action on the bill against the master at Le Havre, and obtained a judgment which declared as follows: “The Tribunal condemns Benson in his quality (capacity) of captain of the vessel Ann Martin, and by privilege on that vessel to pay to the plaintiff” the amount of the bill. The court declared the master to be free from arrest to which otherwise he would have been liable. A higher court, though having an opinion from the Attorney-General that by English law the mortgagee had a better right than the indorsee, affirmed the decision and ordered the ship to be sold. The ship, having been sold, ultimately arrived in England, and the mortgagee brought an action in the Court of Common Pleas to recover her, on the ground that the sale in France was illegal and void.
The decision necessarily depended on the nature of the French judgment. If it was in rem, then the plaintiff must fail, since the ship was in France at the time of the proceedings. If the judgment was in personam, it was not binding on the mortgagee, since he had been absent from the French proceedings. The Court of Common Pleas held the judgment to be in personam, but the Exchequer Chamber and the House of Lords reversed this decision.
The “privilege” which the judgment created on the ship was, according to French law, a species of lien, and although the proceedings were started against the master as well as against the ship, the sale was ordered not in execution of the judgment debt, but in enforcement of the References(p. 548) lien. A more striking example of the manner in which English courts pay recognition to foreign judgments in rem is afforded by Minna Craig Steamship Co v Chartered Bank of India,173 for there the lien that had been declared by a German court was one which conflicted with the principles of English internal law. In this type of case, the only court competent to give a judgment affecting the status of a res that will command general recognition is the court of the country where the res was situated at the time of the action.
(iii) Judgments that order movables to be sold by way of administration
If, in the course of administering an estate in bankruptcy or on death, a foreign court orders the sale of chattels, the sale will be regarded as conferring a title on the purchaser valid in England. In the case of succession on death, jurisdiction to make such an order resides in the court of the country where the deceased died domiciled.174 Subject to the European Union Insolvency Regulation,175 the English courts will recognise the bankruptcy jurisdiction of a foreign court if the debtor was domiciled (or, in the case of corporation, if the debtor was incorporated) in the foreign country or submitted to the jurisdiction of the foreign court.176
(iv) Enforcement of judgments in rem
Whilst recognition of a foreign judgment in rem may be fairly common and relatively straightforward, enforcement of such judgments in England raises different issues. No foreign judgment relating to immovables abroad can be enforced in England. If the judgment relates to movables, the real issue is whether it was sufficient to pass title to the property, ie a question of recognition rather than enforcement.177 A rare example of enforcement of a foreign judgment by an action in rem in England is provided by The City of Mecca.178 Sir Robert Phillimore held that a Portuguese judgment for damages for the loss caused by a collision on the high seas between a Spanish ship and a British ship was a judgment in rem which could be enforced in England by an action in rem against the ship. Although on appeal this decision was set aside on the ground that the Portuguese judgment was, in fact, a judgment in personam,179 the first instance decision is still of good authority and has been applied by Sheen J in The Despina GK.180
(c) Final and conclusive judgment
A foreign judgment will not be given effect in England unless it is res judicata by the law of the country where it was given.181 It must be final and conclusive in the sense that it must have determined all controversies between the parties. If it may be altered in later proceedings between the same parties in the same court, it will not be effective in England.182 These principles will now be examined.
References(p. 549) A provisional judgment is not res judicata if it contemplates that a fuller investigation leading to a final decision may later be held. This aspect of the meaning of finality and conclusiveness is illustrated by the leading case of Nouvion v Freeman.183
X, who had sold certain land in Seville to Y, brought an “executive” action in Spain against Y and obtained a “remate” judgment for a large sum of money. There were two kinds of proceedings under Spanish law: executive or summary proceedings, and “plenary” or ordinary proceedings. In an executive action, on proof of a prima facie case, the judge without notice to the defendant made an order for the attachment of his property. Notice of the attachment was given to the defendant and he was at liberty to appear and defend the action. But the defences open to him were limited in number, and in particular he could not set up any defence that denied the validity of the transaction upon which he was sued. Either party who failed in executive proceedings could institute plenary proceedings before the same judge, and in these could set up every defence that was known to the law.
It was held by the House of Lords, affirming the Court of Appeal, that no action lay on the remate judgment. Since it was liable to be abrogated by the adjudicating court, it was not res judicata with regard to either party, neither did it extinguish the original cause of action.
A more modern illustration is afforded by Blohn v Desser.184 In that case, an action was brought against the defendant personally on an Austrian judgment that had been given not against her individually, but against a firm of which she was a member. To have rendered her personally liable under Austrian law would have necessitated a separate action against her individually, but in this event certain defences would have been available to her that could not have been raised in the proceedings against the firm. Therefore, even if the judgment could be regarded as given against her personally, it was not final and conclusive. Again, to take another important example, a judgment in default of appearance, whilst it can be final and conclusive,185 does not satisfy the condition of finality and conclusiveness if it is given in a country where the defendant is allowed to apply within a limited time for its rescission by the adjudicating court.186
The necessity for finality and conclusiveness appears in a slightly different aspect in the cases dealing with foreign maintenance orders. As is the case in England, foreign courts usually have power to vary the amount of maintenance orders. Thus in Harrop v Harrop187 the issue was the recognition of an order for maintenance made in Perak. A magistrate could order a person to pay a monthly allowance for maintenance of his wife, and, if such order was disregarded, could direct the amount due to be levied in the manner in which fines were levied. On application by the husband or wife and on proof of a change in the circumstances of the parties, the magistrate could vary the amount to be paid. In the present case a magistrate had ordered the payment of a monthly sum, and later, when this fell into arrears, had ordered that payment of the arrears should be enforced by the appropriate method. The wife failed in the action which she brought in England on these orders. Sankey J, in the course of his judgment, put the gist of the matter in these words: “In my view a judgment or order cannot be said to be final and conclusive if (1) an order has to be obtained for its enforcement, References(p. 550) and (2) on application for such an order the original judgment is liable to be abrogated or varied.”188
If a court is empowered to vary the amount of future payments of maintenance but cannot alter its order as to accrued instalments, then instalments that are already due under the foreign judgment may be recovered by action in England.189 Harrop v Harrop is not inconsistent with this rule, for in that case no evidence was given to show that the amount of accrued instalments was unalterable.
A decision that is final and conclusive is not provisional. As regards an interlocutory decision or order, decisions that are interlocutory in the sense of being made pending final determination of the case, such as an interlocutory injunction pending trial, are not final and conclusive.190 But where a case is res judicata, has been decided on a full consideration of the merits, and the matter cannot be challenged or reheard by the same court it will be final and conclusive, even though it remains possible that an adjustment may be made to the damages by the same court on the application of either party (but which does not challenge the existence of the debt).191
The requirement of finality means that the judgment must be final in the particular court in which it was pronounced.192 It does not mean that there must be no right of appeal. Neither the fact that the judgment may be reversed on appeal, nor even the stronger fact that an actual appeal is pending in the foreign country, is a bar to the effectiveness of the judgment in England;193 though where an appeal is pending the English court has an equitable jurisdiction to stay execution, which it will generally exercise.194 If, however, the effect under the foreign law of a pending appeal is to stay execution of the judgment, it would seem that, in the interim, the judgment is not effective in England.195 A foreign judgment that is final in the particular court in which it was pronounced, but which is later set aside by an appeal court, may be effective in England if the foreign setting aside is contrary to public policy References(p. 551) or for another reason (eg violation of the principles of natural justice or violation of the standards of Article 6 of the European Convention on Human Rights) refused recognition in England.196
(d) Enforcement of foreign judgments in personam197
(i) Enforcement by institution of fresh legal proceedings
The common law doctrine is that a foreign judgment, though creating an obligation that is actionable in England, cannot be enforced in England without the institution of fresh legal proceedings. If a fresh action is brought in England on the foreign judgment, that action is subject to the Civil Procedure Rules and, for example, the claimant may apply for summary judgment under Part 24 on the basis that the defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the case should be disposed of at a trial.198 But a summary judgment will not be given where the application of the rules on recognition and enforcement can only be done at trial, for example where the court must decide whether as a matter of foreign law a foreign judgment is final and conclusive and there is conflicting expert evidence on this issue.199 A foreign judgment cannot be enforced by, for example, the appointment of a receiver without a fresh action in England. Furthermore, any action in England will require the English rules as to jurisdiction and service of claim forms to be satisfied.200 The claimant’s action is barred under section 24(1) of the Limitation Act 1980 after six years.201 Following the same provision, once an English judgment is given on an action on a foreign judgment, the judgment creditor will have six years to enforce the English judgment.
(ii) Judgment for a fixed sum
As we have seen, the ground on which a foreign judgment is enforceable in England is that the defendant has implicitly promised to pay the amount due under the judgment.202 It follows that there can be no question of enforcing a foreign decree for specific performance or for the specific delivery or restitution of chattels. Moreover, the law implies a promise to pay a definite, not an indefinite, sum.203 Unless in an action in personam the foreign court has definitely and finally determined the amount to be paid, no action is maintainable in References(p. 552) England.204 In Sadler v Robins205 a court in Jamaica had decreed that the defendant should pay to the plaintiff £3,670 9s 1/4d, first deducting therefrom the full costs expended by the defendant, such costs to be taxed by a master of the court. It was held that until taxation the plaintiff had no cause of action in England, since the sum due on the Jamaican decree was indefinite. A sum, however, satisfies the requirement of certainty if it can be ascertained by a simple arithmetical process.206
This is the position in England.207 In contrast, the Supreme Court of Canada in Pro Swing Inc v Elta Golf Inc208 has held that the traditional common law rule that limits enforcement to fixed sum judgments should be revised so as to open the door to equitable orders, such as injunctions, which are key to an effective modern-day remedy. However, this change must be accompanied by a judicial discretion enabling the Canadian court to consider relevant factors, including the criteria that guide Canadian courts when crafting domestic equitable orders, such as the territorial scope of an injunction being specific and clear.209
(iii) Non-enforcement of foreign revenue, penal or other public laws
English courts will not enforce foreign revenue, penal or other public laws either directly210 or through the enforcement of a foreign judgment.211 Thus in USA v Inkley212 the Court of Appeal refused to enforce a judgment granted in Florida relating to a bail appearance bond, where the purpose of the enforcement action was the execution of a foreign public law/penal process. In United States of America v Abacha213 the Court of Appeal held that a judgment in proceedings brought by the US authorities in the USA to forfeit assets located abroad which had allegedly been involved in money laundering offences within its jurisdiction would not be enforceable in England because, inter alia, it would amount to the enforcement of a foreign penal law. A penalty in this sense normally means a sum payable to the state, and not to a private claimant.214 However, the foreign judgment will be denied enforcement only if it falls References(p. 553) directly within the area of revenue, penal or other public laws, strictly construed. So, when a public or regulatory body brings civil proceedings on behalf of a group of class of victims, it is not seeking to enforce a foreign penal or other public law.215 A foreign judgment for costs may be enforced even though the costs would be payable into a foreign legal aid fund.216 A foreign judgment in respect of an action brought by the USA for compensation under a US statute for the cost of clearing up environmental damage in the USA has been held to be enforceable, the action being regarded as close to one for nuisance.217
A civil judgment, though combined with a penal judgment, may be actionable in England as creating a separate and independent cause of action, despite the general principle218 that penalties imposed abroad are disregarded. Thus in Raulin v Fischer:219
The defendant, a young American lady, while recklessly galloping her horse in the Bois de Boulogne, ran into the plaintiff, a French officer, and seriously injured him. She was prosecuted by the French State for her act of criminal negligence. By French law a person who is injured by a crime may intervene in the prosecution and make a claim for damages, whereupon his civil action is tried together with the prosecution and one judgment is pronounced on both matters. The plaintiff did so intervene. The defendant was convicted of the crime and ordered to pay a fine of 100 francs to the State and 15,917 francs by way of damages and costs to the plaintiff.
It was held on these facts, in an action brought by the plaintiff in England to recover the sterling equivalent of 15,917 francs, that the French judgment was severable. That part of it which awarded the plaintiff damages was not tainted with the penal character of the rest of the proceedings, and therefore might be recovered in England without involving enforcement of a penal judgment.
(iv) Non-enforcement of judgments for multiple damages under the Protection of Trading Interests Act 1980220
The background to this Act is the United Kingdom resentment221 at the extra-territorial application of anti-trust laws by the USA. Diplomatic attempts at solving what is a political References(p. 554) as well as an economic and legal problem failed and led to legal warfare. Under the Act, the Secretary of State is given wide powers to counter foreign measures for regulating international trade which affect the trading interests of persons in the United Kingdom.222
Alongside this, there are restrictions on the enforcement of certain overseas judgments. Section 5(2) provides that a court in the United Kingdom cannot enforce:223
(a) a judgment for multiple damages, ie one “for an amount arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained by the person in whose favour the judgment is given”;224
(b) a judgment based on a competition law which is specified in an order made by the Secretary of State;225
(c) where a judgment coming within (a) or (b) has been given against a third party, a judgment on a claim for contribution.
Three points should be noted about section 5. First, although the Act does not mention any specific foreign country, the reference to multiple damages shows beyond any doubt that the target at which the Act is aimed is US anti-trust laws,226 although it operates against multiple damages in other contexts as well.227 Secondly, the prohibition on the enforcement of a judgment for multiple damages applies to all of the multiplied award and not merely to the non-compensatory part.228 However, where a foreign court gives a composite judgment comprising both a multiplied award and ordinary compensatory damages for separate private causes of action similar to those available under English law, it is possible to separate the different parts and enforce the latter but not the former. This is what happened in Lewis v Eliades.229
A court in the USA gave a composite judgment for over $8 million, which included over $1.1 million damages for racketeering contrary to the RICO Act ($396,000 basic damages trebled up230) plus over $6.8 million damages in respect of separate causes of action for breach of fiduciary duty and fraud. Counsel for the claimant conceded that the whole of the $1.1 million racketeering damages (ie including the basic damages of $396,000) was irrecoverable but sought enforcement of $6.8 million damages for breach of fiduciary duty and fraud.
The Court of Appeal enforced that latter part of the judgment. Thirdly, the prohibition on enforcement does not depend on whether the overseas court applied its anti-trust laws extra-territorially. It has been pointed out231 that section 5 can apply to the enforcement of a judgment in an anti-trust suit brought by one US corporation against another US corporation, which has assets in the United Kingdom, following anti-trust infringements which took place wholly within the USA. The rationale of this section is not, therefore, that there has been an invasion of United Kingdom sovereignty; instead, it is more akin to that underlying the prohibition of enforcement in cases of foreign penal laws or in cases where enforcement would be against public policy.232
Section 5 is a negative provision. More controversial is the accompanying positive provision contained in section 6. This gives a “qualifying”233 defendant, who has actually paid some or all of the multiple damages, the right to recover in the United Kingdom the non-compensatory part of the payment. This claw-back provision is no doubt designed to discourage private litigants from instigating civil proceedings for multiple damages and to persuade the USA to alter its anti-trust stance in respect of United Kingdom defendants.234 Section 6 provides a unique cause of action; for this to be of any assistance to a claimant in England jurisdictional and enforcement problems have also to be overcome. The 1980 Act helps with both problems. Section 6(5) provides that “a court in the United Kingdom may entertain proceedings on a claim under this section notwithstanding that the person against whom the proceedings are brought is not within the jurisdiction of the court”. A claim form will still have to be served on the defendant, but the leave of the court is not required for service out of the jurisdiction.235 Section 7236 allows for Orders in Council to be made providing for the enforcement in the United Kingdom of foreign judgments clawing-back sums paid pursuant to an award of multiple damages. This is done on a reciprocal basis237 so that an overseas country must provide for the enforcement in that country of judgments given in the United Kingdom under section 6. Section 7 applies regardless of whether or not the foreign claw-back provision corresponds to section 6.238 It follows that an Order in Council could specify that the whole of a foreign judgment, including the claw-back of the compensatory part of an award of multiple damages, is to be enforced in the United Kingdom, even though section 6 does not allow the claw-back of this compensatory part in proceedings in the United Kingdom.239
References(p. 556) (e) Recognition of foreign judgments
(i) Estoppel per rem judicatam240
A cause of action, once it has been adjudicated by a court of competent jurisdiction, becomes res judicata, and as such it raises an estoppel against the unsuccessful party.
The rule of estoppel by res judicata, which is a rule of evidence, is that where a final decision has been pronounced by a judicial tribunal of competent jurisdiction over the parties to and the subject-matter of the litigation, any party or privy to such litigation as against any other party or privy is estopped in any subsequent litigation from disputing or questioning such decision on the merits.241
(a) Estoppel as a defence242
According to the doctrine of res judicata, at common law, a foreign judgment was conclusive in two respects in favour of the defendant in England.
First, in the situation where the claimant lost abroad, the judgment provided the successful defendant in the foreign proceedings with an effective defence if he was sued by the other party in England on the original cause of action. The claimant was estopped from denying the conclusiveness of the judgment.243
Secondly, in the situation where the claimant won abroad, but had not been awarded full compensation, the common law rule was that the satisfied judgment of the foreign court provided a good defence to an action brought by the claimant in England for the residue of his claim.244
This common law rule has now been superseded by the much wider statutory rule in section 34 of the Civil Jurisdiction and Judgments Act 1982.245 This provides that:
No proceedings may be brought by a person in England and Wales . . . on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties, or their privies, in a court in another part of the United Kingdom or in a court of an overseas country, unless that judgment is not enforceable or entitled to recognition in England and Wales . . .246
The effect of this provision is that, if the judgment is enforceable or entitled to recognition in England and Wales, the claimant has to sue on the judgment obtained247 and cannot bring fresh proceedings based on the original cause of action.248 To allow the claimant to bring fresh References(p. 557) proceedings in England would be unjust.249 There is no requirement that the foreign judgment has been satisfied; it must merely have been “given”. The operation of this provision has been examined by the House of Lords in Republic of India v India Steamship Co Ltd250 and in Republic of India v India Steamship Co Ltd (No 2).251
Following a fire on board the defendant’s ship, a small number of the cargo of artillery shells were jettisoned and the remainder were damaged. In 1988, the plaintiff, a cargo owner, commenced proceedings in personam against the shipowner in India for short delivery and obtained a judgment in its favour in December 1989. Previously, in August 1989, the plaintiff had launched proceedings in rem in England in respect of damage to the whole of the cargo.
The House of Lords in Republic of India v India Steamship Co Ltd (No 2) held that the plaintiffs’ action in England was barred by section 34. A number of important points emerge from this litigation. First, it did not matter that the English proceedings were launched before the Indian judgment was obtained. Section 34 prohibits proceedings being “brought” in England and this is wide enough to prevent proceedings being continued.252 Secondly, according to the House of Lords in Republic of India v India Steamship Co Ltd the cause of action in the Indian proceedings (for short delivery) and the English proceedings (for damage to the whole of the cargo) was the same. This was despite the fact that the Indian judgment was for only the rupee equivalent of £7,200, whereas the English claim was for the equivalent of £2.6 million. In both sets of proceedings the cause of action came under the same contract of carriage and depended on the same breach of that contract. Moreover, both actions were concerned with a single incident, ie the fire. There may have been a breach of more than one term of the contract but it was not necessary to distinguish these breaches because the factual basis giving rise to the breaches was the same. Thirdly, according to Republic of India v India Steamship Co Ltd (No 2) the parties were the same even though one action was in personam and the other in rem. For the purposes of section 34 an action in rem is an action against the shipowners from the moment that the Admiralty Court is seized with jurisdiction.253 Fourthly, section 34 does not use the idea that a cause of action is lost by its merger in the judgment. It creates a bar against proceedings by the claimant, rather than excluding the jurisdiction of the court.254 Accordingly, this defence can be defeated by waiver, estoppel or contrary agreement.255
It is not required that the claimant should have been the original party in the overseas proceedings or that such proceedings be exclusively civil in character, provided that the judgment References(p. 558) is enforceable or entitled to recognition in England.256 However, the stronger domestic policy of protecting the interests of minors has meant that this provision may not operate to prevent them from bringing fresh proceedings, when the foreign proceedings were not in their interests and there are questions over their consent to the foreign proceedings.257
It must still be the case, though, that if the claimant has two causes of action founded on the same damage against separate defendants, as where the drivers of two vehicles have collided and caused him injury, a judgment of a foreign court against one of them does not bar him from suing the other in England.258 He cannot, however, sustain such an action if the amount awarded him by the foreign judgment is sufficient to compensate him fully for the damage suffered, for English law does not tolerate double satisfaction.259
(b) Cause of action and issue estoppel
So far as English judgments are concerned, estoppel per rem judicatam is a generic term which comprises two species.
The first, called cause of action estoppel, “is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or the existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties”.260 In such a case, a further action for the same cause can never succeed.
The second species, called issue estoppel, becomes relevant where the determination of a cause of action has necessitated the determination of a number of different issues.261 In the case of an English judgment, the rule then is that the parties to an action are estopped from contesting a particular issue which has already been determined in previous proceedings to which they were also parties.262 It is immaterial that the cause of action is not the same in both proceedings.263
There is abundant authority that cause of action estoppel applies to foreign judgments,264 and it is now clear that issue estoppel also applies to foreign judgments.265 In Carl Zeiss Stiftung v Rayner and Keeler Ltd266 a majority of the Law Lords267 were of the opinion that there can be an issue estoppel in respect of a foreign judgment. However, the doctrine was not applied in that particular case since the essentials for the application of the doctrine268 were not satisfied. Since then a number of cases have accepted that issue estoppel applies in respect of foreign judgments,269 and the matter was put beyond any doubt by the House of Lords’ decision in References(p. 559) The Sennar (No 2),270 in which issue estoppel was applied to a Dutch judgment. Lord Diplock said that “it is far too late, at this stage of the development of the doctrine, to question that issue estoppel can be created by the judgment of a foreign court”.271
(c) Prerequisites of estoppel
The same prerequisites apply for a cause of action and an issue estoppel. In both cases an estoppel will not apply unless three conditions are satisfied.272
First, the previous decision must have been final and conclusive273 on the merits,274 and must have been given by a court of competent jurisdiction.275 Generally, a foreign judgment will not be given greater preclusive effect in England than it has in the country where it was given.276 The requirement that the decision is on the merits has been relaxed by the Court of Appeal, which has accepted that, in principle, an issue estoppel can arise from a judgment of a foreign court on a procedural, ie non-substantive, issue.277 Seemingly, this would include a References(p. 560) finding by the foreign court that the defendant had authorised a lawyer to act on his behalf and had accordingly submitted to the jurisdiction.278 But it would not seem to include an order dismissing a case for want of prosecution, a technical objection, or a default of pleading, nor an order made by consent, because such orders are not the product of a decision-making process.279
Secondly, there must be identity of parties,280 that is to say, the parties to the previous decision or their privies must be the same persons as the parties to the later action or their privies.
Thirdly, the cause of action or issue before the court must be identical with that previously determined.281
Nonetheless, when it comes to applying these common rules there is an important difference between cases involving a cause of action estoppel and those involving issue estoppel. When applying the doctrine of issue estoppel the need for caution has been stressed.282 There are good reasons for adopting this attitude. Confronted with an unfamiliar procedure, it may be difficult for an English judge to ascertain, for instance, the exact issues that have been determined by the foreign court and whether each of them has been determined beyond the possibility of further litigation. Issues may not be fully argued abroad because, in cases of a trivial nature, the defendant may have regarded it as impracticable, in terms of time and expense, to defend fully. It may then be unjust to estop the defendant from raising these issues in England. The application of the principles of issue estoppel is subject to the References(p. 561) overriding consideration that it must work justice and not injustice.283 Issue estoppel is a rule of evidence and, as such, is no doubt governed by the law of the forum, but this is a case where the law of the forum ought to be applied “in a manner consistent with good sense”.284 Three further points to note are that determination of the issue said to give rise to the issue estoppel must have been necessary for the decision of the foreign court;285 it is irrelevant that the English court may form the view that the decision of the foreign court was wrong either on the facts or as a matter of English law;286 and an issue estoppel is only created by a decision against an unsuccessful party and not against a successful party on an issue the latter party lost.287
The requirements for an estoppel were discussed by the House of Lords in The Sennar (No 2).288
A bill of lading presented by the original sellers of groundnuts to the original buyers contained an exclusive jurisdiction clause, providing that all actions under the contract of carriage should be brought only before the court of Khartoum or Port Sudan and that the law of the Sudan should apply. Nonetheless, GfG, a German company which was the subsequent buyer, brought an action in the Netherlands against the defendant shipowners for damages for the equivalent of a tort, claiming that a false date had been put on the bill of lading by the master of the defendant’s ship, The Sennar, as a result of which it had incurred liabilities. The Dutch court declined jurisdiction, reasoning that GfG could only found a claim on the contract contained in the bill of lading and the contract had in it the Sudanese exclusive jurisdiction clause. The plaintiff, another German company, which was successor in title to GfG, brought an action in England against the defendant for damages in tort for deceit/negligence in respect of the same cause of action. One of the issues that had to be decided was whether the plaintiff was estopped by the Dutch decision from asserting that its claim did not fall within the exclusive jurisdiction clause, which only dealt with claims under the contract.
The House of Lords unanimously held that the plaintiff was estopped from asserting this; the Sudanese exclusive jurisdiction clause applied with the result that the English proceedings were stayed.289 Since the substance of the claim had not been decided by the Dutch court, this was not a case of cause of action estoppel but one of issue estoppel. There were, however, problems in the instant case in satisfying two of the prerequisites for an estoppel.
First, was the Dutch decision, which only concerned a preliminary matter of jurisdiction and did not raise the substance of the dispute, decided “on the merits”? Lord Brandon gave a wide definition to this concept thus:
Looking at the matter negatively a decision on procedure alone is not a decision on the merits. Looking at the matter positively a decision on the merits is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned.290
(p. 562) Lord Brandon concluded that the Dutch decision was not a procedural one291 and therefore came with the above definition.292 Lord Diplock agreed that the Dutch decision was as to the merits. He held that the Dutch court did not simply decide that it did not have jurisdiction; it decided, first, that the only claim against the shipowners was for breach of contract, and, second, that as a result of the Sudanese exclusive jurisdiction clause that claim was enforceable only in the courts of the Sudan. There was, therefore, a judgment on the merits in respect of these two issues.293
Secondly, was the issue the same in the Dutch and English courts? In the Dutch court, although the action was framed in tort, the issue was whether it could be founded in tort or only on the contract (in the latter eventuality, the issue was whether the exclusive jurisdiction clause applied). However, in the English court, the action was framed in tort and undeniably could be founded in tort and the issue was whether the action would come within the exclusive jurisdiction clause. Nevertheless, the basic issue was held to be the same, ie whether, even though the claim was framed in tort rather than in contract, the exclusive jurisdiction clause applied to such a claim.294
There was no need for the exercise of caution in the use of issue estoppel in the instant case295 since all the issues decided in the Netherlands had been fully litigated. Also the reason why caution is needed is so that issue estoppel does not unjustly prevent defendants from raising issues in England. In the instant case, it was being used to prevent claimants from relitigating the same claim on another basis in a different jurisdiction.296 Indeed, there are strong policy reasons why a court should be very willing to use issue estoppel in a case like The Sennar (No 2):297 shipowners are vulnerable to having their ships arrested and to forum shopping by claimants; exclusive jurisdiction clauses are designed to fix the place of trial and therefore claimants should not be able to avoid such clauses by going from one country to another seeking a classification of the cause of action which achieves this objective; having tried this once abroad, a claimant should not be able to have another bite of the cherry in England.
(ii) The rule in Henderson v Henderson
A related rule is laid down in Henderson v Henderson,298 according to which a party is precluded from raising causes of action and issues which might have been, but were not, raised and decided in the earlier proceedings. In the words of Wigram V-C:
The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.299
Thus if a professional negligence claim is pursued in foreign proceedings solely in tort, a subsequent claim for the same negligence brought in contract in England would be barred; References(p. 563) but if no contract claim could not be pursued in the foreign proceedings because of a foreign procedural rule, the rule in Henderson v Henderson is not engaged.300
(iii) Abuse of process
Quite apart from estoppel per rem judicatam, the courts have an inherent power to prevent any abuse of process which may be involved in an attempt to litigate matters for a second time.301 This doctrine has been used by the Privy Council to strike out a defence of fraud (in respect of which there was no prima facie evidence), thereby avoiding re-opening this issue when it had been determined abroad.302 According to Lord Templeman:303
No strict rule can be laid down; in every case the court must decide whether justice requires the further investigation of alleged fraud or requires that the plaintiff having obtained a foreign judgment, shall no longer be frustrated in enforcing that judgment.
Recourse to what justice requires makes it difficult to predict when this doctrine will operate.304 What is clear, though, is that it is not confined to cases where the issue is that of fraud,305 and it avoids having to determine whether the prerequisites of estoppel have been met.306 It is an alternative to estoppel per rem judicatam but also involves some overlap with that doctrine in that an attempt to litigate a matter for a second time may fall foul of both doctrines.307
(iv) Judgments in personam and in rem
The principle of res judicata applies both to actions in personam and actions in rem,308 for as regards their degree of conclusiveness these actions differ from each other only in the number of persons who are bound by the judgment. A judgment in personam binds the parties and their privies if they litigate the same issue in England. A judgment in rem has a wider operation, since it is conclusive against all the world.309 Both judgments in rem and judgments in personam are conclusive upon the point decided, but in the former “the point”, since it is the determination of status, is conclusive against the whole world, while in the latter, since it is unconcerned with status, is conclusive only between parties and privies.310
References(p. 564) (f) Defences to recognition and enforcement
Despite the fact that the foreign judgment that is relied upon in England is given by a court of competent jurisdiction and is final and conclusive, it is still open to the party against whom the judgment is invoked to show why he should not be bound by the obligation created by the judgment by pleading any one of the available defences. Two situations in which the enforcement of a foreign judgment will be refused, namely non-enforcement of foreign revenue, penal and other public laws and non-enforcement of judgments for multiple damages under the Protection of Trading Interests Act 1980, have already been discussed.311 The seven defences set out below may be pleaded not only by a defendant resisting an action in England on a foreign judgment in favour of the claimant, but also by a party (eg claimant suing in England on the original cause of action) who is met by the defence of estoppel per rem judicatam in favour of the other party.312 But first the matters that cannot be pleaded as a defence will be mentioned.
(i) Conclusiveness of foreign judgments
It is well established that when deciding whether to give an effect to a foreign judgment the English court is not entitled to investigate the propriety of the proceedings in the foreign court.313 Erroneous judgments delivered by a foreign court are not void in England.314 The merits of the case have been argued and determined, and if one of the parties is discontented with the decision his proper course is to take appellate proceedings in the forum of the judgment. The English tribunal, in other words, cannot sit as a court of appeal against a judgment pronounced by a court which was competent to exercise jurisdiction over the parties.315
(a) Mistakes by the foreign court
(i) Mistakes as to facts or as to law
The defendant in England may show that the foreign court had no jurisdiction to try the case or that the foreign judgment is not final and conclusive, or he may plead a limited number of defences, such as fraud, but he is not at liberty to show that the court mistook either the facts or the law on which its judgment was founded.316
A more difficult question is whether a foreign judgment can be impeached on the ground that the court made an obvious mistake with regard to English law when purporting to give a decision according to that law. It has been decided that such a mistake does not excuse the defendant from performing the obligation that has been laid upon him by the judgment.317References(p. 565) The doctrine that a foreign judgment cannot be impeached as to merits has been carried to its logical conclusion. Thus in Godard v Gray:318
The plaintiffs, who were Frenchmen, sued the defendants (Englishmen) in France on a charter-party, the proper law of which was English law. The charter-party contained the clause: “Penalty for non-performance of this agreement estimated amount of freight.” The effect of such a clause under English law was not to quantify the damages exactly, but to leave them to be assessed according to the actual loss suffered; but the French court, believing that the language of the charter-party was to be understood in its natural sense, fixed the damages payable by the defendant at the exact amount of freight.
When sued on the judgment in England, the defendants pleaded this mistaken view of English law in defence. The plea failed. The court held that there could be no difference between a mistake as to English law and any other mistake.
(ii) A mistake as to its own jurisdiction
What, for many years, has been less certain is whether the foreign court must have had internal competence, ie jurisdiction under its own law. Lindley LJ once said that the jurisdiction which alone is important in connection with a foreign judgment is the competence of the foreign court in the international sense. “Its competence or jurisdiction in any other sense is not regarded as material by the courts of this country.”319 According to this view, action will lie in England on a foreign judgment although delivered by a court that, according to its own internal law, had no jurisdiction whatsoever over the cause of action. If, for instance, the foreign court has adjudicated on a claim in excess of the legally permitted amount, is it to be no answer to an action on the judgment in England that the court lacked internal jurisdiction? To admit this would be inconsistent with principle. According at any rate to the English rule, a judgment delivered by a court with no jurisdiction is a complete nullity, and it seems curious that what was null and void in the foreign country can be regarded as valid for the purposes of an English action. Such a foreign judgment creates no rights whatsoever in favour of the claimant, yet it is because a right has been vested in him that, according to the doctrine of obligation, he may sue on the judgment in England. The dictum of Lindley LJ, for it was nothing more, was not applied in Papadopoulos v Papadopoulos,320 where one of the grounds on which the Cypriot decree of nullity was held to be ineffective was that the court had no power by the law of Cyprus to declare the marriage null and void. Similarly, in Adams v Adams321 recognition was refused to a Rhodesian divorce decree because, under Rhodesian law as interpreted in England, the decree was invalid as it had been pronounced by a judge who was not a judge de jure of the High Court of Rhodesia.322
(iii) A procedural mistake
It is essential to observe that if the foreign court is internally competent the fact that it has erred in its own rules of procedure is no answer to an action in England. This is the References(p. 566) explanation of Pemberton v Hughes,323 the case in which Lindley LJ delivered his dictum. In that case:
A decree for divorce had been pronounced by the competent court in Florida in an undefended suit brought by a husband against his wife, both parties being domiciled and resident in Florida. It appeared that she had received only nine days’ notice of the proceedings instead of ten days as required by the law of Florida.
It was held by the Court of Appeal that the decree was final and was binding in England. Lindley LJ in the course of his judgment said:
All that the English courts look to are the finality of the judgment and the jurisdiction of the court, in this sense and to this extent—namely its competence to deal with the sort of case that it did deal with, and its competence to require the defendant to appear before it.324
In other words, the Florida court was not only internally competent to deal with a case of divorce, but also internationally competent, since the defendant was domiciled in Florida. The judge then concluded as follows:
If the court had jurisdiction in this sense, and to this extent, the courts of this country never inquire whether the jurisdiction has been properly or improperly exercised, provided that no substantial injustice, according to English notions has been committed.325
At first sight the decision of the Court of Common Pleas in Vanquelin v Bouard326 may seem difficult to reconcile with this statement of the law.
This was an action in England on a judgment obtained in France on a bill of exchange. The defendant pleaded that by French law the French court had no jurisdiction, since the defendant was not a trader and was not resident at Orleans where the bills were drawn. The plea was disallowed.
If the plea meant that the French action had been brought in the wrong court327 and if this were so, it is arguable that the judgment was a nullity. Erle CJ denied, however, that the court lacked internal jurisdiction. Thus, to repeat the words of Lindley LJ, the French tribunal was competent “to deal with the sort of case that it did deal with”, though perhaps the defendant might have pleaded in defence that he personally was not within that competence. In explanation of both Pemberton v Hughes and Vanquelin v Bouard it has been said that:
The court had competence in the sort of case involved, but there was a mistake or irregularity of procedure in the exercise of that competence which rendered the right created by the judgment merely voidable, capable of being made void by subsequent proceedings.328
A significant feature of Vanquelin v Bouard is that the defendant let the French proceedings go by default. Further, he did not plead in the English action that the French judgment was a complete nullity.
A more recent example of these rules in operation is provided by Merker v Merker.329 A German court had annulled a marriage, declaring it to be “null and void” in circumstances where, under German law, it should have been declared to be “a non-existent marriage”. Although the German court had jurisdiction, its decree would be regarded as a complete (p. 567) nullity by other German courts. Nevertheless, the decree was recognised in England. As the German court had jurisdiction, the English court “must accept the actual decision and exclude any evidence impugning it which falls short of showing that it was obtained by fraud or is contrary to natural justice”.330
(b) Raising defences available abroad
A closely related rule is that defences that were available before the foreign court cannot be raised in England. In such a case the defendant should have raised the defence in the foreign proceedings. Thus in Ellis v M’Henry;331
Judgment had been given in Canada in an action that would have failed had the defendant pleaded a certain composition deed. The plaintiff sued on this judgment in England, and the question was whether the defendant was entitled at that stage to set up the deed as a defence.
Bovill CJ dismissed the contention on the basis that this “would go to impeach the propriety and correctness of the judgment, and is a matter which cannot be gone into after the judgment has been obtained”.332
This doctrine was applied more recently by the Court of Appeal in Israel Discount Bank of New York v Hadjipateras:333
A judgment was granted in New York against two defendants in respect of guarantees given by them to the plaintiff bank. The guarantees provided that the defendants submitted to the jurisdiction of the New York courts. The second defendant, who was aged 21 when he entered into his guarantee, alleged that he only did so under the undue influence of his father, the first defendant. He raised this issue for the first time when enforcement of the New York judgment was sought in England, although he could have raised it during the New York proceedings.
The Court of Appeal accepted that, in principle, undue influence could come within the ambit of the defence that enforcement of the judgment would be against public policy, as could duress and coercion.334 However, since the defence of undue influence was “available” to him in New York (New York law on this defence being the same as English law), he could not now raise it in England. Stephenson LJ, relying on Ellis v M’Henry, said that “a defendant must take all available defences in a foreign country”335 and is at fault if he does not do so. Underlying this principle were considerations of “comity and the duty of the courts to put an end to litigation”.
Whilst the principle is undeniably a sound one, the question that arises in the instant case is whether an exception should be made to it in cases involving the defence of public policy. Public policy is treated as an exception to normal private international law rules in other areas336 and could be treated in the same way in this context. It has to be seriously questioned whether it is right to recognise and enforce a judgment when an allegation of a matter as (p. 568) serious as undue influence has not been considered in either the foreign or the English proceedings. Moreover, as will shortly be seen, where the defendant is relying on the analogous defences of fraud and natural justice, he is allowed to raise these defences in England even though they were available to him abroad, and were not raised there.337 There are therefore weighty arguments against the decision. In Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2)338 the Court of Appeal refused to apply the principles of issue estoppel to a Dutch judgment refusing recognition to a Russian judgment setting aside an arbitral award made in Russia on the ground that the Russian judgment was contrary to Dutch public policy. The reason for this was that the issues decided in the Dutch judgment were different from ones raised in the English court, since English public policy is not the same as Dutch public policy. In the light of this decision, Israel Discount Bank of New York v Hadjipateras339 should be considered as wrongly decided to the extent that it supports the proposition that a party cannot raise the public policy defence in England where that defence could have been raised in the country of origin.
The possibility that a defendant may be precluded from raising defences that were available before the foreign court inevitably raises the question of what is meant by a defence being “available” to a defendant abroad. In Israel Discount Bank of New York v Hadjipateras it was shown that New York law had a defence of undue influence and it was accepted that this was the same as the English defence.340 Presumably, if New York law had been different from English law and did not have a defence of undue influence, or had a narrower concept of undue influence which did not allow the defence to operate in a situation where the English defence would operate, the defence would not be “available” abroad and the second defendant would have been able to raise the issue in England. What is not clear is whether the concept of availability of a defence abroad is referring solely to the existence of a rule which allows a particular defence, or whether it is also referring to the existence of evidence which goes to establish the defence. If new factual existence of undue influence had only come to light after the New York proceedings had ended, it cannot be said, except in the most limited sense, that the defence was “available” to the defendant abroad. Neither can it be said that the defendant was at fault in failing to raise the defence. In this situation the defendant should be allowed to raise the defence in England.
What if the defendant has raised a defence during the foreign proceedings and this defence has failed; can he re-raise the defence in England? The conclusiveness principle in Ellis v M’Henry,341 which was quoted with approval in Israel Discount Bank of New York v Hadjipateras,342 prevents the defendant from doing so.
(ii) Foreign judgment obtained by fraud
If we omit all reference to private international law for the moment, we find a well-established rule that a domestic judgment may be impeached on the ground that it was obtained by fraud.343 The unsuccessful party, instead of appealing or applying for a new References(p. 569) trial, may bring an independent action to set aside the judgment.344 It is not a method that is encouraged,345 or one which, owing to the strict burden of proof imposed on the claimant, easily succeeds. It will not succeed unless he alleges and proves that new facts, evidential of fraud, have been discovered since the judgment and that they were not reasonably discoverable at the time of the trial. He must further prove that this new evidence, had it been adduced in the original action, would in all probability have had a material effect on the decision.346
Turning now to private international law, it is firmly established that a foreign judgment is impeachable for fraud in the sense that upon proof of “operative”347 fraud without which the judgment would not have been obtained to a high degree of probability by the person alleging it348 the judgment cannot be given effect in England.349
(a) Types of fraud
It is clear that, as in domestic law,352 a judgment will be denied recognition and enforcement if the court had been imposed upon by a trick not apparent at the time of the trial, but discovered later. Thus in Ochsenbein v Papelier:353
A French seller, in the course of a dispute in Paris with an English buyer, produced a writ showing that he had begun an action to recover the price of the goods. When remonstrated with, however, he burnt the writ then and there and agreed to refer the dispute to arbitration in London. He nevertheless proceeded with the action behind the buyer’s back and obtained judgment by default. The seller brought an action in the Court of Queen’s Bench on this judgment, and the Court of Chancery, when asked by the buyer to restrain the action, refused an injunction as being unnecessary. It was unnecessary because the above facts, if proved, would afford a good defence to the common law action. The fraud may consist of perjury by the successful party or witnesses.354
The rule that a judgment is impeachable for fraud applies in those rare cases where the foreign court itself has acted in a fraudulent manner. This occurred in Price v Dewhurst355 where, acting under Danish law, certain persons formed themselves into a court for the purpose of administering the property of a deceased testator. On proof that they, or some of them, were interested parties, their decision was treated by Shadwell V-C as fraudulent and void in so far as it favoured the judges themselves.356
References(p. 570) (b) Fraud and going into the merits of the foreign judgment
When fraud is alleged English courts have gone into the merits of the foreign judgment. This has happened both in the situation where the allegation of fraud has been raised and dismissed abroad, and in the situation where the defendant failed to raise this defence abroad, although it was available to him.
(i) Fraud has been raised abroad
In the case of foreign as distinct from domestic judgments, the English appeal courts have, on no fewer than four occasions, proceeded on the same evidence that was given at the original trial and have sustained a charge of fraud that had been investigated and dismissed by the foreign court. The first of these cases is Abouloff v Oppenheimer:357
This was an action brought on a Russian judgment which ordered the return of certain goods unlawfully detained by the defendant or, alternatively, the payment of their value. One defence was that the judgment had been obtained by fraud in that the plaintiff had falsely represented to the Russian court that the defendant was in possession of the goods, the truth being that the plaintiff himself continued in possession of them throughout. It was demurred that this was an insufficient answer in point of law, since the plea was one which the Russian court could, and as a matter of fact did, consider, and that to examine it again would mean a new trial on the merits. The demurrer was overruled.358
Lord Esher, at any rate, had no inhibitions. He said:
I will assume that in the suit in the Russian courts the plaintiff’s fraud was alleged by the defendants and that they gave evidence in support of the charge: I will assume even that the defendants gave the very same evidence which they propose to adduce in this action; nevertheless the defendants will not be debarred at the trial of this action from making the same charge of fraud and from adducing the same evidence in support of it.359
The next case is Vadala v Lawes,360 which raised the simple point whether an allegation of fraud which has already been fully investigated by a foreign court can once more be investigated in England. The Court of Appeal unanimously answered the question in the affirmative, and ordered a new trial with a view to discovering whether there had been fraud in relation to certain bills of exchange.
These two cases were followed in the third case, Jet Holdings Inc v Patel.361
The plaintiffs brought an action in California to recover money allegedly misappropriated by the defendant. The defendant appeared and claimed that he had suffered and been threatened with violence by or on behalf of the president of the plaintiff companies. A default judgment was awarded against the defendant after he failed to attend for a medical examination in California. An action was brought in England to enforce the judgment. This action failed.
The Court of Appeal held that the plaintiffs had implicitly, and even to some extent expressly, asserted to the Californian court that the defendant’s account of violence and threats was untrue. If it was true, this, together with the actual incidents of violence relied upon, was capable of amounting to fraud. On the other hand, fraud cannot be a defence if the foreign References(p. 571) court has not been deceived,362 or if what the defendant alleges is plainly untrue.363 The fraud alleged did not relate, as in the previous two cases, to the cause of action (here, the issue of whether the defendant had misappropriated the money); it was instead an example of what was described as being “collateral” fraud. However, this made no difference to the principles to be applied. In either case, “the foreign courts’ views on fraud are neither conclusive nor relevant”.364 The issue of fraud had to go on trial in England, where the facts would be considered afresh to see whether the defendant was entitled to resist enforcement on this basis.
Finally, in Owens Bank Ltd v Bracco365 the House of Lords has affirmed the common law rule as set out in Abouloff and Vadala. The case involved statutory enforcement under the Administration of Justice Act 1920. It was held that the defence of fraud under that Act uses the term “fraud” in the common law (ie Abouloff and Vadala) sense. Accordingly, the defendants were entitled to show that a St Vincent judgment had been obtained by fraud irrespective of whether they could produce fresh evidence not available to them, or reasonably discoverable by them, before the judgment was delivered. The statutory concept of fraud was settled and could not be altered except by further legislation. Lord Bridge, giving the unanimous decision of the Law Lords, went on to say,366 obiter, that, whilst there might be strong policy arguments for giving a foreign judgment the same finality as an English judgment, it was out of the question to alter the common law rule so that it was different from the statutory rule; to do so would lead to absurdity.
The effect of these decisions is that the doctrine as to the conclusiveness of foreign judgments is materially prejudiced. The Privy Council, in a subsequent case, has said that it does not regard the decision in the Abouloff case with enthusiasm, especially in its application to countries whose judgments the United Kingdom has agreed to register and enforce.367 Nevertheless the Privy Council has recently refused, on an interlocutory hearing on jurisdiction, to change the Aboulouff rule,368 and stated that “a nuanced approach might be required, depending on the reliability of the foreign legal system, the scope for challenge in the foreign court and the type of fraud alleged”.369 The Supreme Court of Canada in Beals v Saldanha has adopted a very different rule whereby the merits of a foreign judgment can be challenged for fraud only where the allegations are new and not the subject of prior adjudication.370 If the Supreme Court were to be faced with a case of fraud arising References(p. 572) in the context of recognition and enforcement at common law, it could overrule the common law rule as set out in Abouloff, although this would lead to the absurdity mentioned in Owens Bank Ltd v Bracco.371 In the meantime, it is necessary to find ways of avoiding the Abouloff rule.
Ways of avoiding the Abouloff rule
There are two ways372 of so doing: the first is to distinguish this rule; the second is to use the court’s inherent power to prevent misuse of its process.
The first way was adopted by the Court of Appeal in House of Spring Gardens Ltd v Waite,373 where the fact that the issue of fraud had already been litigated in Ireland estopped defendants from alleging, at the enforcement stage, that the prior Irish judgment had been obtained by fraud. What differentiated this case from the first three decisions374 mentioned above was said to be that the issue of fraud had been examined in Ireland in a second action (in 1987) separate from the original one (in 1983) in respect of which enforcement was sought.375 It was the judgment in this second action which created the estoppel. The result would have been different and the question of whether there had been fraud re-examined if it had been possible either to impeach the 1987 judgment on the basis that this judgment had itself been obtained by fraud or to produce new evidence of fraud in relation to the 1983 judgment.376
The crucial distinction that has to be drawn is between those foreign judgments which create an estoppel in relation to the issue of fraud and those that do not.377 It is doubtless easier to satisfy the requirements for an estoppel378 if there has been a separate action abroad dealing solely with the issue of fraud, but it may be possible to satisfy these requirements without this. Furthermore the foreign judgment creating the estoppel does not have to have been obtained in the country which granted the original judgment for which recognition and enforcement is now sought.379 The English courts have a discretion to stay the English trial determining whether a foreign judgment was obtained by fraud, pending trial of the same issue in another country.380
References(p. 573) The second way was adopted by the Privy Council in Owens Bank Ltd v Etoile Commerciale SA.381 Lord Templeman, giving the decision of the Privy Council, pointed out that every court has an inherent power to prevent misuse of its process,382 whether by a claimant or a defendant, and that:
Where allegations of fraud have been made and determined abroad, summary judgment or striking out in subsequent proceedings are appropriate remedies in the absence of plausible evidence disclosing at least a prima facie case of fraud.383 No strict rule can be laid down; in every case the court must decide whether justice requires the further investigation of alleged fraud or requires that the plaintiff, having obtained a foreign judgment, shall no longer be frustrated in enforcing that judgment.384
(ii) Fraud has not been raised abroad
The decision of the Court of Appeal in Syal v Heyward385 takes matters even further, for it allows retrial in England notwithstanding that the claimant deliberately refrained from raising in the original trial the facts upon which the allegation of fraud is based. The strange result appears to follow that an English defendant to a foreign action may reserve a defence of fraud available to him with the intention of raising it if the judgment is invoked against him in England.386 There can also be a retrial in England even though there had been an attempt to raise the defence of fraud abroad at a late stage and this had not been allowed.387
(iii) Foreign judgment contrary to public policy
No effect can be given to a foreign judgment which is contrary to the English principles of public policy.388 There is no need to add anything here to what has already been said about the subject of general public policy,389 except to give some examples of the application of the doctrine to the particular case of a foreign judgment.390
References(p. 574) (a) Application of general principles of public policy to recognition and enforcement of foreign judgments
Israel Discount Bank of New York v Hadjipateras391 shows that undue influence, duress and coercion can come within the ambit of the public policy defence.392 The public policy defence also guards against the effectiveness of a judgment given by a court that is biased or corrupt.393 The defence of public policy can be raised in England in this situation even if it was available in the original proceedings but was not put forward there.394
In Phillip Alexander Securities and Futures Ltd v Bamberger395 the Court of Appeal indicated that a foreign judgment obtained in defiance of an anti-suit injunction may not be recognised or enforced in England.
In Vervaeke v Smith396 the House of Lords held that recognition of a Belgian judgment invalidating a sham marriage (ie where the parties had no intention of living together as husband and wife) would be against public policy.397
In Soleimany v Soleimany, there are obiter dicta in the Court of Appeal to the effect that it would be against public policy to enforce a foreign judgment enforcing a contract in the situation where the foreign court has found as a fact that it was the common intention of the parties to commit an illegal act in a state which England regards as a foreign and friendly state.398 As an example going the other way, courts in Canada have enforced foreign judgments for gambling debts even though such debts are not recoverable under the law of the province where enforcement was sought and the activity giving rise to the debt would be criminal.399
References(p. 575) One particularly difficult question that arises is whether the enforcement of a foreign judgment for exemplary or punitive damages would be against public policy.400 It has been said in the Court of Appeal that there is:
nothing contrary to English public policy in enforcing a claim for exemplary damages, which is still considered to be in accord with the public policy in the United States and many of the great countries of the Commonwealth.401
The British Columbia Court of Appeal402 and the Supreme Court of South Australia (Full Court)403 have held that the enforcement of a judgment for punitive damages was not against public policy. The former court held that the enforcement of a judgment for treble damages was akin to one for exemplary damages and was not against public policy.404 Damages awarded, even though not punitive damages, may appear to be excessive. Nonetheless, the Supreme Court of Canada has held that, although the sums awarded by a jury in Florida were considerably larger than those that would be granted as damages in a comparable case in Canada (and indeed appeared disproportionate to the original value of the land in question), this in itself would not bar enforcement under the public policy defence.405 It did not violate Canadian principles of morality.
In contrast, the German Federal Supreme Court has refused on public policy grounds to enforce that part of a Californian judgment which was in respect of exemplary and punitive damages.406 However, no objection was made to the fact that under the judgment 40 per cent of the money received was to be handed over to the plaintiff’s lawyer under a contingency fee agreement. Nor was any objection made to the fact that the damages for pain and suffering were more than twenty times what a German court would award.
References(p. 576) (b) Using human rights law to cast light on the public policy defence
The public policy defence is informed by the requirements under Article 6 of the European Convention on Human Rights (ECHR). It sheds light on when there would be a denial of a fair trial abroad. This is the position under the Brussels/Lugano system407 and it applies equally to recognition and enforcement under the traditional rules. The Court of Appeal in Al-Bassam v Al-Bassam408 said that Lewison J, at first instance, was correct to voice his concern that the judgment of a foreign court given in proceedings which, in the eyes of English law, had failed to meet the requirements of a fair trial, would not be recognised in England.409 This was because an English court when applying its rules on recognition of foreign judgments “will have regard to its own obligation to act in a manner which is not inconsistent with the Convention right to a fair trial”.410 The English rule on the recognition of foreign judgments that would have to be applied to prevent recognition would be the public policy defence.
(iv) Foreign judgment contrary to natural justice
(a) The meaning of contrary to natural justice
Although the judges have frequently asserted that a foreign judgment obtained in proceedings which contravene the principles of natural justice cannot be given effect in England, it is extremely difficult to fix with precision the exact cases in which the contravention is sufficiently serious to justify a refusal of recognition and enforcement. Shadwell V-C once said that “whenever it is manifest that justice has been disregarded, the court is bound to treat the decision as a matter of no value and no substance”.411 But this goes too far. As we have already seen, a foreign judgment is effective notwithstanding that it patently proceeded upon a wrong view of the evidence or of the foreign law, or even of English law, but it would not be extravagant to suggest that this is a questionable application of natural justice. Such a judgment is in a wide sense unjust, but it is difficult to trace delicate gradations of injustice so as to reach a definite point at which it deserves to be called the negation of natural justice. It is therefore not enough to allege that the decision is very wrong or works injustice in the particular case.412
The expression “contrary to natural justice” has, however, figured so prominently in judicial statements that it is essential to fix, if possible, its exact scope. When applied to foreign judgments it relates merely to alleged irregularities in the procedure adopted by the adjudicating court, and has nothing to do with the merits of the case. For many years the courts have been vigilant to ensure that the defendant has been given due notice and a proper opportunity to be heard,413 and natural justice was regarded as being confined to these two requirements. However, there is more recent authority to the effect that these are merely instances of a wider principle of natural justice, according to which the court has to consider whether there has been a procedural defect such as to constitute a breach of an English court’s views of substantial justice.414
References(p. 577) (b) Due notice and proper opportunity to be heard
Concern over due notice has arisen in the situation where jurisdiction has been exercised over absent defendants.415 The English courts are reluctant to criticise the procedural rules of foreign countries on this matter and will not measure their fairness by reference to the English equivalents but, if the mode of citation has been manifestly insufficient as judged by any civilised standard, they will not hesitate to stigmatise the judgment as repugnant to natural justice and for that reason to treat it as a nullity. The relevant cases in modern times have dealt largely with foreign divorces and annulments, and want of notice or of an opportunity to be heard are now dealt with specifically in the Family Law Act 1986.416 Due notice is concerned with notice of the proceedings417 and not of the steps necessary to defend those proceedings.418 If the defendant had knowledge of the foreign proceedings the lack of due notice defence cannot be used.419 If the defendant has agreed to a particular method of service, and service has been effected in accordance with that method, it is immaterial that the defendant did not receive actual notice.420 If the defendant has confessed to judgment and a judgment by confession has been entered against the defendant without notice of proceedings in accordance with foreign procedural rules, the lack of due notice cannot be used.421
As regards the requirement of a proper opportunity to be heard, it is a violation of natural justice if a litigant, though present at the proceedings, was unfairly prejudiced in the presentation of his case to the court. A clear example of this would be if he were totally denied a right to plead, but the defence of unfair prejudice is not one that is lightly admitted.422 It is not sufficient, for instance, that his personal evidence was excluded, if the procedural rule of the forum is that parties may not give evidence on their own behalf.423 On the other hand, granting judgment against an unrepresented litigant, who had attended with documents, without hearing the litigant or adjourning to allow the material to be put into proper form, was effectively a denial of a hearing on the merits and thus against natural justice.424 It is a breach of the ECHR to deny the defendant’s lawyers permission to put forward the defence case in relation to a civil claim as a penalty for non-appearance by the defendant at a criminal trial425 and when it comes to recognition and enforcement of a foreign judgment given in such circumstances the natural justice defence should apply. The question whether the defendant had a proper opportunity to present his side of the case arose in Jacobson v Frachon.426
A French court, before giving judgment in an action brought by an English buyer of goods, alleged to be of inferior quality, against a French seller, appointed an expert to examine the goods in London. The expert, who was a relative of the defendant, made no proper examination, and, though deputed by the court to take evidence, refused to hear the evidence of the plaintiffs and their witnesses. He ultimately made a report adverse to the plaintiffs which was found by Roche J to be the uncandid production of a biased and prejudiced mind. Judgment for the defendant was given by the French court. The plaintiffs then sued the defendant in England for breach of the original contract. The defendant pleaded the French judgment in bar of action, but the plaintiffs replied that this judgment was contrary to natural justice.
The Court of Appeal held that the judgment was not void as contravening the requirements of natural justice, since the plaintiffs had not been prevented from presenting their case to the court. It appeared that by French law the court was not bound by the expert’s report, but could reject it if satisfied of its inaccuracy. The plaintiffs therefore were at liberty to produce witnesses to the court and to attack the report. It further appeared that the plaintiffs had taken this course, although without success. It could not, therefore, be said that the court had refused to hear the evidence of the litigant.
(c) Substantial justice
Normally, an allegation that there has been a lack of natural justice will involve either or both of the requirements of due notice and a proper opportunity to be heard. However, the Court of Appeal in Adams v Cape Industries plc427 did not regard the defence as being restricted to these two instances.428 The ultimate question was whether there was a procedural defect which constituted “a breach of an English court’s views of substantial justice”.429 The defendants in the present case had proper notice of the proceedings but chose not to contest them. Nevertheless, it was said, obiter, that there was a breach of natural justice in the way that the Federal District Court judge in Texas had assessed damages in favour of the 206 plaintiffs; this was fixed between the plaintiffs and judge on an average basis per plaintiff rather than on the basis of their individual entitlement according to the evidence.430 The conclusion of the Court of Appeal that, in such circumstances, a judgment should not be enforced in England is no doubt correct. But it is questionable whether the use of a wide definition of the concept of natural justice was the best way of achieving this result. It opens up a gap between, on the one hand, commercial cases and, on the other hand, cases of recognition of foreign divorces and annulments, where the natural justice defence is expressly confined to instances of want of due notice and opportunity to be heard.431 Want of substantial justice was a much criticised concept, and is no longer a basis for the refusal of recognition of foreign divorces, etc.432 The use of the concept of substantial injustice in relation to the recognition and enforcement of foreign judgments creates new uncertainty over the ambit of the defence of natural justice. Cases of procedural unfairness which do not involve a lack of due notice or opportunity to be heard would be better dealt with under the defence of public policy.433
References(p. 579) If a foreign judgment, which otherwise satisfies the requirements for recognition and enforcement in England, is set aside in the country of origin by a judgment which does not accord with the principles of natural or substantial justice, the setting aside may be refused recognition and the lower instance judgment may be recognised and enforced in England.434
(d) The availability of a remedy in the judgment-granting country
The question was raised in the Adams case of whether the defendants should have sought a remedy in Texas in respect of the lack of natural justice. The Court of Appeal said,435 using the analogy of fraud,436 that in cases involving lack of due process and opportunity to be heard it may well be that the defendant does not have to show that he has sought to take advantage of any available remedy in the foreign courts before he can raise the defence of lack of natural justice in England at the enforcement stage. However, in cases involving a lack of substantial justice other than the two primary kinds the position is different; here it is relevant to consider the fact that there is the possibility of the correction of error in the country where the judgment was obtained. Nonetheless, this was not fatal to the use of the defence on the facts of the case, since there was no evidence that the defendants had any knowledge of the method used for the assessment of the damages in the USA until the stage when enforcement of the judgment was sought in England. Likewise the exhaustion of appeal procedures in the judgment-granting state cannot be a prerequisite in the situation where the possible ground of appeal is not apparent to the defendant in adequate time to pursue this course.437 But in a case where the defendant argued that the damages awarded in a foreign judgment were incorrect because there had been double counting, the court did not refuse enforcement on the basis that the judgment might have been appealed successfully abroad.438
What happens if the defendant actually raised the issue of natural justice in the foreign judgment-granting court, and the issue was determined by that court? The Jacobson case suggests that in such a case the defence of lack of natural justice (at least when referring to a lack of due notice and opportunity to be heard) is no longer available. However, this proposition was doubted in Jet Holdings Inc v Patel,439 a case decided on the basis of fraud which also raised the issue of a lack of natural justice. In fraud cases the normal rule is that an English court at the recognition and enforcement stage can go into this issue, even though it has previously been litigated in the judgment-granting country.440 The Court of Appeal expected that the same rule would apply in cases involving a lack of natural justice, although it did not finally decide this point.
(e) The relationship with human rights law
The defence of lack of natural justice overlaps to a great extent with the defence established by Article 6 of the ECHR. Although it has been argued that Article 6 may now have taken over the role of the common law defence of lack of natural justice,441 it appears that the overlap is (p. 580) not complete. As will be discussed next, Article 6 of the ECHR, as interpreted by the House of Lords in Government of the United States of America v Montgomery (No 2),442 precludes the recognition and enforcement of a foreign judgment only if there is a flagrant breach of the Article 6 standards by the court of origin. An analogous flagrancy requirement does not exist under the common law defence of lack of natural justice, so it seems that this defence can apply in cases in which Article 6 of the ECHR is not engaged.
(v) A breach of Article 6 of the ECHR443
There is a separate defence, the source of which is Article 6 of the ECHR,444 implemented in the United Kingdom by the Human Rights Act 1998, and the jurisprudence of the European Court of Human Rights (ECtHR), rather than the English rules on recognition and enforcement of foreign judgments. Judge Matscher in the ECtHR in Drozd and Janousek v France and Spain445 said that an ECHR Contracting State may incur responsibility by reason of assisting in the enforcement of a foreign judgment, originating from a Contracting State or a non-Contracting State, which has been obtained in conditions which constitute a flagrant breach of Article 6, whether it is a civil or criminal judgment.446 This is an example of how the ECHR has indirect effect. It means that an English court which enforces a foreign judgment which has been obtained in such circumstances will itself be in breach of Article 6. The ECtHR in Pellegrini v Italy447 adopted a wider principle than this by not requiring the breach to be “flagrant”. It held that the Italian courts, before authorising the enforcement of a decision of the Vatican courts, should have satisfied themselves that the Vatican court proceedings fulfilled the guarantees of Article 6 and that “A review of that kind is required where a decision in respect of which enforcement is requested emanates from the courts of a country which does not apply the Convention.”448
The Court of Appeal in Al-Bassam v Al-Bassam449 refused to accept that the ECHR has this indirect effect, even though the decision of the ECtHR in Pellegrini v Italy was cited to it. It accepted that a foreign judgment, granted in circumstances where a fair trial had been denied abroad, would not be recognised. But the reason for this was because the English rules on recognition say it should not be, not because human rights law says it should not.450 Nonetheless, as has been seen,451 the human rights position was not irrelevant. When operating the private international law rules on recognition and enforcement of foreign judgments, account would be taken of the human rights position. In other words human rights law is used to cast light upon private international law concepts.
References(p. 581) However, in a case decided a few weeks after Al-Bassam, the House of Lords in Government of the United States of America v Montgomery (No 2)452 accepted that Article 6 can have indirect effect in cases of enforcement of foreign judgments. The case concerned the registration in England under section 97 of the Criminal Justice Act 1988 of a confiscation order made in the USA in circumstances where the fugitive disentitlement doctrine, under which a court does not have to hear or decide the appeal of a fugitive, was applied. Registration requires the High Court to be “of the opinion that enforcing the order in England and Wales would not be contrary to the interests of justice”.453 Burnton J, at first instance, had decided that it would not be contrary to the interests of justice to do so, even though the order would have been made in breach of the requirements of Article 6 of the ECHR if that Article had applied to the making of that order (which it did not because it was made in the USA). On appeal to the Court of Appeal,454 it was argued that: (i) if the ECHR had applied in the USA, the confiscation order would have been made in contravention of Article 6 and of Article 1 of Protocol 1 in the ECHR; (ii) this being the case, if the courts registered the order, they would be contravening section 6 of the Human Rights Act 1998. The Court of Appeal did not accept that there had been a breach by the US courts of the standards required by Article 6. But even if there had been such a breach, it could not be said that the decision to register gave rise to any breach of Article 6 of the Convention by the English court. The House of Lords affirmed the decision of the Court of Appeal. However, Lord Carswell, who delivered the unanimous judgment of the House of Lords, followed the dictum of Judge Matscher in the Drozd case and accepted that enforcement of a foreign judgment might in principle give rise to responsibility on the part of a Convention State.455 Under this principle there must be a flagrant breach of Article 6456 and on the facts of the instant case there was no such breach. The fugitive disentitlement doctrine applied in the USA, although it failed to secure all of the protection required by Article 6, was said to be a rational approach which had commended itself to the federal jurisdiction in the USA. As such, it could not be described as a flagrant breach. The House of Lords refused to accept that Pellegrini v Italy gave rise to a wider principle under which it was not necessary to show that there had been a flagrant breach abroad. The Pellegrini case was distinguished on the basis that it turned on the relationship between the Italian civil courts and the Vatican court. This confines the Pellegrini case to its facts, ie the enforcement of Vatican court judgments in Italy. According to this view, it is therefore not an authority in the private international law situation where the courts in one state are being asked to recognise and enforce the judgment granted in another state. This is an example of the English courts getting human rights law wrong.457
In Maronier v Larmer458 the Court of Appeal held that there is a strong presumption that the procedures of other signatories of the ECHR are Article 6 compliant. In Joint Stock Co ‘Aeroflot-Russian Airlines’ v Berezovsky, Arden LJ stated obiter that this principle is not limited References(p. 582) to states bound by the Brussels/Lugano system.459 This is not an irrebuttable presumption. When an English court is asked to enforce a foreign judgment, it need not actively inquire whether the foreign court violated the standards of Article 6, but is entitled to assume that the foreign court acted in a proper way unless the contrary was proved.460
If a foreign judgment, which otherwise satisfies the requirements for recognition and enforcement in England, is set aside in the country of origin by a judgment which does not accord with the safeguards of Article 6, the setting aside may be refused recognition and the lower instance judgment may be recognised and enforced in England.461
(vi) A foreign judgment on a matter previously determined by an English court462
A foreign judgment will not be recognised if there has been a prior English judgment in respect of the same matter. The House of Lords so held in Vervaeke v Smith:463
In 1954, the appellant, a Belgian domiciled woman, entered into a sham marriage (ie the parties did not intend to live as husband and wife thereafter) with an Englishman (Smith) in order to avoid deportation. In 1970 the appellant married in Italy, Messina, who died on the day of the ceremony. The appellant wished to inherit Messina’s property as his “wife”. An obvious obstacle to this was her earlier marriage to Smith. She, therefore, sought a decree of nullity in England in respect of her first marriage on the ground of lack of consent. This petition was dismissed;464 the marriage was not invalidated, even though it was a sham marriage. Later, the appellant went to Belgium and obtained a nullity decree on the ground that the marriage was a sham. Armed with this decree, the appellant returned to England and sought a declaration that the Belgian decree was entitled to recognition here (the first petition), and a declaration that, this being so, the marriage between the appellant and Messina was valid (the second petition).
Waterhouse J dismissed both petitions and an appeal to the Court of Appeal was dismissed. The appellant then appealed to the House of Lords.
The House of Lords unanimously dismissed both petitions, thereby refusing recognition of the Belgian judgment.465 The earlier English judgment, which determined the validity of the marriage, meant that the matter was res judicata.466 As far as the appellant’s first petition was concerned, the English judgment operated as a cause of action estoppel preventing the same matter from being raised before the English courts. It would prevent the appellant from directly seeking a nullity decree in England, and it was said that she should be in no better position by virtue of proceeding indirectly by obtaining a judgment References(p. 583) abroad and then seeking recognition of this judgment.467 The Belgian judgment was in respect of the very matter, ie the validity of the marriage, which had previously been determined in the English judgment. As regards the second petition, the English judgment operated as an issue estoppel preventing the granting of the declaration which the appellant sought.468 Although the English judgment did not actually determine the validity of the appellant’s second marriage, it did decide the issue upon which this was dependent, the validity of the appellant’s first marriage.
Vervaeke leaves open two questions.469 First, what would happen if the English judgment in respect of the same matter is given after the foreign judgment for which recognition is sought.470 The reasoning of the House of Lords could apply equally well to prevent recognition of the foreign judgment in this situation. Secondly, what would happen where there are two inconsistent foreign judgments given in different states in respect of the same matter, both of which are required to be recognised at common law? This presents more of a problem since the principles in Vervaeke do not provide an answer. However, the Privy Council in Showlag v Mansour471 has now provided an answer to the question, which is examined below.472
One final observation should be made in connection with Vervaeke. The specific question raised in that case of recognition of a foreign nullity decree following an earlier English decision in the same matter is now dealt with by Brussels II bis473 and the Family Law Act 1986.474 However, Vervaeke still remains a good authority on the general principles to be applied in cases involving recognition of foreign judgments (other than divorces, annulments or judicial separations)475 on matters previously determined by an English court, and has been applied subsequently in a commercial context.476
(vii) A foreign judgment on a matter previously determined by a court in another foreign state
We are concerned here with the situation where there are two irreconcilable foreign judgments, each pronounced by a court of competent jurisdiction and both being final and not open to impeachment on any ground. This situation arose in Showlag v Mansour.477
The legal representatives of a deceased businessman, believing that money deposited in London banks had been stolen by the defendant employee of the deceased, instituted proceedings against him in various jurisdictions. In 1990 an English court held that this money had been stolen by the defendant. In 1991 an Egyptian appeal court dismissed the legal representatives’ civil claim on the ground that the money had been a gift to the defendant. Some of the money was held in Jersey and actions were brought there for its return. It was References(p. 584) argued before the Jersey courts that the question of whether the money was a gift was res judicata following the English judgment. The Court of Appeal of Jersey held that the legal representatives could not insist on the English judgment being applied in their favour and suggested to the parties that they might prefer to relitigate in Jersey the issue of whether there had been a gift. The legal representatives appealed to the Privy Council.
The Privy Council held that it was necessary to determine which of the two conflicting judgments should be given priority and that the earlier of the two judgments (ie the English judgment) must be recognised and given effect to the exclusion of the other.478 In coming to this conclusion the Privy Council was influenced by the fact that the same solution was adopted by the Brussels Convention in the situation where there are two irreconcilable judgments; one granted in a Contracting State, the other in a non-Contracting State.479
(viii) An overseas judgment given in proceedings brought in breach of agreement for settlement of disputes
Section 32 of the Civil Jurisdiction and Judgments Act 1982 provides an important defence which is that:
a judgment given by a court of an overseas country in any proceedings shall not be recognised or enforced in the United Kingdom if—
(a) the bringing of those proceedings in that court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country; and
(b) those proceedings were not brought in that court by, or with the agreement of, the person against whom the judgment was given; and
(c) that person did not counterclaim in the proceedings or otherwise submit to the jurisdiction of that court.480
The background to section 32481 is that some legal systems are much stricter than others in their requirements as to when an arbitration or choice of court agreement is incorporated into a contract. A party who wants to avoid such an agreement may be able to do so by seeking trial in a country which does not accept the agreement as being effective. He may then obtain a judgment as to substance in his favour. If the English courts recognise the agreement, section 32 provides that they shall not recognise and enforce this foreign judgment.
Within a short time of section 32 coming into force, the English courts had to consider the operation of this section in Tracomin SA v Sudan Oil Seeds Co Ltd (Nos 1 and 2).482 A dispute arose between the Sudanese sellers of peanuts and the Swiss buyers. The contracts between the parties References(p. 585) contained a clause providing for the settlement of disputes by arbitration in London. Despite this, the buyers brought an action for damages before the Swiss courts. The sellers unsuccessfully sought a stay of those proceedings, relying on the arbitration clause. The Swiss courts decided that the arbitration clause was invalid because it had not been properly incorporated into the contracts under Swiss law—no evidence of English law, which governed the contracts, having been given. Under English law the arbitration clause had been incorporated into the contracts.
In Tracomin (No 1) the buyers sought an injunction in England restraining the arbitration in London, on the basis that the Swiss judgment created an estoppel in relation to the issue of the validity of the arbitration clause. The Court of Appeal applied section 32 and refused to recognise the Swiss judgment.483 Sir John Donaldson MR (Ackner and Fox LJJ concurring) confined his comments to the precise point of the appeal, whether sections 32 and 33 applied to a foreign judgment granted before those provisions had come into force.484 Having decided that in the circumstances of the case485 they did, it was accepted without argument that the requirements for non-recognition under section 32 were satisfied. This is clearly right. The reasons were explained by Staughton J at first instance. There was an agreement under which the dispute was to be settled otherwise than by proceedings in Switzerland, since the arbitration clause had been validly incorporated into the contracts according to the governing law. The decision of the Swiss court that there was no valid arbitration agreement was immaterial because of section 32(3),486 which provides487 that a court in the United Kingdom is not bound by any decision of the overseas court relating to any of the matters in, inter alia, section 32(1). The first requirement under section 32(1)(a) was, therefore, satisfied. These Swiss proceedings were not brought with the agreement of the sellers; the second requirement under section 32(1)(b) was, therefore, also satisfied. The sellers, although they appeared, did not, according to section 33(1)(b) of the 1982 Act, submit to the jurisdiction of the Swiss courts since they only appeared in order to ask the court to stay the proceedings on the ground that the dispute should be submitted to arbitration. The third requirement under section 32(1)(c) was, therefore, also satisfied.
In Tracomin (No 2), which was decided on the next day, the Court of Appeal used their discretionary powers to grant the sellers an injunction restraining the buyers from litigating in Switzerland.488 The jurisdictional basis for granting this was the existence of the agreement to submit disputes to English arbitration.489
(a) The scope of the section
Section 32 only applies to a judgment given by a court of an “overseas country”, ie any country or territory outside the United Kingdom.490 This means that it does not apply to the judgments of Scottish or Northern Ireland courts.491
References(p. 586) Section 32(1) does not distinguish between recognition and enforcement at common law and by statute and, as will be seen, the defence can operate in respect of at least some of the forms of statutory recognition and enforcement.492 However, its impact will be felt most at common law because there was already a similarly worded provision to section 32 under the Foreign Judgments (Reciprocal Enforcement) Act 1933,493 which it replaces.494
(b) The three requirements for the operation of section 32
(i) There must be an agreement under which the dispute was to be settled otherwise than by proceedings in the courts of the country where the proceedings were brought, and the bringing of the proceedings in that country must be contrary to that agreement (section 32(1)(a)).495 This requirement would be satisfied in the following examples: proceedings were brought in Japan when an agreement provided that all disputes were to be settled by trial in England; proceedings were brought in New York when an agreement provided that all disputes were to be settled by arbitration in Switzerland;496 proceedings were brought in Brazil when an agreement provided that all disputes were to be settled by arbitration in Brazil. The agreement for settlement of disputes will normally take the form of a choice of jurisdiction clause or an arbitration clause contained in a written contract between the parties. It could, however, take the form of an agreement made after the dispute had arisen and could, whenever it was made, be an oral agreement.
The party seeking recognition or enforcement of the overseas judgment can, however, challenge the agreement. Section 32(2) provides that the defence under section 32(1) does not apply where the agreement was “illegal, void or unenforceable or was incapable of being performed for reasons not attributable to the fault of the party bringing the proceedings in which the judgment was given”. In the absence of a foreign decision creating an issue estoppel,497 an English court will have to determine these matters itself. A decision on whether an agreement is illegal, void or unenforceable raises a problem of the applicable law. This will be solved by applying the law governing the agreement as identified using traditional English choice of law principles.498 In Tracomin SA v Sudan Oil Seeds Co Ltd,499 it will be recalled that References(p. 587) the question arose of whether an arbitration clause had been validly incorporated into the contracts. By English law the arbitration clause had been incorporated into the contracts but by Swiss law it had not. Staughton J accepted that English law, as the governing law, should be applied on this question, and that the arbitration clause was validly incorporated into the contracts.500
(ii) It must be shown that the person against whom the judgment was given neither brought the proceedings in the first place nor agreed to the proceedings being brought in that court by the other party (section 32(1)(b)). This is a negative requirement and is concerned to ensure that the agreement for settlement of disputes has not been overridden by either of the above two types of conduct.
(iii) It must be shown that the person against whom the judgment was given did not counterclaim or otherwise submit to the jurisdiction of that court (section 32(1)(c)). This shows a similar concern to that shown under section 32(1)(b), but is dealing with the conduct of the party against whom the judgment was given after the proceedings have been brought. The losing party abroad must not have submitted to the jurisdiction by putting in a counterclaim or in any other way (eg by fighting the action on its merits). Only such counterclaims as amount to a submission count for these purposes.501 It is important to note that, in deciding whether there has been submission, section 33 of the 1982 Act will apply.502 Thus a counterclaim to obtain the release of property threatened with seizure does not amount to a submission and, accordingly, section 32 will operate.503 Nor does an alternative defence on the merits amount to a submission where the defendant makes it abundantly clear that his primary purpose is to challenge the jurisdiction of the foreign court.504 Nor does a defendant, who is a company incorporated and operating in the territory of the foreign court, submit to the jurisdiction of the foreign court if it had no other choice than to defend the merits of the case, having lost the jurisdictional argument, pending renewing his jurisdictional challenge at the appeal stage.505
(c) Decisions of foreign courts in respect of the above matters
Section 32(3) provides that “a court in the United Kingdom shall not be bound by any decision of the overseas court relating to any of the matters mentioned in subsection (1) and (2)”. Thus, as has already been mentioned, in Tracomin SA v Sudan Oil Seeds Co Ltd506 a Swiss court, applying Swiss law, had held that the English arbitration clause was not validly incorporated into the contracts. When the question of recognition of the judgment arose in England, section 32 was raised as a defence. In deciding that there was a valid agreement on arbitration, Staughton J held that the decision of the Swiss court was immaterial, according to section 32(3).
References(p. 588) Section 32(3) does not apply to the decision of a court other than the overseas court which gave the judgment. Instead, the normal principles of issue estoppel507 will apply, and, according to these principles, issues relating to an agreement on jurisdiction may have to be regarded as being settled by the decision of a foreign court.508 To take an example:
Section 32 is raised as a defence to a judgment given in State A and an English court has to decide whether an agreement providing for jurisdiction in State B is valid. The overseas court in State A decided that it was not. The English court is not bound by this decision because section 32(3) applies. However, a court in State C had decided that the agreement was valid. If this judgment is recognised it may create an estoppel in England which prevents any denial that the agreement is valid.
The common law doctrine that a foreign judgment, though creating an obligation that is actionable in England, cannot be enforced in England except by the institution of fresh legal proceedings is subject to important exceptions introduced by a number of statutes, the most important of which are the Civil Jurisdiction and Judgments Act 1982, as amended by the Civil Jurisdiction and Judgments Act 1991 (which deals with both recognition and enforcement within the United Kingdom and under the Brussels Convention (replaced in virtually all cases by the Recast of the Brussels I Regulation), the Lugano Convention and the Hague Convention on Choice of Court Agreements 2005); the Administration of Justice Act 1920, Part II; the Foreign Judgments (Reciprocal Enforcement) Act 1933 and the European Communities Act 1972. Another important statute in this field is the State Immunity Act 1978. We will deal with these statutes separately. As far as the Civil Jurisdiction and Judgments Act 1982, as amended, is concerned, the provisions therein on recognition and enforcement within the United Kingdom and under the Brussels, Lugano and Hague Conventions will also be dealt with separately. Recognition and enforcement under the Recast of the Brussels I Regulation also constitutes an exception to the common law doctrine but is not a statutory exception and will therefore be considered briefly in another part of this chapter and in more detail in the next chapter.
(a) The Civil Jurisdiction and Judgments Act 1982: Recognition and enforcement within the United Kingdom509
(i) Enforcement of United Kingdom judgments in other parts of the United Kingdom
Where a judgment is given in one part of the United Kingdom (ie England and Wales, Scotland and Northern Ireland), section 18 of the 1982 Act provides for its enforcement in another part of the United Kingdom by way of registration under Schedules 6 (money provisions) or 7 (non-money provisions). A judgment to which section 18 applies can be enforced in another part of the United Kingdom only in this way,510 ie the common law rules on References(p. 589) enforcement cannot be used. Schedules 6 and 7 will only apply where there is a “judgment” as defined under section 18.
Section 18 initially gives a wide definition to the concept of a judgment.511 It means, inter alia, “any judgment or order . . . given or made by a court of law in the United Kingdom”. A judgment of an inferior court is therefore covered, as is a judgment in rem. It also includes “any award or order made by a tribunal” and “an arbitration award”.512 The section then gives a detailed list of judgments which it does not cover.513 To take some examples, it does not apply to: (i) a judgment given in a magistrates’ court; (ii) a judgment given in proceedings other than civil proceedings; (iii) a judgment given in the exercise of jurisdiction in relation to insolvency law, within the meaning of section 426 of the Insolvency Act 1986;514 (iv) so much of a judgment as concerns the status or legal capacity of an individual;515 (v) so much of a judgment as is a provisional measure other than an interim payment; (vi) a maintenance order which is enforceable under the separate statutory provisions dealing with enforcement of maintenance orders in another part of the United Kingdom;516 (vii) a judgment of a court outside the United Kingdom which falls to be treated for the purposes of its enforcement as a judgment of a court of law in the United Kingdom by virtue of registration under one of the statutory schemes of enforcement of overseas judgments. Finally, to further complicate matters, section 18 contains a few limited specific inclusions within its scope,517 eg fines for contempt of court.
(a) Enforcement of money provisions
In cases where there is a judgment as defined under section 18, the procedure under Schedule 6 for enforcement of money judgments is as follows.518
A certificate in respect of the judgment is obtained in the original court, whether it is a judgment of a superior or inferior court. This is then registered, within six months, in the prescribed manner in the superior court of the other part of the United Kingdom in which enforcement is sought—in England and Wales or Northern Ireland the High Court, in Scotland the Court of Session. A registered certificate is, for the purposes of its enforcement, of the same force and effect as a judgment of the registering court, which has the same powers in relation to enforcement as if it had given the original judgment.519
There are few defences to enforcement under Schedule 6. A defendant cannot impeach the judgment on its merits and, unlike at common law, cannot plead that the court in the other part of the United Kingdom lacked jurisdiction. Moreover, the defences available at common law cannot be used,520 and section 32 of the 1982 Act cannot apply because the judgment is not given by a court of an “overseas” country.
References(p. 590) The only defences to enforcement under Schedule 6 that a defendant is allowed under the 1982 Act are to be raised after registration and are as follows: first, the registering court must set aside the registration if the procedure in the Schedule has not been complied with; secondly, it may set aside the registration if satisfied that there was an earlier judgment dealing with the matter in dispute given by another court having jurisdiction in the matter.521 The limited nature of the defences means that the party who objects to the judgment given in the original court has to go there and appeal against it, rather than raise his objections when enforcement of the judgment is sought in another part of the United Kingdom.
This, however, raises the problem of an appeal against the original judgment overturning or amending that judgment. This is met in Schedule 6 by providing that a certificate shall not be issued unless, under the law of the part of the United Kingdom in which the judgment was given: “(a) either the time for bringing an appeal against the judgment has expired . . . or such an appeal . . . has finally been disposed of; and (b) enforcement of the judgment is not for the time being stayed or suspended, and the time available for its enforcement has not expired”.522
Even after registration there is a power given to the registering court to stay proceedings for enforcement pending the outcome of an application, under the law of the part of the United Kingdom in which the judgment was given, to set aside or quash the judgment.523
There are special provisions on costs and interest.524
(b) Enforcement of non-money provisions
The 1982 Act extends the previous statutory law by providing in Schedule 7 for the enforcement of non-money provisions. A non-money provision is defined as “any relief or remedy not requiring payment of a sum of money”;525 this would include an injunction, a decree of specific performance and a declaration as to title. The provisions in this Schedule are very similar to those in Schedule 6. There are, however, some minor procedural differences,526 and, more importantly, there is a major difference of substance. It is stated that “a judgment shall not be registered . . . if compliance with the non-money provisions contained in the judgment would involve a breach of the law of that part of the United Kingdom”.527
(ii) Recognition of United Kingdom judgments in other parts of the United Kingdom
Section 19(1) simply states that:
a judgment to which this section applies given in one part of the United Kingdom shall not be refused recognition in another part of the United Kingdom solely on the ground that, in relation to that judgment, the court which gave it was not a court of competent jurisdiction according to the rules of private international law in force in that other part.
With a few exceptions, section 19 applies to the same judgments as section 18.528 It is a curiously worded provision in that it is phrased in negative terms and does not impose a positive duty to recognise judgments.529 It could be read literally so as to infer that there are defences References(p. 591) available to prevent recognition530 and that included in these is a defence of lack of jurisdictional competence, provided that this allegation is combined with another defence.
(iii) The effect of a judgment given in another part of the United Kingdom
This is dealt with by section 34 of the 1982 Act, which, it will be recalled,531 abolishes the non-merger rule in respect of foreign judgments. Once a judgment has been given in another part of the United Kingdom, the claimant may not bring proceedings in England and Wales on the same cause of action unless that judgment is not enforceable or entitled to recognition in England and Wales.
(b) Administration of Justice Act 1920532
This Act makes provision for the enforcement within the United Kingdom of judgments obtained in a superior court of any part of the Commonwealth.533
(i) When registration of Commonwealth judgments is allowed
A person who has obtained a judgment in a superior court in a country or territory forming part of the Commonwealth to which the provisions of the Act have been extended may within twelve months after the date of the judgment534 apply to the High Court in England or Northern Ireland or to the Court of Session in Scotland for its registration, whereupon the court may, if in all the circumstances of the case they think it is just and convenient that the judgment should be enforced in the United Kingdom, order the judgment to be registered.535 Thus, registration is not a right, as it is in cases of recognition and enforcement within the United Kingdom, but lies wholly within the discretion of the court. A judgment cannot be registered, however, unless it is given in civil proceedings and is one under which a sum of money is made payable.536 A “judgment” includes arbitration award.537
(ii) When registration is not allowed
Under section 9(2) of the 1920 Act registration is not allowed if the original court acted without jurisdiction or if the judgment debtor did not voluntarily submit to the jurisdiction of the court, unless he was carrying on business538 or was ordinarily resident within that jurisdiction.539 It is assumed that questions of jurisdiction are to be determined by reference References(p. 592) to the common law rules as to the jurisdiction of the foreign court.540 The other defences available under section 9(2) are also similar to those available at common law,541 namely that the judgment debtor was not served and did not appear in the original proceedings, that the judgment was obtained by fraud,542 and that the original cause of action was one which, for reasons of public policy or for some other similar reason, could not have been entertained in England. A judgment will not be registered if the judgment debtor satisfies the English court either that an appeal is pending or that he is entitled and intends to appeal against the judgment.543 The defences mentioned so far are ones laid down by the 1920 Act itself. In addition, the defences laid down by s 5 of the Protection of Trading Interests Act 1980, in respect of judgments for multiple damages,544 and s 32 of the Civil Jurisdiction and Judgments Act 1982, in respect of an overseas judgment given in proceedings brought in breach of an agreement for settlement of disputes,545 will apply to cases coming within the 1920 Act. A judgment given in a foreign state against that state cannot be registered under the 1920 Act.546
(iii) The effect of registration
A judgment registered under the Act is of the same force and effect, and it may be followed by the same proceedings, as if it had originally been obtained in the registering court.547 A claimant is in no way deprived of his right to sue at common law upon the obligation created by a foreign judgment,548 but if he sues on a judgment that is registrable under the Act he is not entitled to the costs of the action unless registration has been refused or unless the court otherwise orders.549
The Act, however, does not render a judgment registrable within the United Kingdom unless its provisions have been extended by Order in Council to the country or territory in which the judgment has been obtained. Reciprocity is essential. When reciprocal provisions have been made by a Commonwealth country or territory for the enforcement of English, Scottish and Northern Ireland judgments, an Order in Council may be made extending the Act to the country or territory in question.550 The Act has been extended to a substantial number of Commonwealth jurisdictions.551
References(p. 593) (c) Foreign Judgments (Reciprocal Enforcement) Act 1933552
(i) The object of the Act
The policy of facilitating the direct enforcement of foreign judgments in England, and of ensuring that English judgments are enforced abroad,553 received a further impulse from the Foreign Judgments (Reciprocal Enforcement) Act 1933, which applies the principle of registration, not only to the Commonwealth, but also to foreign countries.
(ii) The countries to which the provisions of the Act are extended
The provisions made by the Act for the registration of foreign judgments in England may be extended by Order in Council to any country which is prepared to afford substantial reciprocity of treatment to judgments obtained in the United Kingdom.554 It is undesirable that there should be two systems of registration, one for the Commonwealth, the other for countries outside the Commonwealth, and therefore a policy of the gradual supersession of the 1920 Act has been adopted. With this object in view power is given to render the 1933 Act applicable by Order in Council to countries forming part of the Commonwealth, and it is provided that the 1920 Act shall cease to apply to any such country except those to which it extended at the date of the Order in Council,555 which was introduced in 1933.556 However, in order for the 1933 Act to be applied to any particular Commonwealth country, a further specific Order in Council is required, both in the case of a jurisdiction to which the 1920 Act had never been applicable557 and of one to which it had.558 Orders to this effect have been made for Pakistan,559 India,560 Australia and the Australian states and territories,561 Jersey, Guernsey, the Isle of Man, and Tonga. The Act has also been extended to Canada (except Quebec).562 As regards countries outside the Commonwealth, orders have been made extending the provisions of the Act to Austria, Belgium, France, Israel, Italy, the Netherlands, Norway, the Federal Republic of Germany and Suriname.563 These orders are based on bilateral treaties that the United Kingdom has entered into with these countries and provide that certain judgments in civil and commercial matters References(p. 594) shall be mutually recognised and enforced, notwithstanding that the adjudicating court followed rules for the choice of law different from those that would have been followed in the country where enforcement is sought. The provisions of the Act apply also to foreign judgments given in proceedings which arise under a number of international conventions.564
(iii) Prerequisites of registration
The successful party to proceedings in a foreign country to which the Act has been extended may apply to the High Court at any time within six years565 for registration of the judgment566 in England.567 A “judgment” now includes arbitration awards.568 It does not, however, include a judgment on a judgment,569 eg a judgment given in State A providing for the enforcement of a judgment given in State B. The judgment no longer has to be delivered by a superior court.570 It is, however, required that the judgment was delivered by a recognised court571 (which refers to the identity of the court and not the capacity in which it is acting)572 or tribunal;573 the judgment is given in any civil proceedings574 or any criminal proceedings for the payment of a sum of money in respect of compensation or damages to an injured party; the judgment is final and conclusive or requires an interim payment to be made;575 a sum of money is adjudged to be payable to the applicant, other than a sum in respect of taxes or in respect of a fine or other penalty.576 This latter phrase does not include an award of exemplary damages or damages for “resistance abusive” under French law.577 A judgment is also not to be registered if it has been wholly satisfied or if it cannot be enforced by execution in the foreign country.578 A judgment, however, is to be deemed final and conclusive, notwithstanding that an appeal may be pending against it or that it References(p. 595) may still be subject to appeal in the foreign courts.579 The Act differs from the earlier Act of 1920 in that no discretion is left to the High Court. It is expressly provided that: “On any such application the court shall, subject to proof of the prescribed matters and to the other provisions of this Act, order the judgment to be registered.”580
(iv) Setting aside of registration
There are, however, certain circumstances in which, on the application of the party against whom the registered judgment is enforceable, the registration must be set aside and other circumstances in which it may be set aside.
(a) When registration must be set aside
(i) Lack of jurisdiction
The first case in which the registration must be set aside is if the foreign court acted without jurisdiction.581 The rules by which the 1933 Act specifies the circumstances in which a foreign court shall be deemed to have had jurisdiction are very similar to the common law rules582 and vary according to whether the original action was in personam or in rem. But if the original action was neither in personam nor in rem, the foreign court shall be deemed to have jurisdiction if its jurisdiction is recognised at common law.583
Bases of jurisdiction in personam
In the case of a judgment given in an action in personam the original court is deemed to have had jurisdiction on three main bases: residence, submission and having an office or place of business within the foreign jurisdiction.
In the case of residence, the 1933 Act provides that there is jurisdiction “if the judgment debtor, being a defendant in the original court, was at the time when the proceedings were instituted resident in, or being a body corporate had its principal place of business in, the country of that court”.584 As residence is required, temporary presence would appear to be excluded.585 In the case of corporations, the requirement is not just the one at common law or under the 1920 Act of carrying on business,586 but rather that the principal place of business be in the foreign country.
The second basis of jurisdiction is submission and three instances of this are provided in section 4(2)(a) of the 1933 Act:587
(ii) if the judgment debtor was plaintiff in, or counter-claimed in, the proceedings of the original court; or
(iii) if the judgment debtor, being a defendant in the original court, had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or of the courts of the country of that court.
What in general constitutes submission through a voluntary appearance to contest the jurisdiction of the court is likely to be determined in the same way as at common law.589 The likelihood of this being the case is strengthened by the fact that section 33 of the Civil Jurisdiction and Judgments Act 1982, which provides that in three situations there is no submission by voluntary appearance, applies to recognition or enforcement under the 1933 Act as well as to recognition or enforcement at common law.590 It will be recalled that under section 33 there is no submission where the appearance is to contest the jurisdiction of the court, to seek a stay of proceedings on the ground that there should be an arbitration or trial in another country, or to protect property.
Whilst there is no doubt that an express agreement to submit would fall within section 4(2)(a)(iii), there remains the problem of an implied agreement to submit. It is suggested that, as at common law,591 an implied agreement will suffice.592
The operation of some of these provisions on submission was considered in SA Consortium General Textiles v Sun and Sand Agencies Ltd:593
The plaintiff, a French textile company, sold clothing to the defendant, an English company. The goods came from the plaintiff’s branches in Lille and Paris and the invoice from Lille provided that all disputes were to be referred to the commercial court there, whilst the other invoice gave exclusive jurisdiction to the Seine commercial court. The plaintiff claimed the sums due under both invoices and damages for “resistance abusive” in proceedings before the Lille commercial court. Judgment was given for the plaintiff in default of appearance, though the defendant had been served with notice of the proceedings. The defendant failed to appeal within the three-month period allowed under French law. The plaintiff then sought enforcement of the Lille judgment in England, whereupon the defendant applied to the President of the Court of Appeal in Douai for leave to appeal, and then in fact appealed to the full Court of Appeal. The defendant sought, unsuccessfully, to resist the enforcement of the default judgment of the Lille court on a variety of grounds, such as that it could not be enforced by execution in France,594 or that damages for “resistance abusive” were penal.595 The main issue, however, was whether the defendant could be taken to have submitted to the jurisdiction of the French courts in respect of both claims.
Section 4(2)(a)(iii) of the 1933 Act was interpreted by a majority in the Court of Appeal as not covering an agreement to submit to all the courts of the foreign country by agreeing to submit to one, so that agreement to submit the issues arising under one invoice to the Seine References(p. 597) court did not amount to agreement to submit that issue to any other of the courts of France, including the Lille court.596 However, the appeal to the Court of Appeal in Douai on the merits of the claim did amount to submission as to both claims,597 as did a statement by the defendant’s English solicitors, when proceedings against the defendant were contemplated in England, that all disputes must be brought before the Lille court.598
The third basis of jurisdiction and one not to be found at common law is provided by section 4(2)(a)(v) of the 1933 Act, namely “if the judgment debtor, being a defendant in the original court, had an office or place of business in the country of that court and the proceedings in that court were in respect of the transaction effected through or at that office or place”.
Limitations on jurisdiction
The three bases of jurisdiction are subject to qualification in that, notwithstanding them, the foreign court shall not be deemed to have had jurisdiction if the case concerned immovables outside the country of the foreign court or if the defendant was under the rules of public international law entitled to immunity from the jurisdiction of the foreign court and did not submit thereto.599
Special statutory grounds of jurisdiction
Where a foreign judgment is registered under the 1933 Act pursuant to one of the various statutory provisions600 embodying international conventions, the different statutes provide that the jurisdictional grounds in the 1933 Act shall all be replaced by special jurisdictional grounds relevant to the particular convention in question.601
Statutory grounds of jurisdiction are exclusive
In the case of an action in personam, no other ground of jurisdiction will render a foreign judgment registrable under the Act. The fact, for instance, that the claimant has obtained leave from the foreign court to serve process on the defendant in England does not per se generate jurisdiction for the purposes of registration.602
Meaning of action in personam
It is expressly enacted that the expression “action in personam” shall not include any matrimonial cause,603 or any proceedings connected with matrimonial matters, the administration of the estates of deceased persons, bankruptcy, winding up of companies, lunacy or guardianship of infants.604
Jurisdiction over action in rem
The original court is deemed to have had jurisdiction over an action in rem if the subject matter of the action, whether movable or immovable, was situated in the foreign country at the time of the proceedings.605
References(p. 598) (ii) Other circumstances where registration must be set aside
There are a number of circumstances in addition to want of jurisdiction606 where, according to the 1933 Act,607 registration must be set aside, most of which are very similar to the common law defences:608
(i) if the judgment is not one to which the Act applies or if the procedure in the Act has not been complied with;
(ii) if the judgment debtor, being the defendant in the original proceedings, did not (despite service of process in accordance with the foreign law) receive notice of the proceedings in sufficient time to enable him to defend them and did not appear;609
(iii) if the judgment was obtained by fraud;610
(iv) if the enforcement of the judgment would be contrary to public policy in England;611
(v) if the rights under the judgment are not vested in the applicant.
Two further instances of where registration must be set aside are provided by section 5 of the Protection of Trading Interests Act 1980 and section 32 of the Civil Jurisdiction and Judgments Act 1982:
(b) When registration may be set aside
Registration may be set aside if the registering court is satisfied that the matter adjudicated upon had already been the subject of a final and conclusive judgment by a court having jurisdiction in that matter.614
(a) A judgment which has been registered
A judgment registered under the Act is, for the purposes of execution, of the same force and effect and subject to the same control over the execution as if it had originally been given References(p. 599) in the registering court.615 One significance of this provision would appear to be that the grounds on which registration may or must be set aside may be different from those on which enforcement will be refused. Once the foreign judgment is registered, then it would appear that not only may the registration be set aside for failure to satisfy section 4 of the 1933 Act, but also the registered judgment may be set aside and enforcement refused for any one of the various reasons for setting aside English judgments616 which may be appropriate to a foreign judgment.
(b) A judgment which is capable of registration
Section 6 of the 1933 Act provides that: “No proceedings for the recovery of a sum payable under a foreign judgment, being a judgment to which this Part of this Act applies, other than proceedings by way of registration of the judgment, shall be entertained by any court in the United Kingdom.” This clearly means that no action for enforcement at common law can be brought on a judgment that is registrable,617 but, seemingly, this provision did not prevent the claimant from suing on the original cause of action. However, the claimant is now prevented from doing so by section 34 of the Civil Jurisdiction and Judgments Act 1982 which, as has been seen,618 abolishes the non-merger rule.
Section 8619 of the 1933 Act preserves the common law620 rules as to the conclusiveness of foreign judgments, but it also provides621 that a judgment to which the registration provisions of the Act apply, or would apply had a sum of money been payable thereunder, whether or not it can be or is registered, is to be recognised in England as conclusive between the parties in all proceedings founded on the same cause of action.
(a) An exception to the conclusiveness rule
However, a foreign judgment is not recognised as conclusive under the Act if the registration has been set aside or, where the judgment has not been registered, it would have been set aside if it had been registered.622 The grounds on which registered judgments are set aside are contained in section 4 of the Act.623 The operation of this proviso was considered in Vervaeke v Smith,624 where it was held that a Belgian judgment in respect of the validity of a marriage625 would not be entitled to recognition under section 8 of the 1933 Act because the matter in dispute had previously been the subject of a final and conclusive judgment in England626 and also because recognition would be against public policy.627
References(p. 600) (b) A prerequisite for recognition: the judgment must have been given on the merits
The rule in section 8, unlike the general registration provisions, applies to a judgment in favour of a defendant; ie a foreign judgment to which the Act applies in which the claimant’s claim is dismissed will be recognised in England as conclusive between the parties. However, as with the common law rule on conclusiveness,628 the judgment must have been given on the merits. Thus in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG:629
Just within the six-year limitation period under English law, the English plaintiff began proceedings, on bills of exchange which had been dishonoured, in England and in Germany. The limitation period under German law was three years and had expired, and the German trial court dismissed the action on that ground.630 In the English proceedings, the German defendant argued that the German judgment should be recognised in England under the 1933 Act and, relying on section 8(1), that it was conclusive between the parties as the English and German proceedings were both founded on the same cause of action.
A majority of the House of Lords held that section 8(1), unlike the main provisions of the 1933 Act, applied to judgments in favour of a defendant as well as of a plaintiff. However, the German judgment, dismissing the action because it was time-barred under the German law as to limitation which merely barred the remedy and did not extinguish the right, was not a decision on the merits even though regarded, in Germany, as a decision on substance. The German judgment was not therefore conclusive, though the English proceedings were stayed until the outcome of a final German appeal was known.
The Black-Clawson case remains good authority on the general point that a foreign judgment must be given on the merits in order to come within section 8 of the Act. It is, however, no longer good authority on the specific point of the effect of a foreign judgment involving a limitation period. This is because of section 3 of the Foreign Limitation Periods Act 1984,631 which treats a foreign judgment on a limitation matter as being conclusive “on its merits”. Section 3 applies regardless of whether the foreign court has applied its own law on limitation periods or that of any other country, including England and Wales. It also applies regardless of whether recognition is sought under statutory rules or at common law, and therefore, overturns the common law decision in Harris v Quine.632
The provisions on recognition (section 8), unlike those on enforcement, are not confined to cases where there is a money judgment. This raises the major question of whether section 8 can apply to matrimonial causes, for example foreign decrees of divorce or nullity. For many years this question remained unanswered. However, it is now clear that an overseas divorce, etc cannot be recognised under the 1933 Act.633 The 1933 Act is concerned with “actions”,634 whether in personam or in rem.635 In matrimonial causes, “proceedings” are brought before the English References(p. 601) courts rather than “actions”. Moreover, section 8(1) is concerned with judgments which affect “the parties thereto”. A judgment of marital status has a wider significance and can affect others, such as the state and children of the marriage.
As a result of the European Communities (Enforcement of Community Judgments) Order 1972636 any “Community judgment”637 to which the Secretary of State has appended an order for enforcement shall be registered by the High Court if application is made by the person entitled to enforce it. The judgments to which the Order applies are not those of the national courts of the Member States of the European Union638 but rather judgments of the courts and institutions of the European Union itself, ie judgments of the Court of Justice of the European Union, and decisions of the Arbitration Committee of the European Atomic Energy Community, of the High Authority of the European Coal and Steel Community which impose a pecuniary obligation, and of the Council and of the Commission of the European Union which impose a pecuniary obligation on persons other than states.
The effect of registration is that such European Union judgments and decisions shall, for all purposes of execution, have the same force and effect as if they were judgments of the High Court. The High Court would appear to have no discretion as to whether to register such judgments;639 but the Court of Justice of the European Union may order that enforcement of such a registered judgment shall be suspended. Such order then must be registered by the High Court and when registered shall have effect as if it were an order of the High Court staying the execution of the judgment and no steps to enforce the judgment may be taken while the order remains in force.
The judgments which may be registered are not restricted to those under which a sum of money is payable.640 If, in the case of a European Union money judgment,641 it has been partly satisfied at the date of registration, then it is to be registered only in respect of the sum outstanding; and if the judgment is satisfied in whole or in part after registration, then the registration shall be appropriately cancelled or varied.
It will be recalled that the State Immunity Act 1978 implements the European Convention on State Immunity (1972). The major significance of the Convention and of the 1978 Act is to provide for the circumstances when a sovereign state is to be immune from the jurisdiction of our courts.642 However, provision is also made for the recognition here of judgments given against the United Kingdom by a court in another state which is a party to the 1972 References(p. 602) Convention.643 Recognition must be given to such a judgment if it was a final judgment and if the United Kingdom was not entitled to immunity under the Convention.644 Such a judgment, and any settlement before a court in a Convention State which is treated under the law of that state as equivalent to a judgment,645 shall be regarded here as conclusive between the parties.646 Recognition may, however, be denied on a number of grounds:647 that recognition would be manifestly contrary to public policy; that a party to the proceedings had no adequate opportunity to present his case; that the procedural requirements of the Convention had not been complied with; if prior similar proceedings between the same parties are pending before a court in the United Kingdom, or before a court in a Convention State whose judgment would be required to be recognised; if there are prior inconsistent judgments of a United Kingdom court or a court in a Convention State; in the case of a judgment concerning the interest of the United Kingdom in movable or immovable property by way of succession, gift or bona vacantia, if the foreign court would not have had jurisdiction under rules equivalent to the English rules appropriate to such a claim, or if the foreign court applied a law other than that which would have been applied by an English court and would have reached a different conclusion had it applied that latter law.
The 1978 Act did not deal with the recognition of foreign judgments against states other than the United Kingdom. These are now dealt with by the Civil Jurisdiction and Judgments Act 1982, section 31(1) of which provides that:
A judgment given by a court of an overseas country against a State other than the United Kingdom or the State to which that court belongs648 shall be recognised and enforced in the United Kingdom, if and only if—
(b) that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978.649
The concept of “a judgment given against a State” is defined under the 1982 Act,650 as is the concept of a “State” (ie to include the constituent territories in a federal state).651 Section 31(1) will not affect judgments given in proceedings which arise under a number of international conventions, and which are recognised and enforced under the 1933 Act.652
References(p. 603) (f) The Brussels and Lugano Conventions
The Brussels Convention, which is implemented by the Civil Jurisdiction and Judgments Act 1982, was replaced in virtually all cases by the Brussels I Regulation, which has now been repealed and replaced by the Recast of the Brussels I Regulation. One has to say “virtually” because the Brussels Convention continued to apply and still applies in relation to the territories of the Contracting States653 which fall within the territorial scope of the Brussels Convention and are excluded from the Brussels I Recast.654 The territories in question are (in relation to France) the French overseas territories, such as New Caledonia and Mayotte, and (in relation to the Netherlands) Aruba.655 Judgments from Gibraltar are also recognised and enforced in accordance with the provisions of the Civil Jurisdiction and Judgments Act 1982 that implement the Brussels Convention.656 The free circulation of judgments within the European Union, which was originally provided by the Brussels Convention, was extended to what was left of the EFTA bloc657 by the 1988 Lugano Convention.658 This Convention, which was implemented by the Civil Jurisdiction and Judgments Act 1991 (amending the 1982 Act), was a parallel one to the Brussels Convention, closely based on the latter, but not identical to it. The 1988 Convention has been replaced by the 2007 Lugano Convention, which aligned the Convention with the Brussels I Regulation. Recognition and enforcement under the Brussels and Lugano Conventions is considered in Chapter 17, as is the Recast of the Brussels I Regulation. The rules on recognition and enforcement under the Brussels and Lugano Conventions are significantly different from those of the Brussels I Recast. The biggest difference is the system of exequatur that exists under the two Conventions.
The Brussels Convention provided a new impetus for other countries to enter into bilateral recognition and enforcement conventions with the United Kingdom.659 The requirement that English courts must recognise all judgments of the courts of other Contracting States, even where jurisdiction was taken against a defendant domiciled in a non-Contracting State under an exorbitant basis of jurisdiction, caused considerable anxiety in, for example, the USA660 and Australia.661 However, Article 59 of the Brussels Convention662 allowed663 a Contracting State to conclude conventions with other countries under which judgments of the courts of other Contracting States664 against persons described as habitually resident in such other countries shall not be recognised in the first Contracting State. This was the genesis of a References(p. 604) draft UK/US Judgments Convention.665 However, this Convention was never implemented because of United Kingdom alarm at the prospect of having to enforce American judgments for large awards of damages. Negotiations with Canada and Australia were more successful, with agreement being reached on a UK/Canada Convention666 and a UK/Australia Convention.667 As previously mentioned, the Brussels Convention has been replaced in virtually all cases and the Recast of the Brussels I Regulation contains no equivalent of Article 59.668 However, bilateral agreements containing the Article 59 let-out entered into prior to the entry into force of the Regulation are still honoured. The 2007 Lugano Convention, like the earlier 1988 Convention, contains an equivalent of Article 59 so that bilateral agreements containing the Article 59 let-out entered into prior to the entry into force of the 2007 Convention are honoured, as are conventions entered into in the future.669
Work carried out at the Hague Conference on Private International Law on a multilateral convention on jurisdiction, recognition and enforcement of foreign judgments in civil and commercial matters ended in failure.670 However, in 2005, a Convention on Choice of Court Agreements was adopted.671 This Convention entered into force in 2015. The European Union has ratified the Convention, both in its own right and and on behalf of all the Member States (excluding Denmark). At present, the only other Contracting Parties are Mexico and Singapore, while the USA and Ukraine have signed but not yet ratified. The Convention has been implemented in the United Kingdom by the Civil Jurisdiction and Judgments Act 1982.672
The Convention is concerned to ensure the effectiveness of exclusive choice of court agreements.673 The provisions on jurisdiction have already been discussed.674 A judgment given by a court of a Contracting State designated in the agreement will be recognised in other Contracting States,675 subject to a number of grounds of refusal.676 Where one of these grounds is established, References(p. 605) recognition or enforcement may be refused, rather than must be. The court addressed is not precluded from recognition or enforcement and Contracting States will be able to lay down criteria for recognition of judgments where one of these grounds applies.677 The grounds include where: the agreement was null and void under the law of the state of the chosen court (including its choice of law rules), unless the chosen court has determined that the agreement is valid;678 a party lacked the capacity to conclude the agreement under the law of the requested state;679 the document which instituted the proceedings was not notified to the defendant in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant entered an appearance and presented his case without contesting notification in the court of origin or was notified to the defendant in the requested state in a manner that is incompatible with fundamental principles of the requested state concerning service of documents;680 the judgment was obtained by fraud in connection with a matter of procedure;681 recognition or enforcement would be manifestly incompatible with the public policy of the requested state;682 the judgment is inconsistent with a judgment given in the requested state in a dispute between the same parties;683 the judgment is inconsistent with an earlier judgment given in another state between the same parties on the same cause of action, provided that the earlier judgment fulfils the conditions necessary for its recognition in the requested state.684 These last five grounds are very similar to, and at times identical with, those found in the defences to recognition of judgments within the European Union under the Recast of the Brussels I Regulation.685 The Convention also provides that recognition or enforcement of a judgment may be refused if, and to the extent that, the judgment awards damages, including exemplary or punitive damages, that do not compensate a party for actual loss or harm suffered.686 Overall, the Convention has a dramatic effect on cases where there is a jurisdiction agreement providing for trial in another Contracting State. Thus, for example, recognition and enforcement of judgments granted in Mexico or Singapore, consequent on a jurisdiction agreement, is dealt with, not under the common law rules, but under the very different rules under the Convention.687
One problem which has been touched on already688 and might usefully be examined a little more fully is that of the inter-relation of the common law rules of recognition and those provided by statute (other than the Civil Jurisdiction and Judgments Act 1982689), especially in the fields of jurisdiction and defences. It will be recalled690 that at common law the grounds of jurisdiction of the foreign court which will be recognised in England are based on residence and submission. References(p. 606) Under section 4(2)(a) of the Foreign Judgments (Reciprocal Enforcement) Act 1933,691 there are listed five grounds of jurisdiction in actions in personam,692 the underlying bases of which are residence, submission and having an office or place of business within the country. The problems to be examined are whether the statutory regime is to be regarded merely as a codification of the common law principles and, if not, whether in a case which falls outside the statute, the basis of statutory recognition should affect common law recognition.
Just such issues arose in Société Coopérative Sidmetal v Tital International Ltd.693
The defendant, an English company, had agreed to sell steel to the plaintiff, a Belgian company, and to ship the steel direct to an Italian company which had bought the steel from the plaintiff. Dissatisfied with the steel, the Italian company sued the plaintiff in Belgium and the plaintiff sought to join the defendant as a third party and a Belgian writ was served on it in England. The defendant took no part in the Belgian proceedings, but judgment was given against the defendant and in favour of the plaintiff. The plaintiff had the Belgian judgment registered in England under the Foreign Judgments (Reciprocal Enforcement) Act 1933 and the defendant sought to have the registration set aside.
The real issue was whether the Belgian court had jurisdiction such as to permit an English court to recognise and enforce the Belgian judgment. None of the jurisdictional requirements listed in section 4(2) of the 1933 Act was satisfied, nor were any of the heads of jurisdiction laid down at common law in Emanuel v Symon.694 Nevertheless, it was argued for the plaintiff that the effect of the 1933 Act was fundamentally to change the basis on which foreign judgments are recognised in England, namely that the 1933 Act approaches the question of recognition “on the principle that, if there is reciprocity between the courts of this country and the courts of the country in which the judgment was obtained, then comity of nations requires that the jurisdiction of the courts of that country should be recognised for the purposes of the Act”.695 On such a basis, a Belgian judgment should be recognised either if an English court would have had jurisdiction in similar circumstances, ie service of the claim form out of the jurisdiction,696 or if a Belgian court would have recognised the jurisdiction of the English court in a similar case, mutatis mutandis.
Whilst Widgery J accepted that the 1933 Act did not constitute a codification of the common law principles,697 he was not prepared to accept that this Act had reintroduced comity or reciprocity as the underlying basis for the recognition of foreign judgments either at common law, or under the 1933 Act.698 The bases of jurisdiction laid down in section 4(2)(a) of the 1933 Act are exclusive.699
A different question is whether, in so far as the provisions of the 1933 Act are broader than those of the common law, the 1933 Act could influence the development of the common law recognition and enforcement rules. It is suggested that it could, and should, as in the case of References(p. 607) jurisdiction based on having an office or place of business in the foreign country.700 Certainly it is true in the case of the defence of fraud, illustrated by Syal v Heyward,701 that decisions on recognition at common law may be relied upon for the purposes of the application of the 1933 Act. What one cannot do is to determine the present common law rules by reference to the 1933 Act, for one “cannot ascertain what the common law is by arguing backwards from the provisions of the statute”.702
The jurisdictional provisions of the Recast of the Brussels I Regulation have already been considered,703 but the Recast provides also for the recognition and enforcement in this country of judgments given in civil and commercial matters in European Union Member States, with the exception of Denmark. Under the EC/Denmark Agreement the provisions of the Recast are applied by international law to the relations between the European Union and Denmark. This means that judgments given in another European Union State704 that are within the scope of the Recast must be recognised and enforced under this scheme rather than under the 1920 Act,705 the 1933 Act706 or the common law rules.707 There is no implementing legislation in the United Kingdom for the Recast of the Brussels I Regulation. It is directly applicable in Member States, with the exception of Denmark, and cannot therefore be regarded as a United Kingdom statutory scheme of enforcement.708 The provisions on recognition and enforcement under the Recast are complex, despite the Recast’s aim of simplifying this area of law. Moreover, these provisions are markedly different from the rules on recognition and enforcement at common law or under the 1933 Act.709 For these reasons, it has been thought best to deal with recognition and enforcement under the Recast of the Brussels I Regulation in a separate chapter.710 That chapter will also consider three related Regulations: the European Enforcement Order Regulation, which applies where there is a judgment on an uncontested claim; the European Order for Payment Procedure Regulation; and the European Small Claims Procedure Regulation.
4 Russell v Smyth (1842) 9 M & W 810 at 819, 152 ER 343. See also Williams v Jones (1845) 13 M & W 628 at 633, 153 ER 262; Godard v Gray (1870) LR 6 QB 139 at 148; Adams v Cape Industries plc  Ch 433 at 513, 552–3, CA; Owens Bank Ltd v Bracco  2 AC 443 at 484, HL; Murthy v Sivajothi  1 WLR 467 at 476, CA; Lewis v Eliades  EWCA Civ 1758 at ,  1 WLR 692; Rubin v Eurofinance SA  UKSC 46 at ,  1 AC 236; Gordon Pacific Developments Pty Ltd v Conlon  3 NZLR 760. In Rubin, the Supreme Court confirmed, at , that the doctrine of obligation was based on the mode of pleading an action on a foreign judgment in debt, not merely as evidence of the obligation to pay the underlying liability.
6 See Adams v Cape Industries plc  Ch 433 at 552, CA; Cambridge Gas Transportation Corpn v Official Committee of Unsecured Creditors of Navigator Holdings plc  UKPC 26 at ,  1 AC 508.
10 Morguard Investments Ltd v De Savoye  3 SCR 1077, (1991) 76 DLR (4th) 256; discussed infra, pp 543–4. See also Beals v Saldanha  3 SCR 416, (2003) 234 DLR (4th) 1; discussed infra, pp 543–4.
16 For useful summaries of the law on recognition and enforcement of foreign judgments in some other common law countries see (2014) 15 YBPIL 255 et seq, including Australia at p 255 (report written by Harder), Canadian common law provinces at 313 (by Saumier), Hong Kong at 349 (by Lu and Fan), Commonwealth African countries at 365 (by Oppong), Singapore at 451 (by Yeo) and South Africa at 467 (by Bäder and Kruger).
17 The foreign decision must, of course, always be one that is regarded as a judgment: Berliner Industriebank AG v Jost  2 QB 463, CA—entry of a debt in the record as a judgment in bankruptcy proceedings; Midland International Trade Services Ltd v Sudairy, Financial Times, 2 May 1990—a decision of the Saudi Arabian Chamber for Settlement of Commercial Paper Disputes held to be a judgment; Midtown Acquisitions LP v Essar Global Fund Ltd  EWHC 519 (Comm)—a New York “judgment by confession” held to be a judgment. See also Kuwait Finance House (Bahrain) BSC v Teece  NZHC 3162—a decision of the Bahrain Chamber for Dispute Resolution not a judgment of a court.
26 Schibsby v Westenholz (1870) LR 6 QB 155 at 161; Rousillon v Rousillon (1890) 14 Ch D 351 at 371; Sirdar Gurdyal Singh v The Rajah of Faridkote  AC 670 at 684, PC; Emanuel v Symon  1 KB 302 at 309, CA; Employers’ Liability Assurance Corpn v Sedgwick, Collins & Co  AC 95 at 104, HL. Residence without presence at the date of commencement of proceedings is seemingly enough: State Bank of India v Murjani Marketing Group Ltd, 27 March 1991, CA; Martyn v Graham  QDC 447 at . Cf, however, Adams v Cape Industries plc  Ch 433 at 518, CA; Rubin v Eurofinance SA  UKSC 46 at , ,  1 AC 236; Briggs 2014, para 6.153; Briggs 2015, para 7.47–7.48.
35 The Emanuel v Symon case; see also Wendel v Moran 1993 SLT 44; McTavish and Hampton Securities v Investments Ltd (1983) 150 DLR (3d) 27, Alta Ct of QB; Rafferty’s Restaurant Ltd v Sawchuk  3 WWR 261, Manitoba Co Ct; Kelowna and District Credit Union v Perl (1984) 13 DLR (4th) 756, Alta CA; Hull v Wilson (1995) 128 DLR (4th) 403, Alta CA.
37  Ch 433 at 530–1, CA; Collier  CLJ 416; Carter (1990) 61 BYBIL 402. Cases on the jurisdiction of English courts over claims against foreign companies are relevant in this context: see supra, pp 328–32.
38 Following Littauer Glove Corpn v F W Millington (1920) Ltd (1928) 44 TLR 746 and Vogel v R and A Kohnstamm Ltd  QB 133. See also TDI Hospitality Management Consultants Inc v Browne (1995) 117 DLR (4th) 289, Manitoba CA; Hull v Wilson (1996) 128 DLR (4th) 403, Alta CA. See also Long Beach Ltd v Global Witness Ltd  EWHC 1980 (QB), website accessible from judgment granting state not enough; also, Lucasfilm Ltd v Ainsworth  EWCA Civ 1328 at –,  3 WLR 333; cf the position in Canada, Disney Enterprises Inc v Click Enterprises Inc (2006) 267 DLR (4th) 291, Ont Sup Ct of Justice.
42 But see Case 218/86 Sar Schotte Gmbh v Parfums Rothschild  ECR 4905, which is concerned with jurisdiction under Art 5(5) of the Brussels Convention (identical to Art 7(5) of the Recast of the Brussels I Regulation), discussed supra, pp 279–83.
48 Schibsby v Westenholz (1870) LR 6 QB 155 at 161; Novelli v Rossi (1831) 2 B & Ad 757, 109 ER 1326; Desarrollo Immobiliario Y Negocios Industriales De Alta v Kader Holdings Co Ltd  EWHC 1460 (QB) at –.
50 (1902) 71 LJKB 509. See also Desarrollo Immobiliario Y Negocios Industriales De Alta v Kader Holdings Co Ltd  EWHC 1460 (QB) at –. Distinguish an agreement which merely selects the law of a foreign country as the governing law of a contract: US Mortgage Finance II LLC v Dew  EWHC 3621 (Comm), affd without discussing this point by the Court of Appeal in an unreported judgment of 1 March 2017; infra, p 717.
51 But if the parties agree that a specific court will have jurisdiction and the claimant obtains judgment from another court in the same country, that court will not be the court of competent jurisdiction for the purposes of English private international law: SA Consortium General Textiles v Sun and Sand Agencies Ltd  QB 279, CA. This case is also an authority on submission by voluntary appearance, discussed infra, pp 533–7.
66 Molony v Gibbons (1810) 2 Camp 502, 170 ER 1232; Guiard v De Clermont and Donner  3 KB 145; The Atlantic Emperor (No 2)  1 Lloyd’s Rep 624 at 633, CA; Pattni v Ali and Dinky International SA  UKPC 51 at ,  2 AC 85; Navigators Insurance Co v Mohammed  EWHC 1137 (Comm). On what amounts to an appearance, see Overseas Food Importers & Distributors Ltd v Brandt (1981) 126 DLR (3d) 422, British Columbia CA; Mid-Ohio Imported Car Co v Tri-K Investments Ltd (1995) 129 DLR (4th) 181, British Columbia CA.
68 This point was left open in First National Bank of Houston v Houston E & C Inc  5 WWR 719 at 725, British Columbia CA. But see under the Brussels Convention, Case C–78/95 Hendrikman v Magenta Druck & Verlag GmbH  ECR I-4943.
70  QB 726, CA, following Harris v Taylor  2 KB 580, CA; Carter (1974–1975) 47 BYBIL 379; Collier  CLJ 219; Collins (1976) 92 LQR 268; Solomons (1976) 25 ICLQ 665. Henry v Geoprosco has not been followed in Canada, see Clinton v Ford (1982) 137 DLR (3d) 281, Ont CA; Lange (1983) 61 Can Bar Rev 637.
73 As far as enforcement under the Foreign Judgments (Reciprocal Enforcement) Act 1933 is concerned, s 33 of the 1982 Act merely replaces a similarly worded provision under the 1933 Act (s 4(2)(a)(i)), discussed infra, p 595.
74 As amended by the Civil Jurisdiction and Judgments Act 1991, Sch 2, para 15, Civil Jurisdiction and Judgments Order, SI 2001/3929, Sch 2(IV), para 15, Civil Jurisdiction and Judgments (Maintenance) Regulations, SI 2011/1484, Sch 4, para 10, International Recovery of Maintenance (Hague Convention 2007 etc) Regulations, SI 2012/2814, Sch 4, para 5(4) and the Civil Jurisdiction and Judgments (Hague Convention on Choice of Court Agreements 2005) Regulations, SI 2015/1644, reg 17.
75 In cases coming within the Brussels/Lugano system, recognition and enforcement are not dependent on whether the defendant has submitted to the foreign court (see infra, pp 608–9) and therefore s 33 is irrelevant, see Collins, The Civil Jurisdiction and Judgments Act 1982 (1983), p 144.
84 The Court of Appeal, ibid, at 750, said that this defence could be raised as a plea in bar and not merely where a stay is sought; hence s 33(1)(b) refers to an appearance to ask the court to “dismiss” the proceedings, as well as referring to an appearance to ask the court to stay the proceedings.
86  1 WLR 662 at 670–2, affd by the Court of Appeal  1 WLR 1026; the only point raised on appeal was whether s 33, which came into force during the course of the first instance hearing, could apply to an action commenced and a judgment given before the 1982 Act came into force or had been passed.
87 Golden Endurance Shipping SA v RMA Watanya SA  EWHC 2110 (Comm),  1 All ER (Comm) 438—the fact that under Moroccan law a challenge based on an arbitration agreement was regarded as an “admissibility”, not “jurisdiction”, challenge, which necessitated serving a defence on the merits, did not disengage s 33.
92 The Atlantic Emperor (No 2)  1 Lloyd’s Rep 624 at 633, CA; The Eastern Trader  2 Lloyd’s Rep 585 at 601; Collins, The Civil Jurisdiction and Judgments Act 1982 (1983), p 144. But cf Gourmet Resources International Inc v Paramount Capital Corpn  IL Pr 583, Ont Ct of Justice; Mid-Ohio Imported Car Co v Tri-K Investments Ltd (1995) 129 DLR (4th) 181, British Columbia CA.
95 Boissière and Co v Brockner & Co (1889) 6 TLR 85; The Atlantic Emperor (No 2) case at 633; Akai Pty Ltd v People’s Insurance Co Ltd  1 Lloyd’s Rep 90 at 96–8; Spliethoff’s Bevrachtingskantoor BV v Bank of China Ltd  EWHC 999 (Comm) at –,  1 All ER (Comm) 1034.
96 AES Ust-Kamenogorsk Hydropower Plant LLP v AES Ust-Kamenogorsk Hydropower Plant JSC  EWCA Civ 647 at –,  1 WLR 920; Rushworth and Scott (2011) 82 BYBIL 651; Desarrollo Immobiliario Y Negocios Industriales De Alta v Kader Holdings Co Ltd  EWHC 1460 (QB) at –; Exmek Pharmaceuticals SAC v Alkem Laboratories Ltd  EWHC 3158 (Comm),  1 Lloyd’s Rep 239; Golden Endurance Shipping SA v RMA Watanya SA  EWHC 2110 (Comm),  1 All ER (Comm) 438; see also Harada Ltd (t/a Chequerpoint UK) v Turner (No 2)  EWCA Civ 1695.
99 SA Consortium General Textiles v Sun and Sand Agencies Ltd  QB 279 at 299, 304, 308–9, CA, discussed infra, p 596; and see Guiard v De Clermont  3 KB 145; Karafarin Bank v Mansoury-Dara  EWHC 1217 (Comm) at –,  2 Lloyd’s Rep 289.
100 The SA Consortium General Textiles case at 299, 304, CA; cf the Guiard v De Clermont case at 155. In so far as these cases discuss appeals on jurisdictional issues they must now be read in the light of s 33 of the 1982 Act, discussed supra, pp 534–7.
101 The SA Consortium General Textiles case at 305, 308–9, CA; s 33 of the 1982 Act. It seems that, in two of the Canadian cases where recognition was denied to a default judgment even though the defendant had moved to set it aside, namely McLean v Shields (1885) 9 OR 699, Ont CA and Esdale v Bank of Ottawa (1920) 51 DLR 485, Alta CA, the ground on which the defendant moved to set aside the original judgment was want of jurisdiction; see Read, Recognition and Enforcement of Foreign Judgments (1938), pp 168–70. In the third it was not clear what the basis for seeking to set aside the original judgment was: Carrick Estates Ltd v Young (1988) 43 DLR (4th) 161, Sask CA.
103  Ch 433, supra, pp 530–1. See also The Eastern Trader  2 Lloyd’s Rep 585 at 600; Starlight International Inc v AJ Bruce  EWHC 374 at ,  IL Pr 35; Von Wyl v Engeler  3 NZLR 416.
104 The Adams case at 459. See also Akai Pty Ltd v People’s Insurance Co Ltd  1 Lloyd’s Rep 90 at 96, 97. Cf the Starlight International Inc v AJ Bruce case at —waiver according to US Federal Law.
107  UKSC 46 at –,  1 AC 236; Aitken (2013) 129 LQR 147; Briggs  LMCLQ 26; Chong  LMCLQ 241; Handley (2013) 129 LQR 144; Kirshner  CLJ 27; Rushworth and Scott (2012) 83 BYBIL 271. See also Service Temps Inc v MacLeod  CSOH 162 at -, 2014 SLT 375; Swiss Life AG v Kraus  EWHC 2133 (QB).
111 See generally Adams v Cape Industries plc  Ch 433 at 515, CA; and also Schibsby v Westenholz (1870) LR 6 QB 155 at 161; Rousillon v Rousillon (1880) 14 Ch D 351 at 371; Emanuel v Symon  1 KB 302 at 309, CA. See also State of New York v Fitzgerald (1983) 148 DLR (3d) 176, British Columbia Sup Ct.
112 Douglas v Forrest (1828) 4 Bing 686, 130 ER 933; Schibsby v Westenholz (1870) LR 6 QB 155 at 161; the Rousillon v Rousillon case at 371; the Emanuel v Symon case at 309; Harris v Taylor  2 KB 580 at 591, CA; Forsyth v Forsyth  P 125 at 132, CA. See also Gavin Gibson & Co v Gibson  3 KB 379 at 388.
113 Westlake, p 399; Foote, p 398; Schmitthoff, The English Conflict of Laws (1954) 3rd edn, p 465. It is rejected by Wolff, p 126; Graveson, pp 621–2 (though he suggests exceptions); Briggs 2014, para 6.173; Briggs 2015, para 7.60; Dicey, Morris and Collins, para 14-085; Fentiman, para 18.25; Hill and Chong, para 12.2.23. But see Read, Recognition and Enforcement of Foreign Judgments (1938), pp 151–5.
115 Blohn v Desser  2 QB 116 at 123; and see Rossano v Manufacturers’ Life Insurance Co Ltd  2 QB 352 at 382–3; Vogel v R and A Kohnstamm Ltd  QB 133 at 141; Adams v Cape Industries plc  Ch 433 at 515, CA.
123 US Mortgage Finance II LLC v Dew  EWHC 3621 (Comm), affd without discussing this point by the Court of Appeal in an unreported judgment of 1 March 2017. See also Vizcaya Partners Ltd v Picard  UKPC 5,  3 All ER 181; Dunbee Ltd v Gilman & Co (Australia) Pty Ltd  2 Lloyd’s Rep 394, NSW CA; Mattar and Saba v Public Trustee  3 DLR 399, Alta CA.
133 Re Trepca Mines Ltd  1 WLR 1273 at 1281–2, CA; and see Société Cooperative Sidmetal v Titan International Ltd  1 QB 828 at 841; Schemmer v Property Resources Ltd  Ch 273 at 287; Henry v Geoprosco International Ltd  QB 726 at 745, CA; Felixstowe Dock and Rly Co v United States Lines Inc  QB 360; Murthy v Sivajothi  1 All ER 721 at 730, CA; Crick v Hennessy  WAR 74; Gordon Pacific Developments Pty Ltd v Conlon  3 NZLR 760. See also Morguard Investments Ltd v De Savoye  3 SCR 1077, (1991) 76 DLR (4th) 256.
136  3 SCR 1077, (1991) 76 DLR (4th) 256; Castel and Walker, Canadian Conflict of Laws (2006) 6th edn, para 14.5d; Blom (1991) 70 Can Bar Rev 733; Glenn (1992) 37 McGill LJ 537; confirmed in Hunt v T & N plc  4 SCR 289, (1993) 109 DLR (4th) 16; Walsh (1994) 73 Can Bar Rev 304.
137 For some of the factors relevant to determining this, see Bank of Credit and Commerce International (Overseas) Ltd v Gokal  IL Pr 316 at 319, British Columbia Sup Ct; Moses v Shore Boat Builders Ltd (1993) 106 DLR (4th) 654 at 667, British Columbia CA; Muscutt v Courcelles (2002) 213 DLR (4th) 577 at –, Ont CA. This requirement is also satisfied if the defendant was in the jurisdiction at the time of the action or submitted to the jurisdiction. The new rule can therefore be regarded as adding to the existing common law rules.
140  3 SCR 416, (2003) 234 DLR (4th) 1; criticised by Atrill  CLJ 574, Pitel  LMCLQ 289, Walker (2004) 120 LQR 365. The parties remain free to submit or agree to the jurisdiction in which the dispute is to be resolved, at  and . The real and substantial connection test is subject to a different statutory approach, see at –; Hull v Wilson  IL Pr 307, Alta CA. See also Canada Post Corp v Lépine 2009 SCC 16,  1 SCR 549; Chevron Corp v Yaiguaje 2015 SCC 42,  3 SCR 69.
141 Moses v Shore Boat Builders Ltd (1993) 106 DLR (4th) 654 at 667, British Columbia CA. See also Beals v Saldanha  3 SCR 416 at , (2003) 234 DLR (4th) 1. For enforcement of a judgment of a foreign state where jurisdiction was based on service out of the jurisdiction see Frymer v Brettschneider  IL Pr 138, Ont CA—the subject matter of the litigation must have a real connection with that state.
142 See Briggs (1987) 36 ICLQ 240 and (1992) 109 LQR 549, who favoured recognition and enforcement where the foreign court is the natural forum; contrast Briggs 2014, paras 6.174–6.175, 6.225; Briggs 2015, paras 6.60–6.61. See also Rogerson  CJQ 91, 102. Cf Harris (1997) 17 OJLS 477, who would base recognition and enforcement on whether or not the English courts are willing to restrain the foreign proceedings by anti-suit injunction. The Supreme Court of Ireland has refused to follow the real and substantial connection test: Re Flightlease  IESC 12; Kenny (2014) 63 ICLQ 197.
145 Lazarus-Barlow v Regent Estates Co Ltd  2 KB 465 at 475, CA. And see Fracis Times & Co v Carr (1900) 82 LT 698 at 701, CA; Pattni v Ali and Dinky International SA  UKPC 51 at –,  2 AC 85; Serious Fraud Office v Saleh  EWCA Civ 18 at ; Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (1996) 3rd edn, paras 234–5.
146 Cambridge Gas Transportation Corpn v Official Committee of Unsecured Creditors of Navigator Holdings plc  UKPC 26 at ,  1 AC 508; Briggs  LMCLQ 129 and (2006) 77 BYBIL 575; Ho Tham  LMCLQ 129.
149 The Cambridge Gas Transportation case. According to Lord Hoffmann, at , “The purpose of bankruptcy proceedings . . . is not to determine or establish the existence of rights, but to provide a mechanism for collective execution against the property of the debtor by creditors whose rights are admitted or established.” The decision in the Cambridge Gas Transportation case has been disapproved in Rubin v Eurofinance SA  UKSC 46 at ,  (per Lord Collins),  1 AC 236.
150 Air Foyle Ltd v Center Capital Ltd  EWHC 2535 (Comm),  2 Lloyd’s Rep 753; see also Serious Fraud Office v Saleh  EWCA Civ 18 at ; United States of America v Abacha  EWCA Civ 1291 at –,  1 WLR 1917.
155 “A holding which created a new type of judgment—a hybrid obtained by crossing an action in rem with an action in personam, with the dominant jurisdictional characteristics being possessed by the former.” Read, Recognition and Enforcement of Foreign Judgments (1938), p 264.
156 Ibid, pp 264–7.
166 See Duke v Andler  SCR 734,  4 DLR 529, supra, pp 490–1; see also White (1982) 9 Sydney LR 630. Cf Shami v Shami  EWHC 664 (Ch) at –, affd without discussing this point  EWCA Civ 227; Chapman Estate v O’Hara  2 WWR 275, Sask CA; Briggs 2014, paras 9.57, 9.58. In the USA, although the Supreme Court in Fall v Eastin 215 US 1 (1909) held that recognition need not be given to judgments in personam concerning land, most states are prepared to recognise such judgments: Scoles, Hay, Borchers, Symeonides, para 24.10; Restatement 2d § 102, comment d.
172 (1860) 8 CBNS 405; revsd, ibid, p 405, reversal affd (1870) LR 4 HL 414, HL. See also BCEN-Eurobank v Vostokrybprom Co Ltd (The Phoenix)  1 Lloyd’s Rep 449, E Caribbean CA, concerning the judicial sale of a ship by North Korean and Chinese courts.
176 Cross-border insolvency is dealt with in Chapter 34 of this book.
181 For the relevance of the law of the county where the judgment is given see Joint Stock Co ‘Aeroflot-Russian Airlines’ v Berezovsky  EWCA Civ 20,  1 CLC 53; Scott (2014) 85 BYBIL (evidence of Russian law insufficient for summary determination).
182 Nouvion v Freeman (1889) 15 App Cas 1, PC; Re Riddell (1888) 20 QBD 512 at 516, CA; Blohn v Desser  2 QB 116. Interim payments are now enforceable under the Foreign Judgments (Reciprocal Enforcement) Act 1933, see infra, p 594.
183 (1889) 15 App Cas 1, PC; applied in Colt Industries Inc v Sarlie (No 2)  1 WLR 1287, CA; Berliner Industriebank AG v Jost  2 QB 463, CA; distinguished in Audrain v Aero Photo Inc (1983) 138 DLR (3d) 177, Que CA.
189 Beatty v Beatty  1 KB 807, CA; and see Patton v Reed (1972) 30 DLR (3d) 494, British Columbia Sup Ct; Lear v Lear (1974) 51 DLR (3d) 56, Ont CA; Stark v Stark (1979) 94 DLR (3d) 556, Alb CA; McLean v McLean  1 NSWLR 620.
191 Lewis v Eliades  EWHC 368 (QB) at –,  1 All ER (Comm) 850; appeal allowed in part without discussion of this point  EWCA Civ 1758,  1 WLR 692. The adjustment to the damages arose out of the fact that there was an application for a separate judgment from the same court trebling the damages because of racketeering contrary to the US RICO Act. See also Schnabel v Yung Lui  NRWSC 15.
193 Scott v Pilkington (1862) 2 B & S 11, 121 ER 978; Colt Industries Inc v Sarlie (No 2)  1 WLR 1287, CA; Lewis v Eliades  EWCA Civ 1758 at ,  1 WLR 692; Malicorp Ltd v Egypt  EWHC 361 (Comm) at ,  1 Lloyd’s Rep 423; Enercon GmbH v Enercon (India) Ltd  EWHC 689 (Comm) at ,  1 Lloyd’s Rep 519; Midtown Acquisitions LP v Essar Global Fund Ltd  EWHC 519 (Comm). See also Four Embarcadero Center Venture v Mr Greenjeans Corpn (1988) 64 OR (2d) 746, affd 65 OR (2d) 160. A judgment enforcing a foreign judgment, which is then overturned, will in principle be set aside (unless the foreign overturning judgment is refused recognition in England): see Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniya Naftogaz Ukrayiny  EWCA Civ 196,  1 WLR 3036; Benefit Strategies Group Inc v Prider  SASC 250.
194 The Scott v Pilkington case; the Nouvion v Freeman case at 13; the Colt Industries Inc v Sarlie (No 2) case; Four Embarcadero Center Venture v Mr Greenjeans (1988) 64 OR (2d) 746, affd 65 OR (2d) 160; Arrowmaster Inc v Unique Forming Ltd  IL Pr 505, Ont Ct of Justice; Old North State Brewing Co v Newlands Service Inc (1998) 155 DLR (4th) 250, British Columbia CA.
195 Patrick v Shedden (1853) 2 E & B 14, 118 ER 674; Enercon GmbH v Enercon (India) Ltd  EWHC 689 (Comm) at ,  1 Lloyd’s Rep 519; cf Berliner Industriebank AG v Jost  2 QB 463 at 470–1, CA.
196 See Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniya Naftogaz Ukrayiny  EWHC 1820 (Comm),  2 All ER (Comm) 75, affd on a narrower point concerning the exercise of discretion to set aside a default judgment under CPR r 13.3 in  EWCA Civ 196,  1 WLR 3036; Ahmed (2012) 31 CJQ 417; Harder (2012/13) 14 YBPIL 103; Rushworth and Scott (2012) 83 BYBIL 294; Joint Stock Co ‘Aeroflot-Russian Airlines’ v Berezovsky  EWCA Civ 20,  1 CLC 53.
198 Grant v Easton (1883) 13 QBD 302, CA; see also JSC VTB Bank v Skurikhin  EWHC 271 (Comm) at , . On security for costs see Relational LLC v Hodges  EWCA Civ 774,  IL Pr 4; Rushworth and Scott (2011) 82 BYBIL 659.
200 Perry v Zissis  1 Lloyd’s Rep 607, CA. Amendments to the rules on service out of the jurisdiction have made this easier: see now CPR, r 6.36 and CPR PD 6B, para 3.1(10), supra, pp 355–6. It is not necessary for the claimant to show that the defendant has assets in England: Tasarruf Mevduati Sigorta Fonu v Demirel  EWCA Civ 799,  1 WLR 2508; Habib Bank Ltd v Central Bank of Sudan  EWHC 2288 (Comm); see also Chevron Corp v Yaiguaje 2015 SCC 42,  3 SCR 69; cf Linsen International Ltd v Humpuss Sea Transport Pte Ltd  EWCA Civ 1042.
204 The Sadler v Robins case; Henderson v Henderson (1844) 6 QB 288, 115 ER 111. For enforcement of judgments expressed in a foreign currency and charging orders see Carnegie v Giessen  EWCA Civ 191,  1 WLR 2510; see also Miliangos v George Frank (Textiles) Ltd  AC 443, HL.
208  SCR 612, (2007) 273 DLR (4th) 663; Pitel (2007) 3 J Priv Int L 241; Oppong (2007) 70 MLR 670. See also the decisions of the Grand Court of the Cayman Islands in Miller v Gianne  Cayman Islands LR 18 and of the Royal Court of Jersey in Brunei Investment Agency v Fidelis Nominees Ltd  JRC 152,  Jersey LR 337; Briggs (2009) 80 BYBIL 583. See also Independent Trustee Services Ltd v Morris  NSWSC 1218 at –, (2010) 79 NSWLR 425, where the court ordered an account of administration on the basis of wilful default, mirroring an order made in England.
211 USA v Harden Huntington v Attrill  AC 150, PC; A-G of New Zealand v Ortiz  AC 1 at 31–5, CA; USA v Harden  SCR 366, (1963) 41 DLR (2d) 721. See, however, as exceptions the Criminal Justice Act 1988, s 97 (foreign confiscation orders); Government of the USA v Montgomery (No 2)  UKHL 37,  1 WLR 2241; discussed infra, p 581, and Art 2(12) EU Regulation on Insolvency Proceedings; discussed supra, p 126.
213  EWCA Civ 1291,  1 WLR 1917; see also Pocket Kings Ltd v Safenames Ltd  EWHC 2529 (Ch),  Ch 438 (concerning an order in proceedings brought by a US state in the USA for the seizure or forfeiture of a domain name used for online gambling purposes; the order was categorised as a civil remedy under US law).
214 See SA Consortium General Textiles v Sun and Sand Agencies Ltd  QB 279 at 299–300, CA—an award of exemplary damages or damages for “resistance abusive” under French law not penal. In Lewis v Eliades  EWCA Civ 1758 at ,  1 WLR 692, this point was not regarded as clear. See also Pencil Hill Ltd v US Citta Di Palermo SpA, 19 January 2016, HC—foreign arbitration award enforced where the arbitrators awarded the claimant a reduced additional sum in place of a contractual penalty, representing 25 per cent of the penalty claimed and JSC VTB Bank v Skurikhin  EWHC 271 (Comm) at —arguable that an excessive award of interest is not recoverable on the ground that it is punitive in effect. Compare Old North State Brewing Co v Newlands Services Inc  4 WWR 573, British Columbia Court of Appeal (the judgment for treble damages not regarded as penal), Benefit Strategies Group Inc v Prider  SASC 194 at –, (2005) 91 SASR 544 and Doe v Howard  VSC 75 (punitive damages not penal) with Schnabel v Yung Lui  NSWSC 15 (punitive damages with a public element for failing to comply with an order of a US court regarded as penal).
219  2 KB 93; and see Lewis v Eliades  EWCA Civ 1758,  1 WLR 692, discussed infra, pp 554–5; United States Securities and Exchange Commission v Manterfield  EWCA Civ 27 at ,  1 WLR 172; Pace Europe v Dunham  EWHC 852 (Ch) at –. See also Benefit Strategies Group Inc v Prider  SASC 194 at –, (2005) 91 SASR 544; Schnabel v Yung Lui  NSWSC 15.
220 See Huntley (1981) 30 ICLQ 213, 229–33; Jones  CLJ 41; AV Lowe (1981) 75 AJIL 257; Blythe (1983) 31 AJCL 99; Bridge (1984) 4 Legal Studies 2. For analogous statutes in Australia and Canada, see the Foreign Anti-Trust Judgments (Restriction of Enforcement) Act 1979 (Cth) and the Foreign Extraterritorial Measures Act 1985; see generally Patchett, Recognition of Commercial Judgments and Awards in the Commonwealth (1984), para 3.24; Castel and Walker, Canadian Conflicts of Laws (2006) 6th edn, para 14.29b; Castel (1983) I Hague Recueil 9, 79–92; Collins  JBL 372 and 452.
221 See British Nylon Spinners Ltd v ICI Ltd  Ch 19, CA; Re Westinghouse Electric Corpn Uranium Contract Litigation NDLMDL Docket No 235  AC 547, HL. The resentment is also shared by Australia and Canada, see supra, n 220.
222 See ss 1–4. See also the Protection of Trading Interests (US Antitrust Measures) Order, SI 1983/900; the Protection of Trading Interests (Australian Trade Practices) Order, SI 1988/569, on which see Trade Practices Commission v Australian Meat Holdings Pty Ltd (1988) 83 ALR 299, Australian HC; Protection of Trading Interests (Hong Kong) Order, SI 1990/2291; US Reexport Control Order, SI 1982/885; and Protection of Trading Interests (US Cuban Assets Control Regulations) Order, SI 1992/2449.
223 Either at common law or by statute under Part II of the Administration of Justice Act 1920, discussed infra, p 591 et seq, or the Foreign Judgments (Reciprocal Enforcement) Act 1933, discussed infra, p 593 et seq, see s 5(1) and Service Temps Inc v MacLeod  CSOH 162 at –, 2014 SLT 375; Scott (2013) 84 BYBIL 523. S 5 will not, however, apply to cases coming within the Brussels/Lugano system, discussed infra, pp 608–55, but see especially p 625. For the significance of s 5 in relation to restraining foreign proceedings, see Simon Engineering plc v Butte Mining plc  1 Lloyd’s Rep 104 n; SCOR v Eras EIL (No 2)  2 All ER 278 at 308–12.
224 S 5(3). Foreign laws imposing multiple damages have been described as penal at common law: British Airways Board v Laker Airways Ltd  QB 142 at 163 (per Parker J), and in the Court of Appeal at 201 (per Donaldson MR); cf Old North State Brewing Co v Newlands Services Inc (1998) 155 DLR (4th) 250, BC CA (treble damages based on an unfair and deceptive trade practice statute not anti-trust). More recently, the Court of Appeal has accepted, obiter, that this is arguable but found it unnecessary to decide the point: Lewis v Eliades  EWCA Civ 1758 at ,  1 WLR 692; see also Service Temps Inc v MacLeod  CSOH 162 at –, 2014 SLT 375.