There are parallel systems in relations to the recognition
and enforcement of foreign judgment, in particular the common law principles
(traditional rules) and Brussels Regulation Recast.
Brussels Regulation
(recast) No. 1215/2012 (BRR)
applies only to legal proceedings instituted on or after 10 January 2015: Article 66(1)
Brussels Regulation
No. 44/2001 will continue to apply to judgments given in proceedings
instituted before 10 January 2015: Article
66(2)
You can download BRR here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:351:0001:0032:en:PDF
You can download Civil
Jurisdiction and Judgments Act 1982 here: http://www.legislation.gov.uk/ukpga/1982/27/pdfs/ukpga_19820027_en.pdf
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Recognition and enforcement of judgments under the Traditional Rule
There are several conditions for a foreign judgment to be
enforced in England:
- The foreign court must have been a court of competent jurisdiction
- The judgment must be final and conclusive
- The judgment must for a fixed sum of money
Traditional Rule – The foreign court must have been a court of competent jurisdiction
The court will be one of competent jurisdiction where it has
exercised jurisdiction on one of the bases of jurisdiction recognised as
acceptable according to English rules of private international law.
The question is not whether the foreign court was entitled
to assume jurisdiction according the foreign law, but whether the foreign court
had jurisdiction according to English private international law.
The decided cases indicate that there are two situations in
which the foreign court will be regarded as a court of competent jurisdiction:
- Firstly, where the judgment-debtor (person against whom a court judgment has been made, and who is therefore now obliged to pay money that he or she owes) submitted to the jurisdiction of the foreign country;
- Secondly, where there is a sufficient territorial connection between the judgment-debtor and the country of origin.
A foreign court has jurisdiction over a person who submits
to the jurisdiction of it. Submission can take of one of the following three
forms: Emanuel v Symon (1908)
Firstly, the foreign court will be regarded as a court of
competent jurisdiction if the judgment-debtor consented to the jurisdiction of
the forum in which the judgment was obtained: Feyerick v Hubbard (1902)
Consent can take form of a contractual clause providing for
the exclusive or non-exclusive jurisdiction of the court. In Copin v Adamson (1875), a domiciled
Englishman had submitted to jurisdiction of French court, by taking shares in a
French company whose articles of association provided that disputes arising
during liquidation should be submitted to a French court. It was held that a
judgment from French court could be enforced against him in England.
The consent cannot be implied into the contract, as Scott J in Adams v Cape Industries (1990) stressed that the minimum
requirement is that there must be ‘a clear indication of consent to the
exercise by the foreign court of jurisdiction’.
Secondly, a defendant who voluntarily participates in the
foreign proceedings submits to the jurisdiction of the foreign court. A foreign
judgment can be enforced if the judgment-debtor entered an appearance to defend
the case, or took any step designed to challenge the merits of the claim or
filed an appeal against the judgment to a higher court in the country of
origin, not previously having taken any steps in the action: SA Consortium General Textiles v Sun and
Sand Agencies Ltd (1978)
If the defendant submits to proceedings brought by P1 in a
foreign country this is not to be regarded as an implied submission to related
proceedings commenced by P2 in the same court, even if the proceedings
commenced by P1 and P2 involve almost identical issues: Adams v Industries plc (1990)
An appearance to the court to protest that a foreign court
does not have jurisdiction/ ask the court to dismiss or stay the proceedings on
the ground that the dispute in question should be submitted to arbitration of
the courts of another country/ or to pretest, or obtain the release of,
property seized or threatened with seizure in the proceedings do not give rise
to an effective submission: section
33(1) of the Civil and Jurisdiction and Judgments Act 1982
The defendant will not be held to have submitted to the
jurisdiction of the foreign court if his appearance in the original proceedings
was not voluntary. The question of voluntariness is to be determined by English
law: Desert Sun Loan Corp v Hill (1996).
An appearance is not voluntary if it is due to duress or
undue influence brought to bear by the other party: Israel Discount Bank of New York v Hadjipateras (1994)
A person who is sued in a foreign country whose exercise
exclusive jurisdiction ‘to protect, or obtain the release of, property seized
or threatened with seizure in the proceedings’ will not be regarded as having
submitted to the jurisdiction of the foreign court: section 33(1)(c) Civil Jurisdiction and Judgments Act 1982).
Thirdly, the judgment-debtor will be held to have submitted
to the jurisdiction of a foreign court if he took part in the proceedings as plaintiff:
Emanuel v Symon (1908). If, for
example, P brings an action for breach of contract against D in New York and
the New York court gives a judgment in D’s favour and orders P to pay D’s
costs, the order for costs would be enforceable in England on the ground that P
had submitted to the jurisdiction of the original court.
It is well established that a foreign judgment is
enforceable in England if there was sufficient territorial connection between
the defendant and the country of origin. There are three types of situation may
give rise to the principle.
- Firstly, where the defendant is not only resident in the country of origin but also is present there when the proceedings are commenced: Adams v Industries plc (1990)
- Secondly, where the defendant is present in the country of origin at the commencement of proceeding, but is not resident in that country: Carrick v Hancock (1895) and Adams v Industries plc (1990)
- Thirdly, where the defendant is resident in the country of origin at the commencement of proceedings, but is not present there at the time. The CoA in Adams v Industries plc (1990) expressly left open this third situation. If presence is properly regarded as a sufficient connection, residence – even if not accompanied by presence – should also be adequate since residence is a more substantial connection than mere presence.
According to Adams v
Industries plc (1990), a foreign court may have jurisdiction over companies
if
- It has fixed place of business from which it has carried on its own business for more than a minimal time, and
- The business is transacted from that fixed place of business.
It was suggested that the above rule is easily established
where there is a branch office; it is more difficult where the business is
conducted by a representative, an agent or an employee. In such situations
where there was indirect presence of the companies through a representative,
for examples agent or subsidiaries, the companies would be liable only if the
court are convinced to lift the corporate veil.
Political nationality, domicile, locality cause of action
(for example contract broken or tort committed in the country), choice of
governing law (for example no jurisdiction in Japan merely because Japanese Law
is the applicable law), possession of immovable property in the jurisdiction
and foreign judgment based on service out of jurisdiction do not found
jurisdiction.
A court will not be regarded as a competent court to
determine the issues relating to title to, or the right to the possession of,
foreign immovable property, even though the defendant was present in the
country of origin at the commencement of the proceedings or submitted to the
jurisdiction of its course.
Traditional Rule – The judgment must be final and
conclusive
The case must be res
judicata (has been adjudicated by a competent court and may not be pursued
further by the same parties) by the law of the country where it was given. So
far as the foreign court is concerned, the judgment must conclusively and permanently
decide the matter between the parties.
If, according to the foreign law, the judgment can be
challenged by the parties in the same court with the possibility of its being
set aside, the judgment is not final and conclusive.
A provisional judgment is not res judicata. In Nouvion v
Freeman (1889), it was held a Spanish judgment, which could be abrogated by
the adjudicating court, was not res judicata.
In Blohn v Desser (1962), an
Austrian judgment against a firm, is not final and conclusive against an individual
personally because it wouldn’t render an individual personally liable unless a
separate action is brought.
The fact that a judgment is subject to appeal in the country
of origin does not mean that it is not final and conclusive: Colt Industries v Sarlie (No. 2) (1966).
An action can be brought in England even if an appeal is pending in the foreign
court, but English court has discretion to stay the proceeding pending the
outcome of the appeal.
Traditional Rule – The judgment must for a fixed sum of money
A foreign judgment which granted specific performance or
restitution or injunction would not be enforceable.
As a general rule, if the judgment-debtor is ordered to pay
a sum of money to a private person – rather than to the state – the judgment is
will be enforceable.
A judgment which orders the defendant to pay exemplary or
punitive damage is in principle enforceable: SA Consortium General Textiles v Sun and Sand Agencies Ltd (1978)
A criminal court judgment which orders the defendant to
compensate his victim is also enforceable: Raulin
v Fischer (1911).
A judgment orders the defendant to pay a sum to the state
can be enforceable if the payment is not in nature of a penalty: United States of America v Inkley (1988)
The Supreme Court of Canadian in Pro Swing v Elta Golf (2006) argued that the door should be opened
to modern equitable remedies, such as injunctions.
The defence of mistaken foreign judgment
English courts will not review the foreign judgment on the
merits. It will not influence the English court even if:
- The foreign judgment was based on mistaken facts: Bank of Australasia v Nias (1851); or
- The wrong law has been applied, or the right law has been applied wrongly. This can be seen in the case of Godard v Gray (1870), where the French court took a mistaken view of English law and thus qualified damages wrongly).
If a foreign court makes a mistake as to its own
jurisdiction, which means that it hears a case when it had no jurisdiction, an
English court will not enforce its judgment: Papadopoulos v Papadopoulos (2004)
If a foreign court has made a mistake in its own procedure,
an English court will still enforce its judgment.
- In Pemberton v Hughes (1899), in divorce proceedings a wife had received nine days’ notice of the proceedings instead of the 10 prescribed by Florida law, the CoA held that judgment was binding in England).
If the defendant has failed to raise a defence that is
available in the foreign court, he would not be allowed to raise the particular
defence in English court.
- In Israel Discount Bank of New York v Hadjipateras (1984), the defendant failed to raise the defence of undue influence in the foreign court and Stephenson LJ stressed that a defendant must take all available defences in the court of origin).
- Professor John O’Brien suggested that even where the defence was not available to the defendant in the foreign proceedings, the general principle of not retrying foreign cases should prevent the defendant raising the matter in English court, unless some fundamental principle of English public policy would be offended.
Defences – Judgment obtained by fraud
The English court will not recognise or enforce a judgment
which was obtained by fraud.
Fraud may take a number of forms.
The judge may have taken a bribe or simply not being an
independent body.
- In Korea National Insurance v Allianz (2009), it was claimed that the North Korean judiciary was not independent, the English court accepted the defence even if raises potentially sensitive political/diplomatic issues.
The defendant may have been deprived of the opportunity to
take part in the foreign proceedings because of a trick. These include:
- Telling the defendant to go for arbitration and goes for the court without notifying the defendant (Ochsenbein v Papelier (1873))
- Threat of violence (Jet Holdings Inc v Patel (1988))
- Lying to the court
The unusual part in English law is that it is not necessary
for the judgment-debtor to produce any new evidence.
- Fraud can be raised as a defence even if it has been raised and dismissed aboard (Abouloff v Oppenheimer (1882)).
- This was reaffirmed by the CoA in Jet Holdings Inc v Patel (1988) and the HOL in Owens Bank v Bracco (1994).
There are two circumstances in which the defence of fraud
cannot be brought.
- Firstly, where there have been separate proceedings aboard leading to a judgment which creates an issue estoppel between the parties on the question of fraud. In House of Spring Gardens Ltd v Waite (1990), it was alleged that an Irish judgment (the first judgment) had been obtained by fraud but there had been a second case in Ireland which had determined that there had not been fraud. It was held that this second judgment created as estoppel which renders the first could not thus be questioned.
- Secondly, the court would have an inherent power to strike out the defence in the absence of plausible evidence disclosing at least a prima facie of fraud: Owens Bank Ltd v Etoile Commerciale SA (1995).
Defences – Public Policy
The court will not recognise or enforce a foreign judgment
if its recognition or enforcement would be contrary to the public policy.
Clarkson and Hill
suggested that if the original proceedings had been brought in England, the
cause of action under the foreign law would have been rejected on the ground of
public policy even though the foreign law would otherwise have been
applicable.
It has been held that the enforcement of a judgment for
exemplary or punitive damages is not contrary to public policy: SA Consortium General Textiles v Sun and
Sand Agencies Ltd (1978)
In Re Macartney
(1921), a Maltese judgment, under which the estate of the deceased father was
ordered to pay maintenance to the mother, on behalf of an illegitimate child,
was refused to enforce by the English court on ground of public policy, because
the judgment entitled the child to receive maintenance even after her minority.
A foreign judgment will not be enforced if it is
inconsistent with a previous decision of a competent English court in proceedings
between the same parties: Vervaeke v
Smith (1981)
In Israel Discount
Bank of New York v Hadjipateras (1984), the defendant sought to resist
enforcement of a New York judgment on the basis that it was only as a result of
his father’s undue influence that he entered the contract of guarantee on which
the judgment was based. The CoA rejected the defence that it would be contrary
to public policy to enforce the judgment because the defendant ought to have
raise the defence in New York proceeding. Nevertheless the court accepted that
a foreign judgment on an agreement which contravenes public policy may be
unenforceable on the ground of public policy. Examples are undue influence,
duress and coercion.
Recognition and enforcement of foreign judgment may be
contrary to public policy in light of human right. English court may refuse to
enforce a foreign judgment if the enforcement of the foreign judgment would
have failed to meet the standards of a fair trial: Al-Bassam v Al-Bassam (2004). An English court is under an
obligation under the HRA 1998 and Article 6 of the ECHR, to have regard to its own obligations to act in a manner
which is not inconsistent with the Convention right to a fair trial.
Defences – A breach of Article 6 of the ECHR
In Drozd and Janousek
v France and Spain (1992), it was mentioned that (obiter dictum) an ECHR contracting
state may incur responsibility if it assists in the enforcement of a foreign
judgment obtained in flagrant breach of Article
6.
In Pellegrini v Italy
(2001), it was said the breach did not have to be ‘flagrant’. This was rejected
in United States Government v Montgomery
(No. 2) (2003), which the HOL accepted the dictum in Drozd and Janousek
v France and Spain (1992), said that there must be a flagrant breach of
Article 6. Besides, the HOL accepted that Article
6 can have indirect effect in cases of enforcement of foreign judgments.
Defences – Revenue, penal or other public laws
English court will not enforce foreign revenue, penal or
other public laws either directly or through the recognition of a foreign
judgment (USA v Inkley (1988),
enforcement refused of a bail appearance bond).
An order by criminal court that a defendant compensate his
victim is enforceable: Raulin v Fischer
(1911).
A civil judgment, combined with a criminal judgment may be
actionable in England, as creating a separate and independent course of action.
Defences – Natural Justice
The English court will not recognise or enforce a foreign
judgment which was obtained in a manner contrary to natural justice. Natural
justice consists of two elements: first, the litigant must have been given
notice of the foreign proceedings; second, the litigant must have been given a
proper opportunity of presenting his case before the court: per Atkin LJ in Jacobson v Frachon (1927)
If a method of serving notice on the defendant was used
which was in accordance with a contract between the parties (for instance,
service at a stated address) that will be sufficient for natural justice in the
eye of English law, even if the defendant did not in fact receive the notice
with the consequence that the judgment was obtained against him by default: Feyerick v Hubbard (1902)
If the parties are not competent to give evidence under the
law of the country of origin, this would not preclude the enforcement of the
foreign judgment: Scarpetta v Lowenfeld
(1911)
In addition, in Adams
v Cape Industries plc (1990), it was held that it could extend to a lack of
judicial assessment of damages, which means that the damages had been fixed on
an average basis, rather than an individual entitlement according to evidence.
However, it could be argued that the relationship between natural justice and
substantial justice is far from clear.
Defences – Multiple damages
Section 5(2) of
the Protection and Trading Interests Act
1980 provides that a court in the UK cannot enforce a judgment for multiple
damages.
In Lewis v Eliades
(2003), the US judgment awards compensation for $8 million, which consists of
$1.1 million for racketeering (a multiple damage award) and $6.8 million for
breach of fiduciary duty and fraud. The CoA enforced only the latter part of
the judgment.
Defences- Matter previously determined by an English court (conflicting judgment)
A foreign judgment would not be enforced if the matter has
previously been determined by an English court. It is not reasonable for the
English court to enforce a foreign judgment which conflicts with an English
judgment.
In Vervaeke v Smith
(1982), a Belgian prostitute married to an Englishman to obtain British
citizenship and practice her profession of prostitute in the UK without running
the risk of deportation. The parties had no intention of living together, and
in fact, the Englishman agreed to marry her in return for £50 and a fly ticket
to South Africa. The Belgian prostitute then married again with a prohibitable
brothel owner, who died on the wedding night leaving her a rich widow. The
relatives of her second husband seek to prove the second marriage is void,
because it was bigamous. She sought in English proceedings to annul her first
marriage on the ground of lack of consent on her part. Ormrod J held that her first marriage to be valid. She then
acquired a Belgian decree of nullity, by which under the Belgian law her first
marriage was void because it was a sham marriage. It shall be noted that a sham
marriage is valid by English domestic law. The HOL refused to enforce Belgian judgment
on both res judicata (having regard to the earlier decision of Ormrod J) and public policy
grounds.
Defences – Matter previously determined by another foreign court (conflicting judgment)
A foreign judgment would not be enforced if it is given on a
matter previously determined by a court in another foreign state.
If there are two conflicting judgments, both of which
satisfy the conditions for recognition or enforcement, the earlier judgment
will prevail, unless the circumstances are such that the party wishing to rely
on the earlier judgment is estopped from doing so: Showlag v Mansour (1994), a Privy Council case).
An earlier arbitral award also prevails over later foreign
judgment: The Joanna V (2003).
Defences – Foreign judgment in breach of arbitration or
jurisdiction clause
By virtue of the section
32(1)(a) of the Civil Jurisdiction
and Judgments Act 1982, a foreign judgment has been given in breach of an
arbitration or jurisdiction clause is not enforceable in England.
However a jurisdiction or arbitration clause cannot provide
a defence to recognition or enforcement if it was illegal, void, unenforceable
or incapable of being performed: section
32(2) CJJA 1982. In other words, jurisdictional clause or arbitration clause
is no defence to the recognition or enforcement if it is illegal, void,
unenforceable or incapable of being performed.
An illustration of section
32(1)(a) CJJA 1982 could be seen in the case of Tracomin SA v Sudan Oil Seeds (1983). The contract referred any
dispute to arbitration in England. Nevertheless, the plaintiff sued the
defendant in Switzerland. The Swiss court concluded that the arbitration clause
was of no effect and ordered the defendant to pay damages. The CoA refused to
enforce the Swiss judgment. English law was the proper law and under the
English law the arbitration was valid. The defendant is therefore entitled to
rely on it as a defence to the Swiss judgment.
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Recognition and enforcement of foreign judgments under the BRR
Article 1(1) states
that Brussels Regulation Recast applies in civil and commercial matter only.
Article 2(a)
defines judgment as any judgment given by a court or tribunal of the MS,
whatever the judgment may be called, including a decree, order, decision or
writ of exclusion, as well as a decision on the determination of costs or
expenses by an officer of the court. There is no distinction between final
judgments and provisional measures.
Article 36(1)
states that a judgment given in a MS shall be recognised in the other MS
without any special procedure being required.
Article 37(1)
states that a party who wishes to invoke in a MS a judgment given in another MS
shall produce a copy of the judgment and a certificate issued by the court of
origin under Article 53.
Article 39 states
that a judgment given in a MS shall be enforceable in the other MS without any
declaration of enforceability.
Article 42
provides that the applicant who wishes to enforce in a MS a judgment given in
another MS shall produce a copy of the judgment and a certificate issued by the
court of origin under Article 53.
Defences to Recognition or enforcement under the BRR
Article 46
provides that a MS can refuse to enforce a foreign judgment if it falls within
the scope of Article 45(1).
The first ground is that the foreign judgment is manifestly
contrary to public policy: Article
45(1)(a). The ECJ held that it is for the court of origin to decide whether
it was contrary to public policy: Marco
Gambazzi v DaimlerChrysler (2009)
Mistake in law (Apostolides
v Orams (2009)) and failure to refer to arbitration clause (The Wadi Sudr (2009)) itself by the
court of origin is insufficient.
For the purpose of BRR, public policy is a concept shall be
given a restricted interpretation (Solo
Kleinmotoren v Boch (1994)) and should be invoked only in exceptional cases
(Hoffman v Krieg (1988)). In Interdesco v Nullifire (1992), Phillips J considered that fraud could
be raised as a defence under the heading of public policy, only if the defence
of fraud is not available in the court of origin or the defendant could
establish new evidence to support his defence.
The second ground is where it was given in default of
appearance, if the defendant was not served with the document which instituted
the proceedings or with an equivalent document in sufficient time and in such a
way as to enable him to arrange for his defence, unless the defendant failed to
commence proceedings to challenge the judgment when it was possible for him to
do so: Article 45(1)(b)
If the defendant took part in the proceedings to challenge
the merits of the claim, he would not be entitled to rely on the defence: Sonntag v Waidmann (1993)
If the defendant appeared to contest the court’s
jurisdiction or ask for staying of proceeding, he would also not be entitled to
rely on the defence: Maersk v Firma M de
Haan (2005). As long as the defendant played a part in the proceedings, Article 45(1)(b) would not be
applicable.
It appears that the defence is only available if the
judgment was given in default of appearance. It is for the court in which the
enforcement is sought to decide whether service was in sufficient time and
effected in an appropriate way. In TSN
Kunststoffrecycling GmbH v Jurgens (2002), it was claimed that the
defendant had no sufficient time to arrange for his defence and the default judgment
was held not enforceable.
The third ground is that the judgment is irreconcilable with
a judgment given in a dispute between the same parties in the MS which recognition
is sought: Article 45(1)(c)
The fourth ground deals with irreconcilability with a prior
foreign judgment: Article 45(1)(d).
If the judgment is irreconcilable with an earlier judgment given in another MS
or in a third state, involving the same cause of action and between the same
parties, the latter judgment is not enforceable if the earlier judgment
fulfills the conditions necessary for its recognition in the MS addressed. In
other words, the earlier judgment will prevail over the latter judgment.
The fifth ground is that the judgment is in conflicts with Article 10-16 (matters of insurance), Article 17-19 (consumer contract), and Article 24 (exclusive jurisdiction). It
shall be noted that employment contract and jurisdictional clause or
arbitration clause are excluded from Article
45(1)(e). By virtue of Article 45(2),
the court is bound by the findings of fact on which the court of origin based
its jurisdiction.
Article 45(3)
provides that the jurisdiction of the court of origin shall not be reviewed.
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Please read the disclaimer (at the top of the page) before proceeding.
Please do not take this note as the sole and only sources to study. It is only a guidance which may assist you in drawing out the full picture of the particular area of law. It is never meant to be a comprehensive text.
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