#17359 - Enforcement And Recognition - Conflict of Laws

Enforcement = e.g. A sues B in Germany for breach of contract and obtains a judgment for $5000 in damages; A wishes to seize B’s property and/or garnishee B’s bank account which are in England.

Recognition = treating the claim which was adjudicated as having been determined once for all. The matter is res judicata, both in relation to the entire causes of action and on discrete issues.

• Not every foreign judgment (‘FJ’) which is recognised in England can be enforced. But to be enforced, a FJ must first be recognised.

3 broad categories (depending on the country where the judgment was obtained):

1. Brussels regime: Judgments covered by BIRR—i.e. judgment from other parts of UK, other BIRR states, and EFTA states covered by Lugano Convention—are easiest to enforce.

2. Common law: These are hardest to enforce.

3. Bilateral treaty: Judgments from a small number of states which are party to a bilateral treaty with the UK and from other territories of the Commonwealth and Empire (i.e. a reciprocal regime) for which the statutory conditions for recognition & enforcement reflect the common law, but which benefit from a simplified procedure for enforcement—i.e. same substantive rules but easier procedural enforcement.

4. Hague Conventions 2005 and 2019: The rules introduced in these conventions may well also become increasingly important.

Facing a recognition PQ:

APPLY: 3 conditions for recognition, Carl Zeiss v Rayner (No.2) [1967]:

1. The issue before the English court must be identical with that determined by the foreign court.

• Yukos Capital v Roseneft (CA)—public policy:

  • FACTS: Sought issue estoppel. An arbitration award had been given in favour of one party. The award was annulled in a Russian court. When party sought to enforce the award in Netherlands court, Netherlands refused to recognise the Russian annulment judgment because it was in breach of Dutch public policy. When brought before English court, was there an issue estoppel because the Dutch court had already decided on the recognition of the Russian judgment?

  • HELD: No preclusive effect on grounds of issue estoppel, because different issues: Dutch court held it was in breach of Dutch public policy. English court had to decide if it was in breach of English public policy, which might be different.

2. The foreign decision must be final and on the merits.

3. The parties or their privies must be identical.

(NB Three situations in which recognition may arise:

• D successful in foreign proceedings can rely on a foreign judgment as a defence to English proceedings.

• D relies on a foreign judgment given in the claimant’s favour. s.34 CJJA1982 provides that no proceedings may be brought by a person in England on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties in a foreign court unless that judgment is not enforceable or entitled to recognition in England.

• Judgment-creditor (or the winner in relation to a particular issue) raises an issue estoppel:

  • as a means of limiting the grounds on which the judgment-debtor can challenge enforcement of a foreign judgment in England: Desert Sun Loan Corpn v Hill [1996]

  • as incontrovertible evidence e.g. that the contract was binding on B.)

Facing an enforcement PQ:

PRELIMINARY STEP

1. Procedure for enforcement: CPR 24.2(1). Procedurally, absent reciprocal registration¹, a foreign judgment debt is enforced by an application for summary judgment, using the foreign judgment as evidence of the debt.

2. Establish jurisdiction of the English court:

   1. Service IN England: Regular service rules apply (see Jurisdiction at Common Law notes)

   2. Service OUT of England (where D is abroad): Practice Direction 6B 3.1(10)

• D has assets in England: Can serve

• D has no assets in England: Probably can serve: Tasarruf v Demirel (CA): Anthony Clarke MR pointed out that PD 6B 3.1(1) says nothing about D needing to have assets, so long as there is ‘indirect benefit’: in that case, D was continuously shifting assets about so they might have come through England at some point. Briggs (2015) would agree, as there is nothing in the wording of the directions precluding enforcement where D has no assets.

  • Nevertheless, CA emphasised in Demirel that the rule is discretionary and the court would only grant permission for service out if it was just to do so.

  • In exercising that discretion, the court might follow Stanley Burnton LJ’s slant in Linsen v Humpuss (CA), construing PD 6B 3.1.(10) as having the object of ‘[enabling] enforcement of a judgment against assets within this country that belong to a defendant who is out of the jurisdiction’, and therefore decline to grant service out.

STEP 1: Enforceable type?

1. A final and conclusive judgment

   1. Final = It cannot be reopened in the court which made the ruling, even though it may be subject to an appeal in a higher court (Colt Industries v Sarlie (No.2))—although the English court might stay enofrcement proceedings pending outcome of the appeal.

   2. Conclusive = It represents the court’s settled conclusion on the merits of the point adjudicated.

• May be a whole dispute or a single point

• Both substantive and procedural issues: The Sennar (No.2): Applicability of a jurisdiction agreement can be a decision on the merits if it establishes certain facts, states the law, and expresses a conclusion applying those principles.

• Not if the court establishes only a good arguable case: Desert Sun Loan Corp v Hill

2. of a court

   1. Does not include: award of an arbitral tribunal; decision of an administrative body

   2. Probably includes a court applying a religious law: Midland International v al-Sudairy (Saudi court applying Sharia law)

3. for a fixed debt or sum of money: Sadler v Robins

   1. Non-money judgments (e.g. declaration of liability, order to account, specific performance order) may be recognised but cannot be enforced. This is because the mechanism for enforcement in those other types of judgments will be more complicated—have to take account of background factors etc.

   2. ‘Fixed’; If the judgment can be varied at all (e.g. through deduction of costs or taxation), then not enforceable.

4. Not directly or indirectly for tax, penalty, or other public law (e.g. crime, tax collection): This would directly or indirectly enforce another country’s public law

   1. E.g. USA v Inkley: CA 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, i.e. part of the criminal process.

   2. English law determines whether penal, revenue or other public law, looking at substance not form (SA Consortium).

      1. Public penalty: If paid to other party, not penal: SA Consortium v Sun and Sand

• FACTS: French court added a ‘punitive element’ for D’s ‘resistance abusive’ (unjustifiable opposition), i.e. if D refuses to pay within a certain time, then he is charged more.

• HELD (CA): (1) It is for the English court to decide whether penal. (2) Look at substance, not form: it does not matter if the French label stated ‘punitive’. (3) Key criterion: If the sum is paid to the state penal. If the sum is paid to the other side in the proceedings not penal. On the facts, the sum was paid to the other party, therefore not penal.

  1. Form of proceedings not conclusive: US Securities and Exchange v Manterfield

• FACTS: Action in the US was brought by US regulatory authorities in criminal proceedings.

• HELD: Although there were some criminal charges involved, the order to return disgorged funds to injured investors was a restitutionary claim that could be severed and enforced—it was the substance of what was sought to be enforced which was important.

If satisfied It is an enforcetable type of judgment.

STEP 2: Jurisdiction? Is the judgment-granting court one with internationally competent ‘jurisdiction’? Helpful summaries:

• Emanuel v Symon: 5 cases in which English courts will enforce a foreign judgment: ‘(1) where D is a subject of the foreign country in which the judgment has been obtained; (2) where D was ...