#3623 - Recognition And Enforcement Of Foreign Judgments Cases - Conflict of Laws

RECOGNITION AND ENFORCEMENT OF JUDGMENTS

Recognition/Enforcement at Common Law

Recognition

The Indian Grace [1993]

Case involved a bill of lading where cargo was carried in a ship owned by D. Was fire on board ship and C’s cargo was damaged. C sued D in India in personam for short delivery; C then sued D again in England in rem in respect of D’s vessel on which the cargo was transported. Held:

• See notes

• Actions have same parties

  • For purposes of s.34, English proceedings brought in personam against shipowner involve same parties as proceedings in which C sues D in rem

• Actions have same cause of action

  • i.e. C is relying on breach of contract in both

Desert Sun Loan Corp v Hill [1996]

US bank, C, obtained judgment against a firm of partners. At time of judgment, D, one of partners, lived in England. However partnership’s solicitors in US had accepted service of US proceedings on behalf of D, on basis that D had authorised another partner to instruct solicitors. Held:

• Findings of fact made in US case show that, according to English conflict of laws rules, D submitted to US proceedings.

• Thus D estopped from denying he submitted to US proceedings.

• However on facts, judgment could not be enforced.

Enforceable Judgments

For a Fixed Debt of Sum of Money

United States of America v Inkley [1989]

D had been issued with summons in American civil proceedings. Court in America had granted D bail in return for an appearance bond, designed to encourage D to attend proceedings. When D failed to appear, USA sought to enforce judgment for payment of appearance bond in UK. Held:

• Judgment was a penalty.

• Thus enforcement action was for execution of foreign penal process.

• Therefore USA judgment is unenforceable.

Huntington v Attrill [1893] (PC)

A New York statute prescribed penalties for those found to have made false representations. C sued D for false representation in NY, won, and sought to enforce award of damages made in Canada. Held by Privy Council:

• Mere fact that a state-sanctioned penalty attaches to a breach of a law by D does not make any action to recover that penalty by C ‘penal’.

• Thus penal actions for the purposes of enforcement DO NOT include those in which a penalty is sought to be recovered by a private person.

  • even if this penalty is prescribed by statute.

• Rather they are only those which have as their object the enforcement of punishment by or on behalf of the State itself.

SA Consortium General Textiles v Sun and Sand Agencies [1978]

C obtained punitive damages against D in French proceedings. Sought to enforce judgment in UK. D claimed that i) punitive damages were not enforceable; and ii) the failure of the French court to recite the steps taken to bring summons to D’s knowledge, a procedural error of French law, meant the judgment was invalid and unenforceable. Held:

1. Punitive damages are enforceable.

• Even though they are imposed by court to punish D, are in fact compensatory

• Lord Denning: Punitive damages are also not contrary to public policy

• Are many countries around world in which punitive damages are deemed enforceable.

2. Foreign judgments which are merely voidable under foreign law are enforceable

• And on facts, judgment was at the most voidable

European Bank v Robb Evans [2004] (Australian Case)

D was alleged to have committed mass credit card fraud in US. Federal Trade Commission, a public body in US, used its public law powers to bring case against D in US with view to recovering money D had illegally obtained. C then sought to enforce this judgment in Australia. Held:

• On facts, because the power was used with view to reimbursing private parties is not a ‘penal’ judgment.

• i.e. power was used for a compensatory purpose, and not for benefit of the State.

Competent Jurisdiction

Adams v Cape Industries [1990]

Cape (D), an English registered company dealing in asbestos, operated in America via a subsidiary company incorporated into America. C, group of people allegedly injured by asbestos installed into a factory, obtained judgments against D in America. Question was whether these D was ‘present’ in US. Held:

• See notes.

Submission

Adams v Cape Industries [1990]

Facts from above. D voluntarily submitted to earlier proceedings brought by those allegedly injured by asbestos (the Tyler 1 actions), but did not submit to later proceedings brought by additional workers (the Tyler 2 actions). C argued that submission to the earlier proceedings meant D had impliedly submitted to the second proceedings. Held:

• See notes.

Marc Rich v Societa Italiana [1992]

C brought proceedings against D in Italy. D’s contested jurisdiction of Italian court; however D subsequently, and of his own accord, filed statement of claim containing argument that Italian court should reject relief sought by C – but form stated that this defence was ‘without prejudice’ to contesting of jurisdiction. Held:

• Provided D makes it clear his first and primary defence that he is contesting jurisdiction of court, is not a submission even if there is some additional material constituting a plea on merits

• First defence put forward by D was obviously not a submission.

• However second defence was a submission

  • i.e. was invitation to Italian court to decide on facts of case

Defences

Substantive Justice

Adams v Cape Industries [1990]

Facts from above. After D (Cape) decided not to participate in the Tyler 2 proceedings, Texas proceedings carried on regardless. There were then multiple failures of justice:

1. Was no jury assessment of damages, despite this having been promised;

2. In a departure from normal rules, judge awarded damages without any reference to the individual injury of each plaintiff, but simply by directing that the average award for each plaintiff should be $75,000;

3. The total amount of damages was distributed between plaintiffs by their own counsel on the basis of how severe their injuries were.

Held:

• Was a breach of substantial justice.

• Substantial justice requires that compensation be assessed objectively by an independent person.

• And this not done at all here.

• Thus even if Texas court had had jurisdiction, C could not have enforced judgment.

House of Spring Gardens v Waite [1991]

C obtained judgment in Ireland (the first judgment). D subsequently started separate proceedings in Ireland challenging the first judgment on grounds of fraud; however these were dismissed (the second judgment). C brought enforcement proceedings in England, and D raised defence of fraud. Held:

• D cannot raise fraud as defence if he has already challenged original judgment in separate proceedings on grounds that it was obtained by fraud.

• Here D is estopped from raising defence in enforcement proceedings.

Owens Bank v Etoile [1995]

D challenged a decision of French court on grounds that it was obtained by fraud both on appeal in France, and then in proceedings in St. Vincent; both were unsuccessful. When enforcement proceedings were brought in St. Vincent, D sought to rely upon defence of fraud. However D showed no plausible evidence that any fraud had occurred. Held:

• Where D has brought a separate challenge to original judgment on basis of fraud, D cannot rely upon defence of fraud in enforcement proceedings without showing prima facie evidence of fraud.

• Where D cannot show prima facie evidence, commits an abuse of process.

• Thus defence can be struck out summarily.

Foreign Law

Oppenheimer v Cattermole [1976]

Judgment was obtained abroad on basis of racist Nazi-era German law. Enforcement of judgment refused.

Re Macartney [1921]

Judgment was given in Malta which entitled a child to receive maintenance even after her minority. Was sought to be enforced in England. Held:

• Judgment was contrary to English public policy.

• in that it allowed someone to receive child maintenance even after her minority.

• Thus enforcement refused.

Judgment in Breach of Arbitration or Jurisdiction Clause

Tracomin SA v Sudan Oil Seeds [1983]

C brought proceedings in Switzerland in breach of an arbitration clause in favour of London; Swiss court decided clause was invalid. C sought to enforce subsequent judgment in England. Held:

• CJJA 1982 section 32 applied.

• As per section 32(3), view of Swiss court as to validity of clause irrelevant.

• Thus as clause was valid under English law (the law governing contract), Swiss judgment could not be enforced.

Judgment Contrary to ECHR

USA v Montgomery [2004]

US has doctrine of fugitive disentitlement, whereby if D flees proceedings whilst they are ongoing, D forfeits the right to an appeal. In present case, D fled and had confiscation order made against her assets whilst she was in UK. USA sought to enforce this judgment. Held:

• Article 6 of ECHR is indirectly engaged where enforcement of a judgment obtained outside the contracting States would lead to a flagrant denial of D’s rights.

• On facts, fugitive disentitlement doctrine was not a flagrant denial.

• Thus judgment enforced.

Recognition/Enforcement Under Brussels Regulation

Scope of BIR

Realchemie Nederland v Bayer

C, Dutch company, breached patent law by importing certain goods into Germany. D sued in German proceedings for account of profits; German court awarded this, and gave judgment that it would fine C if it failed to pay account of profits. Held:

• Whether judgment is enforceable depends upon nature of legal relationship between parties.

• Thus judgment was enforceable under BIR.

• as action was commercial one between private parties.

• This despite fact that fine was payable to the State (and that judgment was therefore penal).

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