ReedSmith October 2004 Legal Update ENFORCEMENT OF FOREIGN JUDGMENTS 1 Helen Mulcahy IN ENGLAND T: +44 (0)20 7556 6809 E: [email protected] INTRODUCTION When an international business transaction becomes unworkable because goods or services are not paid for or monies lent are not repaid, creditors can often be left with a shortfall when they discover that the only assets the debtor owns are outside their local jurisdiction. Businesses, which enter into transactions with a foreign party, can sometimes be left vulnerable when the debtor’s only assets, which could satisfy a judgment, are difficult to attack or are at risk of dissipating quickly without trace. The creditor can choose to initiate proceedings, subject to jurisdiction clauses, local procedural rules Mat Heywood T: +44 (0)20 7556 6710 and issues as to forum conveniens in either:- E: [email protected] (a) their local jurisdiction and try to enforce the judgment in the jurisdiction where the assets are located; or (b) the jurisdiction where the assets are located. Often creditors are hesitant to initiate proceedings in unfamiliar jurisdictions where laws and proce- dures may lead to an unsatisfactory result or, may find at the end of the legal dispute that any assets have disappeared because the rules in that jurisdiction did not provide for freezing the debtor’s assets. For a party engaging in business with foreign parties, one of the most important issues at the outset of the relationship is to ascertain the whereabouts, value, and accessibility of the counter-party’s assets; if a dispute arises then a shrewd creditor will endeavour to preserve those assets pending judgment. Indeed, the very act of identifying and securing those assets can often provide an effective leverage in settlement negotiations and may eliminate the need to proceed with litigation and the attendant

LONDON enforcement issues. LOS ANGELES Just as one of the primary considerations for a creditor is whether a favourable judgment may be SAN FRANCISCO enforceable elsewhere; it is equally an important consideration for the debtor: whether he or she can WASHINGTON, D.C. ignore the foreign proceedings, confident that in doing so the judgment will not be (easily) enforce- PHILADELPHIA PITTSBURGH able outside the jurisdiction in which it was obtained, or at least not in the jurisdiction where the OAKLAND debtor’s assets are located. It will be decidedly risky for a debtor to assume that a foreign judgment PRINCETON FALLS CHURCH which is too difficult or too expensive to enforce in certain jurisdictions, will be difficult to enforce WILMINGTON everywhere else. NEWARK MIDLANDS, UK CENTURY CITY 1. English Procedure in respect of enforcement of Foreign Judgments RICHMOND When determining what procedures will be required to enforce a foreign judgment in England, coun- HARRISBURG LEESBURG tries can be split into three categories: WESTLAKE VILLAGE (i) Countries which are signatories to the Brussels Convention 1968, the Lugano Convention 1988 reedsmith.com or Council Regulation (EC) 44/2001 (the "Brussels Regulation"); ReedSmith

(ii) Countries with which the UK has bilateral conventions (e.g. French Court may do so subject to the rules of priority. Commonwealth countries). These are given effect to in the UK Where a party seeks enforcement in England of a judgment decided by the Administration of Justice Act 1920 (the "1920 Act") and in another Member State, the Civil Jurisdiction and Judgments Order the Foreign Judgments (Reciprocal Enforcement) Act 1933 (the 2001 provides that a qualifying judgment can be registered with the "1933 Act"); and English and, once registered, that it "shall, for the purpose (iii) Countries with which the UK has no such conventions (for of enforcement, be of the same force and effect" as if it had been a example USA, Japan and the States of the former Soviet Union). judgment of the High Court. The principal factor which determines the applicable rules for enforc- As mentioned earlier, the aim of the Brussels Regulation is to main- ing a foreign judgment is the identity of the Court which gives tain an efficient system for recognising judgments and to eliminate judgment. For example, if the judgment arises out of a civil or com- the need for further or repeated litigation. It is generally impermissi- mercial matter from a French Court, its enforceability in most other ble at the recognition stage to object to the jurisdiction of the European countries will be governed by the Brussels Regulation; oth- adjudicating Court. If grounds exist for objection, they must general- erwise, the rules governing its enforceability will depend on whether ly be raised before the adjudicating Court itself or not at all, because specific reciprocal arrangements exist with other countries. England is all Courts which are subject to the provisions of the Brussels well placed as a forum to conduct litigation, since it is party to the Regulation are regarded as being equally competent to apply the juris- Brussels Regulation and has reciprocal enforcement arrangements in dictional rules and each have jurisdiction and competence to interpret place with most Commonwealth countries as well as other countries those rules and, if necessary, refer questions upon their interpretation which historically have had ties with England. The legal and practical to the European Court of Justice. considerations involved in choosing a jurisdiction to institute pro- There are several notable differences between the enforcement provi- ceedings with a view to enforcing a judgment can be complicated. sions under the Brussels Regulation and the regime established by the Since the Brussels Regulation regulates most European countries this common law and the 1920 Act and 1933 Act. Three principal dif- note will focus on the procedures laid out in the Regulation before ferences are:- setting out the main differences between the Regulation and the (1) that enforcement under the Brussels Regulation is not limited to Lugano Convention and what is required by the English Court for money judgments, or to final judgments; enforcing judgments from Courts in other non Regulation or (2) in principle but subject to certain limitations, the Court in which Convention countries. enforcement is sought is not entitled to investigate the jurisdic- 2. English procedure for enforcing judgments obtained within tion of the Court which gave judgment; the the European Union (other than England) (3) effect of the Brussels Regulation is that the enforcement proce- European law encourages the free movement of judgments: a judg- dures apply to all judgments within their scope, whether or not ment obtained in one European country is enforceable in almost they are against persons domiciled in a Member State. every other European country, with minimal administration by the At common law, for a judgment to be entitled to be recognised, it enforcing Court. This system of recognising judgments for enforce- must: (a) be final and conclusive in the Court which pronounced it; ment is not the case for many other non-European countries with and (b) it must have been given by a Court regarded by the English which English businesses transact daily. Court as competent to do so. In order to be enforceable a judgment By way of background, where proceedings are instituted in a Member must: (a) be recognised as being final and conclusive upon the mer- State (including England) the Brussels Regulation or the Lugano its of the claim; and (b) be for a fixed sum of money. The method of Convention set out guidelines as to which Court or Courts are enti- enforcement is for the judgment creditor to institute fresh proceed- tled to have jurisdiction. As soon as a Court is seised of an action in ings in the enforcing jurisdiction, setting out the circumstances of the a Member State , that Court (for example, France) can then determine judgment debt and how the two pre-conditions are satisfied and whether to allocate: then, depending on whether the defendant disputes the claim, apply (a) the French Court jurisdiction over the dispute; or for summary judgment. (b) jurisdiction to the French Court and to those in another Member The simplicity in the system for recognising judgments under the State; or Brussels Regulations is similar to enforcement of arbitration awards (c) jurisdiction to the Courts of another Member State and deny it to though arbitrations are outside the scope of the Brussels Regulations the French Court. and successful parties wanting to enforce an arbital award in England In scenario (a) the French Court may (and generally must) hear the must rely on the specific procedures provided for in the English case if called upon to do so. In scenario (b) the French Court may Arbitration Act and the specific Court procedural rules associated determine the case, but not if a Court of another Member State with arbitral awards for enforcement in England. accepts jurisdiction first. In scenario (c) the French Court cannot Where an appeal is pending against a judgment determined by a determine the case. In all cases in which the Brussels Regulation or Member State, the Brussels Regulation provides that the foreign the Lugano Convention allow the French Court jurisdiction, the enforcing Court is not prevented from registering the judgment (if it ReedSmith

is capable of enforcement) but once it is registered the Court may stay (B) CIRCUMSTANCES FOR REFUSING RECOGNITION enforcement proceedings if an appeal has been lodged against the The grounds for refusing recognition or enforcement of judgments judgment in the Member State in which it was given. Enforcement within the Brussels Regulation are very limited. The jurisdiction of the may also be stayed if the time for appeal has not yet expired, though foreign Court may only be investigated by the English Court if the dis- an appeal has not been lodged. As an alternative, the Brussels pute involves insurance contracts, certain consumer contracts or Regulation also provides that the Court may make enforcement con- where the English Court has exclusive jurisdiction. If it is found that ditional upon the provision of security for costs. This is designed to the adjudicating Court violated these jurisdictional provisions, recog- ensure that the judgment debtor does not find that he is unable to nition must be denied, but even in these cases the English Court is recover the judgment debt from the judgment creditor if the original bound by the findings of fact on which the foreign Court based its judgment is overturned. judgment. Since the English Court cannot investigate the jurisdiction of the for- (A) REQUIREMENTS LAID OUT IN THE BRUSSELS eign Court, it is no ground for objection to enforcement that the REGULATION foreign Court accepted jurisdiction wrongly. For example, where the The requirements for the recognition or enforcement of foreign judg- parties relied on a jurisdiction clause in which jurisdiction is allocat- ments under the Brussels Regulation are as follows: ed exclusively to the English Court; it is for the Court in which the (a) The judgment of the Court must be within a Member State: proceedings were begun to rule on whether another Court has exclu- (Art. 32). sive jurisdiction. If the foreign Court decides that the agreement "Judgment" does not include all judicial orders: it does not include: containing the exclusive jurisdiction clause is invalid or inoperative, or (a) interlocutory directions upon the conduct of proceedings, such as for any other reason than the alleged jurisdiction agreement is inap- orders in relation to the taking of evidence; or (b) orders obtained ex plicable and that it has jurisdiction, then the resulting judgment will parte without notice to the defendant, for if the defendant was not still be enforceable in England. entitled to be heard at all, the order cannot be said to be a ‘judgment’. This is in contrast to the position at common law, which provides that (b) The judgment must be in respect of a civil or commercial mat- a judgment in personam will only be recognised if delivered by a ter: (Art. 1). Court which, according to English private international law, was com- The dispute must not be excluded by Art. 1(2) which excludes mat- petent to do so. This means that the Court must be either: ters such as family law disputes. It has not been decided whether a (i) within the jurisdiction in which the defendant was present when Court called on to recognise a judgment from another Member State proceedings were instituted; or is entitled to decide anew whether the judgment is one given in a civil (ii) within a jurisdiction in which the defendant submitted. or commercial matter. In LTU Lufttransport GmbH v. Eurocontrol Where a defendant has appeared to protest the jurisdiction of the the ECJ considered who would be the appropriate party to interpret Court in another State, the Brussels Regulation provides that the the phrase "civil or commercial matter". It was held that in the inter- appearance is not a submission. If the foreign Court holds that it has pretation of the concept "civil" and "commercial matters," reference jurisdiction under the Brussels Regulation and the defendant then must not be made to the law of one of the States concerned but first, contests the proceedings, any resulting judgment against the defen- to the objectives of the Convention and, secondly, to the general prin- dant will be enforceable in England because the foreign Court found ciples which emerge from the totality of the national legal systems. that it had jurisdiction under the Brussels Regulation and that the defendant submitted to that jurisdiction. (c) Judgment given on or after 1 March 2002: (Art. 66(2)). If the proceedings were instituted in the adjudicating Court prior to 1 A Court may refuse recognition if the judgment is subject to a statu- March 2002 (the date of the commencement of the Brussels tory time restriction, such as that imposed by the Limitation Act Regulation), but judgment was given on or after that date, Art. 66(2) 1980. It was noted in Duer v Frazer that the burden of establishing permits the Court to recognise the judgment under the conditions that it would be just to permit late enforcement lay with the judgment and procedures of the Brussels Regulation if either of two original creditor, and, when exercising its discretion, the Court would have regard to factors such as the judgment creditor’s explanation for not jurisdictional conditions are met. These are: issuing execution during the relevant time period, his explanation for (i) if the proceedings were instituted in a Member State after the delay beyond that time period and the prejudice, if any, which had Brussels Convention or the Lugano Convention had been adopt- been suffered by the judgment debtor by reason of such delay. ed both in the enforcing Member State of origin and in the Member State; and (C) DEFENCES TO ENFORCEMENT PROCEEDINGS (ii) in all other cases, if the jurisdiction was founded upon rules (i) Jurisdictional: (Arts. 35 and 72) which accorded with those provided for either in the Brussels As already mentioned there are few, if any, grounds to defend an Regulation or in a Convention concluded between the Member application to enforce on the basis of jurisdiction. It is not per- State of origin and the enforcing Member State (which was in missible to object, in relation to the jurisdictional rules of the force when the proceedings were instituted). adjudicating Court, that recognition would be contrary to public ReedSmith

policy, which is different to the position at common law: if the service was effected in accordance with the law of the Court foreign Court was not jurisdictionally competent, its judgment of origin, provided that the Court of origin has not been seised has no effect in England. The Brussels Regulation states that of this question in adversary proceedings. Under the Brussels "under no circumstances may a foreign judgment be reviewed as Regulation if a defendant was aware of the defective service or to its substance". the judgment, and had taken no steps to challenge it, then (ii) Substantive: (as set out in Art. 34 of the Brussels Regulation) that judgment will be enforced. There are four substantive grounds listed in Art. 34, any of which • Judgment irreconcilable with local judgment (Art. 34(3)). If will prevent recognition of the judgment, but these are the only the foreign judgment is irreconcilable with a local judgment grounds upon which recognition may be opposed. If any one or given in a dispute between the same parties then the Court is more of these apply, the judgment must not be recognised. permitted to follow its own judgment rather than follow that Conversely, if none of them apply it must be recognised. from another Member State. Judgments are irreconcilable if • Recognition manifestly contrary to public policy (Art. 34(1)). they lead to incompatible consequences. In the interests of The doctrine of public policy will prevent the recognition of a free circulation of judgments, this requirement needs a restric- judgment in cases where the duty to confer recognition would tive operation, for example, a judgment which determines require the Court to contravene values which English law that damages be paid for breach of contract is irreconcilable regards as fundamental. It may also contravene public policy with a decision that the contract has been rescinded for mis- if the recognition of a judgment would involve an infringe- representation, the Court which is second to be seised with ment of its own sovereignty, or a violation of constitutional the same cause of action must give up its jurisdiction or stay guarantees conferred upon the judgment debtor or respon- its proceedings, and must recognise the judgment of the first dent. This exception operates only in very exceptional Court. It is not necessary for the same cause of action to be circumstances. involved ; where (for whatever reason) there are irreconcilable • Certain judgments in default of appearance (Art. 34(2)). A judgments, then the English Court may refuse to recognise or default judgment will be denied recognition if three criteria are enforce the foreign judgment, and even if the English judg- satisfied: (1) the judgment was given in default of appearance; ment is outside the scope of the Brussels Regulation. (2) the defendant was not served with the document institut- • Judgment irreconcilable with prior foreign judgment (Art. ing the proceedings, or with an equivalent document, in 34(4)). Recognition is denied to a judgment from the Courts sufficient time and in such a way as to allow him to arrange of a Member State if it is irreconcilable with a prior judgment for his defence ; and (3) it cannot be said against the defen- from the Courts of a Member or non-Member State: the prior dant that though it was possible to challenge the judgment, judgment is required to be in proceedings between the same the defendant failed to do so. This defence only applies to parties and involving the same cause of action as the Member judgments awarded in default of appearance but this expres- State’s judgment; and the latter judgment has to satisfy the sion has been held to have an autonomous meaning, rather conditions required for its recognition in the State addressed. than being defined by reference to the law of the adjudicating By contrast, Art. 27(5) of the Conventions applies only to Court. prior judgments from non-contracting states, and it did not • In Bernardus Hendrikman and Maria Feyen v Magenta Druck make provision for cases in which two Contracting State judg- & Verlag GmbH, a German Court gave judgment against a ments are irreconcilable judgments. It is hoped that Art. 34(4) defendant in circumstances where a legal representative pur- of the Regulation will be given a general application for all ported to be authorised to represent the defendant, but judgments within Europe. where, according to the defendant, no such authorisation had (iii) Human Rights Act been given. As a matter of German law the judgment was not In Maronier v Larmer [2003] , it was held that it is contrary to entered in default of appearance, but the European Court public policy to enforce a foreign judgment obtained in a Member accepted that the judgment was to be seen as one in default State against a defendant who had not received a fair trial, as of appearance, for the defendant had been "quite powerless to required by Art. 6 of the Convention of Human Rights 1953. defend himself" and was on that account to be regarded as a Lord Phillips held that the English Court should apply a strong defendant in default of appearance. presumption that the procedures of other signatories to the • The Court in which enforcement of a default judgment is Human Rights Convention complied with Art. 6, but should not sought must consider the manner in which service was effect- apply an irrebuttable presumption that a judgment given in ed and whether, following service, the defendant had another Member State could not have resulted from a violation of sufficient time to arrange for his defence. Under the Brussels Art. 6. Where a Member State first seised of a dispute reaches a Regulation’s predecessor, the Brussels Convention, which has decision of substantive law, the Court of an enforcing Member similar provisions for this defence, it was understood that an State could not decline, on grounds of public policy, to enforce English Court was allowed and required to consider whether the decision on the ground that it infringed Community law. ReedSmith

There was, however, a distinction in principle between a decision Historically the 1920 Act applies to the enforcement of judgments resolving an issue of substantive law and a decision reached by a given by superior Courts of Commonwealth countries. This differed procedure that violated the fundamental Convention right to a fair from the 1933 Act which provided for the enforcement of judgments trial. given by the Courts of foreign countries outside of the Commonwealth to which the UK had assumed obligations under (D) STEPS FOR ENFORCEMENT UNDER THE BRUSSELS bilateral treaties. REGULATION Example: There are two stages involved in enforcing a judgment which is enti- The Convention between the UK and Canada permits UK judgments to be tled to recognition and enforceable in the state of its origin. registered in the Federal Court of Canada or in the Courts of such provinces (i) The first, which involves only the judgment creditor, is to obtain as have adopted the necessary enacting legislation. Almost all of the Canadian an order for registration for enforcement of the judgment. The provinces have done so and accordingly, England has enacted specific recip- judgment creditor is then entitled to take protective measures rocal legislation to recognise judgments entered in those provinces. against the judgment debtor to preserve assets until execution of the judgment. After the judgment debtor is served with notice of 3. Other Multilateral Conventions the registration, the judgment creditor must wait a short period to In specialist areas, for instance, international transportation or claims allow for any appeal against the order for registration. The deter- for compensation incurred through oil pollution, multilateral con- mination of this appeal settles whether the judgment is to be ventions which contain provisions on jurisdiction and enforcement enforceable. may be relevant to creditors. Enforcement is granted on the basis of The procedure for registration is regulated by Arts. 39 to 52 of the reciprocity between the enforcing Country and the Country of origin Brussels Regulation, as supplemented by the Civil Procedure of the decision. Rules (Part. 74). Initial registration of the judgment is made by Example: Bankruptcy Matters application without notice to the judgment debtor; the judgment The Nordic Bankruptcy Convention between Finland, Denmark, Iceland, debtor has no right to be heard on the initial application and is Norway, Sweden on Bankruptcy Proceedings is meant to ensure that proper- notified only after registration is effected. The Brussels Regulation ty located in any of the Nordic countries belongs to the bankruptcy estate if differs from its predecessor (the Brussels Convention), which per- proceedings are brought in the Court of a Nordic country. It is not super- mitted the registering Court power to refuse registration if it seded by the Brussels and Lugano Conventions, which do not apply to considered that there was a defence to recognition: Art. 41 of the bankruptcy proceedings. Brussels Regulation removes any such right from the Court and all the Court may do is ascertain that the formal requirements set 4. HAGUE CONVENTION 1954 out in Art. 53 have been complied with. According to Art.45(1), The Hague Convention provides for the recognition and enforcement the appeal against registration may only be founded on the of decisions solely on the reimbursement of Court fees to the defen- grounds listed in Arts. 34 and 35, but it is possible that an appel- dant of a litigation which was lost by a plaintiff. This maybe of interest lant must be entitled to question whether the judgment falls to countries with which no bilateral enforcement treaties exist. Thus within the scope of the Brussels Regulation, or that the provisions at least Court cost decisions against the plaintiff who has lost in the of some other law or international treaty preclude its recognition. proceedings can be enforced. Court fees do not comprise enforce- (ii) Secondly, once registered the judgment will have the same effect ment costs and the Convention only applies to decision of countries for the purposes of execution as if it was a judgment of the High which have not adopted the Lugano Convention. Court. 5. ENFORCEMENT OF JUDGMENTS WHERE THERE IS NO Attached to the back of this note is a checklist and set of precedents AUTOMATIC RECOGNITION for enforcement under the Brussels Regulation in England. As mentioned at the outset to this note, where a judgment creditor 2. Bilateral Treaties has obtained a judgment from a country which has no reciprocal The confirmation of the Brussels Regulation and the Lugano enforcement arrangement with England (e.g. USA) the judgment Convention creates the widest multi-national co-operation agreement creditor will be required to launch fresh proceedings in England, for the enforcement of judgments, but that is limited to Europe. based on the foreign judgment. That said, it is generally possible to Fortunately, England enjoys the benefits of several treaties or other obtain summary judgment in the English Court on the basis that the bilateral or multilateral conventions on enforcement of judgments merits have already been properly considered by the foreign Court. with non-European countries. Jurisdiction for the judgment will be an important issue to the Court Multilateral conventions usually prevail over Bilateral treaties where and similar rules to those applicable under the 1920 and 1933 Acts they conflict. Countries which enter into treaties enact domestic leg- will apply. islation implementing the terms of the treaty. In England (and the rest Likewise, an English judgment creditor seeking to enforce the judg- of the UK ) the relevant legislation is the 1920 Act and the 1933 Act. ment in a foreign country which has no agreement for automatic ReedSmith

recognition will have to initiate proceedings in that country. Whether 2. The application for an order that the judgment be registered for the foreign Court will reassess the merits of the case or question the enforcement is made without notice to the party against whom English Court’s assumption of jurisdiction will depend on the foreign enforcement is sought (see Schedule 2). state’s own rules of private international law. 3. The power of the Court to reject the application is extremely lim- This lacks the simplicity of the registration process and is likely to ited: all the Court is entitled to do is check that the lengthen the process. The Court may also consider it necessary to re- documentation is in order. examine the merits of the judgment, especially where the judgment is 4. If the Court approves the documentation and makes the order for obtained on the basis of one party’s evidence alone (for example registration for enforcement, then the debtor must be notified by where a party obtains a "default judgment"). service on him of the order, and, if it has not already served the judgment. Example: United States of America 5. Once the order is made the applicant is entitled to proceed to Despite preliminary discussions in 1992 by the US to become a party to an claim protective measures, but no other measures, against the international reciprocal agreement to recognise foreign judgments, there are property of the party against whom enforcement is sought. currently no conventions or statutory provisions which allow for the direct 6. The judgment may then be executed unless the process of appeal recognition and enforcement of US judgments in the UK, and parties wish- is invoked. ing to enforce US judgments in England are reliant on common law principles. English Courts require the enforcing party to show that the judg- Second stage ment is valid and binding. The Court will also require that the judgment must 1. The Judgment debtor may appeal against the order after the first be for an identifiable sum of money and was delivered by a foreign court with stage of the procedure. There is no possibility for non-parties to competent jurisdiction. There is no uniform prescription for recognition pro- appeal, even if they have an interest in the judgment. cedures for enforcement purposes between each of the States, which means 2. The time limits for appeal are: (a) if the debtor is domiciled in that different States may (and indeed are likely to) adopt different approach- England in which enforcement has been ordered, the debtor has es to the enforcement of a foreign judgment. No party seeking to enforce an one month from date of service of the order to lodge an appeal; English judgment in a US State, advice must taken on the common law prac- (b) if the debtor is domiciled in another Member State, the peri- tices of that State. od is extended to two months from the date of service; and (c) if It is common for successful claims in connection with the Racketeer influ- a person is not domiciled in a Member State the period may be enced and Corrupt Organisations Act (the "RICO Act") to attract awards triple extended because of distance. damages. The English Court does not recognise such awards and so in the 3. The grounds on which the appeal can be made are said by Art. case of Lewis v. Eliades it was argued that since there was an automatic enti- 45(1) to be only those jurisdictional grounds in Art. 35, and sub- tlement to have the damages trebled, the entire judgment was precluded stantive grounds in Art. 34. from registration and enforcement in the UK by reason of Section 5 of the 4. The Court hearing the appeal may, if the debtor makes an appli- Protection of Trading Interests Act 1980. However, it was held that Section 5 cation to this effect, stay the proceedings for enforcement if an of the 1980 Act barred the enforcement in the UK of awards of multiple dam- "ordinary appeal" against the judgment is pending in the state of ages and precluded enforcement of the RICO Act element of the judgment. origin. The remainder of the US judgment was for ordinary compensation damages 5. The party who loses an appeal may make a further appeal on a for private causes of action similar to those under English law and according- point of law. ly that element of the award was enforceable. SCHEDULE 2 SCHEDULE 1 Sample papers required for enforcement pursuant to the Brussels Checklist of steps for enforcement pursuant to the Brussels Regulation Regulations 1. Application Notice asking for a Certified Judgment be ordered As mentioned above, there are two separate stages involved in enforc- pursuant to CPR Part 74.12. ing a judgment, these are explained in more detail below, and for the 2. Draft Order granting a certified copy of the Judgment be issued purposes of this note, specify English procedural rules: pursuant to CPR Part 74.12. First stage 3. A Copy of the Judgment entered into against the Judgment 1. Any party who seeks the recognition of a judgment from the Debtor. Court of a Member State must produce an authentic copy of the 4. Witness Statement of the Applicant explaining the reasons for judgment, and if he is applying for an order which will lead to the requesting an Order as described in paragraph 2 in Schedule 1 enforcement of the judgment, he must also produce a certificate above. which gives certain details about the judgment such as confirma- 5. A draft of the Certificate referred to in Articles 54 and 58 of the tion that the judgment was enforceable in the State which it was Regulation on Judgments and Court Settlements for the court to given. sign and seal. ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith ReedSmith

NOTES 1 The law is as stated at 15 September 2004. 2 The Convention States are: Austria, Belgium, Denmark, Finland, France, Germany, The Hellenic Republic, Iceland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Republic of Ireland, Spain, Sweden, Switzerland and United Kingdom. 3 The Lugano Convention extends the principles of the Brussels Convention to the countries of the EFTA. In most respects the Lugano Convention rules mirror those of the Brussels Convention, but there are two differences: 1. The enforcing Court can refuse enforcement against an EFTA domiciled defendant if it considers that the Court that gave the judgment took jurisdiction on a basis not provided for under the convention; and 2. Where the defendant is domiciled in the state of the enforcing Court, enforcement may be refused where the Court which gave the judgment took jurisdiction in acco dance with a convention to which the state, in which the enforcing Court is located, is not a party. 4 Countries that are party to the reciprocal enforcement conventions under the 1920 Act include Anguila, Antigua and Barbuda, Australia, Bahamas, Barbados, Belize, Bermuda, Botswana, British India Ocean Territory, British Virgin Islands, Cayman Islands, Christmas Island, Cocos (Keeling) Islands, Republic of Cyprus, Dominica, Falkland Islands, Fiji, The Gambia, Ghana, Gibraltar, Grenada, Guyana, Hong Kong, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Malta, Mauritius, Montserrat, Newfoundland, New South Wales, New Zealand, Nigeria, Territory of Norfolk Island, Papua New Guinea, St Christopher and Nevis, St Helena, St Lucia, St Vincent and the Grenadines, Sakatchewan, Seychelles, Sierra Leone, Singapore, Soloman Islands, Sovereign Base Areas of Akrotiri and Dhekelia in Cyprus, Sri Lanka, Swaziland, Tanzania, Trinidad and Tobago, , Tuvalu, Uganda, Victoria, Western Australia, Zambia, Zimbabwe. 5 Countries that are party to reciprocal enforcement conventions under the 1933 Act include Australia, Austria, Belgium, Canada, France, Germany, , India, , Israel, Italy, , The Netherlands, Norway, Pakistan, Suriname, . 6 A Member State is one in which the Brussels Regulation is directly enforceable. The exception is Denmark which still operates under the Brussels Convention. 7 Parties to the Conventions are usually referred to as "Contracting States".. 8 A Court is deemed to be seised: (a) at the time when the document instituting the proceedings or an equivalent document is lodged with the Court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or (b) if the document has to be served before being lodged with the Court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the Court. 9 Article 29: where actions come within the exclusive jurisdiction of several Courts, any Court other than the Court first seised shall decline jurisdiction in favour of that Court. 10 Article 27: where proceedings involving the same cause of action and between the same parties are brought in the Courts of different Member States, any Court other than the Court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the Court first seised is established. 11 See Articles 25 to 30. 12 Schedule 1 paragraph 2 13 In order to establish harmony in the interpretation of the Conventions, the European Court of Justice was given jurisdiction to make interpretative rulings upon the Brussels Convention. 14 The 1920 Act enables certain money judgments of superior civil Courts in specified countries to be registered in the High Court of England and then enforced in England. Most of the specified countries are commonwealth countries. The Act only applies to judgments of superior Courts of the countries, they may be registered within twelve months of the judgment "if it is just and convenient that the judgment should be enforced in the United Kingdom". The registration of the judgment is, in the last resort, discretionary. 15 The 1933 Act is similar to the 1920 Act, again providing a system for the registration of judgments prior to enforcing them in England. It was originally designed primarily for non-commonwealth countries but can be extended to Commonwealth countries as well. For many European countries the Act has been superseded by the Brussels and Lugano Conventions, but it is still relevant for the enforcement of judgments from, for example, Canada, Isle of Man and Jersey. 16 Article 32 of the Brussels Regulation (Art. 25 of the Conventions is identical) provides that "judgment" means any judgment given by a Court or tribunal of a Regulation State, whatever the judgment may be called, including a decree, judgment by consent, order, decision, or writ of execution, as well as the determination of costs by an officer of the Court. The expression includes not only judgments ordering the payment of money, orders for costs and for interest, but also non-money judgments and judgments which are not final and which are interlocutory or provisional in nature. There is no requirement for the judgment to be "final and conclusive". 17 See Article 38 Brussels Regulation and Article 33 of the Conventions. 18 Art. 25 of the Conventions is exactly the same as the provision set out in Art.32 (see footnote 9 above) 19 The Brussels Regulation applies to all Courts, whatever they may be called. see Denilauler v SNC Couchet Freres 20 (29/76) E.C.R. 1541; [1977] 1 C.L.R. 88 22 However this is contained in the Convention on Jurisdiction and Enforcement of Civil and Commercial Judgments 1968. 22 For an example of this in a consumer contract matter - see Tonnoir v Vanherf S.A. Ct.App. Douai 1989 in 1991 Clunet 161. 23 See Case C-351/89 Overseas Union Insurance Ltd. V New Hampshire Insurance Co [1991] E.C.R. I-3317; [1992] Q.B. 434. 24 Until relatively recently at common law it has generally been said that the defendant needed to be resident within the jurisdiction of the Court rather than merely present. It was thought that residence indicated a stronger connection with the state than presence. In Adams v Cape Industries plc [1990] Ch.433, the Court of Appeal held that pres- ence would also suffice. In that decision it was argued that it was much easier to tell whether a person was present in a particular place on a certain day, as distinct from whether his presence there had the quality of being resident. Where the party is not an individual but a corporation, it is necessary to consider two types of situations: i. cases where it is alleged that the company has direct presence in the foreign country. In order to establish this requirement, the corporation must be carrying on business in the foreign country at a definite and, to some extent, permanent place at the time when proceedings were commenced.; and ii. cases of indirect presence, in which it is alleged that the company is present in the foreign country through a representative. The Court has to have regard to all the circumstances of the case. Of particular significance is whether the representative is empowered to conclude contracts on the company’s behalf. If the representative is no more than a channel of communication between the company and third parties the company cannot realistically be regarded as present in the foreign country. The Court of Appeal concluded in Adams: "The English Courts are likely to treat a trading corporation incorporated under the law of one country ("an overseas corporation") as present within the jurisdiction of the Courts of another country only if either (i) it has established and maintained at its own expense (whether as owner or lessee) a fixed place of business of its own in the other country and for more than a minimal period of time has carried on its own business or from such premises by its servants or agents (a "branch office" case), or (ii) a representative of the overseas corporation has for more than a minimal period of time been carrying on the overseas corporation’s business in the other country at or from some fixed place of business". (Slade LJ, [1990] Ch 433, 530-531) As an alternative to his being present, the defendant may have submitted to the jurisdiction of the Court. If he did he is bound by its decision on the merits: if this goes against him, he has no-one but himself to blame. There are 3 versions of submission: i. Submission by voluntary appearance. If the defendant appears and defends the merits of the claim, he will in general, be held to have submitted. Statute may co tradict the common law. If the defendant appeared only for the purpose or purposes of (a) contesting the jurisdiction of the Court or of (b) seeking a stay on jurisdic- tional grounds, or of (c) protecting property threatened with seizure in the proceedings, section 33 of the Civil Jurisdiction and Judgments Act 1982 (the "1982 Act") deems this not to be submission. ii. Other steps taken in the foreign proceedings, and submission. The law on submission and section 33 is given a flexible and generous construction; a defendant may find himself manoeuvred into taking steps in the foreign proceedings by reason of which he runs the risk of having been seen to cast away his shield. iii. Submission by agreement. If a contract provides that a foreign Court is to have jurisdiction to determine a dispute, that Court may be recognised as jurisdictionally competent. The defendant can, by virtue of section 33, appear so as to argue that the clause does not give the alleged jurisdiction. Submission can further be ev ReedSmith

denced with respect to a counterclaim. There are no other bases of jurisdiction recognised by English law. The nationality and domicile of the parties is irrelevant, as is the fact that the cause of action may have aris- en within the jurisdiction of the Court. The fact that an English Court would itself have taken jurisdiction upon similar facts is irrelevant. Even the fact that the foreign Court was the natural forum for the litigation does not give the Court international jurisdiction according to English law.

25 [2001] 1 W.L.R. 919 25 However if it was, under common law, the defendant will be obliged by English law to accept it, unless he can rely on one of the six defences allowed by English law. They are as follows: i. that the Court gave judgment in breach of a valid arbitration or choice of Court clause. This objection can only be relied on by a party who did not agree to the brin- ing of the proceedings on the foreign Court; ii. that the successful party procured judgment in his favour by fraud; iii. that the Court gave judgment contrary to the rules of natural justice; iv. that recognition of the judgment would be contrary to English public policy; v. that the judgment was in conflict with a prior English judgment; and vi. that the judgment was not "final and conclusive" on the issue in respect of which its recognition is sought. It is no defence to recognition that the foreign Court simply got the law wrong. Even if the foreign Court lacked jurisdiction under its own internal law, this is irrelevant to the recognition of the judgment in England. It is an established principle that the enforcing forum is not competent to decide whether the foreign Court of judgment has applied its own law. This therefore prevents an English Court having to grapple with foreign civil procedure.

27 See Article 36 28 Case 145/86 Hoffman v. Krieg [1988] E.C.R. 645, 668; Case C-78/95 Hendrickman v. Magenta Druck & Verlag GmbH [1996] E.C.R. I-4943. 29 In England fraud is a ground for refusal of enforcement of a foreign judgment, and in this context fraud has a very wide meaning (see Beals v. Saldanha (2001) 202 D.L.R. (4th) 630 (Ont C.A.)). In civil law countries fraud is not a distinct reason for non-recognition, and neither the Brussels Regulation not the Conventions contain a special provision for fraud. In Interdesco S.A. v. Nullfire Ltd [1992] Lloyd’s Rep. 180, it was held that the English Court would not refuse enforcement of a French judgment on the ground of alleged fraud, even if there were newly discovered evidence, if the judgment debtor had a remedy in the French Courts. Therefore the Court in the State in which enforcement was sought should always consider whether the judgment debtor could seek a remedy in the foreign Court. 30 Case 166/80 Klomps v. Michel [1981] E.C.R. 1593, 1605; Case 228/81 Pendy Plastic Products v. Pluspunkt [1982] E.C.R. 2723. 31 See Artic Fish Sales Co. Ltd. v. Adam (No. 2), 1996 S.L.T. 970. 32 See Article 27(2) 33 See Debaecker and Plouvier v. Bouwman[1985] E.C.R. 1779 34 See Article 33 Brussels Regulation 35 See Article 28 Brussels Regulation 36 Case 145/86 Hoffmann v. Krieg [1988] E.C.R. 645 37 See Showlag v. Monsour [1995] 1A.C. 431 (P.C.) 38 QB 620 39 Under the provisions set out in the Civil Procedure Rules ("CPR"), where a party has obtained judgment abroad, it is often but not always possible to obtain judgment against the Defendant in this country without the need for a new trial, solely on the strength of that foreign judgment. Part 74 CPR governs the enforcement of judgments in different jurisdictions. This section sets out the procedural requirements for: (i) enforcement in England and Wales of judgments of foreign Courts; (ii) enforcement in foreign countries of judgments of the High Court and County Court; (iii) enforcement in United Kingdom judgments in other parts of the United Kingdom; and enforcement in England and Wales of European Community judgments. As an additional point Rule 6.20(9) allows for service outside the jurisdiction (England and Wales) with permission of the Court if a claim is made to enforce any judgment or arbitral award. 40 See Art. 42 Brussels Regulation which corresponds with Art. 35 of the Conventions and Part 74.6 CPR applies 41 That there is an authenticated copy of the judgment, and a completed certificate in the form set out in Annex V of the Brussels Regulation 42 The United Kingdom, for the purposes of the jurisdiction of the Court, comprises of England, Wales, Scotland and Northern Island. It does not include the Isle of Man or the Channel Islands. 43 Under both the 1920 Act and the 1933 Act, a judgment which is to be enforced must be final, for a specific sum of money, not in respect of taxes or fines, not obtained by fraud or in breach of a jurisdiction or arbitration agreement. Most importantly, the Court giving the judgment must have had jurisdiction under the rules set out in the Acts. This means that a defendant must have: i. been resident in the country where the Court is located; ii. had its principle place of business there (or the place of business through which the relevant transaction was conducted); iii. agreed to submit to the Court’s jurisdiction; or iv. voluntarily appeared in the proceedings. 44 [2000] I.L.Pr. 474 45 See Article 38(1) Brussels Regulation

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