Legal Update ENFORCEMENT OF FOREIGN JUDGMENTS IN ENGLAND 1. ReedSmith

Transcription

1 October 2004 Legal Update Helen Mulcahy T: +44 (0) E: Mat Heywood T: +44 (0) E: LONDON NEW YORK LOS ANGELES SAN FRANCISCO WASHINGTON, D.C. PHILADELPHIA PITTSBURGH OAKLAND PRINCETON FALLS CHURCH WILMINGTON NEWARK MIDLANDS, UK CENTURY CITY RICHMOND HARRISBURG LEESBURG WESTLAKE VILLAGE reedsmith.com ENFORCEMENT OF FOREIGN JUDGMENTS IN ENGLAND 1 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 and issues as to forum conveniens in either:- (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 procedures 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 enforcement issues. Just as one of the primary considerations for a creditor is whether a favourable judgment may be enforceable elsewhere; it is equally an important consideration for the debtor: whether he or she can ignore the foreign proceedings, confident that in doing so the judgment will not be (easily) enforceable outside the jurisdiction in which it was obtained, or at least not in the jurisdiction where the debtor s assets are located. It will be decidedly risky for a debtor to assume that a foreign judgment which is too difficult or too expensive to enforce in certain jurisdictions, will be difficult to enforce everywhere else. 1. English Procedure in respect of enforcement of Foreign Judgments When determining what procedures will be required to enforce a foreign judgment in England, countries can be split into three categories: (i) Countries which are signatories to the Brussels Convention 1968, the Lugano Convention 1988 or Council Regulation (EC) 44/2001 (the "Brussels Regulation");

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

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

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

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

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

7

8

9

10

11

12

13

14

15

16 NOTES 1 The law is as stated at 15 September 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, Turks and Caicos Islands, 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, Guernsey, India, Isle of Man, Israel, Italy, Jersey, The Netherlands, Norway, Pakistan, Suriname, Tonga. 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 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 However this is contained in the Convention on Jurisdiction and Enforcement of Civil and Commercial Judgments For an example of this in a consumer contract matter - see Tonnoir v Vanherf S.A. Ct.App. Douai 1989 in 1991 Clunet See Case C-351/89 Overseas Union Insurance Ltd. V New Hampshire Insurance Co [1991] E.C.R. I-3317; [1992] Q.B 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 presence 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, ) 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 jurisdictional 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

17 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 arisen 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 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 brining 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 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 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 See Artic Fish Sales Co. Ltd. v. Adam (No. 2), 1996 S.L.T See Article 27(2) 33 See Debaecker and Plouvier v. Bouwman[1985] E.C.R See Article 33 Brussels Regulation 35 See Article 28 Brussels Regulation 36 Case 145/86 Hoffmann v. Krieg [1988] E.C.R See Showlag v. Monsour [1995] 1A.C. 431 (P.C.) 38 QB 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 See Article 38(1) Brussels Regulation This Note does not contain legal advice or provide a thorough and complete analysis of the law, and no liability is accepted in connection with it. Some provisions of the law are not covered. The purpose of this Note is to provide a basic summary of selected main provisions and their effects and to offer some general practical guidance. Specific legal advice should be taken in relation to the facts of any given case. Reed Smith LLP is a Limited Liability Partnership of solicitors and Registered Foreign Lawyers registered in England, regulated by the Law Society. A list of members and the jurisdictions in which they are qualified is open to inspection at the registered office: Minerva House, 5 Montague Close, London SE1 9BB. Registered No. 0C Reed Smith LLP of England is associated with Reed Smith LLP of Delaware, USA.