The criteria of the recognition of foreign judgments at English common law. Theoretical basis for recognition and enforcement of foreign judgment
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1 The criteria of the recognition of foreign judgments at English common law Waritda Tippimarnchai Theoretical basis for recognition and enforcement of foreign judgment Though, today there are various legislative provisions, in England, the recognition and enforcement of foreign judgments originally depended solely on the common law. Judgments from all other states, besides from the Member States of the European Community (EC) or Lugano States, are subject to the traditional rules of English law. English common law adopts the obligation theory where the foreign judgment is regarded as creating an obligation. It is not enforced by a procedure equivalent to the exequatur of the civil law, the claimant must bring a new action. However, this action is not on the original obligation, but on the new obligation created by the foreign judgments. All the claimant has to prove is that the foreign judgment exists, that it is in his favour and against the other party and that the foreign court had jurisdiction. Then, unless the other party can establish certain limited defences, the English court will grant a judgment in his favour for the sum awarded by the foreign court. Procedurally, therefore, a new action is brought; in substance, however, the foreign judgment is recognized and enforced.
2 Two rules of English law that may be regarded as consequences of the obligation theory are, first, that the foreign judgment must be final and conclusive; and, secondly, that it can be enforced only if it is for a sum of money. The first rule means that the judgment must not be subject to revision in the court that gave it. 1 Provisional awards cannot be enforced. However, it does not matter if the judgment is subject to appeal, though, if the appeal is successful, the enforcement will be set aside. Under the second rule, a judgment will not be enforced, though it may be recognized, if it is not for a fixed and definite sum of money 2 ; thus, injunctions and decrees of specific performance will not be enforced. The requirement for the recognition of foreign judgments For the purposes of the recognition of a foreign judgment at English common law, an English court must find jurisdictional competence. This is done by reference to English law, not foreign law and can be established in the following circumstances: 1) The defendant s presence in the foreign forum; or 2) The defendant s submission to the foreign court. 1 Nouvion v. Freeman (1889) 15 App Cas 1 (HL). If an appeal is pending, or if the judgment-deptor is entitled and intends to appeal, it is hard to believe that it would not apply if the award could be revised by the court which granted it. 2 The fixed and definite requirement means that an English court will not enforce a judgment that simply requires the defendant to compensate the claimant for loss suffered, unless it assesses that loss in monetary terms. However, the English court is willing to undertake a simple arithmetical calculation. Thus, a judgment for 1,000 plus interest at 10 per cent per annum from a given day will be enforced.
3 1. The defendant s presence in the foreign forum As to an individual, this means the defendant s physical presence in the jurisdiction. This was expressed in Adam v. Cape Industries 3 (stating the rule as to individuals obiter). However, until the Adams decision it was thought that mere presence was too weak a link. The test was considered to be residence. The current rule is thus more of a mirror image of the English rule of jurisdiction regarding personal service within the forum, though the doctrine of forum non-conveniens is not applied. As to a corporation, this can be established by direct or indirect presence. Direct presence refers to incorporation, registration, a branch, principle administration, etc. Indirect refers to an agent or subsidiary with the authority to bind the corporation. See, Vogel v. Kohnstamn Ltd The defendant s submission to the foreign court A foreign court is regarded as having jurisdiction over a person if he submitted to it. For this purpose, submission may take three forms. First, where the parties have concluded a choice-of-court agreement in favour of the foreign court, they are deemed to have submitted to its jurisdiction. Secondly, if a claimant brings 3 Adams v. Cape Industries [1990] Ch 433; [1990] 2 WLR 657. The voluntary presence of an individual in a foreign country, whether permanent or temporary and whether or not accompanied by residence, is sufficient to give the courts of that country territorial jurisdiction over him under our rules of private international law. 4 Vogel v. Kohnstamn Ltd. High court [1973] 1 QB 133; [1971] 3 WLR 537; [1971] 2 All ER A foreign court will be regarded as having jurisdiction over a company if the company has established its own place of business there, or if it did business there through an agent in circumstances that would give jurisdiction to an English court.
4 proceedings in a foreign court, he is deemed to have submitted to the jurisdiction of that court with regard to any counterclaim on a related matter. Thirdly, if the defendant defends the case on the merits (substance), he is deemed to have submitted to the jurisdiction of the court with regard to any judgment in that case. In conclusion, submission can be established in cases where a defendant agreed to a choice-of-court clause or brought a counter-claim or otherwise defended a case on the merits. Section 33 of Civil Jurisdiction and Judgments Act 1982 (CJJA) 5 indicates steps not to amount to submission, such as (a) contesting the jurisdiction of the court ; (b) asking for a dismissal or stay based on forum non-conveniens or arbitration, or choice-of-court clause, See, Henry v. Geoprosco 6, 5 Submission: Civil Jurisdiction and Judgments Act 1982 (as amended), Section 33 - certain steps not to amount to submission to jurisdiction of overseas court. (1) For the purpose of determining whether a judgment given by a court of an oversea country should be recognized or enforced in England and Wales or Northern Ireland, the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally otherwise) in the proceedings for all or any one or more of the following purposes, namely- (a) to contest the jurisdiction of the court; (b) to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country; (c) to protect, or obtain the release of, property seized or threatened with seizure in the proceedings. (2) Nothing in this section shall affect the recognition or enforcement in England and Wales or Northern Ireland of a judgment which is required to be recognized or enforced there under the 1968 Convention or the Lugano Convention [or the Regulation]. 6 Henry v. Geoprosco [1976] QB 726 (CA). The proceedings had been brought before a court in Alberta. The defendant applied for a stay on the ground of forum non conveniens. When this was
5 (c) to protect seizure of property. This brief summary of the rules on recognition of foreign judgments highlights that English courts do not find a foreign court jurisdictionally competent where the foreign court gained jurisdiction based on service on the defendant outside of the jurisdiction. Schibsby v. Westenholz, a case from the 19 th century, establishes this point. The court followed the doctrine of obligation articulated in Godard v. Grey. The court appeared to reject the idea of comity. It was reluctant to recognize foreign judgments on that basis out of concern that local defendants would be forced to the corners of the world to defend cases and also generally out of concern about the quality of foreign courts. It is therefore not surprising that the Schibsby rule has been criticized due to the lack of uniformity with the English jurisdiction rules. At present, courts appear to view jurisdictional rules and recognition of foreign judgments rules as separate areas of the law, allowing for more liberal rules of jurisdiction than the recognition of judgments from abroad, though as to the jurisdiction rules, the doctrine of forum non-conveniens can be invoked by the defendant. However, this seems to highlight even more disparity between the rules. refused, it withdrew from the case. A default judgment was given against it. Enforcement proceedings were brought in England. It argued that the Alberta court had no jurisdiction. The English court held, however, that the defendant had submitted: by asking for a stay, it was impliedly accepting that the Alberta court had jurisdiction. However, this case has no longer been applied because it s laid down by Section 33 of the Civil Jurisdiction and Judgments Act 1982 that a defendant is not deemed to submit just because he argues that the court ought not to hear the case on the ground of forum non conveniens, or because of an arbitration agreement or choice-of-court agreement in favour of another court.
6 As a result, a number of common law jurisdictions no longer follow the rule. In particular, the Supreme Court of Canada in Morguard Investments Ltd v. De Savoye 7 recognized that the old common law rule was no longer applicable in the modern world. Discussing the history and theory behind Schibsby, the court referred to the obligation theory. However, the court found that the theoretical basis behind the new rule would be international comity. The idea of comity announced in the U.S. Supreme Court decision of Hilton v. Guyot 8 would be followed ( International duty and convenience ). The Canadian court found that modern private international law and commerce required an approach whereby judgments could cross state lines easier. The court found that the 19 th century reasons no longer applied, namely that prejudice would fall against local defendants, etc. Although the case applied to provincial judgments within Canada, the rule was extended to foreign judgments in Beals v. Saldanha. The new rule written by Judge La Forest was that a foreign judgment could be recognized where there was a real and substantial connection 9 between the defendant and the foreign forum. Thus, the court added a third circumstance above in the case of service out of the jurisdiction, thereby integrating more the jurisdictional and recognition rules. 7 Morguard Investments Ltd v. De Savoye. Supreme Court of Canada [1990] 3 SCR 1077; (1990) 76 DLR (4th) 256; [1991] 2 WWR 217; (1990) 52 BCLR (2d) Hilton v. Guyot, 159 US 113 (1895), at pp A case on the recognition of a French judgment. Although it applied general common law principles, it held that reciprocity was a requirement. At the time, American judgments could be reviewed on the merits in France; so the Supreme Court said that French judgments would not be given conclusive effect in the United States. 9 Derived from the judgment of Morguard Investments Ltd v. De Savoye- It seems to me that the approach of permitting suit where there is a real and substantial connection with the action provides a reasonable balance between the rights of the parties. It affords some protection against being pursued in jurisdictions having little or no connection with the transaction or the parties.
7 The U.S. also has what some may call more liberal or internationalist rules on recognition of foreign judgments. Section 5 (Personal Jurisdiction) of the Uniform Foreign-Country Money Judgments Recognition Act 10 is part of a uniform statute that many U.S. states have adopted and allows recognition of a foreign judgment in Section 5(b) in cases of service outside jurisdiction ( The court of this state may recognize bases of personal jurisdiction other than those listed in subsection (a) ) as long as they comport with the U.S. Constitutional requirement of due process of law. See, Bank of Montreal v. Kough 11. Judgments from other U.S. states are recognized by virtue of the Full Faith and Credit Clause of the U.S. Constitution. 10 Section 5 of the Uniform Foreign-Country Money Judgments Recognition Act Personal Jurisdiction (a) A foreign-country judgment may not be refused recognition for lack of personal jurisdiction if; (1) the defendant was served with process personally in the foreign country; (2) the defendant voluntarily appeared in the proceeding, other than for the purpose of protecting property seized or threatened with seizure in the proceeding or of contesting the jurisdiction of the court over the defendant; (3) the defendant, before the commencement of the proceeding, had agreed to submit to the jurisdiction of the foreign court with respect to the subject matter involved; (4) the defendant was domiciled in the foreign country when the proceeding was instituted or was a corporation or other form of business organization that had its principle place of business in, or was organized under the laws of, the foreign country; (5) the defendant had a business office in the foreign country and the proceeding in the foreign court involved a [cause of action] [claim for relief] arising out of business done by the defendant through that office in the foreign country; or (6) the defendant operated a motor vehicle or airplane in the foreign country and the proceeding involved a [cause of action] [claim for relief] arising out of that operation. (b) The list of bases for personal jurisdiction in subsection (a) is not exclusive. The courts of this state may recognize bases of personal jurisdiction other than those listed in subsection (a) as sufficient to support a foreign-country judgment. 11 Bank of Montreal v. Kough. US Court of Appeals for the Ninth Circuit 612 F 2d 467 (1980)
8 The Canadian and U.S. examples, along with the rules of Brussels I Regulation 12 dealing with recognition of Member State judgments, including Articles 33 13, suggest possible alternatives to the common law rule. Cases such as Morguard are not without criticism in that the real and substantial connection is too flexible and essentially can include any number of factors. However, there is no doubt that the common law rule needs reforming. Perhaps reference to the rules on jurisdiction and other areas such as the doctrine of forum non conveniens 14 (See, Spiliada Maritime Corporation v. Consulex 15 ), service 12 Brussels I Regulation is not a new piece of legislation, but a re-enactment with a few changes of the Brussels Convention, an international agreement that was concluded among the six original Member States in As Brussels I Regulation constitutes EC legislation, the European Court has an automatic right to interpret it on a preliminary reference. However, as it is a re-enactment of the Convention, the European Court s case law on the Convention will continue to apply under the Regulation, except where the provisions of the Convention have been amended. 13 Article 33 of Brussels I Regulation. Recognition- (1) A judgment given in a Member State shall be recognized in the other Member States without any special procedure being required. (2) Any interested party who raises the recognition of a judgment as the principal issue in a dispute may, in accordance with the procedures provided for in Sections 2 and 3 of this Chapter, apply for a decision that the judgment be recognized. (3) If the outcome of proceedings in a court of a Member State depends on the determination of an incidental question of recognition that court shall have jurisdiction over that question. 14 The doctrine of forum non conveniens is the first attempt to determine which court is more appropriate to hear the case. It operates not only when the case is pending before the courts of another, but also when it could have been brought before them. It applies even if there is no conflict of courts. Its mainly purpose is to deal with the justice to the parties by ensuring that the most appropriate court hears the case. 15 Spiliada Maritime Corporation v. Consulex. House of Lords [1987] AC 460; 3 WLR 972; [1986] 3 All ER 843 This case concerned a shipment of sulphur from Vancuver, British Columbia, to ports in India. The contract of carriage contained an English choice-of-law clause. The ship was registered in Liberia and the shipowner, Spiliada, was a Liberian registered corporation. The ship was managed partly in Greece and partly in England. It was chartered to an Indian company. Spiliada claimed that the sulphur was wet when loaded and had corroded the ship s hold. It claimed that this was the fault of the shipper, Cansulex, a Canadian company. It brought proceedings against Cansulex in England. It obtained permission to serve the claim form outside the jurisdiction on the ground that the contract of carriage was governed by English law. Cansulex applied to have permission set aside. Lord Goff made clear in this case that the test in England is not just to show that England is not the natural
9 outside jurisdiction (Seaconsar) and anti-suit injunctions 16 (See, Societe Nationale Industrielle Aerospatiale v. Lee Kui Jak 17 ) can serve as a basis for finding the right mix or balance between modern day commercial needs and individual rights of local defendants. The Canadian court appears to follow more of a natural forum test ( real and substantial connection ). This is certainly a move in the right direction. Although there is a concern that jurisdiction could be founded on liberal jurisdiction rules like Article 14 of the French Civil Code 18 which essentially allows a person domiciled in France to bring a claim against a defendant, regardless of his forum or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. The House of Lords said that The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, in which the case may be tried more suitably for the interests of all the parties and the ends of justice. 16 Antisuit injunction is unlike the common law writ of prohibition, the equitable injunction was not directed against the other court, but against the claimant in that court. It is issued for the purpose of precluding the proceedings in other courts. 17 Societe Nationale Industrielle Aerospatiale v. Lee Kui Jak. Privy council [1987] AC 871; [1987] 3 WLR 59; [1987] 3 All ER 510. The case arose out of a helicopter crash in Brunei in which a Brunei businessman was killed. The helicopter was made by French company, Aerospatiale; it was owned by an English company and operated by a Malaysian company under contract to a Sarawak company. Claims by the widow against these latter defendants had already been settled for US$ 430,000. She then brought proceedings against Aerospatiale in a state court in Texas: at the time, Texas law did not recognize forum non conveniens in wrongful-death cases. Since Aerospatiale could not get the proceedings stayed or dismissed in Texas, its only chance was to apply to the courts of Brunei for an antisuit injunction against the widow. The Brunei courts refused to grant it, and Aerospatiale appealed to the Privy Council in London. Lord Goff in this case considered the viewed that the test applied to decide whether to stay English proceedings on the ground of forum non conveniens should also be used to determine whether an antisuit injunction should be granted. This would mean that the English courts would grant an antisuit injunction whenever they considered the English courts to be the natural forum, unless justice required that the claimant should be allowed to continue the proceedings in the foreign jurisdiction. He also rejected this approach on the ground that it would be inconsistent with comity and with the fundamental requirement that an injunction will only be granted where the ends of justice so required. 18 Article 14 of the Civil Code grants jurisdiction to French court on the sole ground that the plaintiff is a French national. This is widely regarded as an exorbitant head of jurisdiction, except in family matters.
10 connections with France, in most cases the real and substantial connection test should alleviate these concerns. One could even consider a more liberal standard given that the theoretical basis underlying the law is international comity. The U.S. case, Hilton, described international comity as international duty and convenience. Perhaps recognition of foreign judgments should be the norm and the defendant should essentially provide a reason why the judgment should not be recognized. This approach would be more akin to the case of recognition of a judgment unless there was some sort of abuse of process or as in case of a Member State judgment under Article 33 of the Brussels I Regulation 19. There is certainly an analogy here with anti-suit injunctions at common law. Anti-suit injunctions are not usually granted unless foreign proceedings are vexatious and oppressive. This would certainly give the foreign court wide competence as for recognition purposes. In such cases, defendants would still be able to argue common law defenses of fraud, natural justice, public policy, etc. However, despite the real and substantial connection test being flexible, it probably balances international comity and the rights of local defendants to a more satisfactory degree. Following the model similar to Article 33 of the Brussels 1 Regulation would provide defendants with fewer options in cases where jurisdiction had been achieved through service outside jurisdictions. 19 Supra note, see 13
11 Bibliography Fentiman, Richard, International Commercial Litigation (Oxford University press, Oxford, 2009) Gaudermet-Tallon, Helene, Competence et execution des judgments en Europe (LGDJ, Paris, 3 rd edn, 2002) Hill, Jonathan, International commercial Disputes in English courts (Hart Publishing, Oxford and Portland, OR, 2005) James, Michael, Litigation with a Foreign Aspect: A Practical Guide (Oxford University Press, Oxford, 2009) Kaye, Peter, Civil Jurisdiction and Enforcement of Foreign Judgments: The Application in England and Wales of the Brussels Convention of 1968 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters under the Civil Jurisdiction and Judgments Act 1982 (Professional Books, Abingdon, 1987) Lowenfeld, Andreas F., International Litigation and the Quest for Reasonableness: Essays in Private International Law (Clarendon Press, Oxford 1996) Wolff, Martin, Private International Law (Clarendon Press, Oxford, 2 nd edn, 1950)
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