In the second of a two-part series on enforcement of judgments, Gregory Pooler sets out the process for foreign jurisdictions.

You’ve obtained a judgment against a defendant who is either domiciled outside the jurisdiction, or has assets located outside the jurisdiction against which the judgment could be enforced. Now what?

The process for enforcing English court judgments in foreign jurisdictions can be an expensive and complex exercise. Advice from local counsel in the jurisdiction will invariably be required.

The enforcement strategy will depend on:

• the subject matter of the judgment (i.e. what type of relief the judgment provides);
• the private international law of the state in which the judgment creditor is seeking to enforce, both as to the recognition of the validity of the judgment and the process of its enforcement; and
• whether that jurisdiction is a party to any one of the patchwork of treaties/conventions that constitutes the international enforcement regime.

The guidance below is subject to the obvious health warning that when it comes to enforcing English judgments in the EU and other EFTA states, as at the date of publication it is not clear what regime will apply beyond 12 April 2019. Under the terms of Theresa May’s withdrawal agreement, the status quo under the Recast Brussels Regulation (discussed below) is broadly preserved.

The information in this article also only applies to certain categories of civil judgments; matrimonial, insolvency, administrative and criminal disputes are either generally not covered by enforcement regimes or are subject to separate bilateral arrangements.

Initial considerations

A first step in any litigation strategy involving cross-border enforcement issues will involve building up an asset profile of the defendant and identifying the jurisdiction(s) in which those assets are located.

Money is invariably converted into either real property or other high value chattels such as yachts or art etc., which can be realised to satisfy the judgment debt. An assessment will need to be made as to whether it is a worthwhile exercise going after that particular defendant (especially in multi-defendant proceedings) and the assets identified, depending on the jurisdiction in which they are located. Less sophisticated or evolved jurisdictions may make international enforcement very difficult. Where the value of the dispute is significant, it may be that a party has obtained interim as opposed to final relief in the form of a Worldwide Freezing Order and this can also affect the method/approach to enforcement.

Key considerations therefore include: (i) the requirements of any applicable treaty regime to which that jurisdiction is a party; and (ii) the instruction of local counsel at an early stage to assist with the local procedures for recognition and enforcement of the judgment.

Enforcement mechanisms

In theory, if a treaty applies then this should make it easier to enforce the judgment. For example, the enforcement of judgments between EU member states[1] (with one or two exceptions) is effected through the Recast Brussels Regulation.[2] This provides a simplified procedure under which English judgments are recognised in other member states and enforcement can be effected on the basis of a certified copy of the judgment for that purpose (see below) and without the need to obtain a declaration of enforceability from the foreign court. The Commonwealth countries also have a separate regime under the Administration of Justice Act 1920 for High Court judgments.

A number of significant jurisdictions in which potential defendants and their assets are likely to be found do not, however, have any treaty arrangements in place with the UK. This includes the United States, Japan and China. In these instances, the private international law of the relevant jurisdiction will apply to the enforcement process. Typically this involves commencing fresh proceedings in that jurisdiction which can therefore be a more expensive and riskier process because the judgment debtor may be able substantively challenge the judgment if a ‘summary judgment’ mechanism is not available to the enforcing party.

Whichever regime applies, it usually requires the judgment creditor to obtain a certified copy of the judgment; typically certification of the judgment is obtained by way of application to the Court to a Master or District Judge. This is a particularly important step as the local court will invariably examine the procedural mechanism by which the judgment was obtained and a savvy defendant may seek to challenge the judgment on procedural or policy grounds. The other procedural hurdle which will need careful consideration and planning involves service of documents in the jurisdiction in which the judgment is being enforced; procedural irregularities can be capitalised on by defendants to avoid/frustrate the process.

Early planning recommended

Leaving aside the state of uncertainty that exists as a result of the UK’s decision to leave the EU and the lack of clarity as to how that will be implemented, this is an area of law that is constantly evolving. Some of the existing international treaties are in the process of being amended and in some cases the process of implementation by jurisdictions that have signed certain treaties is not complete. It will be important to ensure that the enforcement process is planned out at an early stage of the litigation and that the enforcing party makes provision for the costs of the exercise.

[1] For EFTA states, the 2007 Lugano Conventions which sets up a broadly similar scheme for enforcement as that which applies under the Recast Brussels Regulation.

[2] Applies to proceedings initiated after 10 January 2015.

 

Gregory Pooler is a managing associate at Grosvenor Law.

Read the first part of the series

The contents of our blog posts do not constitute legal advice and are provided for general information purposes only