Enforcing judgments obtained outside of the EU

Enforcing judgments in England and Wales that were originally issued by a court of another member state is relatively straightforward. However, it is often more problematic where the judgment was obtained in a state that is not a member of
the EU.

Reciprocal arrangement

Consider, for example, that you have a judgment issued by a court from outside the EU.
The debtor has no assets in
that jurisdiction, but you have established that the debtor
owns a mansion in London.
This raises the question, how
can the judgment creditor
get its hands on that asset?

The first question to ask is whether the judgment was obtained in a country where there is a reciprocal arrangement for the enforcement of judgments within England
and Wales.

The principal relevant statues and conventions are:

• Administration of Justice Act 1920;
• the Foreign Judgments (Reciprocal Enforcement) Act 1933;
• the Civil Jurisdiction and Judgment Acts 1982;
• Brussels Convention 1983; and
• the Lugano Convention 1988.

Essentially, the countries
covered by these statutes
and conventions are British Commonwealth and Dominion countries, and members of the European Free Trade Association (EFTA), which are not now members of the EU.

If the state in which the judgment was obtained is covered by one of these statutes or conventions, then the courts of England and Wales will recognise that judgment.

To enforce such a judgment, an application will need to be made to the High Court which will register the judgment providing the requirements of the relevant statutes or conventions are met.

The application is made without notice and must be supported by a witness statement, the original judgment and a certified English translation of it.

Care should be taken to make the application in time, as different time limits apply to various statutes.

Local requirements

Where the judgment was obtained in a country that is
not a signatory to a treaty and there is therefore no reciprocal arrangement in place, then the judgment will not automatically be recognised by the courts.

However, it is possible to enforce the judgment by a common law action. Fresh proceedings will have to be brought in England and Wales based on the foreign judgment. The proceedings will have to be issued and then served on the judgment debtor.

Service can be either through the diplomatic system or by using the local rules for service. Care
will be required to ensure that
the appropriate rules for service are complied with. In some jurisdictions, the local service requirements can add considerably to the overall
time that the process may take.

Once served and the appropriate time has lapsed,
if the judgment creditor fails
to acknowledge service of
the proceedings, then a default judgment can be obtained for
the sum of the original foreign judgment.

The judgment debtor has a right to defend the proceedings but, providing the English court is satisfied that the judgment was given by a competent court, it is unlikely to go behind the original judgment, except in some fairly exceptional circumstances.

In circumstances where the judgment debtor attempts to defend the proceedings, it would be appropriate to make an application for summary judgment and in most instances
a summary judgment would be granted.

This process does take longer than when a convention country is involved and there is a risk of the asset being dissipated before judgment is obtained. If there is
a genuine risk of this, then an application should be made
for an interim freezing order to prevent a disposal pending determination of the proceedings.

Once registered or recognised by the court, the judgment can be enforced using any of the enforcement processes available, including a charging order over assets, third party debt orders and High Court enforcement.

There are more signatory states to the New York Convention than any of the conventions referred
to at the start of this article.
There is greater scope for having an arbitral award recognised in another state than a judgment issued by the courts. If arbitration is an option therefore, it ought to be considered.

Despite some of the procedural difficulties that may have to be overcome, comparatively, England and Wales offers a straightforward and cost-effective means of enforcing foreign judgments. SJ

John Abbott, pictured, is the head of dispute resolution and Ben Thorogood is a trainee solicitor