Navigating international disputes: recognition and enforcement of Pakistani judgments and arbitral awards in England

Posted: 21/11/2024

Enforcing foreign judgments and arbitral awards is a complex yet crucial part of multi-jurisdictional dispute work. This article looks at the legal process for enforcing Pakistani court judgments within the jurisdiction of England and Wales to aid Pakistani lawyers advising their clients and businesses. It is a high-level checklist guide to assist in understanding the options available and also compares the regime for registering judgments with the process for enforcing arbitral awards by reference to the relevant regulations, challenges, and practical steps for the legal professionals and parties involved.

Executive summary

Enforcement of a judgment
There are two main methods of enforcing judgments from the courts of Pakistan in England. First, judgments from ‘recognised courts’ in Pakistan can (and where applicable must) be enforced under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (FJA 1933). Second, judgments from any other courts in Pakistan (or where the judgment does not fall within the scope of the FJA) may be enforced under the common law rules. Where the FJA 1933 applies, it is mandatory.

Enforcement of an award
Arbitral awards given in Pakistan, which are expected to increase once the Pakistan Arbitration Bill is passed, can be recognised and enforced in the UK under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention), enacted into English law under the Arbitration Act 1996.

Enforcement in England of Pakistani judgments under the Foreign Judgments (Reciprocal Enforcement) Act 1933

Requirements for enforcement in England under the FJA 1933
To enforce a judgment from Pakistan in England under the FJA 1933, the judgment must be given by a ‘recognised court’. The Reciprocal Enforcement of Judgments (Pakistan) Order, 1958 provides that a ‘recognised court’ is one of the following: 

• the Supreme Court of Pakistan;
• all High Courts;
• all district courts; and
• all other courts whose civil jurisdiction is subject to no pecuniary limit, provided that the judgment sought to be registered under the said act is sealed with a seal showing that the jurisdiction of the courts is subject to no pecuniary limit, in specified territories.

The judgment must also be: 

• final and conclusive[1] or require the judgment debtor to make an interim payment to the judgment creditor;
• for a specified sum of money which is not taxes, fines, or other penalties; and
• enforceable by execution in the country of the original court.

Procedure
Where the requirements stipulated by the FJA 1933 are satisfied, the enforcing party will need to:

• apply to the English High Court to register the Pakistani judgment in England within six years of the foreign judgment, or where the judgment has been subject to appeal, from the date of the last judgment in the foreign proceedings; and
• serve the registration order on the debtor.  

Once the Pakistani judgment has been registered, it will have the same status as if it were a judgment of the English court. However, the debtor can apply to set aside the registration of the judgment in the following limited circumstances.

Defences to enforcement in England under the FJA 1933
If the above criteria are satisfied, there are several potential defences to enforcement:

• the judgment is not one to which the FJA 1933 applies, or it was registered in contravention of its provisions;
• the original court in Pakistan had no jurisdiction in the circumstances of the case (based on English conflict of law principles – ie on a consensual or territorial basis);
• the debtor did not receive notice of the proceedings in sufficient time to defend and did not appear in the proceedings;
• the judgment was obtained by fraud (this requires the debtor to prove fraud to a ‘high degree of probability’, see Ahmed v Habib Bank Limited [2001] EWCA Civ 1270);
• the debtor has lodged (or is entitled to and intends to lodge) an appeal against the judgment in Pakistan[2] (note this only gives the English court a discretion to set aside or to adjourn registration or enforcement, and does not prejudice a further application to register the judgment once the appeal has been disposed of);
• the judgment is contrary to English public policy. This is rare but can arise where the monetary award given in the judgment is phrased as a ‘penalty’;
• the rights under the judgment are not vested in the person by whom the application for registration was made;
• the judgment is irreconcilable with an earlier final and conclusive judgment by a court which had jurisdiction.

To challenge enforcement, an application to the English court to set aside the registration order should be made without delay and within the time limit set out in the registration order.    

Enforcement in England of Pakistani judgments under common law rules 

Where the Pakistan court is not a ‘recognised court’ under the FJA 1933 and/or the Pakistani judgment does not fit within the FJA criteria, it can be enforced in England pursuant to the common law regime.

Requirements of enforcement
For the common law regime to apply, the following must be satisfied:

• the judgment must be final and conclusive; and
• it must be for a debt or definite sum of money (but again not generally for taxes, a fine or other penalty).

Defences to enforcement
If the above criteria are satisfied, there are (similar to those under the FJA 1933) several potential defences to enforcement:

• the foreign court did not have jurisdiction on a territorial or consensual basis;
• the judgment was obtained by fraud;
• enforcement would be contrary to English public policy;
• the judgment is contrary to the rules of natural justice, such as the debtor not having a proper opportunity to defend the claim;
• it is inconsistent with a prior judgment on the same subject matter and between the same parties;
• the judgment is for multiple damages;
• the proceedings were brought contrary to a jurisdiction or arbitration agreement. 

Procedure
Where the conditions for enforcement under the common law are met, the Pakistani judgment will not be automatically enforceable in England. The enforcing party will need to: 

• issue a new claim in the English High Court to enforce the judgment;
• if relevant, seek permission from the English court to serve proceedings on the debtor (if outside of England and Wales); and
• apply for summary judgment to expedite enforcement (provided there are grounds to do so).

Jurisdiction

One of the most commonly used defences in cases of enforcement of foreign judgments is lack of jurisdiction of the foreign, ie Pakistani, court. While the grounds of jurisdiction of the FJA 1933 closely reproduce those under common law, there are some procedural differences.

A key takeaway for anyone whose residence or place of business is in England, and who is faced with proceedings in Pakistan, is to seek advice on the English law position prior to making any submissions in the Pakistani proceedings. 

When to use which method?

Where the FJA 1933 applies to a Pakistani judgment, it must be enforced via registration under its terms. However, the English courts have recently ruled on some key differences between the two regimes. In Invest Bank PSC v El-Husseini & Ors [2023] EWHC 2302, the High Court held that while under the terms of the FJA 1933, a foreign judgment cannot be registered if it could not be enforced by execution in the country of origin, there is no equivalent prohibition under the common law. It is therefore crucial to carefully consider the applicable enforcement regime.

Enforcement in England of Pakistani arbitral awards under the New York Convention

Requirements for recognition
While foreign arbitral awards can be enforced under the common law, section 10A of the FJA 1933, or under section 66 of the Arbitration Act 1996, the most common and most effective method of enforcement is pursuant to sections 100 to 103 of the Arbitration Act 1996, which provide for the enforcement of arbitral awards under the New York Convention.

Prior to enforcing a foreign arbitral award in England, an application must be made to the English High Court for permission to recognise the award. Both Pakistan and the UK are signatories of the New York Convention. As a result, recognition in England of an arbitral award given in Pakistan is mandatory except where the following defences apply:

• where a party to the arbitration agreement (under the law applying to it) was incapacitated;
• where the arbitration agreement was invalid (under its applicable law);
• where a party was not given proper notice of the appointment of an arbitrator, of the arbitral proceedings, or was unable to present its case;
• where the dispute to which the award relates did not fall within the scope of the arbitration agreement;
• where the arbitral tribunal was not properly constituted either in accordance with the terms of the agreement or the law of the seat;
• where the award is not yet binding on the parties or has been set aside by a court with competent authority to do so[3];
• where the award relates to a matter not capable of settlement by arbitration pursuant to English law;
• where the enforcement would be contrary to English public policy.

Procedure
Once permission to recognise the arbitral award has been granted by the English court, an application to enforce the award must be made. Once granted, the order must then be served and, if not set aside, can be enforced as if it was an order of the English court.

Conclusion

The English court rules for the enforcement of foreign judgments and arbitral awards are strict and must be followed. Early and expert advice is recommended to ensure that a successful and speedy resolution can be obtained. In general terms, however, the English courts will always try to give effect to validly obtained judgments and awards and English civil procedure provides a comprehensive range of enforcement measures.

For further assistance, please speak to Kamran Rehman or Valya Georgieva, who are members of the commercial dispute resolution team and Pakistan desk.

This article was written in collaboration with Jahanzeb Awan, Neha Asif, and Umar Shahzad Abbasi of Haidermota & Co.

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