When will the English courts refuse enforcement of a foreign judgment?

Posted: 09/12/2024

The English courts generally enforce foreign judgments and only refuse to exercise their power to do so in exceptional circumstances. This article looks at two such circumstances and the approach adopted by the courts to enforcement in recent case law.

Foreign judgments can be enforced by the English courts in several ways, depending on the country from which the judgment originates. Where both countries are party to a bilateral or multilateral enforcement treaty, a simplified registration regime may apply (for the UK this is principally pursuant to the Hague Convention on Choice of Court Agreements 2005, the Administration of Justice Act 1920 and the Foreign Judgments (Reciprocal Enforcement) Act 1933). However, where no such regime applies (and in some instances as an alternative even where registration is available), a foreign judgment can be enforced under the common law rules.

This article considers the bases on which the courts may refuse to enforce foreign judgments under the common law rules.

Avoiding enforcement or recognition of a foreign judgment procured by fraud

The first exception to enforcement is where the court determines that the foreign judgment was obtained by fraud - either (a) fraud on the part of the party in whose favour the judgment is given; or (b) fraud on the part of the foreign court pronouncing the judgment (although, for obvious reasons, it is extremely challenging to demonstrate that this latter fraud has taken place). A recent decision illustrating this exception is that of Mr Justice Knowles to refuse the enforcement of an arbitral award following his determination that it had been obtained by fraud (The Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638).

Case law has provided a number of clear examples of the types of conduct that constitute ‘fraud’ in the context of foreign judgments:

• a claimant suing for the delivery of goods but concealing from the court that they were already in his possession: Abouloff v Oppenheimer (1882) 10 BD 295 (CA);
• a claimant suing on bills of exchange but falsely claiming that they were mercantile when they had been given for gambling debts: Vadala v Lawes (1890) 25 QBD 310;
• a claimant suing for a debt but concealing from the court that half the sum was a usurious interest charge upon the other half which the defendant had insisted on being paid in advance: Syal v Hayward [1948] 2 KB 443;
• a claimant lying about the fact that he had exerted actual violence, threatened violence and instilled fear in the defendant to ensure that he did not appear at the trial to tell his side of the story: Jet Holdings Inc v Patel [1990] 1 QB 335;
• a claimant obtaining judgment by forging documents and giving perjured testimony: Owens Bank Ltd v Bracco [1992] 2 AC. 

To rely successfully on the ground of fraud, the party alleging fraud/resisting the enforcement of a foreign judgment must demonstrate a ‘conscious and deliberate dishonesty’ and that this dishonesty was an operative cause in bringing about the foreign judgment (pursuant to RBS v Highland Finance Partners LP [2013] EWCA Civ 238 and GFH Capital Ltd v Haigh [2020] EWHC 1269 (Comm)). It is also important for the party alleging fraud to demonstrate that (i) the material it relies upon to justify the plea of fraud is not new but that (ii) the material was not advanced and/or the fraud was not alleged in the original proceedings (per Abouloff; Syall; JSC VTB Bank v Skurikhin [2014] EWHC 271 (Comm)). 

Given the fraud ground for resisting enforcement is a ‘carefully delineated exception and is not to be given an expansive application’ (per Gelley v Shepherd & another [2013] EWCA Civ 1172 at [47]), however, the English court will take a nuanced and highly cautious approach to re-opening the substantive merits of final and conclusive judgments by foreign courts. 

It is less likely, for example, that the English court will refuse enforcement on the ground of fraud where the foreign jurisdiction in question has a sophisticated legal system. Further, generalised assertions of fraud made on the basis of bad faith or political motivation are increasingly unlikely to be well-received by the English court – an example being the relatively recent case of Shamma v Jawad [2022] EWHC 2987 KB, which involved unsubstantiated claims in relation to the Iraqi legal system. 

With these principles in mind, it is critical when seeking to avoid the enforcement of a foreign judgment in England to ensure that any assertion of fraud is credible, demonstrated by clear evidence and carefully pleaded. Such assertions must only be made by legal practitioners under these limited circumstances, with careful consideration of the strict principles outlined by Lord Millett in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2001] UKHL 16, including that ‘fraud…must be distinctly alleged and as distinctly proved; that it must be sufficiently particularised; and that it is not sufficiently particularised if the facts pleaded are consistent with innocence’. 

Non-enforcement of a foreign judgment which is unenforceable in the country in which it was given

The second circumstance in which the English courts will not enforce a foreign judgment is when it is unenforceable in the country in which it was given.

If a judgment is enforced via registration pursuant to section 2(1)(b) of the Foreign Judgments (Reciprocal Enforcement) Act 1933, it cannot be enforced if ‘it could not be enforced by execution in the country of the original court’. 

However, the position is not the same when enforcing at common law.

In Merchant International Company Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz [2012] EWCA Civ 196, for example, the Court of Appeal dismissed an appeal brought by Naftogaz, the Ukrainian state-owned energy company, against a decision of the English Commercial Court which allowed a Ukrainian judgment against Naftogaz to be enforced, even though the Ukrainian judgment had since been set aside by the Ukrainian Supreme Court. 

In refusing to set aside the Commercial Court’s decision to enforce the Ukrainian judgment, it arguably recognised as res judicata a judgment that would not be regarded as such in the jurisdiction in which it was given. In this case, however, the circumstances were particularly unusual, with the Court of Appeal having to consider whether the English court could properly consider breaches of the ECHR by another member state, whether the Ukrainian proceedings had violated the Article 6 ECHR right, and whether the principle of res jurisdicta should take precedence in circumstances where there had been such an Article 6 violation.  

More recently, in Invest Bank PSC v El-Husseini [2023] EWHC 2302 (Comm), the High Court held that, provided that the foreign judgment is final and conclusive in its jurisdiction of origin, a mere impediment to enforcement in that jurisdiction did not constitute a defence to enforcement. Consequently, Abu Dhabi judgments for amounts due under two guarantees were held to be enforceable in England despite a subsequent change in the law of the UAE which meant they could not be enforced there. 

The cases of MIC v Naftogaz and Invest Bank make it clear that, when it comes to the enforceability of foreign judgments in England and Wales, parties should be wary of relying on local procedural bars without careful further analysis. 

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