Recent decisions illustrate the difficulty of resisting enforcement of a foreign judgment on grounds which could be raised in the original court

Two recent High Court decisions have shown how difficult it is to resist enforcement of a foreign judgment in England by relying on matters which were, or could have been, raised in the original court. They also show that the English court will give careful consideration to whether any of the limited defences to enforcement apply, and will not allow them to be used as an indirect route to challenge the original court's findings: Superior Composite Structures LLC v Parrish [2015] EWHC 3688 (Admin), Smith v Huertas [2015] EWHC 3745 (Comm).

The practical lesson is that a party should generally pursue all available remedies in the country giving judgment (where it is taking part in those proceedings). It is not likely to benefit from saving up challenges for the enforcement stage.

Background

The rules governing enforcement of a foreign judgment in England differ depending on where the judgment is from. None of the regimes permit a review of the foreign judgment based on an argument that the original court got it wrong, whether on the law or the facts. There are however limited grounds to resist enforcement, such as breach of public policy or breach of natural justice.

Decisions

Superior Composite Structures LLC v Parrish

This case concerned enforcement of a US judgment. There are no reciprocal arrangements for enforcement between the US and the UK, so enforcement is subject to the common law rules. Under those rules, the judgment creditor brings proceedings relying upon the judgment as a debt and then generally applies for summary judgment. The judgment debtor is not entitled to re-litigate the merits but can put forward a number of limited defences.

Here the judgment debtor, Mr Parrish, resisted enforcement claiming that the judgment was procured by fraud, was contrary to the rules of natural justice, in contravention of the right to a fair trial under Article 6 of the ECHR (European Convention on Human Rights) and contrary to public policy.

One of the arguments he put forward was that the damages awarded were incorrect because there had been double counting. The court commented that the damages award "might well have been appealed successfully" but no appeal was brought in the US proceedings and it was not for the English court to assess the damages at the enforcement stage.

Mr Parrish was unable to prove any of the limited grounds to resist enforcement, so enforcement of the judgment was ordered. As the judge commented, "it may be that the Defendant was unlucky and differently conducted on a different day in front of a different Judge he might have not faced such a heavy award against him." However, that was "not the test to be applied" to the case.

Smith v Huertas

This case concerned enforcement of a French judgment. As the underlying proceedings were commenced before 10 January 2015, enforcement of the judgment was under the Brussels I Regulation (Council Regulation (EC) No 44/2001).

Under the Brussels regime, a judgment given in one EU member state is entitled to recognition and enforcement in another member state after certain formalities have been complied with. The formalities are minimal and have been reduced still further where judgment is given in proceedings commenced after 10 January 2015 and enforcement is therefore under the Recast Brussels Regulation (Council Regulation (EU) 1215/2012).

In no circumstances may the judgment be reviewed as to its substance, but there are limited defences available such as breach of natural justice or where there has been a manifest breach of public policy. For the breach of public policy defence to apply, there needs to be a breach of a rule of law regarded as essential in the legal order of the member state in which enforcement is sought or of a right recognised as being fundamental in that legal order (see post on the CJEU decision in Diageo Brands v Simiramida).

The proceedings in France in the Huertas case were long-running and the claims against the defendant, Mr Smith, a former director of an insolvent French company, were hotly disputed. Mr Smith was ultimately found by the French court to be guilty of a criminal offence and liable to pay compensation in respect of certain transfers made by the company. He resisted enforcement in England on the ground that the judgment was manifestly contrary to public policy. A number of complaints were raised, including the length of time the proceedings had taken, alleged bias by the French court and unfairness in its procedures.

The judge held that where the factors relied on as being contrary to public policy were factors which the court had already considered in the foreign jurisdiction or which could have been raised there, then that country must generally be treated as the best place for those arguments to be raised and determined. To do otherwise would be contrary to the spirit of the Brussels regime and, where issues of unfairness are raised which are capable of being the subject of appeal in the foreign jurisdiction, an enforcing court is much less able to assess them than the original court which is familiar with its own forms of procedure. There was moreover a "highly unattractive element" in a defendant not raising points which he could have raised in an appeal against the judgment and only seeking to raise those matters on enforcement.

The defendant therefore had to show that the system of legal remedies in France did not afford a sufficient guarantee of his rights, overcoming the strong presumption that the procedures in France, another contracting state, are compliant with ECHR Article 6.

The judge then embarked on a detailed investigation of the complaints made to see if Mr Smith could establish both a manifest breach of public policy and that the system of legal remedies in France did not afford a sufficient guarantee of his rights, concluding that was not the case. In a number of instances the French courts or European Court of Human Rights (ECtHR) had decided the point raised against the defendant, for example complaints regarding the length of time the proceedings and prior investigation had taken, so the challenge was an attempt to challenge the substance of the decision. In other instances challenges were available under the French system (and to the ECtHR) but were not made, for example to allege bias on the part of the French court.

The court therefore granted Mr Huertas summary judgment, declaring the judgments as recognised and enforceable in the English courts.