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Steven LOBLE

International & Commercial Litigation

Enforcement of US judgments in England

Enforcement of US judgments in England


There is a large amount of trade and investment between the United States of America and the United Kingdom.  The United Kingdom of Great Britain and Northern Ireland comprises Great Britain which includes England, Scotland, and Wales as well as Northern Ireland which is one sixth of the island of Ireland.

As a result of these commercial activities as well as other types of claims, the situation often arises in which it is necessary to seek enforcement of judgments from one country in the other.

Legal systems are generally limited territorially. However, over centuries, private international law has developed rules permitting judgments of one country to be recognised or enforced in other countries. Whilst similar rules apply in all constituent parts of the United Kingdom, I deal below specifically with the rules for recognition and enforcement of US judgments in England & Wales.  For the sake of brevity, I will refer throughout to England, but this includes Wales. 

The United States does not have treaties with any other country for the reciprocal enforcement of judgments.

When does enforcement of a court in the United Statesof America become an issue? A creditor who has a judgment from a foreign court may want to enforce the judgment in an English court. This may happen for example, where X has obtained judgment in the USA against a company registered in England, but the judgment remains unsatisfied and the debtor's assets are all located in England. If there are assets in England, X will want to secure those assets towards satisfaction of the judgment. To do so, X would need to enforce the US judgment in England. 

How do I enforce a US judgment in England?

Judgments of countries with whom there is no reciprocal enforcement treaty may be enforced by bringing an action on the judgment. There is, for example, no treaty between the United Kingdom and the UnitedStates of America. The action to enforce the judgment is an action at common law. In contrast to the European and Commonwealth treaties, the common law rules are more restrictive. The foreign judgment is the cause of action and an application can be made for summary judgment on the grounds that there is no defence to the action. In order for a foreign judgment to be enforced the English courts must be satisfied that the foreign court had jurisdiction to render the judgment according to the English rules of private international law. 

In a nutshell, the English courts' requirements for jurisdiction are that:

a)     The defendant in the enforcement proceedings in England was resident or, if a body corporate, hada place of business (or perhaps waspresent) in the country of the foreign court which gave judgment; 

b)     The defendant to the enforcement proceedings was the plaintiff or counterclaimed in the proceedings in the foreign court; 

c)     The defendant agreed to submit to the jurisdiction of the foreign court;

d)     The defendant submitted to the jurisdiction of the foreign court (by taking an active step in the proceedings other than in relation to (i) property which had been seized or (ii) disputing the jurisdiction of the foreign court);

e)     The foreign judgment is final and conclusive. The claim in the English proceedings is to enforce a judgment for a definite sum of money (this includes a final order for costs). This does not include taxes, fines or penalties. The defendant was served with the process of the foreign court and judgment was not obtained by fraud or any cause of action which is contrary to the public policy of England. 

In England, fraud is a ground for refusal of recognition or enforcement of a foreign judgment. This is different to the position in civil law countries, where fraud is not a reason for non-recognition. However, a foreign judgment may be refused recognition in civil law countries if it was procured by fraud on the grounds of public policy. 

The leading case on the foreign law enforcement judgment is Adams v Cape Industries Plc [1990] Ch. 433 (described in Dicey, Morris & Collins "The Conflict of Laws" 15th Ed. as "the leading modern authority"). I acted for the plaintiffs in that case, which involved the common law enforcement of judgments obtained in Texas by 206 plaintiffs injured by asbestos. The judgments were obtained against the defendants in the United States District Court for the Eastern District of Texas Tyler Division and proceedings were brought in the High Court of Justice in London to enforce the judgments. The court declined to enforce the judgment for the following reasons: 

"1) the defendants were not present in the country of the foreign court when the proceedings were commenced; 

2)  it would be contrary to natural justice/public policy to enforce the judgment on the grounds that there had been no proper judicial assessment of the damages."

The Court also found that the fact that the defendants, if they had been shown to be present in the United States, would have been present in Illinois and that the judgment was given in Texas would not prevent the judgment from being enforced. This was because the issue was before a Federal Court and a Federal Court is a court of the United States and not of the State in which it was sitting. 

Enforcement of penal judgments

The English court will not entertain an action to enforce (either directly or indirectly) a penal or revenue law. This is essentially part of the conflict of law rule that penal laws will not be enforced in an English court. The application of this rule to enforcement of foreign judgments by the English court has led to confusing outcomes. The foundation for this rule was explained by Lord Watson in Huntington v Attrill [1893] A.C. 150: 

"The rule has its foundation in the well-recognised principle that crimes, including in that term all breaches of public law punishable by pecuniary mulct, or otherwise, at the instance of the State Government, or of someone representing the public, are local in this sense, that they are only cognizable and punishable in the countrywhere they were committed."

In United States v Inkley [1989] Q.B. 255 (a case in which I acted for the United States), the US Government sought to enforce in England a default judgment obtained in Florida. In this case, a British subject, Mr Inkley, had been arrested in Florida on fraud charges and had been released on bail on the condition that he entered into an "appearance bond". He was given permission to leave the United States for 30 days but did not return. The United States obtained judgment in civil proceedings in the USA for the sum payable pursuant to the bond. 

A civil action was then commenced in England to enforce the American civil judgment. In England, the High Court gave judgment in favour of the United States butwas reversed on appeal. The Court of Appeal held that notwithstanding the civil form of the enforcement proceedings, in substance the purpose of the civil action was the execution of the United States own penal laws. English courts therefore had no jurisdiction to hear the claim. The English appeal court stated that:

"... the whole purpose of the bond was to ensure, so far as it was possible, the presence of the executor of the bond to meet justice at the hands of the State in a criminal prosecution. The fact that the obligations under the bond were the subject matter of the declaratory judgment in a civil court does not affect, in our judgment, the basic characteristic of the right which that judgment itself enforced, namely the right of the State as the administrator of public law and justice to ensure the due observance of the criminal law or the exaction of pecuniary penalties if that course was frustrated. Notwithstanding its civil clothing, the purpose of the action initiated by the writ issuedin this case was the due execution by the United State of America of a public law process aimed to ensure the attendance of persons accused of crime before the criminal courts."

(per Purchas LJ, in United States v Inkley [1989] Q.B. 255) 

There would seem to be two questions at the back of the court's mind when dealing with an application to set aside the registration of the foreign judgment: 

(1) Would its enforcement, directly or indirectly, involve the executionofthe penal law of another State? 

(2) If so, then that right should not be enforced in England. The enforcement of the civil judgment in USA v Inkley would not have forced Mr Inkley to return to the USA. 

No exception for insolvency

In Rubin v Eurofinance SA [2012] UKSC 46; [2013] 1 A.C. 236 the Supreme Court rejected the suggestion that there should be different rules applicable to the enforcement of foreign judgments from insolvency as opposed to any other proceedings. The Court was also not prepared to accede to the Respondents' argument "that each of these issues be resolved, not by a black letter rule like the common law rule for enforcement ofjudgments, but instead by an appeal to what was said in oral argument to be the discretion of the English court to assist the foreign court." 

Whilst the decision was undoubtedly a disappointment to insolvency practitioners, it had the welcome benefit of retaining rules on the enforcement of foreign judgments which have developed over nearly two centuries and are predictable, and avoided the court having to "ascertain (or, more accurately, develop) two jurisdictional rules. There are two aspects of jurisdiction which would have to be satisfied if a foreign insolvency judgment or order is to be outside the scope of the Dicey Rule: the first is the requisite nexus between the insolvency and the foreign court, and the second is the requisite nexus between the judgmentdebtor and the foreign court." (judgment at para.117). The Supreme Court implicitly approved the decision in Adams v Cape. This decision provides greater certainty as to the enforceability of foreign judgments. 

State Immunity

The Supreme Court has made it clear that it will be difficult for a party seeking to enforce a judgment against a foreign state to attach assets of that state in a foreign country. The case is SerVaas Inc v Rafidain Bank [2012] UKSC 40; [2013] 1 A.C. 595.

The Supreme Court said: 

"On the facts of the instant case SerVaas cannot show that the Admitted Claims were property in use for a commercialpurpose. It does not say that Iraq intended or intends to draw them down for commercial purposes. On the contrary, it accepts that they were intended to be used for sovereign purposes."


An interesting question concerns whether a party who was successful in proceedings in a foreign State and awarded judgment for a sum of money, but considers it would have been awarded higher damages, in say England, is able to seek to issue fresh proceedings in England. That party would be estoppedfrom doing so. The basis of this principle is that the English court recognises the validity of a foreign judgment in respect of a claim or cause of action as between the same parties. Similarly, if the party was unsuccessful in the foreign court and wantedto try again in England, the defendant would claim that the case is res judicata. The doctrine of estoppel has important ramifications in globalised and transnational litigation. From a public policy point of view, if a decision is decided in a foreign court, then it makes sense that it should not be generally reconsidered in the English court. 

However, what happens when the foreign court expresses its opinion on a matter which is not a crucial part of its reasoning process? This question was dealt with in Desert Sun Loan Corp v Hill [1996] 2 All E.R. 847, a controversial decision which, instead of clarifying matters has complicated them. In that case, Desert Sun Loan Corp, a US bank, had obtained judgments in Arizona against a limited partnership and against certain partners of the partnershipincluding Hill. 

At the time the proceedings in the United States were issued, Hill lived in England and was no longer a partner. However, the attorneys for the partnership in the United States, accepted service of the US proceedings on behalf of Hill (on the basis that Hill had expressly authorized another partner, Mr G to instruct the US attorneys) as well as the partnership. Judgment was obtained against Hill who then applied to set aside the judgment on the basis that he had not authorised the US attorneys to accept service on his behalf. His application failed. Hill was a resident in England and the bank applied to enforce the judgment against him in England. Whether or not Mr Hill had authorised Mr G to instruct the US attorneys to act on his behalf was a question of fact for the English court. The US Court found thatHill had done so. The Court had to then turn its mind to the question of issue estoppel in the English action - that is, that Hill could not reopen an issue of fact or law in England as the issue had been concluded in the foreign proceedings. This was a novel question: the court had to deal with whether there is "issue estoppel when the decision of the foreign court was interlocutory rather than final, whether the rights in question were procedural, not substantive" (per Evans J. Desert Sun Loan Corp v Hill [1996] 2 All E.R. 847). The court decided that as the judgment of the US court arose out of an interlocutory or procedural ruling it was not "final" but provisional and therefore did not give rise to issue estoppel. 

From a practical point of view, it is difficult to envisage a case where the English court would be willing to find that a decision by a foreign court on an interlocutory matter was "final" and "conclusive". Such an approach would effectively mean that the foreign court had the power to conclusively determine jurisdictional competence. Ultimately, the matter went to trial and Desert Sun, represented by me, was successful. 

In Joint Stock Co Aeroflot - Russian Airlines v Berezovsky [2014] EWCA Civ 20 the Court of Appeal ruled that the question whether a Russian judgment was final and binding could not be determined by summary judgment, but would have to go to trial. 

In that case, a second Russian judgment had increased the amount of the first judgment almost tenfold by way of indexation to take into account inflation over a more than 10-year period.

The judge at first instance ruled that the reopening of the first judgment would breach the finality principle. The Court of Appeal said:

"20. …I have, however, found helpful as a starting point the recent explanation given by the Strasbourg court in Varniené v Lithuania (App No 42916/04). It seems to capture the essence of the finality principle for the purposes also of the common law, and to capture the concept which the judge had in mind: "38. Legal certainty presupposes respect for the principle of res judicata, that is the principle of the finality of judgments. This principle underlines that no party is entitled to seek a review of a final and binding judgment merelyfor thepurpose of obtaining a rehearing and a fresh determination of the case. Higher courts' power of review should be exercised to correct judicial errors and miscarriages of justice, but not to carry out a fresh examination. The review should not be treated as an appeal in disguise, and the mere possibility of there being two views on the subject is not a ground for re-examination. A departure from that principle is justified only when made necessary by circumstances of a substantial and compelling character (see Ryabykh, cited above, para.52; Asito v Moldova [2005] ECHR40663/98, para.46, 8 November 2005)." "

The judgment continued:

"25 The finality principle is also part of English public policy. English law has developed thefinalityprinciple beyond the basic principle described in the passage cited above. In particular, English law recognises:- issue estoppel, that is, that an earlier final and binding decision will prevent anyre-litigation not only of the same cause of action but also of any issue decided in it;- the " Henderson v Henderson " principlethat, if it is unjust for him to do so, a party may not raise by fresh proceedings claims which he could have raised in the earlier proceedings ( Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood [2002] AC 1), or- the principle of election between remedies."

The court went on to hold that:

"a later foreign judgment infringes the finality principle when it interferes witha prior judgment ifunder the foreign law the prior judgment was not final and binding. The test is whether the earlier judgment would have precluded the unsuccessful party from bringing fresh proceedings in the jurisdiction. The reason for this rule is obvious. If English law did nottake this approach, the courts of this country could end up recognising and enforcing a judgment which is liable to be set aside and later set aside in the country in which it was made. That would clearly be unjust.30 The converse would equally be unjust, namely if the English courts were to refuse to recognise and enforce a foreign judgment on the ground that it altered a prior judgment if in fact that judgment was always properly capable of being so altered. This might create a black hole in the recognition and enforcement of judgments in international law."

Submission to the Jurisdiction

A recent decision of the High Court (Desarrollo Immobiliario Y Negocios Industriales De Alta v Kader HoldingsCo Ltd [2014] EWHC 1460 (QB)) is a timely reminder of the danger of a defendant submitting itself to the jurisdiction of a US court, which makes a judgment of the US court enforceable in England, when it might otherwise have been unenforceable. 

The case also dealt with whether a jurisdiction clause constituted an agreement to submit to the jurisdiction of the Arizona court. The English court found that it did.

In relation to the submission to the jurisdiction of the Arizona court, the English court found that, even though the actions taken by the defendant indefence of the action did not constitute a submission the jurisdiction of the Arizona court according to Arizona law, they did under English law.

The defendant had not only fought the case on the merits, whilst preserving its objection to jurisdiction for appeal, it also made a counterclaim and a cross claim against another party. The English court found that those actions were an express submission to the jurisdiction of the Arizona court.

Judgments in Foreign Currency

If a judgment is for an amount in a foreign currency, the claim for enforcement can be in that foreign currency (Miliangos v George Frank (Textiles) Ltd [1976] A.C. 443). The foreign judgmentwillbe registered in England in the foreign currency in which it was expressed or its sterling equivalent at the time of payment. When it comes to enforcing the foreign judgment registered in England, the foreign currency needs to be converted into sterling based on the rate of exchange at the date of enforcement. 

Matters for a Defendant to consider

Some matters the defendant should consider are:

i) Does the contract have a jurisdiction clause? 

ii) Did the foreign court have jurisdiction? 

iii) Are there any ways the defendant can prevent enforcement (e.g. was the defendant duly served)? 

iv) Was the judgment obtained by fraud? 

It is important for defendants to get expert advice before taking any steps in England. 

Key points for parties

Enforcement of judgments can be complex where different countries and different systems are involved. It is crucial that parties obtain expert advice early to protect their position in the event of a dispute. The importance of parties preserving their positions is even more crucial now in an era of globalised and transnational litigation. Parties who do not maximise the use of foreign courts and laws do so at their peril. English law will look at the defendant's actions in foreign countries when considering whether the foreign court was jurisdictionally competent. Defendants need to be very careful about what actions they take or refrain from taking and should seek advice before doing anything to ensure they do not unintentionally prejudice their position.

In my experience, enforcement is too often only considered after a foreign judgment has been obtained. Plaintiffs should carefully consider how the judgment sum will be satisfied before issuing proceedings and where the defendant's assets are locatedas this will save time and legal costs. Plaintiffsshould also consider whether it may be appropriate to seek asset-freezing orders or other similar relief before issuing proceedings. It may be dangerous for a defendant to wait to be sued. A party who may ordinarily be the 'defendant' in proceedings in one country, may try to have the case dealt with in another country by bringing an action for a declaration or an anti-suit injunction. 

Practical Considerations

Obtaining a judgment against a party which cannot be enforced either through the foreign court or in England renders the judgment meaningless. A company may prefer to litigate in the United States because it is based there. However, in cases in which the assets of the other party are locatedin England, it may be more effective toissue proceedings in England. The cost consequences of not doing so could be substantial, and there could be a significant delay in obtaining ultimate payment. Bear in mind that a second set of proceedings will need to be brought in England in any event in order to enforce the judgment.  Where a party has the negotiating power to obtain whatever jurisdiction clause it wants, it should consider having provision for jurisdiction in the courts of e.g. the USA, with the option to sue in any other courts which have jurisdiction (for example England). 

Summary Jurisdiction and enforcement of foreign judgments is a three-dimensional puzzle. When considering what jurisdiction to specify in a contract, regard should be had not just to the relative convenience of the parties, but also the likely obstacles to enforcement of any eventual judgment in the jurisdiction where the likely defendant is to be found or has his assets. Thought should be given not just enforcement of judgments, but other means of obtaining payment, such as regulatory or insolvency proceedings. 

The Desarollo case is a timely reminder that parties should consider jurisdiction and the possible enforcement of judgments from other countries at various times, including:

i) When a contract is being negotiated;

ii). Before instituting proceedings; 

iii) Before taking steps to defend proceedings; 

iv) Before making a counterclaim or claiming against any other party. 

For recent practical tips see Don’t step in the jurisdiction accidentally

Steven Loble

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