The United Kingdom, is a renowned global centre for finance and business. It is also frequently chosen as the international destination for legal disputes – a report in October 2023 stated that London was the “most attractive centre for commercial litigation and international arbitration… outperforming New York and other competitors”.
However, even when disputes arise, and are adjudicated upon, overseas it may be an award cannot be enforced in that jurisdiction. We address how a judgment creditor might be able to enforce a foreign judgment in England and Wales; for example, where a debtor possesses assets or interests in the UK.
Recognition of a foreign judgment in England can also bring advantages as, once recognised, it becomes as enforceable as an English judgment. This means that the party who won the judgment is able to use the full range of legal tools available in England to try to make sure they get paid. These tools include revealing the debtor’s finances, freezing assets globally, and placing liens on assets. Importantly, these enforcement options are not limited to England—they can extend internationally, thereby affecting parties and assets outside the UK.
Whilst there is no automatic right to enforce a foreign judgment in England and Wales, it is often possible to do so. There are different methods and procedures depending on the country where the overseas judgment was obtained, but essentially there is a two-stage process:
- recognition (or ‘domestication’ of the (foreign) judgment) and
- enforcement.
The First Step: The judgment needs to be recognised in the Courts of England and Wales
The recognition test is primarily based on the principle of reciprocity. The English and Welsh courts will be more likely to recognise a foreign judgment if it was made by a court of competent jurisdiction, it is final and conclusive in the jurisdiction obtained, and if it is for a definite sum of money.
The acknowledgement of a judgment’s validity hinges on the specific jurisdiction in which it was obtained. In certain jurisdictions, a judgment can be immediately enforced. For instance, if the judgment originates from a jurisdiction bound by the Hague Convention on Choice of Court Agreements 2005, the application for enforcement doesn’t necessitate serving the responding party. Instead, an opportunity to contest the order arises only at any appeal, after a registration order is made.
However, in other scenarios where a claim must be initiated, various defences might be raised. These could include arguing that the foreign court lacked jurisdiction according to English law or asserting that the judgment was obtained through fraudulent means. The recognition process and the availability of potential defences will vary depending on the specific approach sought for recognition.
The Second Step: Enforcing a Foreign Judgment
Once a foreign judgment has been recognised, its enforcement does not generally differ from judgments in England and Wales. There are different methods available to enforce judgment debts and, whilst each enforcement mechanism might be available, the most appropriate approach will depend on the circumstances.
The range of recovery actions include, the seizure of assets, charging orders, attachment of earnings, and insolvency proceedings. The choice of action will depend on the individual circumstances of each case, and the nature of the debtor’s assets.
Many judgment creditors find it worthwhile to consider pursuing enforcement of their foreign judgment in England and Wales as the benefits of pursuing such action may often outweigh the challenges. For example, one of the key advantages of pursuing enforcement in the UK is the accessibility of public records – including Companies House and Land Registry records – which, together with other investigations, may provide valuable information about the debtor’s assets.
In addition, a judgment creditor may also be able to obtain a court order requiring a judgment debtor to provide information about their finances and anything else relevant to enforcing the judgment. In such a scenario, the person (or, in the case of a company, an officer of the company) served with such an order has to attend court to answer questions truthfully under oath and provide any necessary documents. This is a strong measure as disobeying a court order could be contempt of court and lead to imprisonment.
Conclusion
The fact that a court judgment has been obtained in another jurisdiction (and even if there are procedural obstacles in enforcing in that jurisdiction) does not necessarily preclude action being taken against a debtor with assets or interests in England and Wales.
To discuss any of the points raised in this article, please contact Robert Kay or fill in the form below.
