Recognition and enforcement procedure
What is the formal procedure for seeking recognition and enforcement of a foreign judgment?
Under common law, the judgment creditor should file a claim form, statement of claim and (most likely) an application to serve the claim out of jurisdiction on the judgment debtor. Once the claim has been served, the claimant will generally be able to file an application either for judgment in default or for summary judgment. Once judgment has been obtained it will be enforced in the same way as any other BVI judgment. A common method of enforcement, if the judgement debtor owns shares in a BVI company (which is the main reason for enforcement of judgments in the British Virgin Islands) is to apply for a charging order over the shares in the company.
The procedure for registering a foreign judgment under the Reciprocal Enforcement of Judgments Act 1922 is by way of application made pursuant to Part 72 of the Civil Procedure Rules. This may be made without notice, but must be supported by affidavit evidence which exhibits the judgment (or a copy of it) and specify the overall amount that remains to be paid under the judgment, including any interest due.
What is the typical timeframe for the proceedings to grant recognition and enforcement?
When seeking to enforce by way of a common law debt claim, the timeframe will often be heavily influenced by the time it will take to effect service on the defendant(s) out of the jurisdiction (which, once permission has been granted by the court, can vary between a few days to over a year depending on the methods of service available and the willingness of the defendant to accept service). Service aside, the proceedings will usually be concluded relatively quickly, given that it will almost always be determinable on summary judgment and will take typically between two to three months (assuming that the court has capacity to determine the claimant’s application for permission to serve out and any summary judgment application).
The process for registering a foreign judgment under the Reciprocal Enforcement of Judgments Act will be generally quicker – it should be possible to have an application for registration determined within a month. However, before a judgment registered under the act can be executed on, notice of its registration must be served on the judgment debtor and the period for the judgment debtor to make an application to set aside that registration must have passed. That period will be determined by the judge on the registration of the judgment and will generally take into account the specific circumstances of the case (which may include a consideration of where the judgment debtor is located).
What fees apply to applications for recognition and enforcement of foreign judgments?
The court fees for filing a claim to enforce a foreign judgment under common law is $1,500 (or $300 if a fixed-date claim form is used). The fees associated with filing an application for permission to serve out of the jurisdiction and for summary judgment are approximately $600 to $700. Any legal fees incurred in pursuing the claim can be claimed in the usual way.
When seeking to register a judgment under the Reciprocal Enforcement of Judgments Act a court fee of around $600 will be payable on application. The act provides that the reasonable costs of an incidental to the registration of the judgment (including the costs of obtaining a certified copy of the judgment from the original court) will be recoverable as if they were sums payable under the judgment.
Must the applicant for recognition and enforcement provide security for costs?
Under common law procedure the applicant is not required to provide security for costs. However, under the procedure for registration under the act, the court may order the judgment creditor to give security for the costs of the application for registration and of any proceedings which may be brought to set aside the registration.
Where both regimes of enforcing a judgment are available to a judgment creditor, the creditor will be entitled to recover any costs of a common law action only if an application to register the judgment under the statutory regime has already been refused or the court otherwise allows.
Are decisions on recognition and enforcement subject to appeal?
An order or judgment made pursuant to a claim to enforce under common law is theoretically appealable. If summary judgment has been granted, an application could be made to set it aside. However, because a cause of action that has been adjudicated on by a foreign court becomes res judicata and the parties are estopped from rearguing the matter, there will be limited scope for appealing the order of the BVI court on substantive grounds.
A judgment debtor can make an application to set aside an order registering a foreign judgment under the Reciprocal Enforcement of Judgments Act. He or she must do so within the time specified within the order.
How does the enforcing court address other costs issues arising in relation to the foreign judgment (eg, calculation of interest, exchange rates)?
Any interest payable on a foreign judgment being enforced by common law claim should be rolled up and added to the overall amount being claimed in the enforcement proceedings. Where the foreign judgment to be enforced requires payment in a currency other than US dollars, the claimant can choose which currency to claim. If he or she chooses US dollars, the claimant should include within the claim form and statement of claim the exchange rate that they have used to calculate the sum payable.
Where a judgment is registered under the Reciprocal Enforcement of Judgments Act, it will be of the same force and effect as if it had been originally obtained or entered on the date of registration. As such, any interest provided for in the judgment will be enforceable, but should be calculated only as from the date of registration.
Enforcement against third parties
To what extent can the courts enforce a foreign judgment against third parties?
In order for a BVI court to enforce a foreign judgment (either by statute or under common law rules) it must be satisfied that the original court was entitled to assume jurisdiction over the defendant. A foreign court will be considered to have had jurisdiction in four kinds of case (sometimes known as the ‘Dicey cases’ or ‘Dicey rule’):
- if the judgment debtor was, at the time the proceedings were instituted, present in the foreign country;
- if the judgment debtor was the claimant, or counterclaimed in the proceedings before the foreign court;
- if the judgment debtor, being a defendant in the foreign court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings; or
- if the judgment debtor, being a defendant in the proceedings before the foreign court, agreed in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or the courts of that country.
It is not sufficient that the foreign court believed it was entitled to assume jurisdiction over the defendant under its own procedural rules. Consequently, a foreign judgment that seeks to provide relief against a third party is not enforceable in the British Virgin Islands against that third party unless the foreign court had jurisdiction over them.
Where a judgment creditor seeks to enforce the judgment against third parties that comprise the assets of the judgment debtor (eg, the shares in a company owned by the judgment debtor), once the judgment has been registered or is enforceable under common law rules, the judgment creditor can apply for charging orders over the assets of the judgment debtor (and possibly other relief as against third parties in support of the enforcement process).
Partial recognition and enforcement
Can the courts grant partial recognition and enforcement of foreign judgments?
Under the statutory regime there is no provision for the registration of part of a foreign judgment – if the criteria for registration are met, the judgment will be registered and be of the same force and effect as if made by the BVI court.
Under the common law regime, it is possible to issue a claim to enforce only a part of a foreign judgment or to enforce against only one (or some) of several defendants. A claimant may elect to do so where it is likely a court would grant permission to serve out only on one or some of the judgment debtors.