Case Alert - [2018] EWHC 385 (Comm)

Judge rules that insurers' proceedings to enforce a US judgment had been validly served and defendants had submitted to US jurisdiction

Clyde & Co (Jane Andrewartha and Thomas McCall) for claimants

The claimant insurers obtained judgment against the defendants (including the Syrian Arab Republic) in the US for damages after an insured plane was destroyed in a terrorist hijacking allegedly sponsored by Syria. The insurers then commenced these proceedings to enforce that judgment in England. Two issues arose in this case:

1) Had the defendant been validly served or should service be dispensed with?

Where service is made on a State, section 12 of the State Immunity Act 1978 ("section 12") requires the writ to be "received" by the State. Prior caselaw has held that service on a State's Embassy in the UK is insufficient. Instead, CPR r6.44 requires the claimant to file a request for service to be arranged by the Foreign and Commonwealth Office ("FCO"). In this case, the FCO arranged for the necessary documents to be served, via a courier, at the Syrian Ministry of Foreign Affairs ("MFA"). The MFA's representative had refused to take the package and had insisted on its immediate removal. Nevertheless, the judge held that there had been valid service: "It seems likely that the word “received” is intended, at least, to indicate that it is not sufficient merely for documents to be transmitted in the sense of being dispatched: they must actually reach the relevant Ministry. Conversely, section 12 does not in my view require the documents to be accepted upon delivery: otherwise the recipient could evade service simply by declining to accept delivery".

Furthermore, had it been necessary, the judge would have made an order dispensing with service, pursuant to CPR r6.16 and 6.28, because he held that this was an exceptional case (given the withdrawal of UK diplomatic personnel from Syria and the MFA's refusal to accept delivery). The judge also held that it is possible to make such an order, notwithstanding the mandatory nature of section 12, because that section applies to "any writ or document required to be served" and if there has been an order dispensing with service of the claim form, that document is not a document which is "required to be served".

2) Had the defendants submitted to the jurisdiction of the US courts?

As there is no instrument for mutual recognition of judgments between the UK and the US, the English court will have jurisdiction only if (inter alia) the defendant has voluntarily submitted to the US court's jurisdiction. In addition, judgments by overseas courts against States will only be recognised under the Civil Jurisdiction and Judgments Act 1982 if the defendant submitted to the US court's jurisdiction.

Here, the defendants took no part in the US first instance proceedings but they subsequently filed a Notice of Appeal against the judgment. Reference was made to the ECJ decision of Elefanten Shuh [1981], which concerned the interpretation of Article 18 of the Brussels Convention (which provides that a Contracting State court does not have jurisdiction just because the defendant has entered an appearance solely to contest jurisdiction). Some English cases have suggested that the same test laid down by Elefanten Shuh should also apply to the common law concept of submission. In this case, the judge held that Elefanten Shuh does not support the argument that a step taken prior to filing a defence cannot amount to a submission if the defendant subsequently contests jurisdiction by the time the defence is submitted.

In any event, this case concerned the filing of a notice of appeal, rather than a defence. It was held that such a filing, where the appellant's position on jurisdiction is not reserved, can amount to a submission. Here, Syria had submitted to the US court's jurisdiction.

The judge also held that the US post-judgment interest rate was the applicable rate of interest to be applied on the US judgment sum up until the commencement of these proceedings. Thereafter, the US Prime Rate was the appropriate rate for the period from the date of issue up to the date of judgment by the English court (but only on the judgment sum, not also on the US post-judgment interest amount).