Examination of the foreign judgment

Vitiation by fraud

Will the court examine the foreign judgment for allegations of fraud upon the defendant or the court?

Depending on the nature of the activity involved, it could be said to be contrary to public policy (which is a stated basis for refusal of recognition and enforcement under the Brussels Regime or Lugano Convention)  to recognise or enforce a judgment that is tainted by allegations of fraud.

Recognition and enforcement of a judgment procured by fraud may be refused at common law. This is so irrespective of whether the fraud was by the original court or the plaintiff, and irrespective of whether fraud was raised as a defence in the foreign proceedings (see the persuasive English authority of Owens Bank Ltd v Bracco [1992] 2 AC 443).

In each case, an Irish court is likely to give some weight in exercising its discretion over allowing recognition and enforcement in such circumstances on whether, and how, allegations of fraud were addressed by the original court.

Public policy

Will the court examine the foreign judgment for consistency with the enforcing jurisdiction’s public policy and substantive laws?

The Irish courts will not allow recognition and enforcement of a foreign judgment where it is contrary to Irish public policy. Such public policy considerations are not closed and it is important to note that what may be permissible in another jurisdiction may not necessarily be consistent with Irish public policy (see Sporting Index Ltd v O’Shea [2015] IEHC 407).

The Brussels Regime and Lugano Convention provide that recognition may be refused where it is manifestly contrary to public policy in the member state addressed. Irish case law has confirmed that ‘manifestly’ is a threshold issue that highlights the exceptional nature of the public policy basis (see Sporting Index Ltd v O’Shea [2015] IEHC 407) and other cases stress how the issue involved must be fundamental with regard to the rights of an individual or the public good. Accordingly, the Irish courts will apply a high standard in determining whether or not an alleged breach of public policy warrants the refusal of recognition on this ground under such regimes.

At common law too, a judgment that is contrary to the principles of Irish public policy may be refused by an Irish court. Although there is no direct Irish authority with regard to the standard applicable to the public policy exception in respect of common law recognition and enforcement, it would be anomalous if the same considerations that applied pursuant to the Brussels Regime and Lugano Convention did not also apply. In this regard, the most closely analogous case has identified being contrary to public policy as involving ‘some element of illegality’, being ‘injurious to the public good’ and ‘offensive to the ordinary responsible and fully informed member of the public’ (see Brostrum Tankers AB v Factorias Vulcano SA [2004] 2 IR 19, which addressed the public policy exception to the enforcement of arbitral awards under the New York Convention). Accordingly, in order to invoke the public policy exception to Irish common law enforcement successfully, a defendant has a high threshold to meet.

Conflicting decisions

What will the court do if the foreign judgment sought to be enforced is in conflict with another final and conclusive judgment involving the same parties or parties in privity?

The Brussels Regime, the Lugano Convention and the Hague Convention 2005 are designed to avoid the possibility of conflicting judgments as to the same causes of action between the same parties in Ireland or another jurisdiction.

Interestingly, the Brussels I Regulation and the Lugano Convention do not prevent what has become known as the Italian torpedo. This is where, despite there being an exclusive jurisdiction clause, and before proceedings are issued in the courts of the chosen EU member state, one party issues proceedings seeking negative declaratory relief in another state (one with a reputation for a slow or inefficient judicial system) with the sole aim of frustrating the other party’s claim. This is because the rules under those treaties require that the court of the member state in whose favour the jurisdiction clause was drafted waits until the first court seised has decided whether or not it has jurisdiction over the claim.

However, the Brussels I Recast Regulation goes a step further and gives primacy to the chosen EU member state court, even if proceedings have been issued elsewhere in the EU first. (In other words, those proceedings do not step the proceedings in the chosen court from continuing.) Article 31(2) of the Recast Regulation provides that member state courts that are not the seat of an exclusive jurisdiction clause ‘shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement’.

Where there is no valid jurisdiction agreement in place and multiple courts have exclusive jurisdiction under the Recast Regulation, any court other than the court first seised must decline jurisdiction in favour of that court.

At common law, there is no specific authority that identifies the approach of the Irish court to recognition and enforcement of foreign judgments where there is a conflicting judgment involving the same parties. However, based on persuasive English authority, a conflicting judgment on the same or similar issue could be a basis on which recognition and enforcement might be refused, depending on which judgment has priority. In determining priority, it would appear from the persuasive common law authority that the judgment to be given priority is to be determined by reference to that which was first rendered. Accordingly, a conflicting judgment should only be effective in precluding recognition and enforcement of (another) foreign judgment where the conflicting judgment was first rendered.

Enforcement against third parties

Will a court apply the principles of agency or alter ego to enforce a judgment against a party other than the named judgment debtor?

As a general principle, enforcement is only possible against the interest of a named judgment debtor, and principles of agency or alter ego are not relevant. The circumstances where, for a corporate judgment debtor, a judgment creditor would be entitled to look behind the strict legal personality of that corporate entity are very limited, and the threshold to be met to obtain such an order is very high.

Alternative dispute resolution

What will the court do if the parties had an enforceable agreement to use alternative dispute resolution, and the defendant argues that this requirement was not followed by the party seeking to enforce?

The question of whether the parties had an enforceable agreement to use alternative dispute resolution (excluding arbitration and expert determination) is something for the court where judgment was pronounced to consider upon the application of the defendant or judgment debtor. If such an issue was not raised, or was determined in the negative by the court in which judgment was pronounced, the Irish court should not look behind the judgment and should proceed to recognise and enforce it.

Favourably treated jurisdictions

Are judgments from some foreign jurisdictions given greater deference than judgments from others? If so, why?

Where enforcement of a judgment under the Brussels Regime or Lugano Convention is sought, there is no distinction.

Enforcement at common law is more straightforward where the country in which the relevant judgment was pronounced has the legal system and applicable legal principles that are similar to those in Ireland. Substantive and procedural equivalence was identified by the Irish High Court as persuasive factors when exercising its discretion in favour of granting an order in aid in Drumm [2010] IEHC 546 in the context of US bankruptcy proceedings. The equivalence of approach was also a factor in the case of In re Mount Capital Fund Limited (In Liquidation) & Ors [2012] IEHC 97 (unreported) High Court, Laffoy J, 5 March 2012.

Alteration of awards

Will a court ever recognise only part of a judgment, or alter or limit the damage award?

The Irish courts can, when considering recognition and enforcement, make such orders in respect of only part of a judgment if deemed appropriate. Certain elements of a judgment may be contrary to principles of public policy or may otherwise be ineligible under the relevant enforcement rules (eg, they may constitute taxes or penalties, or may not be quantified or susceptible to easy quantification). In circumstances where a portion of a judgment is considered unenforceable, the balance may still be recognised and enforced.

Article 48 of the Brussels I Regulation provides for severance as a general matter; where the original judgment cannot be registered in respect of all matters dealt with in a judgment, the courts shall give the declaration limited to only those eligible parts of the judgment. The Hague Convention 2005 also explicitly provides for the severability of parts of judgments.

Law stated date

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6 August 2020.