As any successful litigant will tell you, achieving a judgment in your favour is just the first step in the process, particularly in circumstances where it will be necessary to enforce the judgment in a foreign jurisdiction. Under the common law, the courts of England and Wales will generally recognise and enforce the judgment of a foreign court provided (i) there are no defences to recognition; (ii) the court which gave the judgment had “international jurisdiction” over the defendant; and, importantly, (iii) the judgment is final and conclusive. This third requirement was recently considered by the Court of Appeal in JSC AeroflotRussian Airlines v Berezovsky.

The case concerned judgments that Aeroflot had obtained against two defendants in Russian criminal proceedings. Aeroflot had initially been awarded 214 million roubles in compensation. However, three years after that award, Aeroflot obtained a further judgment from the Russian court by which it was granted indexation of its loss, increasing the amount of compensation to some 2,118 million roubles. Aeroflot then sought to enforce the second judgment in England, proceeding under the common law as there is not a reciprocal enforcement treaty between England and Russia. However, at first instance it was held that Aeroflot’s claim for recognition and enforcement would breach the finality principle and so summary judgment was awarded in the defendants’ favour. Aeroflot appealed.

As the Court of Appeal noted, the key question in this case was whether English law applied to all questions arising from the application of the finality principle and, in particular, whether English law governed the question of whether the foreign court’s judgment is final and binding for the purposes of the finality principle. The implication of the first instance decision was that English law governed the question of whether the original Russian judgment (awarding the lower amount of compensation) was final and binding. However, the Court of Appeal considered that this conclusion was contrary to both principle and authority. Although the English court must determine whether a matter offends English public policy by reference to English law, when considering the finality principle, the first question the court must address relates to the incidents of the foreign judgment with which the later foreign judgment is said to interfere. The Court of Appeal considered that the English courts will not hold that a later foreign judgment infringes the finality principle when it interferes with an earlier judgment if, under the foreign law, the earlier 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 foreign jurisdiction. In this case it was therefore necessary to consider whether the original Russian judgment was final and binding and therefore preclusive of any further order uplifting compensation by reference to inflation. That question had to be resolved under Russian law, which could only be resolved at a full trial, and therefore it was not appropriate to grant summary judgment and the appeal was allowed.

In reaching this decision the Court of Appeal noted that, for a principle considered by the courts to be fundamental to the rule of law, it is surprisingly hard to find a comprehensive judicial definition of the finality principle. The decision is therefore to be welcomed in providing guidance on the approach to be taken to determining issues relating to finality.

Joint Stock Company “AeroflotRussian Airlines” v Berezovsky & Anr [2014] EWCA Civ 20