Whether foreign judgment should be recognised or whether fraud exception applied

http://www.bailii.org/ew/cases/EWCA/Civ/2013/1172.html

It is an established principle that an English court will not recognise and give effect to a judgment of a foreign court which is obtained by fraud. In the textbook Civil Jurisdiction and Judgments by Adrian Briggs, the phrase “tainted by fraud” is used and the respondent sought to argue that on this basis the judgment obtained in BVI by the appellant should not be recognised.

The Court of Appeal ruled that the fraud exception “is a carefully delimited exception and is not to be given expansive application”. Most crucially, a foreign judgment should be recognised if it can be shown that the foreign court would have made the same order even if it had been fully aware of the fraud: “it is necessary to establish that the fraud in question has been operative in obtaining the foreign judgment…in the sense that without such fraud having been practised the order would not have been made, or there is a real possibility that it would not have been made. Although use of the phrase “tainted by fraud” can be a useful shorthand label for this, this is a narrower and more precise question than simply to ask whether in general terms the order was “tainted by fraud””. In reaching that conclusion, the Court of Appeal relied on Staughton LJ’s judgment in Jet Holdings v Patel [1990] (with which Nicholls LJ agreed) as well as other texts such as Halsbury’s Laws and The Conflict of Laws by Dicey, Morris and Collins.

It was also relevant to note that a foreign judgment obtained by fraud remains valid and binding elsewhere, including in the country where it is made, and in practical terms it is unlikely that the foreign court will rule again on an issue which it has already ruled on: “The force of this consideration increases still further where, as in this case, the English court has no power itself to achieve the outcome achieved by the foreign order...and where interests of innocent third parties may also be affected if the English court does not recognise the foreign order”.

On the facts of the case here, it was held that the foreign judgment was not obtained by fraud.