When the notorious Willy Sutton was asked why he robbed banks, he is said to have replied: “because that is where the money is.” In the same way, after obtaining a judgment against a defendant, a successful claimant has to enforce against assets owned by that defendant. That may mean enforcing in a different jurisdiction.
In many cases London is “where the money is”. It is – in practice – usually very easy to enforce a foreign court judgment in England, even if no convention or statute provides for mutual enforcement of judgements. An outline of the procedure is set out here1. Even at common law the defendant to an enforcement claim does not have the right to re-open matters of fact and law decided in the foreign judgment. In many cases the matter can in fact be dealt with by a summary judgment application.
In this case the underlying dispute involved bank loans made to a Russian construction company by a Russian bank. The Defendant (the chairman of that company) signed personal guarantees for these loans. These guarantees were subject to Russian law and contained a Russian jurisdiction clause. The construction company was declared insolvent, and the bank sued to enforce the guarantees.
Three Russian Judgments were obtained by the Claimant against the Defendant amounting to approximately £150m. The Claimant sought to enforce these judgments against the Defendant in England. After issue of proceedings the Claimant applied for summary judgment.
The In this case the Claimant issued proceedings and applied for summary judgment saying that there was no defence, and certainly no compelling reason why the claims should continue to trial.
The Defendant opposed the summary judgment application, arguing that:
- The Russian proceedings were in breach of natural justice as he had not received notification of some hearings and not had time to prepare for other hearings.
- The Russian proceedings were obtained by fraud as the bank had not informed the Russian court that the guarantees were signed under duress and that the Defendant had a defence to the claim.
- The Russian proceedings were subject to improper influences by important political figures, and there were irregularities in the reasoning in the judgment which could only be explained by such pressures.
Mr. Justice Cranston rejected these arguments.
- The Judge noted that Russian procedural law required each person to give a registered address for service of official proceedings. The Defendant had done so. It was no answer to say that he had not monitored that address. There was no suggestion that the Russian court had even come close to breaching any of the rules of natural justice.
- The fraud and improper influence arguments were not arguable. There was no cogent evidence to suggest that the Russian court had behaved in an unusual way, or to suggest that the transactions in issue were anything other than routine commercial loans made to a company backed up by a personal guarantee.
Granting the Claimant’s application for summary judgment, Mr. Justice Cranston remarked that the Russian litigation was a straightforward proceeding to enforce routine commercial security. A number of matters had been raised to try to complicate matters and to camouflage the true position. This had not worked, and the Judge could see no arguable defence to the claim to enforce the Russian judgments in England.
What this decision does show is just how easy it can be to enforce a foreign judgment in England, even a judgment from a country such as Russia which is not party to any mutual enforcement convention with England.