Enforcing a foreign judgment and whether a defendant had submitted to the foreign jurisdiction

http://www.bailii.org/ew/cases/EWHC/QB/2014/1460.html

The claimant sought to enforce a money judgment given by the Superior Court of Arizona in England. It had to show that the US court had had jurisdiction to make the judgment and one ground on which it might show this is if the defendant submitted voluntarily to the US court’s jurisdiction. One of the issues in this case (which the judge was not required to decide, since she found that the parties had agreed to US jurisdiction) was whether a defendant who objects to a foreign court’s jurisdiction but still fights the case on its merits can be said to have submitted to the jurisdiction.

Andrews J DBE noted that the issue of whether there had been a submission to the US court had to be determined in accordance with English, and not US, law (in this case, the court in Arizona did not regard the defendant as having waived its right to object to its jurisdiction).

The judge went on to observe that “If he has no choice but to participate in the hearing of the substance of the dispute and to wait to appeal a decision on jurisdiction until after the decision on the merits has been reached, his appearance at the substantive hearing will not, without more, be characterised as voluntary”. However, a party should not be allowed to “play the system” by deliberate “sandbagging”, which has been described as follows: “whereby the court and the opposing party are led to believe that the objection to the jurisdiction is no longer being pursued, and the party concerned then metaphorically pops up with a gun from behind a sandbag and fires a round of ammunition against jurisdiction on appeal”.

In this case, the defendant had set out no positive case as to why the Arizona court lacked jurisdiction. After losing the jurisdictional challenge at first instance, it made a cross-application for summary judgment and two further applications to the court to reconsider the summary judgment in favour of the claimant: “that behaviour plainly invoked the exercise by the Arizona court of its jurisdiction to consider and rule upon the merits of the claim”. Those steps had not been necessary to preserve its challenge to the jurisdiction or to avoid a default judgment. Even if those steps had been no more than compulsory defensive steps, it had also raised its own counterclaim. That went “well beyond taking steps to defend itself”.

The judge concluded that the defendant had therefore voluntarily submitted to the jurisdiction: “[the defendant] participated fully in the Arizona proceedings and took every point open to it at every stage save where it decided, for tactical reasons, to abandon an argument …It was under no compulsion to act as it did; its behaviour was inconsistent with its initial objections to the jurisdiction, and the permissive effect of the local procedural rules does not derogate from the fact that its behaviour was voluntary”.

COMMENT: In this case the defendant’s actions in the Arizona court made it fairly clear that there had, in truth, been a submission to that court’s jurisdiction. However, it is interesting to note that the judge supported the view that a party can in some circumstances participate at substantive hearings without being held to have voluntarily submitted to the jurisdiction: “the party concerned must not be put in the invidious position of having to choose between losing his right to challenge the jurisdiction and losing his right to defend himself”. Some textbooks take a stricter view, though. For example in Civil Jurisdiction and Judgments by Briggs and Rees it is stated that “the usual approach is to ask whether the defendant took a step in the action to contest the merits; if he did, his act will be seen as a submission” and in Dicey, Morris & Collins, The Conflict of Laws, it is stated that: “Where…a defendant…appears and pleads to the merits without contesting the jurisdiction there is clearly a voluntary submission. The same is the case where he does indeed contest the jurisdiction but nevertheless proceeds further to plead the merits”.