The latest installment of proceedings involving former Leeds United managing director David Haigh has placed the spotlight on when English courts will recognise overseas judgments.
For those unfamiliar with the backstory, which stretches from the sunny beaches of Bahrain to the green fields of Cornwall, the crux is an allegation that Mr Haigh defrauded his employer (GFH Capital Limited) by misdirecting payments to his own bank account. Mr Haigh maintained the payments were effectively a salary, whilst GFH argued they amounted to fraud. The proceedings have involved allegations of torture in Dubai jails, lack of access to proper legal representation and private prosecutions launched in the UK.
Against that background, Mr Haigh resisted GFH’s attempts to enforce a judgment obtained in the Dubai courts (the Dubai International Financial Centre or DIFC) in the UK. His arguments included a violation of his human rights through his detention/prosecution in Dubai, that the Court was not impartial due to its close links to the Ruler of Dubai and a 2019 report questioning the independence of the DIFC.
Perhaps surprisingly to the third-party observer, given the allegation of breaches of human rights and the right to a fair trial, the English Court dismissed Mr Haigh’s arguments. It found (in what appears to be the first such reported case involving a DIFC judgment) that the DIFC had jurisdiction to hear the claim, the allegations against Mr Haigh were substantively considered in Dubai and that it was an abuse of process for Mr Haigh to attempt to re-litigate matters dealt with in Dubai in the UK. In August, Mr Haigh’s attempts to appeal that judgment were refused.
When will judgments be recognised and enforced?
The issue of enforcement often comes to the fore when a successful litigant is forced to chase the defendant for payment. Often the only way of doing so is to pursue the defendant in a country in which they have significant assets.
In the context of an EU Judgment, the English Courts are unlikely to refuse to recognise a judgment of a member state’s court and an efficient process is in place to allow speedy recognition and enforcement. There are only a limited number of defences which a defendant can deploy when faced with an application for recognition before the English courts, including public policy (for example where the judgment infringes a key principle of English law), where the defendant was not given notice of the proceedings (and had no subsequent right to challenge the judgment) or where conflicting judgments (between the same parties/cause of action) are capable of being enforced, for example if separate member states have issued judgments on the same matter.
As to the position post-Brexit, the more efficient process of recognition of EU judgments will continue to apply in circumstances where the relevant underlying litigation commenced prior to 1 January 2021. Whether an agreement is reached to continue this form of simplified recognition is currently unknown, but it is clear that enforcement of final EU judgments will remain possible, albeit it may take a little longer and cost more.
Rest of the world
Outside of the EU, the approach an English court will take will depend on the country which delivered the original judgment and any reciprocal arrangements in place. Leaving aside the procedural aspects making the logistics of enforcement more complex, some of the criteria the courts may look at in respect of non-EU judgments include:
- The type of judgment applying to be recognised – generally it must be final and conclusive and for a sum of money (but not taxes, fines or other penalties).
- An examination of whether, under English law, the original court had jurisdiction to hear the claim. This will usually be based on factors such as the location of the parties, the location of land subject to the dispute or agreement by the parties to the jurisdiction in question determining the dispute.
- Would it be a breach of natural justice to enforce the judgment? In the 2019 case of Agbara v Shell Petroleum Co of Nigeria and others, for example, enforcement was denied on the basis Shell did not have the proper opportunity to present its defence before the Nigerian Courts.
- Whether the judgment results from fraud or if English public policy reasons should mean the English court should not recognise the judgment. In these circumstances, the English Court is likely to examine the extent to which this defence was (or could have been) raised in the initial proceedings.
Issues surrounding enforcement of overseas court judgments are fact specific, depending in large part on the underlying proceedings and whether the court had jurisdiction or allowed the Defendant to defend the claim against it.
A clear picture does emerge from a review of relevant case law that it will only be in limited cases that, where judgment was given by a competent court following a full trial at which the defendants were represented, the English Courts will not recognise and allow enforcement in England.
As the David Haigh proceedings show, even when faced with allegations of violence and lack of legal representation, attempts to re-litigate matters determined by the first instance trial, or raise matters that could have been so raised, are unlikely to be sufficient to avoid enforcement in England.