Conditions for recognition and enforcement of foreign judgments in the British Virgin Islands

Conditions for recognition and enforcement

Enforceable judgments

Which types of judgment (eg, monetary judgments, mandatory or prohibitory orders) are enforceable in your jurisdiction and which (if any) are explicitly excluded from recognition and enforcement (eg, default judgments, judgments granting punitive damages)?

For a judgment to be enforceable, whether under the Reciprocal Enforcement of Judgments Act 1922 or common law, the original judgment must be for a debt or a definite sum. It cannot be for a sum payable in respect of taxes or other charges similar to or in respect of a fine or penalty. However, other types of judgment can be indirectly enforced by the commencement of fresh proceedings and reliance on issue estoppel to prevent matters from being re-litigated in full.

In addition, a judgment must be final and conclusive. Under common law (although not under the Reciprocal Enforcement of Judgments Act) a foreign judgment can still be final and conclusive even though it may be, or is being, appealed to a higher court. Further, a judgment given in default may be final and conclusive, even though it is capable of being set aside in the court which made the judgment.

The BVI courts will not enforce the criminal or revenue law of another state. Awards of exemplary or punitive damages are not unenforceable, unless found to be contrary to public policy.

How are foreign judgments subject to appeal treated?

Under common law a foreign judgment will still be final and conclusive, even with a pending appeal. As such, foreign judgments subject to appeal are still capable of enforcement. However, under the Reciprocal Enforcement of Judgments Act, a judgment will not be able to be registered if it is subject to appeal.

Formal requirements

What are the formal and documentary requirements for recognition and enforcement of foreign judgments?

Where an application is made to register a foreign judgment pursuant to the Reciprocal Enforcement of Judgments Act, the claimant must make an ex parte application supported by affidavit evidence. The affidavit should exhibit the judgment, or a copy of it, and specify the amount payable under the judgment, including interest.

A claimant seeking to enforce a judgment under common law must commence proceedings for the payment of a debt and should therefore file a claim form and statement of claim, which appends a copy of the judgment. If the defendant is not domiciled within the British Virgin Islands, the claimant must also obtain permission to serve the claim form and statement of claim on the defendant outside of the jurisdiction in accordance with Part 7 of the Civil Procedure Rules.

Substantive requirements

What substantive requirements (if any) apply to the recognition and enforcement of foreign judgments? Are enforcing courts in your jurisdiction permitted to review the foreign judgment on the merits?

The Reciprocal Enforcement of Judgments Act provides that a judgment shall be registrable within 12 months of the date of the judgment (or a longer period if allowed by the court) if in all the circumstances of the case the court considers it just and convenient that the judgment should be enforceable in the British Virgin Islands.

For applications to be brought pursuant to the Reciprocal Enforcement of Judgments Act and for claims to enforce foreign judgments by way of common law debt claim, the original judgment must be:

• for a debt or definite sum;
• final and conclusive; and
• from a foreign court which had jurisdiction to give the judgment. 

A claim is for a definite sum where the foreign court has finally determined the amount to be paid and that final amount can be arithmetically determined. An award of unspecified damages is insufficient. While non-money judgments are not directly enforceable in the British Virgin Islands, a fresh claim can be made on a non-money judgment in the British Virgin Islands on which the principle of estoppel can be used to prevent the cause of action or issues from being re-litigated in full (known as the rule in Henderson v Henderson (1844 6 QB 288)).

The question of whether a judgment is final and conclusive is approached differently under common law and the Reciprocal Enforcement of Judgments Act. Under the act, a judgment is not registrable if the judgment debtor satisfies the BVI court that either an appeal is pending or that he or she is entitled and intends to appeal the judgment, whereas under common law a judgment can be considered final and conclusive, even where it is subject to appeal proceedings (in a higher court).

A foreign court will be considered to have had jurisdiction in four kinds of case (sometimes known as the ‘Dicey cases’ or ‘Dicey rule’):

• if the judgment debtor was, at the time the proceedings were instituted, present in the foreign country;
• if the judgment debtor was the claimant, or counterclaimed in the proceedings before the foreign court;
• if the judgment debtor, being a defendant in the foreign court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings; or
• if the judgment debtor, being a defendant in the proceedings before the foreign court, agreed in respect of the subject matter of the proceedings, to submit to the jurisdiction of that court or the courts of that country.

The principle of res judicata prevents the court from re-examining the merits where the cause(s) of action and issues have already been decided. As such, if the requirements set out above are satisfied then the BVI court will not look beyond the foreign judgment, except where:

• there was fraud on the part of the person in whose favour the judgment was given or on the part of the court;
• recognition or enforcement of the judgement in the British Virgin Islands would be contrary to public policy; or
• the proceedings pursuant to which the judgment was obtained were contrary to natural justice.

Limitation period

What is the limitation period for enforcement of a foreign judgment?

The Reciprocal Enforcement of Judgments Act provides that a judgment will be registrable within 12 months of the date of the judgment. However, the court has discretion to allow a judgment to be registered more than 12 months after judgment was made.

Under common law a claimant will not be able to commence a debt claim on any judgment after 12 years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment can be recovered after six years from the date on which the interest was due.

Grounds for refusal

On what grounds can recognition and enforcement be refused?

Where the claimant makes an application to register a judgment pursuant to the Reciprocal Enforcement of Judgments Act, the judgment will not be registered where:

• the original court acted without jurisdiction;
• the judgment debtor is not ordinarily within the jurisdiction of the original court and did not voluntarily appear or otherwise submit to the jurisdiction;
• the judgment debtor was not duly served with the process of the original court and did not appear (even though he or she was ordinarily within the jurisdiction of that court or submitted to its jurisdiction);
• the judgment was obtained by fraud;
• the judgment debtor can show that an appeal is pending or that he or she is entitled to and intends to appeal the judgment; or
• the judgment was in respect of a cause of action which, for reasons of public policy or otherwise, could not have been entertained by the BVI court.

The rules of common law largely mirror the provisions of the Reciprocal Enforcement of Judgments Act in relation to the parameters within which foreign judgments will be enforced, and the limitations listed above will apply in a largely commensurate fashion to any application to enforce a foreign judgment at common law. However, under common law, a judgment will be considered final and conclusive (and therefore enforceable) even if subject to appeal.

Service of process

To what extent does the enforcing court review the service of process in the original foreign proceedings?

In order for a BVI court to enforce a foreign judgment (either under the Reciprocal Enforcement of Judgments Act or common law) it must be satisfied that the original court had jurisdiction over the defendant. However, the specific method of service of the foreign proceedings will not generally be relevant unless there is an argument that lack of effective service renders the judgment impeachable (eg, because the defendant alleges that the foreign proceedings were never properly served).

Public policy

What public policy issues are considered in the court’s decision to grant recognition and enforcement? Is there any notable case law in this regard?

Examples of judgments which have been refused recognition in the commercial sphere on public policy grounds are rare. In this regard, English case law is likely to be followed and the decision in Oppenheimer v Cattermole ((1976) AC 249) provides an illustration of how the principle may be used. In that case, the House of Lords found that (for reasons including that it would be contrary to public policy) it was not required to recognise a decree made in Nazi Germany which had deprived certain German Jews of their citizenship.

The BVI courts will not enforce the criminal or revenue law of another state. The relevant test in relation to revenue laws is whether enforcement would involve the indirect enforcement of another state’s revenue laws. The two most relevant cases on this issue are Peter Buchanahn Ltd v McVey ((1955) AC 516) and QRS 1 ApS v Frandsen ((1999) 1 WLR 2169).

Awards of exemplary or punitive damages are not contrary to public policy, although penalty clauses will not be enforceable.   

The BVI courts will also not recognise or enforce a foreign judgment where there has been a breach of the rules of natural justice and, as in other instances, the BVI courts are likely to follow English case law in this regard.

Jurisdiction

What is the extent of the enforcing court’s power to review the personal and subject-matter jurisdiction of the foreign court that issued the judgment?

As stated above, in order to enforce a judgment the court must be satisfied that the original court had jurisdiction over the defendant. The decision as to whether the foreign court had jurisdiction over the defendant will be decided in accordance with BVI law, not the law of the country in which the judgment was awarded. In this regard a foreign court will be regarded as having had in personam jurisdiction over the defendant:

• if the judgment debtor was, at the time the proceedings were instituted, present in the foreign country;
• if the judgment debtor was the claimant or counterclaimed in the foreign proceedings;
• if the judgment debtor otherwise submitted to the jurisdiction by voluntarily appearing in the proceedings; or
• if the judgment debtor, being a defendant, agreed to submit to the jurisdiction of the court in respect of the subject matter before the proceedings commenced.   

The subject matter of the proceedings is not relevant at the enforcement stage (except to the extent that certain judgments, such as judgments which impose criminal penalties, will not be enforceable in the British Virgin Islands).

Concurrent proceedings and conflicting judgments

How do the courts in your jurisdiction address applications for recognition and enforcement where there are concurrent proceedings (foreign or domestic) or conflicting judgments involving the same parties/dispute?

Once a cause of action has been adjudicated on by a court (foreign or domestic) it becomes res judicata and the parties are estopped from rearguing the matter. This estoppel relates to the cause of action as a whole and any issue which is determined in the course of the proceedings. Accordingly, the BVI courts take the view that, once matters are decided by a foreign or domestic court, they should not be re-litigated.

Where the BVI courts are confronted with two irreconcilable foreign judgments, which are both seemingly entitled to recognition, then the earlier of the two judgments should be recognised to the exclusion of the other. This is clearly the rule under common law, although it is not specifically dealt with in the Reciprocal Enforcement of Judgments Act.

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