Offshore financial centres (OFCs) are litigation hotspots, home to some of the most complex and high value disputes in the world. Judgments obtained in OFCs often need to be enforced elsewhere.
In this article, partner Tom Clark and associate Josh Page outline the key procedures and considerations for successfully enforcing OFC judgments in England and Wales.
An overview of available regimes
Judgments obtained in OFCs commonly involve individuals, entities and assets that make it beneficial, or indeed necessary, to enforce them in England and Wales. The key starting point is to establish the applicable enforcement regime.
Enforcement in England and Wales is determined by the applicable regime, either statutory or common law. Statutory regimes include the Administration of Justice Act 1920 (AJA) and the Foreign Judgments (Reciprocal Enforcement) Act 1933 (FJA). The AJA covers territories like the Bahamas and Cayman Islands, while the FJA applies to jurisdictions such as Jersey, Guernsey, and certain Commonwealth countries. For other countries, including Hong Kong, Panama, and the UAE, the common law regime is used, requiring fresh proceedings in the High Court of England & Wales.
A summary of OFCs and the applicable regime in England and Wales is set out below. The overview is intended to cover the main OFCs but is not an exhaustive list.
| Regime | Jurisdictions |
| Administration of Justice Act 1920 (AJA) | Bahamas, Barbados, Bermuda, Belize, British Virgin Islands, Cayman Islands, Mauritius, Singapore, Turks and Caicos Islands, as well as other UK Overseas Territories. |
| Foreign Judgments (Reciprocal Enforcement) Act 1933 (FJA) | Jersey, Guernsey, Isle of Man.
|
| Common law regime | Applies to all other countries that are not covered by the above statutory regimes, the European regimes (the Brussels Regulation 44/2001, the Brussels Recast Regulation 1215/2012, the Brussels Convention 1968 and 2007 Lugano Convention) or the Hague Convention on Choice of Court Agreements.
This therefore includes countries such as the UAE, Hong Kong (which was until recently covered by the AJA) and offshore jurisdictions such as Panama. Following Brexit, depending on the time that proceedings were commenced (ie before or after 31 December 2020), the common law regime will be used for judgments from jurisdictions such as Switzerland and Luxembourg where the above regimes do not apply. |
The statutory regimes – AJA and FJA
There are similarities between these two regimes. For a judgment to be enforceable under the AJA or FJA, it must be:
- Final and conclusive
- For the payment of a sum of money (except taxes, fines or other penalties).
Therefore non-monetary judgments, such as injunctions or freezing orders are not enforceable under these statutes (the court in Standard Chartered Bank v Zungeru Power Ltd [2014] EWHC 4714 (QB) set aside an order that registered a Nigerian freezing order and disclosure order under the AJA, on the basis that such orders were not judgments for payment of money). This also applies to arbitral awards where they have become enforceable where the award was made in the same manner as a judgment.
However, there is a key difference between the two regimes. Under section 9(1) AJA the English court will only register the foreign judgment if, in all the circumstances, it considers it just and convenient to enforce the judgment in England. There is no such requirement in the FJA, meaning that the court will register the foreign judgment provided that the specified criteria are met.
Application
There is no need to start fresh proceedings under these statutory regimes. An application to register the foreign judgment must be made to the High Court of England & Wales, accompanied by a witness statement and authenticated copy of the judgment that is to be registered (and if necessary, a certified English translation).
Jurisdiction
The court must be satisfied that the foreign court had jurisdiction to make the order, in accordance with English common law principles on jurisdiction. In practice this effectively means that the foreign court must have jurisdiction on a territorial or consensual basis.
There is a slight divergence in the rules as between the AJA and FJA on territorial jurisdiction. The AJA’s position (section 9) is simply that the judgment debtor must have either been an ordinary resident, or carried on business, within the jurisdiction of the original court. The definition is broader under the FJA (section 4), which states that the judgment debtor must have been:
- at the time when the proceedings were instituted, resident in (or if a body corporate had its principal place of business in) the country of the original court; or
- must have had an office or place of business in the country of the original court and the proceedings concerned a transaction effected through, or at, that office or place of business.
Alternatively, there will be consensual jurisdiction under both the AJA and FJA if the judgment debtor agreed to the relevant jurisdiction before the proceedings were commenced, appeared in the proceedings voluntarily, or was the claimant or counter-claimant in the proceedings.
Time limits
Section 9(1) AJA requires the application for registration to be made within 12 months of the date of judgment “or such longer period as may be allowed by the court”. The court can therefore extend the time limit if it considers it just and convenient in all the circumstances to do so.
On the other hand, section 2(1) FJA permits applications within six years of the date of final judgment. In other words, where an appeal is made, the time limit runs from the date of the final judgment of that appeal.
Service
The application to register a foreign judgment itself can be made without notice. The order granting permission to register the foreign judgment (known as a registration order) must then be served personally (or by any of the methods permitted by the Companies Act 2006, or as the court directs) on the judgment debtor (under CPR 74.6), who has a right to apply to set it aside. The court may decline to register the judgment if it finds that the judgment debtor was not properly served and did not appear in the original proceedings.
Right to apply to set aside
Once granted, the registration order will state that the judgment debtor has the right to apply to set it aside and will stipulate a time limit. No enforcement steps can be taken before expiry of that date.
There are various grounds under which the judgment debtor can apply to set aside the registration order which broadly are where requirements under the AJA or FJA have not been complied with. But other grounds of appeal include if the foreign judgment was obtained by fraud or enforcement of the judgment would be contrary to public policy.
Enforcement
Once the registration order has been made and either the time for the judgment debtor to apply to set aside the order has expired, or that application has failed, then the foreign judgment is enforceable in exactly the same way as a judgment from England & Wales. The judgment creditor may then utilise a range of enforcement methods available under English law.
Common law regime
When enforcing an offshore judgment under the common law regime, the courts are subject to broadly similar requirements to the statutory regimes. For example, the judgment must be final and conclusive and for the payment of a sum on money (except taxes, fines or other penalties) and so therefore excludes interim relief such as injunctions or declaratory relief. The English court must also be satisfied that the foreign court had jurisdiction on a territorial or consensual basis, which is considered in a broadly similar way as under the statutory regimes.
The key difference is that fresh proceedings must be issued in the High Court of England & Wales under the common law regime, as opposed to the AJA and FJA where the foreign judgments are simply registered. The judgment creditor must essentially make a debt claim on the basis of the foreign judgment. The claim must be made within six years of the date that the foreign judgment became enforceable (s.24(1) Limitation Act 1980). If the judgment debtor is outside the jurisdiction, the judgment creditor may serve the claim form out of the jurisdiction. Permission of the court may be required to serve out.
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