Finally, Arts 34(3)–(4) and 45(1) of the Regulation deal with irreconcilability between judgments. Recognition and enforcement must be refused if the judgment is irreconcilable with another judgment which was given in a dispute between the same parties in the state addressed. Recognition and enforcement must also be refused if the judgment is irreconcilable with an earlier judgment which was given in another member state or in an external country, which involved the same cause of action and was between the same parties, and fulfils the conditions necessary for recognition in the state addressed.51a For this purpose, judgments are irreconcilable with each other where they entail mutually exclusive legal consequences.52 Moreover, as the European Court ruled in Italian Leather v WECO Polstermöbel,53 these provisions extend to provisional measures, such as an interim injunction prohibiting the infringement of a trade mark, and a foreign judgment granting such an injunction is irreconcilable with a local judgment between the same parties refusing to grant such an injunction, even if the conflicting effects of the two judgments are due to differences in the procedural requirements for the grant of such relief laid down by the national laws in the relevant countries.The European Court also emphasised that these provisions have a mandatory character, so that, once the court addressed finds that the relevant irreconcilability exists, it is bound to refuse to recognise the foreign judgment. However, the irreconcilability must be with an actual judgment, not merely with a court settlement falling within Chapter IV of the Regulation,54 nor merely with a pending action, in favour of which the foreign court should have declined jurisdiction under Art 27.55

External judgments

There are three distinct regimes which govern the enforcement in the UK of judgments given in a foreign country that is neither an EU member state nor a party to the Lugano Convention.The three regimes are provided for respectively by the common law; the Administration of Justice Act 1920; and the Foreign Judgments (Reciprocal Enforcement) Act 1933. The 1920 and 1933 Acts apply to judgments given in a country to which, on account of reciprocity, the Act in question has been applied by Order in Council,56 whereas the common law applies to judgments from countries, such as the US, to which these Acts have not been applied. The three regimes are substantially similar to each other, but radically different from the regime now applicable to European judgments.57

The common law regime involves the bringing of an ordinary action in an English court, pleading the foreign judgment and seeking the entry of a similar English judgment, whereas the statutory regimes involve an application to an English court for an order that the foreign judgment

51a Where the irreconcilability is between two judgments from the same member state, the problem must be resolved by reference to the law of the state of origin, which is likely to give effect to the later judgment; see per Wahl AG in pending Case C-157/12: Salzgitter Mannesmann v Laminorul, 16 May 2013.

52See Case 145/86: Hoffmann v Krieg [1988] ECR 645. Cf Case C-406/92: The Maciej Rataj [1994] ECR I-5439, on Art 28; and Case C-539/03: Roche Nederland BV v Primus [2006] ECR I-6535. See also T v L [2008] IESC 48, where the Irish Supreme Court refused under Art 34(3) to recognise a Dutch maintenance order, made ancillarily to a Dutch divorce decree, as being irreconcilable with an Irish decision refusing to recognise the divorce.

53Case C-80/00, [2002] ECR I-4995.

54See Case C-414/92: Solo Kleinmotoren v Boch [1994] ECR I-2237.

55See Brasserie du Pecheur v Kreissparkasse Main-Spessart (1996) unreported, 14 May (French Court of Cassation); and Tavoulareas v Tsavliris

[2006] EWHC 414 (Comm) (Tomlinson J).

56The 1920 Act applies to judgments from numerous Commonwealth countries. The 1933 Act applies to judgments from (among others) Australia, Canada, India, Pakistan and Israel. The 1933 Act also applies to judgments given in pursuance of certain international conventions dealing with particular matters, such as carriage by rail or road, in any country other than the UK which is a party to the relevant convention. But s 1(2A) of the 1933 Act (as amended) excludes from enforcement thereunder a judgment for the enforcement of a judgment given in a third country.

57On European judgments, see at pp 570-77 above.

be registered for enforcement; however, this distinction is formal and of little importance. As regards judgments within its scope, in general each regime is exclusive not only of enforcement of the judgment under the other regimes, but also of an English action based on the original claim.58 To qualify for enforcement in England under any of the regimes, the judgment must be enforceable in the original country59 and must award a definite sum of money (rather than, for example, ordering the specific performance of a contract).60 The judgment must not be for payment of a fine or tax.61 It may, however, be a judgment given by a criminal court in ancillary civil proceedings, awarding compensation to a victim who has intervened in a prosecution to claim damages,62 or even a judgment awarding exemplary damages in respect of a civil claim.63

As regards mere recognition without enforcement, external judgments are governed by the common law and s 34 of the Civil Jurisdiction and Judgments Act 1982, even if the original court is one to which, as regards enforcement, the 1920 Act or the 1933 Act applies.64 Section 34 eliminates a former restriction on the effects of recognition, whereby recognition did not prevent a person entitled under an unsatisfied but enforceable money judgment from suing in England on the original claim. In effect, it extends to foreign judgments the doctrine of merger, whereby a plaintiff’s cause of action merges in a judgment in his favour and ceases to have any separate existence.65 Accordingly, an external personal judgment against a shipowner will prevent a subsequent English action in rem against the ship in respect of the same claim.66

The three regimes differ, however, in their requirements concerning the finality of the judgment in the original country. At one extreme, a judgment cannot be registered for enforcement under the 1920 Act if the respondent satisfies the English court that an appeal is pending in the original country, or that he is entitled and intends to appeal there.67 Less demandingly, to qualify for recognition or enforcement at common law, a judgment must be final in the original court, in the sense that it constitutes res judicata in the court by which it was given and cannot be reviewed by means of any proceedings in that court,68 but even this requirement may be inapplicable to a default judgment,69 or where only the amount of damages awarded by the judgment is open to adjustment.70 Conversely, the pendency or possibility of an appeal to a higher court in the original country does not prevent recognition or enforcement at common law, although a judgment will not be enforceable here if enforcement in the original country has been stayed pending appeal.71

58See the 1933 Act, s 6; the Civil Jurisdiction and Judgments Act 1982, s 34; The Sylt [1991] 1 Lloyd’s Rep 240; and Republic of India v India Steamship Co Ltd [1993] AC 410. Cf s 9(5) of the 1920 Act.

59See Colt Industries v Sarlie (No 2) [1966] 1 WLR 1287; s 9(1) of the 1920 Act; and s 2(1)(b) of the 1933 Act. A dubious exception seems to permit enforcement at common law despite a stay of execution in the original country on account of the judgment debtor’s bankruptcy; see Berliner Industriebank v Jost [1971] 2 All ER 1513.

60See Sadler v Robins (1801) 1 Camp 253; Beatty v Beatty [1924] 1 KB 807; ss 9(1) and (3) and 12(1) of the 1920 Act; and ss 1(2) and 2 of the 1933 Act.

61 See Huntington v Attrill [1893] AC 150; Rossano v Manufacturers’ Life [1963] 2 QB 352; ss 9(2)(f) and 12(1) of the 1920 Act; and s 1(2)(b) of the 1933 Act.

62See Raulin v Fischer [1911] 2 KB 83; and ss 2(5) and 11(1) of the 1933 Act.

63See General Textiles v Sun and Sand Agencies [1978] 1 QB 279.

64In the case of judgments to which the 1933 Act applies, s 8 makes some provision for mere recognition, but probably does not alter the results otherwise reached under the common law.

65See Republic of India v India Steamship Co Ltd [1993] AC 410. Cf Black v Yates [1992] 1 QB 526.

66See The Sylt [1991] 1 Lloyd’s Rep 240.

67See s 9(2)(e).

68See Nouvion v Freeman (1889) 15 App Cas 1; Harrop v Harrop [1920] 3 KB 386; Beatty v Beatty [1924] 1 KB 807; and Cartwright v Cartwright [2002] 2 FLR 610 (CA).

69See Vanquelin v Bouard (1863) 143 ER 817, p 828.

70See Lewis v Eliades [2003] 1 All ER (Comm) 850.

71See Colt Industries v Sarlie (No 2) [1966] 1 WLR 1287.

At first sight, the 1933 Act seems to follow the common law, since s 1(2)(a) (as amended by the 1982 Act) explicitly requires finality in the original country, except in the case of judgments for an interim payment. However, other provisions of the 1933 Act appear to deprive the requirement of finality of all content. For s 1(3) specifies that a judgment counts as final, even if in the original country an appeal against it is pending or still admissible; and s 11(1) defines ‘appeal’ as including any proceeding by way of discharging or setting aside a judgment, or an application for a new trial or a stay of execution, apparently including an application for review made to the very court which gave the judgment. Thus, it seems that in all cases the possibility that the judgment may be set aside or varied in the original country falls to be dealt with under s 5, whereby, on application by the respondent, the English court has a discretion to set aside the registration on the ground that an appeal in the original country is pending, or is admissible and intended, or to adjourn the respondent’s application for a period reasonably sufficient to enable the applicant to take the necessary steps to have the foreign appeal disposed of, and also to impose appropriate terms.The English court remains free, however, to permit immediate and unconditional enforcement despite the pendency of a foreign appeal, and is likely to do so where it considers that the respondent is engaged in unmeritorious procedural manoeuvrings for purposes of delay.72

Under all three regimes, the English court will review the jurisdiction of the original court under the English rules of indirect jurisdiction and will refuse recognition and enforcement if the foreign court lacked competence under those rules. Other available grounds for refusal are that the judgment was obtained by fraud, that the defendant abroad was not properly notified of the foreign proceedings, and that enforcement would contravene a stringent English public policy.

The general rule under all three regimes is that the English court cannot review the substance or merits of the foreign decision. It is not open to the English court to consider whether the original court made some error in determining the underlying dispute, whether the error alleged is of fact or of law (and whether of English or foreign law, and of substantive or conflict law).73 However, there is a major exception for judgments obtained by fraud, under which the English court will review the merits of the underlying dispute in order to ascertain the existence of fraud, even where the party alleging fraud relies on evidence which he placed or could have placed before the foreign court,74 unless the claim that the judgment had been obtained by fraud has been rejected in a subsequent action in the foreign country.75

Under the three regimes, a personal judgment will not be recognised or enforced, unless the original court is regarded as having had jurisdiction over the respondent (the person against whom the judgment is invoked) under the relevant English rules of indirect jurisdiction. The burden of establishing the existence of such indirect jurisdiction lies on the party seeking recognition or enforcement.76 The rules of indirect jurisdiction differ, but only slightly, between the common law, the 1920 Act and the 1933 Act. Under all three systems, the only connections giving rise to indirect jurisdiction over a person are his residence (in varying senses) in the original country at the institution of the action there or his submission to the jurisdiction of the original court, either by express agreement to such jurisdiction, or by appearance in the original action.77 It is not enough that some or all of the acts

72See General Textiles v Sun and Sand Agencies [1978] 1 QB 279.

73See Godard v Gray (1870) LR 6 QB 139; Henderson v Henderson (1844) 115 ER 111; Ellis v McHenry (1871) LR 6 CP 228; s 9(2) and (3) of the 1920 Act; and ss 2(1)–(2) and 4(1) of the 1933 Act.

74See Abouloff v Oppenheimer (1882) 10 QBD 295; Vadala v Lawes (1890) 25 QBD 310; s 9(2)(d) of the 1920 Act; s 4(1)(a)(iv) of the 1933 Act; Syal v Heyward [1948] 2 KB 443; Jet Holdings v Patel [1990] 1 QB 335; and Owens Bank v Bracco [1992] 2 AC 443.

75See House of Spring Gardens v Waite [1991] 1 QB 241.

76See Adams v Cape Industries [1990] Ch 433.

77See Schibsby v Westenholz (1870) LR 6 QB 155; Singh v Rajah of Faridkote [1894] AC 670; Emanuel v Symon [1908] 1 KB 302; Adams v Cape Industries [1990] Ch 433; s 9(2)(a)–(b) of the 1920 Act; ss 4(1)(a)(ii), 4(2)(a), and 11(2) of the 1933 Act; and ss 32 and 33 of the 1982 Act.

and events which gave rise to the cause of action occurred in the original country and that an equivalent connection with England would have conferred direct jurisdiction on the English courts.78 As regards a respondent individual, under the common law the requirement of residence refers simply to his physical presence in person in the original country, however transiently, at the institution of the action there.79 It is not enough that he was carrying on business there through an agent.80 However, under the 1920 Act, s 9(2)(b) makes it necessary and sufficient either that he was ordinarily resident in the original country, or that he was carrying on business there. Under the 1933 Act, it is probable that s 4(2)(a)(iv), which merely speaks of his residence, should be understood as referring simply to his physical presence in person, however transiently, so as to accord with the common law. However, s 4(2)(a)(v) makes it alternatively sufficient that he had an office or place of business in the original country, provided that the action was in respect of a transaction

effected through or at that office or place.

Where the respondent is a corporation, the requirement of residence in the original country for the purposes of the common law (and the 1920 Act) was elucidated by the Court of Appeal in Adams v Cape Industries.81 The court explained that residence requires that the corporation should have been carrying on business (or, in the case of a non-trading corporation, other corporate activities) in the original country at a definite and reasonably permanent place. Thus a corporation is resident in a country if it has a fixed place of business of its own there (whether as owner, lessee or licensee) and for more than a minimal period of time has carried on its own business from such premises by its servants or agents. However, a corporation may be resident in a country, even though it has no fixed place of business of its own there, if an agent acting on its behalf has for more than a minimal period of time been carrying on the corporation’s business (as opposed to his own business) at or from some fixed place of business in the country. To determine whether the business carried on by an agent should be regarded as his own business or as that of the corporation necessitates an investigation both of the activities and functions of the agent and of the relationship between him and the corporation. Many matters are relevant in this investigation, but no single one is conclusive. It is of great importance whether the agent has authority to enter into contracts on behalf of the corporation without submitting them to the corporation for approval; and the fact that a representative never makes contracts in the name of the corporation or otherwise in such manner as to bind it is a powerful factor pointing away from the residence of the corporation. The same principles apply where a parent company is alleged to have carried on business through the agency of a subsidiary company. Even though they may constitute a single economic unit, each of the companies in a group is a separate legal entity, and there is no presumption that a subsidiary is carrying on the business of its parent as its agent. A parent company is entitled to arrange the affairs of its group in such a way that the business carried on in a particular country is the business of its subsidiary and not its own, and the court will not ‘pierce the corporate veil’ merely because the parent’s purpose was to reduce its own exposure to the jurisdiction of the foreign court.

In the instant case, the Court of Appeal concluded that an English parent company was not resident in Illinois through a subsidiary incorporated and carrying on business there, mainly because, although the main function of the subsidiary was to assist in the marketing in the US of asbestos sold by its sister companies, and for such services it was remunerated by way of commission on sales, paid to it by the sister companies, it had no general authority to bind the parent to

78See Turnbull v Walker (1892) 67 LT 767; Re Trepca Mines [1960] 1 WLR 1273; and Sidmetal v Titan [1966] 1 QB 828. Cf Morguard v De Savoye (1990) 76 DLR 4th 256 (Canadian Supreme Court).

79See Carrick v Hancock (1895) 12 TLR 59; and Adams v Cape Industries [1990] Ch 433.

80See Blohn v Desser [1962] 2 QB 116.

81[1990] Ch 433. See also Littauer Glove v Millington (1928) 44 TLR 746; Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139;

Sfeir v National Ins Co of New Zealand [1964] 1 Lloyd’s Rep 330; Vogel v Kohnstamm [1973] 1 QB 133; and s 9(2)(b) of the 1920 Act.

any contractual obligations, and it never in fact, even with prior authority from the parent, effected any transaction in such a manner that the parent thereby became subject to contractual obligations to any person. Similarly, in Lucasfilm Ltd v Ainsworth, the Court of Appeal held that an individual or company does not become present in a country, and subject to the jurisdiction of its courts, by selling through the Internet to persons resident there.82

In contrast, for the purposes of the 1933 Act, s 4(2)(a)(iv) and (v) require that a respondent company should have had, in the original country, either its principal place of business, or a secondary office or place of business through or at which the transaction involved in the original action was effected.

In any event, by s 32 of the 1982 Act, residence does not create indirect jurisdiction over an individual or a company under any of the three regimes, if the original action was brought in defiance of a valid agreement for arbitration or for the exclusive jurisdiction of the courts of another country, unless the agreement was incapable of being performed for reasons not attributable to the claimant’s fault. For this purpose the English court is not bound by findings of the original court.

Under all three regimes, indirect jurisdiction over a non-resident may arise from his submission, by agreement83 or appearance. As regards submission by agreement, an agreement on jurisdiction must be explicit and can never be implied.84 However, an explicit agreement on jurisdiction may take the form of a clause contained in a standard form contract, such as the articles of association of a company,85 or it may be constituted by an informal expression of consent to accept the jurisdiction.86 It may contemplate exclusive or non-exclusive jurisdiction, and it may refer to the courts in general of a specified country, or to a particular court, and in the latter case it will not confer jurisdiction on other courts of the same country.87

As regards submission by appearance, it is enough that the respondent appeared as plaintiff or counterclaimant in the original proceedings.88 Thus a plaintiff in a foreign action is regarded as submitting to the jurisdiction of the original court not only as regards his own claim, but also in respect of any counterclaim which the original court permits to be made against him in the same proceedings by a person whom he has sued. Similarly, a defendant who counterclaims is regarded as submitting to the jurisdiction of the original court in respect of the plaintiff’s claim against him, as well as his own counterclaim against the plaintiff.

There is also submission by appearance on the part of a defendant in a foreign action who voluntarily appears in the original action without counterclaiming,89 and the appearance may be either at first instance or on appeal.90 However, s 33(1) of the 1982 Act requires that to found indirect jurisdiction under any of the three regimes the appearance must be on the merits, and not for the limited purposes of contesting the jurisdiction of the original court, or requesting it to decline jurisdiction in favour of arbitration or of adjudication in another country, or of protecting or obtaining the release of property seized or threatened with seizure in the foreign proceedings. It is probable that the reference to seizure of property should be construed as confined to seizure before judgment for the purpose of founding jurisdiction or providing security, as distinct from seizure after judgment in execution.91

82[2009] EWCA Civ 1328, affirming [2009] FSR 2. This point was not considered on the final appeal, [2011] UKSC 39.

83See Emanuel v Symon [1908] 1 KB 302; Feyerick v Hubbard (1902) 71 LJ KB 509; s 9(2)(b) of the 1920 Act; and s 4(2)(a)(iii) of the 1933 Act.

84See Singh v Rajah of Faridkote [1984] AC 670; Emanuel v Symon [1908] 1 KB 302; and Vogel v Kohnstamm [1973] 1 QB 133.

85See Copin v Adamson (1874) LR 9 Ex 345; (1875) 1 ExD 17.

86See General Textiles v Sun and Sand Agencies [1978] 1 QB 279.

87Ibid.

88See Emanuel v Symon [1908] 1 KB 302; the 1920 Act, s 9(2)(b); and the 1933 Act, s 4(2)(a)(ii).

89See Emanuel v Symon [1908] 1 KB 302; s 9(2)(b) of the 1920 Act; and s 4(2)(a)(i) of the 1933 Act.

90See General Textiles v Sun and Sand Agencies [1978] 1 QB 279.

91Cf De Cosse Brissac v Rathbone (1861) 158 ER 123; Voinet v Barrett (1885) 55 LJ QB 39; and Guiard v De Clermont [1914] 3 KB 145.

Under all three regimes, the recognition and enforcement in England of an external judgment is subject to a proviso that recognition of the judgment must not be contrary to English public policy.92 The proviso may apply where the English court considers that recognition of the judgment would be unconscionable because of the outrageous character of the substantive rule applied by the original court – for example, where the foreign judgment upheld and enforced a contract to pay a fee to an assassin for carrying out an assassination. It was once held that a maintenance order against the father of a non-marital child, lasting beyond the child’s minority, fell into this category.93

Another situation in which public policy may be invoked is where, despite proper notification of the institution of the original action, the respondent was in some other way denied a reasonable opportunity to present his case, or was otherwise prejudiced by the use by the foreign court (perhaps in breach of its own law) of a procedure which is considered seriously unfair by English standards.94 Thus, in Adams v Cape Industries,95 the Court of Appeal refused to enforce at common law an American judgment, given against a defaulting defendant in a personal injury action brought by numerous plaintiffs, because the American court, in unexpected breach of its own procedural law, had assessed damages without receiving evidence of the particular injuries sustained by the individual plaintiffs. It had, instead, fixed an average amount for all the plaintiffs and left it to their counsel to distribute the total award so arrived at between them. An argument that the defendant should have applied to the American court to have the judgment set aside on the ground of this procedural irregularity, an application which would have succeeded if made timeously, rather than raising the objection in England when enforcement here was sought, was rejected on the ground that the defendant had not been aware of the method of assessment used until enforcement in England was threatened. Slade LJ conceded, however, that if a foreign law were to provide for the plaintiff to serve a notice specifying a sum claimed as damages, and then for a default judgment to be entered for that sum without proof or judicial assessment, such a procedure would usually be considered unobjectionable, provided that, after due allowance had been made for differences between the foreign law and English law in levels of award and in substantive law, the amount of the actual award was not irrational. He further held, perhaps surprisingly, that, even if the only procedural impropriety related to the assessment of damages, the judgment creditor could not invoke the foreign judgment for the purpose merely of establishing liability, so as to obtain an English judgment under which damages would be assessed by the English court.

A crystallisation of English public policy is found in s 5 of the Protection of Trading Interests Act 1980, which prevents the enforcement at common law or under the 1920 or 1933 Acts of a judgment for multiple damages. Even the unmultiplied element of the damages awarded, representing the actual loss sustained, is rendered unenforceable in England; but severance is possible where the sum awarded by the judgment comprises an identifiable sum awarded as multiple damages in respect of one claim, and another identifiable sum awarded as ordinary damages in respect of another claim.96 Section 6 goes further by enabling, in certain circumstances, a person who has satisfied, or suffered enforcement abroad of, an external judgment for multiple damages, to sue in England for recoupment of the multiple element paid or enforced.97 However, there appears to be no English policy against the enforcement of foreign judgments awarding exemplary or aggravated damages – for example, where the defendant has perversely refused to meet a clearly

92See Re Macartney [1921] 1 Ch 522; the 1920 Act, s 9(1) and (2)(f); and the 1933 Act, s 4(1)(a)(v).

93See Re Macartney [1921] 1 Ch 522.

94See Jacobson v Frachon (1927) 44 TLR 103; and Adams v Cape Industries [1990] Ch 433.

95[1990] Ch 433.

96See Lewis v Eliades [2004] 1 All ER (Comm) 545 (CA), affirming [2003] 1 All ER (Comm) 850.

97See also s 7, which provides for the reciprocal enforcement of foreign ‘recoupment’ judgments.