Injunction against enforcement of foreign judgment wrongly obtained
Other kinds of injunction have come before the courts in a way which suggests that their appearance may become more and more frequent. Here again, though the commercial sense which justifies the grant of these injunctions is clear enough in the cases in which it has been done, or not done for reasons clearly given, there is less clarity about their doctrinal basis.[1] As said above, an injunction, after all, is not an order made by way of case management, albeit with teeth. It is not enough to point to litigation procedure of which the court disapproves, and to reason that because the court has power to stop it, it should. In this and the next two paragraphs, we consider in particular the injunction to restrain the enforcement of a foreign judgment, and the injunction to restrain the institution of arbitration proceedings.
A judgment creditor who wishes to enforce a foreign judgment in England will often take advantage of the various schemes examined in Part E of this book, to secure the authority of the English court for the enforcement. But it is not necessary to do so: a judgment creditor under a foreign judgment may be able to enforce without the assistance of the English court and without regard to the limitations which English private international law would place on judicially authorised enforcement; the question is then whether there is anything a judgment debtor may be able to do to prevent this freestyle enforcement.
It is obvious that at this point no real distinction is drawn between judgments which could and could not have been enforced under the various schemes examined in Part E of this book: the fact that a foreign judgment could not have been enforced by obtaining an order at common law, for example, does not mean that it is in some sense unlawful to seek to enforce it by other means. The law is evolving, but it is convenient to divide the cases into those in which it was, as far as English law is concerned, wrong to obtain the foreign judgment in the first place, and those in which the objection is to the enforcement of a judgment which was, on the face of it, unobjectionable. The common thread is that the particular enforcement measure which is to be restrained must, as a matter of English law, be found to be a wrongful act whose restraint is properly a matter for the English court. Once again, a wrong is needed; mere disapproval is not enough.
In the first category of case, an injunction may be sought and ordered to restrain the enforcement of a foreign judgment where obtaining the foreign judgment in the first place was itself wrongful. For example, in Ellerman Lines Ltd v Read,™ a judgment was obtained from the court at Constantinople in breach of a jurisdiction agreement for the English courts; an injunction was ordered to restrain the judgment creditor from enforcing it. The Court of Appeal made no secret of its disapproval of the outrageous conduct of the claimant[2] in obtaining a judgment he had contracted not to obtain; it did not doubt its power to order the judgment creditor to refrain from exploiting his polluted judgment (and to order the judgment debtor to be compensated for his loss). It must surely follow that where a party has obtained a foreign judgment in defiance of an English anti-suit injunction, the obtaining of the judgment is necessarily (equitably) wrongful, and an English court should be able to extend the injunction to order the judgment creditor to not enforce it.
The question whether, in such cases, the court may order non-enforcement outside England as well as within England, is easy to answer. Although restraining a judgment creditor from taking steps in England presents few problems, to restrain the judgment creditor from taking steps within the territorial jurisdiction of a foreign court may appear to be a more delicate matter. Even if it is right to enforce a jurisdiction or arbitration agreement robustly, with scant worry about comity or caution about affronting a foreign court, it may be surprising to argue that nothing material has changed once the foreign court has adjudicated. But the very point was raised by the judgment creditor in Ellerman Lines v Read, and Scrutton LJ made his views perfectly clear. The passage in his judgment deserves to be read in full.
Mr Wilfrid Lewis, who said everything that could be said for a client for whom there was very little to be said, took the point that while he did not dispute that the injunction might be granted against instituting the proceedings, no injunction could be granted after the foreign Court had given a judgment, restraining a person who had got that judgment from getting the fruits of his judgment. It was said that there was no authority for the Court acting after judgment. I think it is time ive made one: for I cannot conceive that if an English Court finds a British subject taking proceedings in breach of his contract in a foreign Court, supporting those proceedings by fraudulent lies, and obtaining a judgment by fraudulent lies, the English Court will say: “ We cannot interfere to stop you, a British subject, from enforcing a judgment which you have obtained by fraud against the property of a person towards whom you have broken your contract": and I am quite clear that there is jurisdiction in the Courts to grant an injunction restraining Count Landi from taking the fruits of the judgment which he has obtained by fraud, and that such an injunction ought to have been granted.
If anything, the taking of steps to enforce a judgment which should not have been obtained in the first place aggravates the original wrong. The result is that an English court may order an injunction to restrain a judgment creditor who committed a legal wrong in obtaining a foreign judgment from enforcing that foreign judgment overseas.
That leaves one question remaining: whether there is a further requirement, that there must be a sufficient connection to England, or a sufficient English interest, for the relief to be granted. To demonstrate that obtaining the judgment was a wrong is one thing, but to say that an English court should make orders to prevent the overseas enforcement of it is another. In Ellerman Lines v Read, there were strong connections with England: the parties had agreed to resolve their disputes in England, and both parties were, one way or another, English. Whether the result would have been the same if the judgment creditor had been subject to the personal jurisdiction of the English court, but all the relevant facts had been foreign, is, on the current incomplete state of the law, too early to say for sure.[3]
- [1] Senior Courts Act 1981, Section 37, may be the statutory basis for the order, but it does not disclose the principles which regulate its exercise and non-exercise. 2 This, though, does appear to be the effect of Clearlake Shipping Pte Ltd v Xiang Da Marine Pte Ltd [2019] EWHC 2284 (Comm). 3 Cf Airbus GIE v Patel [1999] 1 AC 119. 4 [1928] 2 KB 144. Whether the injunction was ordered to restrain a breach of contract, or the commission of a legal wrong (fraud), or an equitable wrong (breathtakingly unconscionable behaviour) is not very interesting: there had been and still was a wrong and it needed to be stopped. Almost a century ago, it was justified as restraint of a fraudster seeking to harvest the proceeds of his fraud. Today it would
- [2] Its indignation seemed to be made greater and worse by the fact that the party to be restrained as an open fraudster was a naturalised British subject. Count Zanardi Landi. 2 The Angelic Grace [1995] 1 Lloyd’s Rep 87; Donohue v Armco Inc [2001] UKHL 64, [2002] 1 Lloyd’s Rep 425. 3 Enka Insaat ve Sanayi AS v ООО Insurance Co Chubb [2020] UK.SC 38, [2020] 1 WLR 4117. 4 There are observations in Ecobank Transnational Inc v Tanoh [2015] EWCA Civ 1309, [2016] 1 WLR 2231 which appear to doubt that an injunction may be granted to restrain enforcement of a judgment which was obtained in breach of a jurisdiction agreement. It is hard to see those doubts as well-founded.
- [3] There is an analogy to be made with Enka Insaat ve Sanayi AS v ООО Insurance Company Chubb [2020] UKSC 38, [2020] j WLR 4117, and I РОС International Growth Fund Ltd v ОАО CT Mobile [2007] Bermuda LR 43: see para. 28.07, above. If it is sound, the fact that the wrong consisted in bringing proceeding before the wrong foreign court would not be a barrier to relief in the form of an antienforcement injunction. Whether it is sound must await the decision of a court. 2 Bank St Petersberg OJSC v Arkhangelsky [2014] EWCA Civ 593, [2014] 1 WLR 4360. 3 [1991] 1 Lloyd’s Rep 429. 4 Evidently the wording of the earlier settlement agreement was not comprehensive, but it was too late to do anything about that.
