Recognition as the basis for issue estoppel

A court may be asked to give effect, by way of recognition, to something other than the formal order made by the foreign court. Suppose that, in dismissing a claim, the first court made a finding that a particular document had not been sent, or had been received, or something like that. If a separate second action were to be brought, would the defendant be entitled to ask the second court to give effect to and to consider itself as bound by this particular element of the first court’s reasoning or adjudication? Suppose the first court found that a contract was governed by a particular law: in the second action, would the court be entitled to reach its own conclusion as to the governing law, or would it be obliged to follow the conclusion of the first court?

In the absence of clear authority, one should probably distinguish between principles of European and of national law. As far as European law is concerned, the Regulation and Convention oblige a court to recognise judgments and orders.^[1] They do not, in terms at least, oblige a court to give any, or any particular, effect to statements or reasons mentioned en route to the judgment. No doubt this is deliberate: the main legislative purpose was to assist the free circulation and quick enforcement of judicial orders throughout the legal territory of the Member/Lugano States. It is not an inherent part of that purpose to give effect to statements recorded in judgments, not least because the volume and status of these may differ very sharply from one court to another and from one State to another. Of course, if a party to proceedings is able to persuade a court to make formal declarations on points which he wishes to have conclusively determined in his favour, the declaratory judgment would be entitled to be recognised.

If the foreign court has not made a declaration or other judgment on a particular point, but a party still wishes to place reliance on some step or reason contained in its judgment, nothing prevents an English court applying its own principles of issue estoppel to conclusions reached and expressed by a court in the course of a judgment which otherwise qualifies for recognition. Issue estoppel is a principle of English law of evidence or procedure; and as such it is capable of operating independently of the Regulation or Convention, so long as it does not jeopardise its practical effect. It therefore follows that an English court should be free to apply its doctrine of issue estoppel to statements and rulings contained in judgments which otherwise qualify for recognition.

If this analysis is correct, the applicable principles will be those of English law rather than European law. Accordingly, although the Regulation or Convention, as the case may be, will determine that the judgment is one which is entitled to recognition, it must still be shown that the point relied on can be accurately characterised as a finding which the court needed to make, and that it was final in the court which pronounced it, and it was given in proceedings between the parties or their privies, and that it was founded on the merits of the point at issue, for these are the elements of common law estoppel by res judicata. It would be insufficient for the purposes of issue estoppel if all the court had done was to express a view, but which did not have the status of a judicial conclusion:^[2] that would be insufficient for the purposes of issue estoppel. And it would be insufficient for the purposes of issue estoppel - though it would not prevent recognition of the judgment under the Convention or Regulation - if the first court had disposed of the issue on grounds which did not involve a consideration of the merits of the point, but which could be labelled as ‘procedural’ only. Moreover, the fact that the doctrine is one of English law means that the question of who is to be regarded as estopped by the decision is answered by English rules about parties and their privies, rather than by a principle of European law.

• [1] The separate treatment of decisions on the application of the Brussels I Regulation, in C-456/11 Gothaer Allgemeine Versicherung AG v Samskip GmbH EU:C:2012:719, [2013] QB 458, seems unlikely to extend to this kind of issue. 2 Berkeley Administration Inc v McClelland [1995] ILPr 201. 3 C-365/88 Kongress Agentur Hagen GmbH v Zeehaghe B V [ 1990] ECR I-1845. 4 Though see Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] EWCA Civ 327, [2003] 1 WLR 2295. 5 As these are, in essence, the basic requirements for an estoppel. See Chapter 34, below. And see generally Barnett, Res judicata. Estoppel, and Foreign Judgments (OUP, Oxford, 2001). 6 In C-351/96 Drouot Assurances SA v CA// [1998] ECR 1-3075, a case on the rules of lis alibi pendens in Section 9 of Chapter II of the Regulation, the Court said that the parties were to be regarded as the same where they actually were or where, though different, their interests were ‘identical to and indissociable from’ those of the other. For the proposition that this may yet influence the English doctrine of res judicata, see Handley (2000) 116 LQR 191. For a fuller account of the English principles of res judicata and estoppel, see Chapter 34, below.
• [2] And at this point, the English court should be wary of attributing to a judicial statement a quality of finality of determination which it was not intended to have. 2 For the English doctrine, see House of Spring Gardens Ltd v Waite [1991] 1 QB 241. For a loosely analogous issue within the scope of the Brussels Convention, see Schlosser [1979] OJ C59/71, [191] (judgment against debtor binding on surety).