Recognition of judgments in rem: connection to the foreign court

A foreign court has jurisdiction to give a judgment in re/?/,^[1] so far as the common law is concerned, if the res in respect of which judgment was given was at the material time situated or located within the territorial jurisdiction of that court.

A judgment in rem determines title to a thing, or the status of a person, or the legal existence of a company or corporation. Therefore, a judgment which decrees and causes sale of a thing within the territory of the foreign court to satisfy a claim against the thing in question is liable to be recognised in England: English law recognises the effect of dispositions of property which are effective under the law of the State in which the property was when the disposition occurred, and the effect of the judgment is to adjudicate the property to its new owner. Likewise, a judgment which determines title to shares in a foreign company will be recognised or enforced as a judgment in rem only if it was given by the courts at the situs of the shares. It follows that a foreign judgment purporting to determine title to land, or other property, in England will not be recognised.

On the other hand, a judgment which is properly seen as being in personam, founded on contractual or other obligations in relation to foreign land or foreign shares, may be recognised and enforced between the parties as a judgment in personam,'⁴⁰ and the truth of the matter is that it is the order, rather than the judgment, which has to be examined to see whether it was made to take effect in personam or in rem. Indeed, a judgment which may be identified as one in rem, and which would not be recognised on that basis, may in an appropriate case be understood to impose a personal obligation on the parties to the proceedings, and the judgment may in that sense be enforced as a judgment in personam.'⁴' It is rare for an order in rem to require enforcement, as opposed to recognition, in England; if a court at the situs of land makes an adjudication of title, there will be no rational basis^[2] for the judgment to be denied recognition in England.

According to the private international law of corporations, questions of corporate creation, continuation, dissolution and amalgamation are all governed by the lex incorporations, the law under which the company was created. The principle that what is created by the lex incorporations may be uncreated by it as well is plain; and it applies also to corporate amalgamation. It does not usually require a judgment to bring about the legal result in question, though if a company were to be dissolved by judicial order, a judgment in such terms from the courts of the lex incorporations would be recognised as having been given by a jurisdictionally competent court. But a related issue, namely that of judicial appointments of receivers and liquidators, may raise the issue of recognition of judgments.

The question whether to recognise a judgment or order which appoints a person to a particular status is most frequently in the context of matrimonial causes, and therefore falls outside the scope of this book. But it also arises in relation to receivers and liquidators, where a person appointed by a foreign court appears in English proceedings and seeks relief. The common law has in some respects been superseded by statute; but the general view at common law was that a liquidator (but not a receiver) appointed under the law of the place of incorporation to be the legal representative or embodiment of the company would be recognised as such in England. This properly, maybe inevitably, follows from the proposition that the question of who has power to act on behalf of a company is determined by the law under which the company was formed, the lex incorporations.' This is not to say that appointments made under another law will necessarily be denied recognition, especially where the appointment would be recognised under the lex incorporations. Whether appointments by a foreign court which is not that of the lex incorporations and which the lex incorporations would not recognise could still be recognised, for example, by appeal to a principle of reciprocity or comity must be very doubtful at best. Indeed, it is probably now not possible, or if it is possible, the scope of recognition will be confined to the business of the company within the jurisdiction where the appointment was made.

The appointment and status of a receiver is rather different, as they are usually appointed to safeguard the position of investors or creditors, and not the company. However, if the receiver is authorised to act according to the lex incorporations it seems plausible that his appointment will be recognised as allowing him to act in

England. In other cases, a receiver appointed by a foreign court to protect the interests of investors in the company will not be recognised in England.^[3] The recognition of a receiver appointed by a court whose judgment in personam against a defendant is one which an English court will recognise, and who has been appointed by the foreign court to enforce the obligations of the judgment, does not raise any particular issue of principle. If the judgment is one which binds the defendant as a judgment in personam, according to the ordinary rules, there is no reason to raise objection to the appointment of a receiver who then seeks to enforce that judgment in England by bringing proceedings on the judgment debt in the ordinary way.

• [1] This Section does not primarily refer to admiralty actions in rem. Rather, it refers to judgments which determine the status or ownership of a thing (most often land: see Re Trepca Mines [1960] 1 WLR 1273) situated within the jurisdiction of a court. 2 In principle, and in the interests of legal certainty, this should be at the institution of proceedings. 3 Even in the case of a court somewhere as improbable as North Korea: BCEN Eurobank v Vostokrybprom Co Ltd (The Phoenix) [2014] 1 Lloyd’s Rep 449 (E. Caribbean CA). 4 Castrique v Imrie (1870) LR 4 HL 414; Calyon v Michailidis [2009] UKPC 34, [2007-2009] Gib LR 321. This applies the rules on recognition of judgments in rem to determine whether to recognise a judgment which determines title to property, even though this question arises within the context of proceedings which allege a wrong in relation to that property, such as conversion or dishonest assistance. 5 English law will therefore recognise a sale of a ship by a court abroad as giving title to the purchaser. But if the foreign court does not consider its decree as having an effect in rem, an English court will not treat it as a judgment in rem: Air Foyle Ltd v Centre Capital Ltd [2002] EWHC 2535 Comm, [2003] 2 Lloyd’s Rep 753 (noted [2004] LMCLQ 303). 6 Blue Holdings (1) Pte Ltd v United States [2014] EWCA Civ 1291 [2015] 2 All ER 237. 7 Duke v Andler [1932] 4 DLR 529 and Shanti v Shanti [2012] Ch 664 (appeal dismissed [2013] EWCA Civ 227 without specific reference to this point) accept the point more or less clearly, though the latter explains that even if this is the law applicable to judgments in rem, it has no application to foreign judgments in personam (as to the obligations of a trust, for example), even if the land is in England. 8 Though enforcement will be limited to money judgments: see at para. 34.36, below. And on the separate nature of claims in personam, see R Griggs Group Ltd v Evans [2004] EWHC 1088 (Ch), [2005] Ch 153. 9 Pattni v AH [2006] UKPC 51, [2007] 2 AC 85 (PC, loM) (Kenyan judgment in relation to agreement to transfer of shares in Manx company not, on its true construction, a judgment in rem, but one which enforced obligations which the parties had assumed and which bound them in personam); applied in Brunei Investment Agency v Fidelis Nominees Ltd [2008] JLR 337; distinguished on entirely orthodox grounds in Blue Holdings (1) Pte Ltd v United States [2014] EWCA Civ 1291, [2015] 2 All ER 237 (judgment did not purport to operate in personam, and in any event the individuals were not present within and had not submitted to the jurisdiction of the foreign court); and approved in Chen v Ng [2017] UKPC 27 (PC BVI).
• [2] Public policy apart, as when the adjudication is based on disgraceful grounds: Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and5) [2002] UKHL 19, [2002] 2 AC 883. 2 Lazard Bros v Midland Bank [1933] AC 289; Russian and English Bank v Baring Bros [1932] 1 Ch 435; Deutsche Bank v Banque des Marchands de Moscou (1932) 158 LT 364. 3 National Bank of Greece & Athens SA v Metliss [1958] AC 509; Toprak Enerji Sanayi AS v Sale Tilney Technology Pic [1994] 1 WLR 840. 4 If the dissolution were to have been done for thoroughly disgraceful reasons, it may be that it would be refused recognition on grounds of public policy: Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19, [2002] 2 AC 883. 5 Bank of Ethiopia v National Bank of Egypt and Ligouri [1937] Ch 513; Felixstowe Dock & Railway Co v US Lines Inc [1989] QB 360. The approximate reason may be that the liquidator is appointed to assume the company’s very personality, whereas a receiver is an agent acting on behalf of the company. 6 Travers v Holley [1953] P 246. 7 Re Trepca Mines Ltd [1960] 1 WLR 1273; Felixstowe Dock & Railway Co v US Lines Inc [1989] QB 360; Soc Cooperative Sidmetal v Titan International Ltd [1966] 1 QB 828; Scheinmer v Property Resources £«
• [3] Re Stanford International Bank Ltd [2010] EWCA Civ 137, [2011] Ch 33. 2 Robb Evans v European Bank Ltd (2004) 61 NSWLR 75. The decision was approved, though not really analysed, in United States Securities and Exchange Commission v Manterfield [2009] EWCA Civ 27, [2010] 1 WLR 172. It does not apply where the foreign judgment orders confiscation of assets as a response to crime, in circumstances where the confiscating State is entitled to keep the assets and is under neither obligation nor expectation to turn these over to the civilian victims. 3 Civil Jurisdiction and Judgments Act 1982, Section 32. 4 Ibid, Section 32(1 )(b). 5 That is, the successful claimant or the successful defendant may be shown to have committed fraud; and upon such proof the judgment in his favour will be disqualified from recognition. 6 Such as refusing to enforce a foreign judgment which amply meets the criteria for enforcement for fear (the word is used advisedly) that it will offend another country: Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd [2016] HKCFA 79, [2017] 4 HKC 379. The judgment creates an obligation, after all, not a discretion.