Defences to recognition of a judgment as res judicata

I f there was no relevant connection to the foreign court, or (in more traditional language) if foreign court did not have ‘international jurisdiction’ over the party who is said to be bound by the judgment, in the eyes of the English common law, its judgment has no effect on him as a matter of English law. If the court was jurisdictionally competent, the defendant (assuming him to be the losing party) will in principle be obliged by English law to accept his defeat as res judicata, or the unsuccessful claimant, when he is the losing party, will be bound by, and must accept as conclusive, the dismissal of his claim. However, if the party to be bound to the foreign judgment can rely upon one of the defences to recognition provided for by English law, the judgment will not be binding on him after all.

The seven defences to the plea of res judicata, examined below in paragraphs

34.23 to 34.34, are notionally separate though they may in places overlap. The first is that the judgment was not ‘final and conclusive’ on the issue in respect of which its recognition is sought. The second applies if the court gave (or was asked to give) judgment contrary to a valid dispute resolution agreement: this objection can be relied on only by a party who did not agree to the bringing of the proceedings in the foreign court, which naturally excludes the claimant. The third is that the successful party obtained judgment in his favour by fraud. The fourth applies if the court gave judgment contrary to the rules of natural, or perhaps of substantial, justice. The fifth is that recognition of the judgment would be contrary to English public policy. The sixth is that recognition of the judgment by the English court would violate the Human Rights Act 1998. And the seventh defence will apply if the judgment was in conflict with a prior English judgment. So far as is known, there are no others.

The defences to recognition take no direct account of the particular basis on which the foreign court was found to be jurisdictionally competent. But there is an argument to be made to the effect that they may, to some extent, reflect the jurisdictional basis on which recognition is based. In particular, a defendant who has contracted or consented to be sued in a particular court should perhaps not have the same right to complain about fraud or natural justice as a defendant who did not submit to the jurisdiction of the court but happened to be present when process was served on him. Indeed, a defendant who contracted to accept the jurisdiction of the foreign court may, and perhaps should, find it more difficult to complain about the procedure followed by the foreign court than one who did not but who was constrained by commercial necessity to appear and defend the proceedings. Moreover, if the English common law were ever to move in the direction marked out by the Supreme Court of Canada, which it should not, and recognise judgments coming from a court which had a real and substantial connection to the dispute, a more generous allowance for defences may be appropriate, and succeed in striking the right balance between the legitimate interests of all the parties. It is possible, of course, that at a subliminal level this is already happening. But no case has yet admitted it openly.[1]

Objections which are not defences to recognition as res judicata

The seven defences set out above, and examined in detail below, are limited. It is, for the avoidance of doubt, worth making specific mention of facts and matters which -perhaps surprisingly - do not furnish a defence to the recognition or enforcement of the judgment.

One may start with a point relating to jurisdiction. It is generally understood that even if the foreign court lacked jurisdiction under its own internal law, this does not affect the recognition of the judgment in England. This saves an English court from having to grapple with foreign rules of jurisdiction and civil procedure. It makes sense, for it is an English obligation, as distinct from a foreign judgment, which the court acknowledges and enforces; it is improbable that the defendant assumes an obligation which is defined by reference to the internal jurisdiction of the foreign court.

This is sensible as far as it goes, but it may not go quite far enough. If the foreign court’s lack of internal jurisdiction meant that the defendant acted prudently in ignoring the proceedings, which were a nullity under the law of the place where they were instituted and which resulted in a nullity only pretending to be a judgment, it would surely be daft for English law to disregard this fact and to recognise the judgment. If the foreign judgment is a nullity, it should not be regarded in English law as binding the defendant; there can hardly be an obligation in relation to non-existent subject matter. If it is not a nullity the judgment is valid, and should be regarded as creating an obligation, even if a voidable one.[2] But it will be rare for a foreign judgment to be a nullity. Much more likely is that a judgment handed down by a court in excess of its local jurisdiction is voidable, or liable to be set aside. A voidable judgment is, by definition, a valid judgment unless and until it is avoided; and it will give rise to an obligation.

So far as concerns what took place at trial, it is no defence to a claim for recognition that the foreign court got the facts wrong or utterly wrong, or got the law wrong, or had been trying to apply English law and manifestly got that wrong as well. For if arguments which simply allege error on the part of the foreign court could be advanced to oppose recognition, there would be no recognition of foreign judgments, just reinvestigation of the basis of a foreign judgment. A contention that a court should refuse to recognise a judgment from a foreign court which did wrong in ‘refusing to apply’ English law would lie outside the mainstream of contemporary thinking, although where the court appears to have refused to apply its own law properly, other defences to recognition, such as fraud or judicial bias, may be open. Errors of fact or of law do not impugn the obligation created by the foreign judgment. Indeed, it would hardly be admissible for the judgment debtor to say that he agreed to the jurisdiction of the foreign court and assumed an obligation to abide by its judgment only if the court were to make no error of fact or law. When he obliged himself, and obliged himself to the other, to accept the jurisdiction of the foreign court, the obligation was to abide by the judgment of the foreign court, whether it was right or wrong.

For similar reasons, it is no defence that the foreign court applied a conflicts rule which was different from that which an English court would have applied if it had adjudicated the same claim or the same issues. It has never been a requirement of English private international law that the foreign court has applied the same law, or rule for choice of law, as would have been applied by an English court and that unless it did so its judgment would not be entitled to recognition. Such a rule may be found in French private international law; but in England its effect would be to restrict, very severely, the effect given to foreign judgments. However, where the foreign court has applied a law different from that for which the parties made an express agreement, the issues may be somewhat different; the issue is touched on below.[3]

So far as concerns matters which arise after the trial, it is no defence to recognition or enforcement in the fact that the foreign judgment is not, or not yet, enforceable under the law of the foreign court which gave it. The enforceability of the foreign judgment under the law of the court which gave it may well be relevant in relation to those schemes for registration of a foreign judgment, where it is the foreign judgment itself which is given direct effect in England. As the common law does not enforce the judgment as such, as distinct from the obligations which arise from the adjudication, whether the foreign judgment is enforceable under the law which gave it is a matter of foreign procedure, not relevant to a court in England.

It may follow from this, and appears to be correct in principle, that a defence to recognition may be applied to the judgment of an appellate court which has overruled or annulled the decision of a lower court, with the consequence that the lower court judgment is left available for recognition in England as creating an obligation, as though nothing of legal relevance had happened to it. This makes sense. If an appellate judgment is procured by fraud, for example, it will have no effect in England; the result then is that the original judgment is untouched by anything to which English private international law will ascribe legal effect. It may appear odd that the result is that a foreign judgment which is - rightly or wrongly - now void of legal effect in the State in which it was given may be recognised in England. But the common law recognises obligations arising from the relationship between the parties, or from the presence of the defendant when the proceedings were instituted, rather than the judgment as a judgment. That being so, it is not at all difficult to accept that a foreign judgment, as to which English private international law saw no sustainable objection, may give rise to an obligation binding the parties, it being treated as unaffected by a subsequent foreign judicial act which has no effect in the English legal order.

On occasion it may seem that the real reason for wishing to refuse recognition to a foreign judgment is that there is what, in the context of the sale of goods, may be described as a congeries of defects: that it is just not good enough to take effect in the English legal order, even though individual defences of fraud, bias, lack of adherence to the rules of procedural fairness, may not be distinctly made out, and even though it is evident from the fact of the record that the foreign judicial process was objectively unsatisfactory. So far, English courts have resisted any invitation to refuse recognition on such a basis, and have endeavoured to shoehorn the objections into one or more of the established defences. They may be right to do so; but one cannot help thinking that where the real point is that the foreign proceedings, and the judgment which they produced, were just not good enough, it is better to say so than to pretend to be saying something else.

And finally, when it comes to the English proceedings to obtain recognition or enforcement of the foreign judgment, there is no clear authority that a party seeking to enforce the judgment be acting in good faith or come with clean hands,[4] though one can see how the case for such a defence, vague and imprecise as it is, could be made. It is true that the principle has recently been identified as a proper basis for the refusal of equitable relief in the form of an anti-suit injunction, but the obligation to abide by a foreign judgment arises at common law, not in equity. Although an argument based on estoppel or unconscionability might be advanced in an appropriate case, and possibly accommodated within the defence that recognition would be contrary to public policy, the clean hands principle of equitable doctrine would appear to have no discrete role in the common law of foreign judgments.

We proceed to examine in detail the seven defences to the plea of res judicata.

  • [1] See further Briggs (2004) 8 Singapore Yearbook of International Law 1. 2 Dicey, 15th edn (2012), Rule 49(2); Vanquelin v Bouard (1863) 15 CBNS 341; Pemberton v Hughes [1899] 1 Ch 781. The law was described as ‘unsettled’ in PJSC Rosgosstrakh v Starr Syndicate Ltd [2020] EWHC 1557 (Comm), [82], which, given the antiquity of the authorities and the depth of the real issue, is fair enough. 3 Cf Couturier v Hastie (1852) 8 Ex 40 (contract to sell and buy non-existent subject matter is void). 4 No less so if it may be set aside at a later date. On the other hand, if it may be set aside by the very court which pronounced it, it may not be regarded as final and conclusive. This may mean that it cannot be recognised in England.
  • [2] Cf Isaacs v Robinson [1985] AC 97 for the position in domestic English law. 2 Though for the possibility that an English judgment may be (wholly) void rather than voidable, see the excellent discussion of authorities in M v P [2019] EWFC 14, [2019] Fam 431. 3 Godard v Gray (1870) LR 6 QB 288. 4 Godard v Gray (1870) LR 6 QB 288; Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853. 5 The ‘perverse and deliberate refusal' of a court in Louisiana to apply English law led to nonrecognition of the judgment in Simpson v Fogo (1863) 1 H & M 195, 247. When the common law was used as the basis for Indian law as legislated in the Code of Civil Procedure (1908), Art. 13(c) of the Code provided (and still provides) for non-recognition of a judgment ‘founded on a refusal to recognise the law of India in cases in which such law is applicable'. This seems to suggest that Simpson v Fogo was considered to be sound and of more general application. Though the case may be out of favour in England today, its evident acceptance as correct 50 years later by the colonial draftsman, and its continued application in a significant part of the common law world, should not be overlooked. And for the possibility that the argument may still be run, see OJSC Bank of Moscow v Chernyakov [2016] EWHC 2583 (Comm); PJSC Rosgosstrakh v Starr Syndicate Ltd [2020] EWHC 1557 (Comm). 6 Deliberately rather than incompetently; in bad faith rather than good. 7 For a very different approach, proceeding from a very different analysis of what parties agree to, where the judgment was obtained by fraud, see below, para. 34.28. 8 This follows indirectly, if not directly, from the judgment of Lord Collins NPJ in First Laser Ltd v Fujian Enterprises (Holdings) Co £/
  • [3] Paragraph 34.27. 2 Merchant International Co Ltd v NAK Naftogaz [2012] EWCA Civ 196, [2012] 1 WLR 3036. In fact the Court of Appeal was able, and evidently preferred, to uphold the decision below on the rather narrower ground that when proceedings in England first relied on the foreign judgment, the first instance judgment had not been reversed by the appellate decision said to have resulted from fraud or a breach of the rules of natural justice or the Human Rights Act 1998. But the broader proposition appears to be perfectly sound: see Yukos Capital Sari v OJSC Oil Co Rosneft [2014] EWHC 2188 (Comm) (refusal to give effect to a Russian judgment purporting to set aside an arbitral award). 3 Pollock v Macrae 1922 SC (HL) 192.
  • [4] See Beals v Saldanha [2003] 3 SCR 416; Briggs (2004) 8 Singapore Year Book of International Law 1. 2 Royal Bank of Scotland Pic v Highland Financial Partners LP [2013] EWCA Civ 328, [2013] 1 CLC 596. 3 Though for an excellent analysis of cases in which a court of equity gave effect to a foreign judgment, which the author considers to have been overlooked, see Lee (2020) 39 UQLJ 313. 4 As distinct from a judicial disposal by application of a foreign procedural rule: Naraji v Shelbourne [2011]EWHC 3298 (QB). 5 (1889) 15 App Cas 1. See also JSC Aeroflot Russian Airlines v Berezovsky [2014] EWCA Civ 20, [2014] 1 WLR 4360 (evidence of finality of foreign judgment too unclear for summary determination).
 
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