Judgment not final and conclusive on the merits: procedural disposals

A judgment will be conclusive if none of the defences to its recognition may be raised by the party against whom it is asserted. The judgment is on the merits if it is ‘a decision which establishes certain facts proved or not in dispute, states what are the relevant principles of law applicable to such facts and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned’.^[1] If there is judgment for a party on procedural grounds, properly so called, the judgment may not be on the merits. But a ‘judgment by confession’, as may be obtained in the United States, should be seen as a judgment on the merits, even though there is nothing resembling a trial. After all, a confession of the merits is, in the civilised world, perhaps the best possible evidence of the merits; and it would be absurd if such a confession were to deprive the claimant of a judgment which he could enforce.

Decisions on (or disposals of) jurisdictional applications or challenges, which may well be interlocutory in the foreign court, may in certain cases be seen as final and conclusive for the purposes of English private international law. If, as in The Sennar (No 2),^m a court decided that the parties concluded a jurisdiction agreement, and that the proceedings should be dismissed accordingly, the decision that there was a jurisdiction agreement will be the last word of the court on that issue. The decision will be perfectly capable of recognition in England as res judicata against the person who is to be bound by it,^[2] for a decision on the validity and interpretation of a contract is no less a decision on the merits for being concerned with the validity and interpretation of a jurisdiction clause contained in that contract. By contrast (and for completeness) the consequential decision of the Dutch court, that it had no jurisdiction, will be irrelevant to the English court which has to answer a quite different question, and the question of the recognition of that Dutch decision will not arise.

The Sennar (No 2) is a special case. It cannot be extended to the decision of a foreign court to stay or dismiss an action of the ground of forum non conveniens so as (for example) to require a court in another country to accept that it is the forum conveniens. Though a foreign court may finally dispose of a case by dismissing it on these grounds in favour of trial in an identified natural forum, there is no authority which clearly holds that such a decision of this kind by a foreign court may qualify for recognition as res judicata, or that the court so identified is bound to find that it is, by reason of res judicata, the natural forum for the litigation. Likewise, if the foreign court has refused to stay proceedings, on the basis that it finds a foreign court not to be the natural forum, this will not meet the requirements for recognition as a foreign judgment, either. The decision of a court in a common law jurisdiction that a case should not be stayed will be based on a combination of factors, weighed by the judge as an exercise of individual assessment. Such an overall evaluative judgment is not designed to meet the criteria for recognition as a foreign judgment.

The same point may be put another way. It is true that a foreign court in another common law jurisdiction may have applied principles which are to the same broad effect as those which an English court would have applied. It has been held that the construction of a contract by a foreign court and an English court involves one and the same issue, even if the two courts apply different choice of law rules to determine it: one issue, two systems, as it might be put. It may then be contended that the application and effect of the principle of forum non conveniens, when applied by different common law courts, should be viewed in the same way: two systems, but one issue. But a decision of a foreign court, that proceedings before it should or should not continue, will be based on its own rules^[3] of jurisdictional discretion, access to justice, public policy, and so on; they are separate and distinct from those which an English court applies, even if they spring from the same root. In other words, two systems, two issues.

It will almost always denature a judgment on the broad issue of forum conveniens to try to dismember it, or to pick a strand out of it. And even if the foreign court has purported to decide a question - whether the claimant sustained the injury of which he complains within the territory or not, for example - which may also be asked by an English court, it may not have done so to the ordinary civil standard, or it may not have been required to decide it to that standard for the purpose of the decision it had to take. Even here, and even assuming the defendant is held to have submitted to the jurisdiction of the foreign court, the obstacles to recognition of such a finding by a foreign court are, and ought to be, formidable. In an extreme case - say, where the parties agreed that a decisive factual or legal issue should be determined by the foreign court to the ordinary civil standard - it may be an abuse for the losing party to ask the English court to ignore the foreign finding. But such cases must be rare, and they should not call into the question the sense of the general point, which is that forum decisions are, in general, not final and conclusive on the merits, and do not give rise to issues of res judicata.

• [1] Lord Brandon in The Sennar (No 2) [1985] 1 WLR 490. This definition was given for the purpose of the expression ‘on the merits’ as it is used to found an estoppel. But there is no reason to think that it is not of general application. 2 Cf Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591; The Sennar (No 2) [1985] 1 WLR 490; see also Charm Maritime Inc v Kyriakou[9%T 1 Lloyd's Rep 433; Desert Sun Loan Corp r Hill [1996] 2 All ER 847; Naraji v Shelbourne [2011] EWHC 3298 (QB); Saleh v Serious Fraud Office v Saleh [2017] EWCA Civ 18, [2017] Lloyd’s Rep FC 177 (order made in consequence of claimant withdrawing claim not a judgment on the merits). Care must be taken not to make too much of this proposition. As the more recent cases show, a decision on a question of interlocutory civil procedure can still be on the merits of the point; and a judgment could hardly be denied enforcement if the claimant had won (only) because the defendant had failed to discharge the burden of proof procedurally placed upon him. A court’s decision not to stay proceedings is not likely to give rise to an estoppel: Salgaocar v Jitendra [2019] SGCA 42. 3 Unless preceded by waterboarding. 4 Midtown Acquisitions LP v Essar Global Fund Ltd [2017] EWHC 519 (Comm), [2017] I WLR 3083; further proceedings [2018] EWHC 2545 (Comm), [2019] 1 All ER (Comm) 631. 5 As they are usually made on the application of the defendant against the claimant, and as the claimant chose the court and, therefore, submitted to its jurisdiction, there is no difficulty in satisfying the requirement that the court have international jurisdiction. 6 It follows that ‘interlocutory’ is not a useful term of art in this context. 7 There is need for considerable caution. In Deutsche Bank AG v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023, [22] [29], the court was asked to give some effect to a transcript of comments made by a Texas judge in the course of a hearing on a motion to dismiss, where the order made by the judge was, in conformity with Texas procedure, unaccompanied by reasons. This cannot have been an appropriate thing to consider doing. 8 [1985] 1 WLR 490. And see also Marubeni Hong Kong & South China Ltd v Mongolian Government [2002] 2 All ER (Comm) 873. 9 By contrast, if it dismisses a jurisdictional challenge, the defendant will not be regarded as having submitted (see 1982 Act, Section 33(1)) unless he participates further in the proceedings.
• [2] And it is of no relevance that the foreign court may have applied a choice of law rule which is not that which would have applied in an English court. See also Leibinger v Stryker Trauma GmbH [2006] EWHC 690 (Comm). The principle was misapplied by the Australian Federal Court in Armacel Pty Ltd v Smurfit Stone Container Corp (2008) 248 ALR 573, where it was held that a finding made against a defendant who appeared before the foreign court only to challenge jurisdiction was nevertheless binding on him. 2 More precisely, that the party against whom the decision is given is bound to accept it. 3 Quite apart from any arguments about whether the defendant to the foreign proceedings, who applied for the stay or dismissal, submitted to the jurisdiction of the foreign court in doing to. See Standard Chartered Bank (Hong Kong) Ltd v Independent Power Tanzania Ltd [2016] EWCA Civ 411, [2016] 2 Lloyd’s Rep 25. 4 See, to the same effect, Salgaocar v Jitendra [2019] SGCA 42. For the analogous proposition that English decisions made on an application to dispute the jurisdiction do not amount to res judicata in the later trial, see BNP Paribas SA v Trattamento Rifiuti Metropolitan SpA [2020] EWHC 2436 (Comm). 5 For the proposition that a court may have to consider whether the foreign doctrine of forum non conveniens is sufficiently close to its own, see Amchem Products Inc v British Columbia (Workers’ Compensation Board) [1993] 1 SCR 897, 931932. 6 First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd [2012] HKCFA 52, [2013] 2 HKC 459.
• [3] Which some may refer to as ‘multi-factorial’. 2 Something similar was said about Dutch public policy and English public policy, in a case in which it was still hard to imagine that the two policies actually diverged: each court should make its own assessment, according to its own judgment: Yukos Capital Sari v OJSC Rosneft Oil Co [2012] EWCA Civ 855, [2014] QB 458, esp. at [151]. 3 See also Foreign Judgments (Reciprocal Enforcement) Act 1933, Section 1(2A), which excludes such judicial decisions from the material scope of that Act. 4 But which in this context it probably is not: see above, para. 34.03. 5 The proposition in the text is supported by Cortés v Yorkton Securities Inc (2007) 278 DLR (4th) 740. For a very surprising suggestion that an order registering a foreign judgment in Singapore is itself capable of registration as a Singapore judgment in Hong Kong, see Morgan Stanley & Co International Ltd v Pilot Lead Investments Ltd [2006] 4 HKC 93 (on which, see Smart (2007) 81 ÀLJ 348): as a matter of common law the decision must be taken as wrong. A ‘judgment on a judgment' does not qualify for registration under Administration of Justice Act 1920 (see Chapter 35, below): Strategic Technologies Pte Ltd v Procurement Bureau of the Republic of China Ministry of National Defence [2020] EWCA Civ 1604.