Consequences of non-recognition of a foreign judgment

It is finally necessary to notice that if a judgment is not entitled to recognition in England as res judicata, because the party against whom it is asserted was not present and did not submit to the jurisdiction of the foreign court, it has no effect in the English legal order. It decides nothing; it precludes nothing. And it suggests nothing: it has no weight as evidence of the truth or otherwise of the issues determined, or of the underlying claim. This follows from the decision in Hollington v F Hewthorn & Co Ltd,™ although the principle can be traced back much further than that. In fact, Hollington is not concerned with the effect of a foreign decision, but the decision of another English court. The position in relation to a foreign judgment is, of course, a fortiori.™

On occasion, a judge is prevailed upon to soften the hard edges of the rule established by Hollington.™ The temptation may be understandable, but it would be wrong to yield to it. After all, if one were to ask whether ‘some effect falling short of recognition’ could be attributed to the judgment, the answer given by the Privy Council in Calyon v Michailidis,™ as well as by the Court of Appeal in Rogers v Hoyle,™ is that as it is impossible to measure or quantify what effect that would be, the answer must be no; no effect can be ascribed to the judgment; no juice can be squeezed from it.

Judgments against States

According to general principles of public international law, a foreign court has no jurisdiction to give (and another State should not enforce) a judgment against a defendant who is entitled to sovereign immunity, and who did not choose to submit to the jurisdiction of that court.^[1] Foreign judgments given against States are covered by Section 31 of the 1982 Act, where it is stated that a judgment against a foreign State shall be enforced only if (a) it would have been entitled to recognition and enforcement if not given against a State, and (b) that court would have had jurisdiction if the foreign court had applied rules which were in accordance with Sections 2-11 of the State Immunity Act 1978.

Section 31(1 )(a) has been held to require the recognising court to ask (or decide) whether the foreign State was present within the territorial jurisdiction of the foreign court, or submitted or agreed to its jurisdiction. In cases in which the State is party to a contract which contains a jurisdiction agreement, a question of construction arises in the usual way, even though the context is unusual, and submission or agreement may be found. Where this is not so, and it is necessary to establish that the State was present within the territory of the foreign court, any attempt to apply the plain and simple rule is liable to be complicated by the difficulty of deciding whether an entity or a building, admittedly within the territory of the State whose courts have adjudicated is to be considered, as a matter of English law, as the State, or an executive organ of the State, whose presence is in issue.

Even if there is a sufficient connection to the foreign court, a State may still rely on the principle of State immunity to oppose enforcement of the judgment against it. A detailed examination of the principles of State immunity and the 1978 Act is beyond the scope of this book. However, in NML Capital Ltd v Argentina the Supreme Court gave guidance on the common law rules - and, one supposes, the rules which govern registration under the 1920 and 1933 Acts, considered in the following Chapter - in cases in which the foreign judgment was given against a State. The Argentine State had issued bonds on which it had defaulted. Judgment had been obtained against it in New York, and an attempt was made to enforce the judgment under the common law rules applicable to judgments from the United States. The Supreme Court interpreted the State Immunity Act 1978 as leading to the conclusion that the State could not rely on its immunity in the English proceedings. This conclusion was not based on Section 3 of the Act, which removes immunity for proceedings relating to a commercial transaction, but because the express terms of the bond contained a broadly-worded submission to the courts of New York which was sufficient to waive the immunity the State would otherwise have had.

The first part of this conclusion is not completely persuasive: the assertion that the proceedings before the English court were not proceedings relating to a commercial transaction because they were in fact proceedings relating to the enforcement of a foreign judgment (which was given in proceedings relating to a commercial transaction) is not self-evidently correct, though if it is correct to construe the immunity of a State broadly, and the exceptions narrowly, it may be understood. But the second part of it seems plainly correct: the width of the State’s waiver of its immunity would have been sufficient for it to have been sued in the English courts, and as a result the jurisdiction of the New York court conformed to English law as set out in the State Immunity Act 1978. The court also considered that the terms of the State’s waiver were independently wide enough to apply to the English proceedings in any event.

• [1] But if the foreign State did engage with the merits of the claim against it, not reserving its position on jurisdiction, the judgment may be recognised in the ordinary way: Certain Underwriters at Lloyd's London v Syrian Arab Republic [2018] EWHC 385 (Comm). 2 Did the defendant submit? Did the proceedings relate to a commercial transaction? For illustration, see NML Capital Ltd v Argentina [2011] UKSC 31, [2011] 2 AC 495. 3 On this, see La Générale des Carrières et de Mines v FG Hemisphere Associates LLC [2012] UKPC 27 (Jer), [2013] 1 All ER 409. 4 See for illustration, Heiser v Islamic Republic of Iran [2019] EWHC 2074 (QB), accepting that where the State did not submit, presence was a precondition to the recognition of a judgment against it, and that the effecting of service was not by itself sufficient to satisfy the rule. As to whether diplomatic premises could count as presence, the court in Heiser treated the law as unclear.