Enforcing foreign judgments in England and Wales is not always straightforward, especially for those countries where there is no reciprocal enforcement regime. However, the recent case of Shovlin v Careless and Others [2024] EWHC 324 (KB) clarifies the legal concepts underpinning this area and provides practical guidance for litigants hoping to successfully enforce US judgments in England and Wales.

Shovlin v Careless and Ors

The High Court’s decision in Shovlin v Careless and Ors concerned enforcement in England of a default judgment granted against defendant companies by the Superior Court of the State of California. The case explores the procedure for enforcing foreign judgments in England and Wales and the concept of voluntary submission in relation to jurisdiction.

The California proceedings were initiated in 2013 and concerned alleged fraud and defamation. The underlying dispute arose from events that mainly took place in 2008 between the claimant and the first to fifth defendants – English companies in well-known price comparison website business Money Expert Group. The claimant requested that judgment be given in default, as the defendants had failed to file a defence. At a “prove up hearing” to assess damages in 2019, the defendants’ lawyer made a “special appearance”, arguing that the case should be dismissed as they had not complied with the five-year rule. Under California law, civil proceedings should be brought to trial within five years of the action being commenced.

However, the California court was not persuaded by the defendants and ultimately granted default judgment in the claimant’s favour for $10,066,353 (the US Judgment). Following this, in October 2021, the claimant, a UK citizen who had resided in the United States for years, issued proceedings in the courts of England and Wales to enforce the judgment debt at common law.

How are foreign judgments enforced in England and Wales as a matter of common law?

The common law regime is the default regime for countries where there is no applicable treaty, statute or convention providing for enforcement. To be enforceable at common law, a judgment must be:

• Final and conclusive in the court which pronounced it.
• For a sum of money, but not for a fine, penalty or for taxes. Non-monetary relief is therefore not capable of enforcement through the common law regime.
• On the merits of the claim. In accordance with criteria laid down by Lord Brandon in The Sennar No 2 [1985] 1 WLR 490, a decision on the merits must establish certain facts as proved (or not in dispute), state what the applicable principles of law are and find a conclusion regarding the effect of the principles on the facts of the case in hand.
• Have been established as the appropriate jurisdiction. The foreign court must have established proper jurisdiction over the defendant in accordance with English private international law. Broadly, this means that the foreign court must have jurisdiction on a territorial or consensual basis. The original court will be deemed to have had territorial jurisdiction if the debtor was present in the foreign country when the proceedings were commenced, and consensual jurisdiction if the debtor agreed to the relevant jurisdiction, voluntarily appeared in the proceedings, or otherwise submitted to the foreign jurisdiction.

Defences to enforcement include that the judgment was obtained by fraud; the judgment is contrary to English public policy; the defendant did not have a fair opportunity to be heard; and the judgment is inconsistent with a prior judgment on the same subject matter and between the same parties.

The Enforcement Proceedings

In Shovlin, the claimant sought to enforce the US Judgment at common law (there being no relevant treaty or statute providing for enforcement of a US Judgment). It was common ground that the US Judgment was a final and conclusive judgment on the merits for a definite sum of money. The critical issue for determination before the High Court was whether the defendants had voluntarily submitted to the California court’s jurisdiction by making a special appearance at the prove up hearing. The claimant argued that the defendants’ appearance and participation could constitute an implied submission to the California court’s jurisdiction. The defendants maintained that they had only made the special appearance to contest jurisdiction and had therefore not made a general appearance which could imply submission to the jurisdiction.

Rejecting the claimant’s arguments, the High Court concluded that the defendants had not voluntarily submitted to the California court’s jurisdiction. As a result, the Court dismissed the case and ruled that the California judgment could not be enforced in England. The Court concluded that submission to the jurisdiction required the unambiguous waiving of objection to the California court’s jurisdiction and in this case the defendants’ attendance at the prove up hearing did not constitute such a waiver. Instead, the defendants had maintained their position that they did not recognise the California court’s jurisdiction to hear and determine the claim and had not unequivocally represented that objection was not being taken to that jurisdiction.

Key Takeaways

The Shovlin decision demonstrates that enforcing foreign judgments in England and Wales does not come without its challenges and not every foreign judgment is enforceable. It is necessary to scrutinise the foreign judgment, and certain underlying facts, at an early stage to ensure the requirements for enforcement can be met.

When considering whether jurisdiction was established in the foreign proceedings, the presence or submission of the defendant is often determinative. As highlighted by the decision in Shovlin, this can include appearing in the foreign court without contesting jurisdiction. If an appearance is necessary, then it should be made clear that jurisdiction is disputed in order to preserve this position at a later stage.

However, submission to a certain jurisdiction can also include agreeing to the jurisdiction in a contract. Therefore, it is important to check any contractual provisions relating to jurisdiction. If a particular court is specified, which is different from the foreign court that gave the judgment being enforced, then that judgment may not be enforceable.

Whilst it doesn’t appear to have been a significant in Shovlin, whether a defendant is given proper notice of any foreign proceedings can also impact the decision to permit enforcement in England. If a defendant is not given proper notice and has not had a fair opportunity to present their case, then it’s unlikely that any subsequent judgment from the foreign court will be enforceable.

Accordingly, if foreign proceedings are initiated with a view to enforcing any subsequent judgment abroad, litigants should consider, at the outset with their legal advisors including those in the jurisdiction where enforcement will be sought, the requirements that the judgment should meet for it to be successfully exported.