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"Judgment laundering" doesn’t wash with the English Court of Appeal

22 Jan 2021

The English Court of Appeal answers a longstanding issue in the authorities and textbooks: can you enforce a "judgment on a judgment"?

In Strategic Technologies Pte Ltd v Procurement Bureau of the Republic of China Ministry of National Defence [2020] EWCA Civ 1604, the claimant obtained a money judgment in the courts of one Commonwealth state (Singapore). It then sought to enforce that judgment by a common law action on the judgment in a second Commonwealth state (the Cayman Islands), which it obtained via default judgment. Could it then register that second judgment (a "judgment on a judgment") in England under the Administration of Justice Act 1920? The Court of Appeal said no.

While the Cayman Islands judgment was within the literal definition of the term “judgment” in the 1920 Act, Lord Justice Males preferred a more purposive construction. He considered a literal approach was not in accordance with the purpose and scheme of the Act. He found that that the fundamental principle for including a state within the regime under the 1920 Act was reciprocity. To interpret the Act as permitting registration of a judgment on a judgment would mean that a judgment given in a state with which no such arrangements existed could in effect be registered for enforcement in England by way of an action to enforce that judgment in an intermediate state to which the 1920 Act does apply: what is sometimes called "judgment laundering".

Nor was Lord Justice Males content to resolve the issue by leaving it to the Court’s discretion to refuse registration under the Act as it could not have been within parliament’s intention. To hold otherwise would have the effect of permitting registration of a judgment granted by a court of a non-reciprocating jurisdiction, contrary to the intent of the legislation.

Further, he held that the safeguards provided under the Act (such as excluding judgments where the original court acted without jurisdiction) only make sense if they refer to the proceedings in the court which gave judgment on the underlying dispute as opposed to the intermediate court.

This will be a useful and relevant decision for offshore practitioners in jurisdictions where foreign judgments are often sought to be enforced.

Authors

Laura De Heer Harneys front portrait image on a grey background
Vicky Lord Harneys front portrait image on a grey background
Ian Mann Harneys front portrait image on a grey background
William Peake Harneys front portrait image on a grey background

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