Enforcement of foreign judgments in England and Kazakhstan

There have been an impressive number of recent cases involving CIS parties (including Kazakhstan) heard in English courts. Although CIS companies and individuals frequently choose to litigate in London, there are very few reported cases concerning recognition and enforcement of judgments granted by the CIS courts in England and Wales.

The author has yet to experience Kazakh judgments to be enforced in England and Wales, however the recent Russian case JSC VTB Bank v Skurikhin and others [2014] EWHC 271 (Comm) clearly shows what position the English court might take.

The English Commercial Court has recently handed down a summary judgment to VTB Bank, a substantial Russian bank and the claimant, permitting it to enforce in this jurisdiction the principal elements of 16 judgments that it obtained in the Russian courts against the defendant, Mr Skurikhin, pursuant to commercial guarantees governed by Russian law.

The case contains a number of interesting facts and deals with certain points of private international law, however there are two important points to emphasise that might be of interest to those who choose English courts for resolving their disputes. Firstly, the English Commercial Court has confirmed that it is prepared to enforce final and binding judgments handed down by the Russian courts, which is good news for those looking to pursue judgment debtors who have assets within the English jurisdiction. And secondly, the English court rejected to recover penalties from the defendant on the basis that “they are punitive in effect” and do not conform to the English public policy.

Interestingly, the English court enforced the Russian judgments despite the absence of a bilateral treaty to facilitate the enforcement of foreign court judgments. The judgment of the English court contains neither references to any multilateral treaties nor principle of reciprocity.

Since 17th century onwards, the English courts have recognised and enforced foreign judgments. In the absence of a legislative provision or applicable enforcement treaty, the procedure for enforcing the judgment of a foreign court is to bring a separate claim in the English courts based upon the foreign judgment. The English courts will generally not decide on the merits of the case. The decision of the foreign court cannot be set aside on its merits, even if the English court can be satisfied that the foreign judgment is wrong as a matter of law. For a foreign judgment to be recognized, the English court has to be satisfied that a foreign judgment is final for a sum of money and if the foreign court is deemed to have had jurisdiction over the debtor. If these conditions for enforcement are met, the usual procedure is to apply for summary judgment on the claim, which in most cases is a straightforward and relatively cheap procedure. English law does not have a requirement of reciprocity, and will enforce a foreign judgment even if an English judgment would not be enforceable in that foreign country.

There are circumstances however, which may prevent enforcement, i.e. if (i) the judgment is obtained by fraud; (ii) the enforcement of foreign judgment would be contrary to public policy in England; (iii) the foreign proceedings were contrary to natural justice; and/or (iv) the matter involves foreign public or criminal law (e.g. tax evasion). In this context, Mr Skurikhin successfully argued that certain claims of VTB for default interest payments amounted to penalties and were contrary to public policy; although he failed to establish that Russian judgments were obtained by fraud.

It is worth mentioning, however, that in the recent case JSC Aeroflot Russian Airlines v Berezovsky [2014] EWHC 70 (Ch) the Commercial Court initially granted the application for a summary judgment brought by the defendants, but finally the Court of Appeal cancelled the judgment due to finality issue involved.

Unlike English court, the Kazakhstan courts will enforce a foreign court judgment only if there is a statutory provision or an enforcement treaty between Kazakhstan and the relevant foreign country. While Kazakhstan has entered into several bilateral[1] and a multilateral treaty with the CIS countries[2] to facilitate the enforcement of foreign court judgments, none of those treaties are with Western European countries (including the UK).

Article 425 of the Civil Procedure Code of the Republic of Kazakhstan however mentions the principle of reciprocity. It is possible in theory to recognise and enforce foreign courts judgments in Kazakhstan in the absence of an enforcement treaty on the basis of reciprocity. Some academics support this view and argue that the absence of a bilateral treaty must not be an obstacle for recognition and enforcement of a foreign judgment. Apart from that, the refusal to enforce foreign judgments on the basis of reciprocity would breach the Constitution of Kazakhstan and human rights. However, some practitioners take the opposite view due to the fact that there is no clear understanding as to what will constitute reciprocity. Unfortunately, this issue has not been properly tested in the Kazakh courts and there is no clear and defined case history to follow. It is also the case that Kazakh courts are prone to political pressure and undue influence.

Conclusion: English court generally takes a generous view on enforcing foreign court judgments and the procedure is relatively quick and cost effective. Any party with a foreign judgment in their favour ought to consider whether their opponent has assets in England and, if they do, to consider enforcing that judgment through the English courts. Kazakh courts would probably take a narrower view and would not recognise and enforce a foreign judgment unless there is an international treaty in place.

 


[1] The bilateral treaties on enforcement of court judgments were concluded with Azerbaijan, China, Georgia, Iran, Kyrgyz Republic, Lithuania, Mongolia, North Korea, Pakistan, Turkey, Turkmenistan, UAE and Uzbekistan.

[2] Kishinev Convention (CIS States) on Mutual Legal Assistance on Civil, Family and Criminal Cases dated 7 October 2002

Kulzhan Mehrabi

This entry was posted in and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *