01 October 2008

The English High Court has confirmed that its judgments remain enforceable after 6 years


In Westacre Investments Inc v The State-owned Company Yugoimport [2008] EWHC 801 (Comm) the Commercial Court has ruled, in response to a request by the Singapore Court of Appeal, that there is no general rule that English court judgments should not be enforced after 6 years has elapsed. The requirement to seek the court’s permission to enforce after 6 years applies only to enforcement by way of seizure of goods, land or funds (ie writs of execution).

Background

The original dispute between Westacre, a Panamanian company and Yugoimport arose out of a consultancy agreement when Westacre claimed that it had not been paid consultancy fees for successfully procuring contracts for the sale of military equipment for Yugoimport. That dispute was resolved in Westacre’s favour by an ICC arbitration in Switzerland with a final award made against Yugoimport and its guarantor bank in February 1994. In August 1995 Westacre applied to the English High Court for permission to enforce the award as an order of the English court. That process was challenged by Yugoimport and the bank but at trial the High Court dismissed the challenge and made the order that the award be enforcement and judgment entered in the terms of the award in the net sum of £41.5m. Appeals were pursued unsuccessfully and a stay of enforcement pending appeal expired in November 1999.

Despite the obvious lack of assets available within Serbia, Westacre commenced enforcement proceedings in a number of jurisdictions and in 2004 discovered, through an anonymous source, that moneys were being held on Yugoimport’s behalf in an account in Singapore. Westacre therefore applied to the High Court in Singapore to register the English judgment with a view to obtaining a garnishee order in respect of the funds in the bank account. An injunction freezing the account was also secured.

Challenge to enforcement in Singapore

Yugoimport’s first challenge to the registration succeeded only in having it limited to enforcement by garnishee only. Its appeal succeeded in striking out the registration on the grounds that it was not just and convenient that the judgment be registered more than 12 months after originally made. Westacre appealed, and the Singapore Court of Appeal directed Westacre to seek from the English High Court the answer to a hypothetical question, namely: if it were the English High Court being asked, in October 2004, to make a garnishee order in respect of its judgment, would it have given leave to enforce?

English law and procedure on enforcement

There is a well-established difference in the enforcement procedures available for English judgments. Writs of execution, which are essentially the party’s instructions to a court officer to seize and sell goods belonging to the judgment debtor, are generally issued without judicial involvement. Rules of court require the party seek the court’s permission only in limited circumstances, one of which is the elapse of 6 years or more since the date of the judgment. The presumption is that enforcement by writ of execution will not be permitted after 6 years unless the party seeking permission can show good reason. The onus is on the party to explain the delay.

By contrast, garnishee orders, requiring those owing money to the judgment debtor to pay monies directly to the party holding the judgment, are made by the court and there is no rule or practice limiting their issue after 6 years. That was established as long ago as 1885 and the current statutory regime governing what are now called ‘third party debt orders’ (in England but not Singapore) clearly places the onus on the judgment debtor to make good any objection to the order being made.

The court’s ruling

In the face of such an established position, the Commercial Court refused to apply by analogy the limitation on issuing writs of execution after 6 years to the making of a garnishee orders. In the circumstances of this case the English court would not have “hesitated long, if at all” in making the order. The delay of 6 years would, in itself, have been of little consequence. Even if the limitation had applied, the court went on to say that it would have given permission for enforcement in any event as Westacre has been actively attempting to enforce its judgment throughout that time, and the debtor was well aware of that.

It remains to be seen whether this ruling will be sufficient to convince the Singapore Court of Appeal that it is ‘just and convenient’ to allow Westacre to register its judgment for enforcement.

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