March 17, 2017

Jurisdiction - Midtown Acquisitions v Essar Global Fund (High Court)

Whether a foreign consent judgment could be enforced in England

The parties settled their dispute in an agreement, under which the defendant accepted liability and "confessed to judgment". The New York courts then entered a Judgment by Confession (similar to an English consent judgment) and the claimant then sought to enforce that judgment in England. The defendant challenged the English court's jurisdiction.

Teare J has now rejected that challenge. He rejected an argument that a Judgment by Confession is not a judgment under English law. It made no difference that there had been no action between the parties (no action having been required by the New York Court).

Under common law, the foreign judgment must be final in the particular court in which it was announced, in order for it to be enforced here. It will be final even if it is the subject of an appeal, unless a stay of execution has been granted in the foreign country pending the hearing of the appeal. Teare J rejected the argument that where a judgment of a foreign court may be set aside by the very court which gave the judgment, the foreign judgment cannot be enforced in England: "In circumstances where (i) the New York rules of court provide that a judgment by confession is enforceable to the same extent as a judgment in an action, (ii) it is common ground that the New York judgment is enforceable today and (iii) … the judgment continues to be final and conclusive notwithstanding the motion to vacate, I have concluded that the Claimant has much the better of the argument on this issue, notwithstanding that a motion to vacate … might result in the judgment being set aside".

Furthermore, the judge held that the New York judgment was a judgment "on the merits".