Westacre Investments Inc. v Yugoimport-SDPR (also known as Jugoimport-SDPR)
| Jurisdiction | England & Wales |
| Judge | THE HON. MR JUSTICE TOMLINSON |
| Judgment Date | 21 April 2008 |
| Neutral Citation | [2008] EWHC 801 (Comm) |
| Docket Number | Case No: 2007 Folio 1060 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 21 April 2008 |
[2008] EWHC 801 (Comm)
The Hon. Mr Justice Tomlinson
Case No: 2007 Folio 1060
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
MICHAEL CRYSTAL QC and TOM SMITH
(instructed by Messrs Forsters LLP) for the Claimant
DUNCAN MATTHEWS QC and SIMON MILNES
(instructed by Messrs Masseys) for the Defendant
Approved Judgment
Hearing dates: 17–18 March 2008
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Tomlinson
Introduction
This is an unusual although not altogether unprecedented application. In the context of proceedings in Singapore in which there is sought registration of an English judgment dated 13 March 1998 and, ultimately, enforcement thereof by way of garnishee order, the judgment creditor has, at the direction of the Singapore Court of Appeal, applied to this court for declaratory relief. In the context of its consideration whether it is just and convenient that the English judgment should be enforced in Singapore, the Singapore Court of Appeal has directed the judgment creditor to ascertain whether, if the judgment creditor had applied for a third party debt order on 5 October 2004, the date on which registration of the English judgment was initially permitted in Singapore on the ex parte application of the judgment creditor, the English court would have given leave to enforce the judgment in that manner. The assumption that the English court is asked to make is that there was on 5 October 2004 a third party within the jurisdiction of the English court who owed or held money to the credit of the judgment debtor.
In one sense there is no lis pending between the two parties of which this court is seised, and the court is on that footing being asked to determine a hypothetical question. This court is of course always anxious to respond so far as properly it can to a request for assistance from an overseas court. I am not sure however whether it is entirely right to characterise what has here occurred in precisely that way. I do not have a full transcript of the proceedings before the Singapore Court of Appeal, but that court seems to some extent to have tended to the view that, in the light of the nature of the Singapore Reciprocal Enforcement of Commonwealth Judgments Act, it had in any event been incumbent upon the judgment creditor before seeking registration in Singapore first to ascertain from the English court whether the judgment in question is enforceable in England. On that view of the matter the judgment creditor is unable to obtain relief in Singapore without first applying to the English court for declaratory relief, as it has now in any event been directed to do. In at least two reported cases in this area of the law similar applications have been made with a view not to execution in this jurisdiction but to assist the passage of execution in another jurisdiction – see Duer v. Frazer [2001] 1 WLR 919 and The Society of Lloyd's v. Longtin [2005] EWHC 2491 (Comm). It should also be borne in mind that what is sought in Singapore is registration and enforcement of a judgment of this court, a remedy which is sought under legislation made “to facilitate the reciprocal enforcement of judgments and awards in Singapore and other parts of the Commonwealth”. However the matter is properly to be characterised, it is in my judgment clearly appropriate that the English court should assist the parties and the Singapore court by indicating, so far as it is able, how the discretion of the English court would have been likely to have been exercised in the circumstances posited.
The short answer to the question posed is that, as Lord Brown of Eaton under Heywood has recently pointed out in A v. Hoare [2008] 2 WLR 311 at 336H, conceptually a judgment of this court, although interest bearing for only six years, remains enforceable without limit of time. Different procedural rules apply to the different methods of enforcement. In the context of a third party debt order the relevant rules place the burden on the judgment debtor to show why an interim order should not be made final. In the context of the present case, without encroaching on the fact-finding function of the Singapore court, I find it virtually impossible to contemplate that the English court would in the circumstances either have declined to make an interim order or, if the judgment debtor had filed evidence stating grounds for objecting to the making of a final order, given effect thereto by declining to make the interim order final.
Background
The underlying dispute is already familiar to the English court, having been considered by first Colman J and then, on an unsuccessful appeal therefrom, by the Court of Appeal – see Westacre Investments Inc v. Jugoimport-SDRP Holding Company Ltd & Ors [1999] QB 740, and [2000] QB 288.
The Claimant, to which I shall refer as “Westacre”, is a company incorporated in Panama. The Defendant, to which I shall refer as “Yugoimport”, is a state-owned entity, describing itself as a company, based in Serbia. It is the successor to The Federal Directorate of Supply and Procurement of the former Socialist Federal Republic of Yugoslavia, again a state-owned entity which became in turn from 2003 to 2006 a state-owned entity of the now dissolved State Union of Serbia and Montenegro. Yugoimport is or was at all material times engaged in the export of armaments and defence equipment.
In 1988 Yugoimport wished to sell armoured vehicles to the Kuwaiti Government. In an attempt to bring this about Yugoimport entered into an agreement dated 12 April 1988 with Westacre pursuant to which Westacre agreed to provide consultancy services to Yugoimport in connection with the proposed sale of military products and construction services to the State of Kuwait. In due course Yugoimport was successful in procuring a contract or contracts to supply Kuwait which contract or contracts was or were duly performed. Yugoimport did not however pay to Westacre the consultancy fees which in consequence fell due.
In accordance with the contract in November 1990 Westacre invoked the agreed arbitration procedures in Switzerland. On 28 February 1994 the International Court of Arbitration of the International Chamber of Commerce issued a Final Award in favour of Westacre in the sum of US$50,010,093.36 and £1,029,629.37 together with interest accruing at 5% per annum. The award was in fact made jointly and severally against Yugoimport and Beogradska Bank, the latter liable as guarantor. The respondent parties appealed the award to the Swiss Federal Tribunal which appeal was dismissed on 30 December 1994.
On 15 August 1995 pursuant to Westacre's application to this court Buxton J gave leave to enforce the award as a judgment of the court, that order being made pursuant to section 26 of the Arbitration Act 1950 and section 3 of the Arbitration Act 1975. On 15 November 1995 Yugoimport and Beogradska Bank applied to set aside that order and on 19 April 1996 it was ordered that the application should be continued as if begun by writ. The principal ground of resistance to enforcement was on grounds of public policy. It was alleged that the agreement with Westacre was for the purpose of procuring sales through bribery or other corrupt influence, an argument raised before but rejected by the arbitrators. On 23 April 1996 Westacre issued a separate writ commencing an action on the award itself. The 1995 application and the 1996 action were consolidated. On 11 March 1997 Westacre applied in both actions for the trial of a preliminary issue.
On 19 December 1997 Colman J found for Westacre and ordered that it be at liberty to enforce the award in the same manner as a judgment against Yugoimport and Beogradska Bank and that judgment be entered in terms of the award in the net sum of £41,584,488.56. The formal judgment which is now sought to be enforced is dated 13 March 1998.
Yugoimport and Beogradska Bank appealed to the Court of Appeal. Their appeal was dismissed on 12 May 1999. They then presented to the House of Lords a petition for leave to appeal. That petition was dismissed on 20 October 1999. Yugoimport and Beogradska Bank applied for and obtained from first Colman J and then the Court of Appeal a stay of execution on the judgment pending the appellate process. Execution was in consequence stayed from 13 March 1998 until 10 November 1999, a period of twenty months.
It has at all times been the case of Yugoimport that its financial condition is parlous, that its assets in Serbia are extremely limited, that it is impecunious and that it has at all material times been unable to pay the judgment debt. It has adduced evidence to that effect. I believe it to be uncontentious that the judgment debt has at all material times been equivalent to a significant proportion, possibly at times of the order of 50%, of Serbia's foreign currency reserves. I also believe it to be uncontentious that there may be competing claims as between successor states to the assets, if any, of Yugoimport. The turmoil which has afflicted this part of the world in recent years is well-documented. It is unnecessary and inappropriate for me to essay any appraisal of the extent to which that turmoil has affected the efficient functioning of the judicial and administrative systems in Serbia and over what period of time. It suffices to say that, given the circumstances, given that Yugoimport is a state entity and given the nature of the...
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