Enforcement of Foreign Judgments and Arbitral Awards

David John Addington · September 1^st, 1999

The Supreme Court of Bermuda (“the Court”) has power under The Judgments (Reciprocal Enforcement) Act 1958 (“the Act”) to permit enforcement in Bermuda of a judgment or order of The High Court of Justice in England (and in Scotland and Northern Ireland) within six years of the judgment or order being given. Procedure is regulated by The Judgments (Reciprocal Enforcement) Rules 1976 (“the Rules”).

Thus judgments obtained in a superior court of the United Kingdom or in any part of The Commonwealth, or in a foreign country to which the Act is extended, may be registered. The Act does not extend to the United States of America or Canada, but final judgments of “non-extension” countries may be enforceable at English Common Law under the doctrine of obligation (see below).

In matrimonial proceedings certain maintenance orders are enforceable under The Maintenance Orders (Reciprocal Enforcement) Act 1974 and include certain of the States of the United States of America.

The Act provides for the registration of a judgment where:

1. it is final and conclusive between the parties;
2. there is payable under the judgment a sum of money which is not in respect of taxes or of a similar nature and which is not in the nature of a fine or penalty.

The judgment creditor may apply to the Court at any time within six years from the date of the judgment or the date of the last judgment in those proceedings. No judgment may be registered if at the date of the application it has been wholly satisfied or if it could not be enforced by execution.

A foreign judgment so registered may for all intents and purposes be enforced in like manner to an original judgment of the Court.

The Act and Rules provide for an application to be made to set aside registration and execution is prohibited during such proceedings.

A registered judgment may be set aside if:

1. the judgment is not a judgment to which the Act applies; or was registered in contravention of the Act; or
2. the foreign court had no jurisdiction in the circumstances of the case; or
3. the judgment debtor did not receive sufficient notice of the proceedings in the foreign jurisdiction to enable him to defend the proceedings and he did not appear; or
4. the foreign judgment was obtained by fraud; or
5. the rights under the foreign judgment are not vested in the person by whom the application for registration was made.

Courts of a foreign jurisdiction are for the most part deemed to have jurisdiction where the judgment was given in personam. However the deeming provisions do not apply where:

1. the subject matter of the proceedings was immovable property outside the jurisdiction of the foreign court; or
2. except in certain cases, if the bringing of those proceedings in the foreign court was contrary to an agreement under which the dispute in question was to be settled otherwise than by way of proceedings in that foreign court; or
3. where the judgment debtor was under the rules of public international law entitled to immunity from the jurisdiction of the foreign court and did not submit to the jurisdiction.

Judgments from Courts in all other jurisdictions including the United States can only be enforced under the “Doctrine of Obligation”. This Doctrine can be stated simply as “a foreign Judgment by a Court of competent jurisdiction becomes a legal obligation which may be enforced (in Bermuda) by an action for debt.”

It is the foreign Judgment which creates the debt and not any contractual liability under which the foreign Judgment was obtained.

The Judgment must be final and conclusive for a sum of money payable (not being a sum payable in respect of taxes or other charges of like nature, in respect of a fine or other penalty, or in respect of multiple damages).

Once the foreign Judgment has been proved i.e. by production of a certified copy thereof, it is up to the Defendant to show cause why he should not be made to pay it.

The Defendant’s possible defences may be briefly stated as follows:

1. the Judgment was contrary to natural justice;
2. the judgment was contrary to (Bermudian) public policy; and
3. the Judgment was obtained by fraud.

The Judgment itself is conclusive and cannot normally be re-examined by the Court in Bermuda on its merits. It has been held recently, however, that the onus is upon the plaintiff who wishes to enforce a judgment of a foreign court to prove the jurisdiction of that court.

The test of jurisdiction is the English Conflict of Laws Test as well as the test of jurisdiction under the laws of that country.

Arbitration Awards

Under the Bermuda International Conciliation and Arbitration Act 1993 a Convention Award may be enforced in Bermuda by action or may, by leave of the Court, be enforced in the same manner as a judgment or order to the same effect. Where leave is given, judgment may be entered in terms of the award. Convention Award means an award made in pursuance of an arbitration agreement in a state or territory other than Bermuda, which is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration on 10th June, 1958.

Awards made in proceedings on an arbitration in the United Kingdom or in any part of Her Majesty’s Dominions outside the United Kingdom to which the Judgments (Reciprocal Enforcement) Act 1958 extends, may be registered and be enforced in manner similar to that described at the beginning of this text for foreign judgments and the Act and the Rules apply with appropriate modifications.

Registration is also possible in respect of awards made under the United Kingdom Arbitration (International Investment Disputes) Act 1966 as extended to Bermuda.