Enforcement of foreign judgments in Guernsey08 Jun 2011
This briefing explains how foreign judgments may be recognised and enforced in Guernsey.
Guernsey has its own distinct legal system and, in common with Jersey, is a separate jurisdiction from that of England and Wales. Furthermore, Guernsey is not a member state of either the European Union or European Economic Area, nor a signatory to the Brussels or Lugarno Conventions which each cover enforcement of judgments in civil and commercial matters. There is a limited statutory regime for the reciprocal enforcement of judgments but the commonest method of enforcement is under common law in Guernsey.
Under the Judgments (Reciprocal Enforcement) (Guernsey) Law, 1957 as amended ("the Judgments Law") a judgment of a superior court can be reciprocally enforced by way of registration. The scope of the Judgments Law, though, is limited to only a small number of jurisdictions including the United Kingdom, Israel, Netherlands and Italy. Not all judgments given by a superior court can be registered and there are certain qualifications to registration. For example, the judgment must be final and conclusive as between the parties and provide for the payment of a sum of money (but not in respect of taxes or similar charges or a final other penalty). Furthermore, the judgment must be not more than six years old.
An application to register a judgment under the Judgments Law is relatively straight-forward requiring an application for leave to register the judgment in Guernsey to be made to the Royal Court. The Royal Court may attach conditions to an order for registration including, for example, the provision of security of costs or for the service of notice on the judgment debtor. Following the making of an order for registration under the Judgments Law the judgment debtor does have the ability to apply to set aside the registration in a fourteen day period. There are various limited grounds upon which a registration order may be set aside including fundamental attacks on the validity of the judgment that is being registered – for example, that the judgment was obtained fraudulently.
Enforcement in common law
As noted the Judgment Law has a limited scope bearing in mind the few countries to which it applies. As Guernsey is a major player in the global financial market it is not surprising, therefore, that most foreign judgments or, indeed, arbitration awards, are enforced under common law. Here the judgment creditor must sue on the foreign judgment itself and the procedure is very similar to that applicable in England and Wales. The right to enforce such a judgment arises as a matter of Guernsey law, on the basis that the judgment of a foreign court of competent jurisdiction imposes an obligation on the judgment debtor to pay the judgment debt. It is therefore not dependent on principles of comity or reciprocity. To enforce a foreign judgment in personam the judgment must be final and conclusive for a debt or definite sum of money (not payable in respect of taxes or a fine or penalty) given by a court of competent jurisdiction and not impeachable on the grounds of fraud or that it is contrary to public policy or natural justice.
The key issue is often whether or not the foreign court had jurisdiction to grant the judgment which is being enforced. The foreign court will be held to have jurisdiction if, for example, the judgment debtor was physically present and served with foreign process within that court's jurisdiction, the judgment debtor voluntarily appeared in the foreign proceedings to contest the action on its merits, the debtor was the plaintiff or counter claimed in those proceedings or, indeed, he expressly agreed to submit to that foreign court's jurisdiction. The latter condition is often covered by contractual jurisdiction clauses within agreements.
In a non-money judgment, or a judgment in rem (the judgment of a court of competent jurisdiction relating to the status of a person or thing in contrast to a particular interest held in that thing), such judgment pronounced by a court of competent jurisdiction is conclusive and binding in Guernsey. Where such a judgment relates to moveable items that judgment will be recognised and enforced if the items were situated in the foreign country concerned at the time of proceedings. However, in the case of immovables, the foreign judgment will be recognised if the immovables are situated in the relevant foreign country. For obvious reasons enforcement of a judgment in rem being sought for immovable items located outside of Guernsey is extremely rare.
Means of enforcement
Once a foreign judgment has either been registered under the Judgments Law or successfully sued upon at common law, all methods of enforcement under Guernsey law are open to the judgment creditor as if the judgment had been made by the Royal Court originally. Money judgments are enforced by Her Majesty's Sheriff who has powers to arrest and sell personalty. An insolvency procedure called "desastre" may be employed to realise a debtor's personalty and wages can also be arrested.
A judgment may also be registered against a debtor's realty and realisation of such realty can be enforced by a procedure called "saisie". The saisie procedure will include an application to evict a debtor from property and then ordering its sale. Under the saisie procedure, and unlike mortgage enforcement proceedings elsewhere for example, the judgment creditor is entitled to retain all proceeds of sale of the property and may keep the balance of any funds realised notwithstanding they exceed the debt owed. However, the judgment creditor must take care in using the saisie procedure as once a decision is taken to enforce against realty all rights to enforce against personalty may be lost.
In this time of ever increasing international litigation it is helpful for parties to know that the process for enforcing foreign judgments in Guernsey is relatively straightforward and uncomplicated. Recognising that Guernsey is a separate jurisdiction means that some care has to be taken as to the appropriate route – whether by seeking registration under the Judgments Law or enforcement under common law. Overseas practitioners will recognise similarities under English law but should also be aware of the quirks of enforcement that can be taken advantage of under Guernsey law.