Home Information Cases Joint Stock Co “Aeroflot - Russian Airlines” v Berezovsky & Anor (2014)

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Joint Stock Co “Aeroflot - Russian Airlines” v Berezovsky & Anor (2014)

Summary

A Russian company's action to enforce a money judgment of the Russian court could not be summarily dismissed on the basis that the judgment breached the principle of finality. The English courts would not hold that a foreign judgment infringed the finality principle when it interfered with a prior judgment if, under the foreign law, the prior judgment was not final and binding. The question of whether the Russian judgment was final and binding could only be determined at trial.

Facts

The appellant Russian company (X) appealed against a decision ([2012] EWHC 3017 (Ch)) granting summary judgment in favour of the respondents (B and G) in X's action to recognise and enforce a money judgment of the Russian court.

G and B had both been convicted, in Russia, of fraud perpetrated against X. In proceedings in 2006 and 2007, they had each been found liable to compensate X. Although X had already recovered the judgment debt in full, it subsequently issued a claim for an uplift or indexation of the amount of damages awarded. In 2011, the court granted the indexation claim, which had the effect of increasing the sum payable to X tenfold. X issued proceedings in the United Kingdom, seeking recognition and enforcement of the indexation judgment. The UK court dismissed the claim on the basis that the Russian court's decision to reopen the judgment to allow for indexation breached the principle of finality because no new facts had come to light and there was no suggestion that the indexation claim was a separate cause of action. The issues were whether (i) English law applied to all questions arising from the application of the finality principle, particularly the question of whether the foreign court's judgment was final and binding for the purposes of that principle; (ii) the foreign court's violation of the European Convention on Human Rights 1950 art.6 had to be "flagrant" to justify withholding recognition on that ground; (iii) there was a strong presumption of Convention compliance because Russia was a contracting party to the Convention.

Held

(1) By implication, the judge had decided that domestic law governed the question of whether the Russian judgments were final and binding. That approach was contrary to principle and authority. The English courts would not hold that a later foreign judgment infringed the finality principle when it interfered with a prior judgment if, under the foreign law, the prior judgment was not final and binding. The test was whether the earlier judgment would have precluded the unsuccessful party from bringing fresh proceedings in the jurisdiction. If English law did not take that approach, the English courts could end up recognising and enforcing a judgment which was liable to be set aside in the country in which it was made. The converse would be equally unjust, namely if the English courts were to refuse to recognise and enforce a foreign judgment on the ground that it altered a prior judgment if that judgment was always properly capable of being so altered, Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 A.C. 853, Nouvion v Freeman (1889) 15 App. Cas. 1 and Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniya Naftogaz Ukrayiny [2012] EWCA Civ 196, [2012] 1 W.L.R. 3036 followed. In the instant case, before it could consider whether to recognise the Russian judgments, the court needed to make findings of fact about whether the 2007 compensation judgment was final and binding. It could only do that at trial because it had to make findings on questions of Russian law about which there was conflicting expert evidence. Further, any issue about whether the indexation judgment varied the compensation judgment or replaced it had to be determined under Russian law and could not be decided on the instant appeal. For that reason, there could not be summary judgment without a trial (see paras 28-46 of judgment). (2) It was not necessary to decide in the instant case whether there was some threshold test of seriousness in relation to breaches of the finality principle. Whilst the instant court was not in a position to say whether the finality principle had been breached until there had been findings on questions of Russian law, the position had to be that if the compensation judgment had been final and binding under Russian law, any breach of the finality principle was certainly flagrant, Soering v United Kingdom (A/161) (1989) 11 E.H.R.R. 439 considered (paras 49-52). (3) When the court said, in Maronier v Larmer [2002] EWCA Civ 774, [2003] Q.B. 620, that there was a "strong presumption" that the procedures of other signatories of the Convention were compliant with art.6, it was not using the word "presumption" in its usual sense. When a court was asked to enforce a foreign judgment, it need not actively inquire whether the foreign court was entitled to make the order it made. It was entitled to assume that the court acted in a proper way unless the contrary was proved. It should not simply judge the foreign court's procedure by reference to its own, but should require a clear breach of the finality principle to be shown, Maronier v Larmer explained. In the instant case, however, the presumption of compliance with art.6 would be displaced if, following the findings of Russian law, it was clear that the final Russian judgment breached the finality principle (paras 54-60).

Appeal allowed

Court of Appeal
Arden LJ, Kitchin LJ, Lord Toulson
Judgment date
16 January 2014
References

LTL 16/1/2014 : [2014] EWCA Civ 20