Atlantic no barrier to enforcement

Posted: 28th January 2016

RCJCooperation between legal systems throughout the civilised world is the bedrock of international law. In one case which proved the point, the Atlantic proved no barrier to High Court enforcement of an American judge’s ruling in a multi-million-pound contract dispute.

The contract related to the proposed exploitation in America of a novel system for constructing homes. The system’s British inventor was accused, amongst other things, of fraudulently misrepresenting the viability of the venture. His partner in the project, an American company, obtained a judgment against him for more than $2 million from a court in South Dakota. The company subsequently took action in London to enforce that judgment.

The inventor, who did not defend the American proceedings, nevertheless argued that the judgment had been procured by fraud. The South Dakota court was said to have breached the rules of natural justice and to have awarded a sum which was so manifestly excessive that to enforce it would contravene public policy.

In granting the company’s application, however, the Court noted that final and conclusive foreign judgments for definite sums are in principle enforceable in England and cannot be impeached for error of law or fact. There were limited exceptions to that rule but the inventor had failed to show that his case fell within any of them.

Describing him as an unreliable witness, the Court found that his strong criticisms of the company were not supported by the evidence and that it was difficult to see how the South Dakota court could have reached any other conclusion than it did. The judgment against him had been granted in accordance with the laws of South Dakota and he had not appealed against it.