Dispute Resolution

You have obtained a final judgment in your favour. The other party is not complying with it voluntarily. Time to think about formal enforcement action.

As you might expect, there are various options available for the enforcement in Scotland of a Scottish court order, but what if you need to enforce an order which was granted by the courts of another jurisdiction?

There are different reasons why this may be necessary, the most obvious examples being that the debtor is now based in or has assets/bank accounts in Scotland. The good news is that this will not be a barrier to enforcement, although the ease with which the order can be enforced in Scotland will depend on where it was obtained.

In a case which was reported earlier this week, Daniel Mikhail Zigal v Gordon Alexander Buchanan [2018] CSOH 94, the Scottish courts considered the enforcement in Scotland of a judgment of the High Court of Hong Kong Special Administrative Region. Proceedings had been brought in Hong Kong in connection with a business dispute, no defence was lodged and the Hong Kong High Court pronounced a final judgment in favour of Mr Zigal. Mr Zigal subsequently sought to enforce the order in Scotland by raising an action of decree conform, which involves the Court of Session granting an order in the same terms as the foreign decree.

Mr Buchanan had not sought to have the judgment set aside in the Hong Kong courts but he defended the Scottish proceedings. He claimed that the judgment should not be recognised in Scotland as service of the court papers in Hong Kong was invalid and the Hong Kong courts did not have jurisdiction. As a secondary position he claimed that the judgment should not be recognised on public policy grounds. 

Both parties were allowed to lead evidence and the court found in favour of Mr Zigal. Lord Ericht confirmed that in these proceedings the court was not concerned with the substance of the matters raised in the action in Hong Kong and could not enquire into the facts behind the final judgment which had been awarded. The onus was on Mr Buchanan to satisfy the court that the judgment was obtained irregularly and improperly and that it should not be given effect to, however he failed to do so. This case has not altered the existing position in relation to decree conform but serves as a reminder that the enforcement process is not necessarily automatic.

For enforcement between some jurisdictions, there are statutory measures which have been introduced to ensure a more straightforward process. For example, Parliament and Council Regulation (EU) 2015/2012 (“Brussels I Recast”), which applies to the enforceability of judgments between a number of European states, provides for the recognition of judgments from other participating states without the need for any special enforcement procedure. There are some exceptions, but generally the onus is now on the party seeking to have the recognition or enforcement refused to be proactive and apply to the court, which differs significantly from the process in an action of decree conform. 

Accordingly, foreign decrees may be enforced in Scotland with varying degrees of difficulty and the particular measures to be taken will be dependent upon the circumstances of the case and the origin of the order. The presence of a debtor or their assets in Scotland will not prevent a party in possession of a foreign court order from enforcing that order in Scotland, but care will need to be taken to ensure that the appropriate enforcement measures are used.

If it is known at an early stage of the dispute that a debtor is based in or has assets in Scotland, it may be worth giving some consideration to eventual enforcement and recovery when deciding where to raise proceedings.

Please contact Ross Campbell or your usual Brodies contact if you require any assistance from our experienced litigation team.

Ross Campbell

Ross Campbell

Senior Solicitor at Brodies LLP
Ross is a senior solicitor in the Business Disputes and Asset Recovery Team and specialises in commercial dispute resolution.
Ross Campbell

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