February 28, 2020

Cross-border disputes: English Court enforces Dubai money judgment - public policy not offended despite illegality ruling in parallel arbitration and English/Dubai law differences


In Lenkor Energy Trading DMCC v Irfan Iqbal Puri [2020] EWHC 75, the English High Court decided that the judgment of a Dubai Court (the "Dubai Judgment") should be recognised in England, and it awarded summary judgment in respect of the Claimant (judgment creditor)'s common law claim brought on the judgment debt.

The Defendant (judgment debtor) had argued that it would be contrary to English public policy to recognise/enforce the Dubai Judgment:

  • in view of a finding, in parallel arbitration proceedings, that the underlying transactions to which the Dubai Judgment related were tainted by illegality;
  • since English law would not have imposed personal liability on the Defendant;
  • on the basis that the interest ordered by the Dubai Court constituted a penalty.

That defence failed, and summary judgment was awarded to the Claimant, for the following reasons:

  • The public policy defence only operated if the recognition/enforcement of the foreign judgment, as opposed to the underlying transaction on which it was based, offended English public policy.
  • Although there are some circumstances in which an English Court might enquire into the underlying transactions giving rise to a foreign Court judgment, no such circumstances existed here. That was because the Dubai Judgment was based on the self-contained and independent consequences of signing cheques under Dubai law for which there was a powerful rationale. Although different from English law, this did not offend any principle of English public policy.
  • Even if it were permissible to consider the underlying transactions, enforcing the Dubai Judgment would not amount to the indirect enforcement of an obligation to pay monies which, by reason of the underlying illegality, the parallel arbitration proceedings had determined did not exist.
  • The fact that English law, unlike Dubai law, would not have imposed personal liability on the Defendant did not mean that English public policy would be offended by recognising/enforcing the Dubai Judgment.
  • The rate and period of interest imposed by the Dubai Judgment diverged little from English law, and so it was unrealistic to characterise the interest ordered as amounting to a penalty.

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