Demirel v Tasarruf Mevduati Sigorta Fonu

A claimant seeking permission to serve out a claim to enforce a foreign judgment need not establish that the judgment debtor has assets in England and Wales. The court nevertheless retains a discretion and must be satisfied that England and Wales is the proper forum.

The claimant must have a good arguable case for enforcement and must ordinarily show a reasonable expectation of a legitimate benefit from an English judgment. That benefit may be indirect or prospective. The possibility that assets will later enter the jurisdiction, the availability of enforcement procedures and an approaching limitation deadline may provide a sufficient benefit.

Tasarruf Mevduati Sigorta Fonu sought to enforce in England a Turkish judgment for US$30 million against Mr Demirel. Lawrence Collins J permitted service outside the jurisdiction. On Mr Demirel's application, the judge maintained permission for that judgment but discharged a worldwide freezing injunction because no assets had been found in England and its continued utility was doubtful.

Mr Demirel sought an extension of time and permission to appeal. He contended that Rule 6.20(9) of the Civil Procedure Rules authorised service out only where assets were present or likely to be available in England. Alternatively, the proceedings served no useful purpose and the Cayman Islands were the proper forum.

1. Extension of time and permission to appeal were granted, but the appeal was dismissed.

2. Rule 6.20(9) of the Civil Procedure Rules was unambiguous. A claim to enforce a foreign judgment could be served outside the jurisdiction without proof that the debtor presently had assets in England and Wales. “Enforcement” naturally included enforcement by action. Neither the wording nor the history of the rule justified implying a territorial restriction.

3. The territorial limitation recognised for third-party debt orders in Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2004] 1 AC 260 arose from materially different considerations, including conflicting jurisdiction and the risk of double payment. Those considerations did not apply to an action upon a foreign judgment.

4. The protection of a foreign defendant operated through the court's discretion under Rules 6.20 and 6.21(2A), rather than through a restrictive construction of Rule 6.20(9). Permission should not be granted automatically. The claimant must have a good arguable case for enforcement and must ordinarily demonstrate a reasonable expectation of a legitimate benefit from an English judgment. The benefit may be indirect or prospective.

5. There was a sufficient prospective benefit here. Mr Demirel had conducted substantial international business and held assets through offshore trusts. Assets might later enter London or become accessible through the international banking system. An English judgment would also permit the use of domestic methods and aids to enforcement. Section 24 of the Limitation Act 1980 was material because a fresh English enforcement action would shortly become time-barred.

6. England and Wales was the proper place for an action seeking an English judgment upon the Turkish judgment. The overlapping Cayman proceedings did not make service unjust. Any risk of duplicated issues, delay or expense could be controlled through sensible case management.

1. Court of Appeal (Civil Division): Granted an extension of time and permission to appeal, but dismissed the appeal. The order permitting service outside the jurisdiction in respect of the Turkish judgment dated 20 November 2001 therefore remained effective.

2. High Court: Lawrence Collins J set aside permission concerning two Turkish judgments which were not final, but maintained permission concerning the judgment dated 20 November 2001. He discharged the freezing injunction because no English assets had been found and its continued effectiveness was doubtful.