Karafarin Bank v Mansoury-Dara

A claimant may commence or continue English proceedings despite a foreign judgment on the same cause of action where that judgment is unenforceable or not entitled to recognition in England and Wales. Section 34 of the Civil Jurisdiction and Judgments Act 1982 permits fresh proceedings in that situation and does not require the claimant first to set aside the foreign judgment. A stay for lis alibi pendens may nevertheless be refused where enforcement against assets in England is a legitimate juridical advantage unavailable in the foreign jurisdiction. Delay, the imminence of the English trial, and the uncertain duration and effect of foreign appellate proceedings are material case-management considerations.

The claimant sued on 13 cheques said to be governed by Iranian law. Before the English proceedings, it had obtained Iranian criminal and civil judgments concerning four cheques, in the defendant’s absence. Those judgments were not enforceable or entitled to recognition in England.

The defendant later learned of the Iranian proceedings, appealed the civil judgments, and applied shortly before the English trial for a stay. He relied on abuse of process, lis alibi pendens, section 34 of the Civil Jurisdiction and Judgments Act 1982, and case-management considerations. The central issues were whether the English proceedings should be stayed or treated as abusive while the Iranian appeals continued.

1. Application dismissed. Both the primary application for a stay and the alternative application pending the Iranian appeals were dismissed.
2. It was prima facie abusive to pursue the same debt or damages against the same defendant in two jurisdictions. The principle recognised in Australian Commercial Research and Development Ltd v ANZ McCaughran Merchant Bank Ltd was, however, subject to section 34 of the Civil Jurisdiction and Judgments Act 1982.
3. Section 34 permitted fresh English proceedings because the Iranian judgments had been obtained in the defendant’s absence and were not enforceable or entitled to recognition in England. The provision did not require the claimant to seek to set aside the Iranian judgments first. The English claim also extended to nine cheques not covered by the Iranian judgments.
4. The continuation of the English proceedings was therefore not an abuse. The claimant had continued in accordance with the court’s directions after the defendant knew of the Iranian judgments and had not sought a stay at the pre-trial review.
5. The principle in The Abidin Daver did not justify a stay. Although Iran might be a natural and appropriate forum, enforcement against the defendant’s assets in England was a legitimate juridical advantage available only in England. It was sufficiently important to justify continuation of the English proceedings, particularly given the defendant’s delay and the absence of proceedings in Iran concerning nine cheques.
6. A stay pending the Iranian civil appeals was also refused. The only estimate was that those appeals would take one to two years, whereas the English trial was imminent and the parties had prepared for it. It was also uncertain whether the appeals would retrospectively amount to submission to the Iranian jurisdiction and make the Iranian judgments enforceable in England. An undertaking not to remove assets from England did not alter that conclusion.
7. The court did not decide whether Osuwu v Jackson barred a stay based on lis alibi pendens, because the application failed on the other grounds.