Joint Stock Company (Aeroflot -Russian Airlines) v Berezovsky & Anor

Recognition and enforcement of a foreign judgment involves distinct questions. English law determines the requirements for finality and the public-policy effect of a breach of the finality principle. The foreign law determines the prior judgment’s incidents and legal effect, including whether it was final, binding and preclusive in its own jurisdiction. The relevant question is whether that judgment would have prevented fresh proceedings there. English courts should not give a foreign judgment greater finality than its own law allows. Conversely, they should not refuse recognition because a later judgment altered an earlier judgment which was properly capable of alteration under the foreign law. Where conflicting foreign-law evidence is material, the issue cannot be resolved summarily and must proceed to trial.

Aeroflot sought recognition and enforcement of Russian judgments awarding compensation for fraud, including a later judgment which indexed the original award for inflation. The High Court, applying the finality principle as a public-policy defence, summarily dismissed the claim: [2012] EWHC 3017 (Ch).

On appeal, Aeroflot challenged the choice of law applied to the finality issue. The respondents also raised questions concerning international jurisdiction, estoppel, election, delay and the parties’ failure to advance their positions in the Russian proceedings. The central issue was whether the prior Russian judgment was final and binding under Russian law before the English court considered recognition of the later judgment.

Lady Justice Arden gave the leading judgment. Lord Justice Kitchin and Lord Toulson agreed.

1. Appeal allowed. Summary dismissal required the court to be satisfied that the claim had no real prospect of success. Conflicting expert evidence on Russian law meant that the finality and binding effect of the second Savelovsky judgment required findings at trial.
2. Choice of law. English law determines the requirements for a final and binding judgment and whether interference with a prior judgment engages English public policy. The incidents and legal effect of the foreign judgment, including whether it was final, binding and preclusive in its own jurisdiction, must be determined under foreign law. The court must ask whether the earlier judgment would have precluded fresh proceedings in that jurisdiction. This followed Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] AC 853 and Nouvion v Freeman (1889) App Cas 1. The meaning and effect of the later Russian judgment, including whether it varied or replaced the earlier judgment, also fell to be determined under Russian law. Merchant International Company Ltd v Natsionalna Aktsionenra Kompaniya Naftogaz [2012] 1 WLR 3036 was consistent with that analysis.
3. Convention and public policy issues. The finality principle forms part of English public policy and engages sections 2 and 6 of the Human Rights Act 1998. The court provisionally considered that a clear and serious breach might be required, but did not decide the threshold. It explained that practical assumptions of procedural and Convention compliance may be displaced by proof of a clear breach of the finality principle.
4. Other grounds. Questions concerning failure to raise a defence, estoppel, election, delay and the possible application of the Henderson v Henderson principle required fuller factual and legal examination. They could not support summary judgment. The applicability of that principle to recognition of a foreign judgment remained open.
5. Cross-appeal and orders. The international-jurisdiction issue concerning Mr Glushkov also depended on findings about Russian law and was remitted to the trial judge. Aeroflot’s fresh-evidence application was dismissed, and Mr Glushkov’s respondent’s notice was dismissed.

1. Court of Appeal (Civil Division) — [2014] EWCA Civ 20: allowed Aeroflot’s appeal, dismissed the respondents’ application for summary judgment, dismissed Aeroflot’s fresh-evidence application and Mr Glushkov’s respondent’s notice, and remitted relevant issues to trial.
2. High Court of Justice (Chancery Division) — Floyd J, [2012] EWHC 3017 (Ch): summarily dismissed Aeroflot’s claim on the basis that recognition would breach the finality principle.