Desarrollo Immobiliario Y Negocios Industriales De Alta v Kader Holdings Company Ltd

A foreign money judgment may be enforced where the defendant agreed to the foreign court’s jurisdiction, construed objectively from the contractual documents and the transaction as a whole. A jurisdiction clause concerning contractual rights and obligations under a lease is not rendered contrary to public policy merely because the land is situated elsewhere. Procedural rules allocating jurisdiction between domestic courts do not ordinarily restrict the parties’ freedom to choose a foreign forum or governing law.

Submission for enforcement purposes is a question of English law inferred from all the circumstances. A defendant may preserve a jurisdictional objection while taking steps necessary to defend the merits. However, counterclaims, cross-claims, applications for merits judgment and prolonged merits litigation may amount to voluntary submission where they go beyond what is necessary for the defence.

Desarrollo sought enforcement in England and Wales of a money judgment given by the Superior Court of Arizona, Santa Cruz County, against Kader under a guarantee of a Mexican lease. Kader was incorporated in Bermuda and had its principal place of business in Hong Kong. The lease and guarantee concerned land in Sonora, Mexico, but a later amendment selected Arizona law and jurisdiction.

The principal issues were whether Kader had agreed to submit disputes under the guarantee to the Arizona courts, whether the Arizona jurisdiction clause was void on Mexican public-policy grounds, and whether Kader had otherwise submitted to the Arizona proceedings by its counterclaim, cross-claim and conduct on the merits.

1. Contractual jurisdiction. The lease, guarantee and amendment had to be construed together under Sonora law. The guarantee made Kader jointly obligated with the tenant for all obligations under the lease. That included the obligation to submit disputes to the exclusive jurisdiction of the courts of Hermosillo, Sonora. The amendment, signed by all three parties, validly substituted Arizona law and jurisdiction for Sonora law and jurisdiction and satisfied the contractual and procedural requirements for a clear written submission to a specified forum (paras [27]-[35]).
2. Public policy. Mexican law did not prohibit private parties from choosing a foreign forum or foreign governing law for disputes concerning personal contractual rights and obligations arising from a lease of land in Sonora. Article 121 of the Mexican Constitution concerned internal federal coordination, not private contractual relations with a foreign jurisdiction. Article 568 of the Federal Code of Civil Procedure applied where the Federation had an interest. Articles 15 of the CCS and 109(III) of the CPCS did not make the Sonora forum mandatory or prevent a different forum being chosen (paras [36]-[56]).
3. Voluntary submission. Under Rubin and another v Eurofinance SA and others, and other appeals [2012] UKSC 46, [2013] 1 AC 236, submission for enforcement is determined by English law and inferred from all the facts, with regard to the foreign procedural law. A defendant is not required to choose between preserving its jurisdictional objection and defending itself against judgment on the merits. Kader nevertheless went beyond necessary defensive participation: it brought a positive counterclaim, an indemnity cross-claim, its own merits application for summary judgment, and repeated applications for reconsideration. Its conduct amounted to voluntary submission under Ground 3 of Dicey Rule 43 (paras [59]-[89]).
4. The Arizona judgment was therefore given by a court of competent jurisdiction under Ground 4, and alternatively under Grounds 2 and 3. Desarrollo was entitled to enforce it in England and Wales (paras [57]-[58], [89]-[90]).