Islandsbanki Hf & Ors v Stanford

Registration of a foreign judgment under the Lugano Convention does not permit enforcement during the period for appealing the registration order or while an appeal is pending, except for protective measures. Domestic rules govern enforcement mechanics but cannot override that prohibition. A writ issued and acted on during the prohibited period is not a curable procedural irregularity. CPR rule 3.10, case-management powers, inherent jurisdiction and insolvency formal-defect provisions cannot validate it. Unlawful enforcement cannot constitute execution or other process returned unsatisfied for the purposes of section 268(1)(b) of the Insolvency Act 1986, even where no property was seized.

Islandsbanki HF and others presented a bankruptcy petition against Kevin Stanford based on an unpaid Icelandic judgment registered in England under the Lugano Convention. A writ of control was issued before the period for appealing the registration order had expired. Enforcement officers attended Stanford’s property, but no goods were seized, and the writ was later returned unsatisfied.

The Insolvency and Companies Court dismissed Islandsbanki’s petition and adjudged Stanford bankrupt on HMRC’s later petition. Fancourt J upheld that decision in [2019] EWHC 1818 (Ch.). The Court of Appeal considered whether the premature enforcement satisfied section 268(1)(b) of the Insolvency Act 1986 and whether the defect could be cured.

Appeal dismissed unanimously. The writ of control could not support the bankruptcy petition.

1. Articles 43(5) and 47(3) of the Lugano Convention create an overarching prohibition on enforcement during the period for appealing a registration order and while any appeal is pending, apart from protective measures. National law governs the detail of execution, but cannot derogate from that prohibition. The prohibition applies whether or not property is actually seized.
2. Section 4A(3) of the Civil Jurisdiction and Judgments Act 1982 gives domestic effect to the same restriction. CPR Part 74 implements it. The reference to rules of court does not permit CPR Part 3 or the court’s inherent jurisdiction to override the Convention or the statute.
3. CPR rule 3.10 and related case-management powers cannot cure the premature writ. The case was materially different from [2008] 1 WLR 180 and [2016] EWCA Civ 1034, where procedural defects could be remedied. It was analogous to the principle in [2000] 3 All ER 784: general procedural powers cannot circumvent express prohibitions.
4. The writ was prima facie valid until set aside, but it was voidable and had to be set aside once the unlawfulness came to the court’s attention, ex debito justitiae. Enforcement prohibited by the Lugano Convention and section 4A could not amount to execution or other process returned unsatisfied under section 268(1)(b) of the Insolvency Act 1986. The defect was fundamental, not a formal irregularity of the kind considered in [2001] BPIR 673.
5. The prohibition could not be avoided by enforcing before the registration order had been served. There was no order as to costs.

1. Court of Appeal (Civil Division): Islandsbanki’s appeal was dismissed. The Court upheld the conclusion that the premature enforcement could not satisfy section 268(1)(b) of the Insolvency Act 1986.
2. High Court (Chancery Division): Fancourt J dismissed Islandsbanki’s appeal from the Insolvency and Companies Court, reported at [2019] EWHC 1818 (Ch.).
3. Insolvency and Companies Court: ICC Judge Jones dismissed Islandsbanki’s bankruptcy petition and adjudged Stanford bankrupt on HMRC’s later petition.