Lenkor Energy Trading DMCC v Puri

A foreign judgment will not be refused recognition merely because its enforcement has an economic effect equivalent to enforcing an underlying claim which is unenforceable for illegality. The relevant question is whether the foreign judgment or the cause of action on which it rests infringes an applicable rule of English public policy. A factual or causal association with an underlying transaction is insufficient. Where a foreign statutory cause of action creates self-contained and independent liability, the English court need not recharacterise it as enforcement of a different contractual obligation. The absence of an equivalent English rule, or the fact that the foreign rule is more onerous, does not itself make enforcement repugnant to English public policy.

Lenkor Dubai obtained judgment in Dubai against Mr Puri under Article 599/2 of the Dubai Commercial Transactions Law in respect of two dishonoured cheques. The Dubai judgment imposed personal liability on the drawer and was upheld on appeal.

The respondent brought a common law debt claim in England to enforce that judgment. Master Davison granted summary judgment. Mr Puri appealed on the ground that enforcement would offend English public policy because the cheques related to a transaction which an arbitrator had found partly unenforceable for illegality under English law.

The central issue was whether recognition of the Dubai judgment would indirectly enforce the allegedly illegal contractual claim.

1. Appeal dismissed. The Master’s reasoning contained no error of law, and the Dubai judgment was properly recognised. Summary judgment for Lenkor Dubai therefore stood.
2. The Dubai judgment was based on Article 599/2 of the Dubai Commercial Transactions Law. That provision imposed personal liability on the drawer of a cheque where the account lacked sufficient funds. Its legal consequences were self-contained and independent of the underlying transaction. Although English law imposed no equivalent liability, the provision was neither surprising nor repugnant to English public policy.
3. The court rejected the submission that it had to look through the Dubai cause of action to the Tripartite Agreement. The mere existence of an association or causal connection between an allegedly illegal transaction and an otherwise unimpeachable foreign cause of action did not require an English court to investigate the connection or refuse enforcement.
4. The principles discussed in Lemenda Trading Co Ltd v Africa Middle East Petroleum Co Ltd [1988] QB 448 and Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [2000] QB 288 applied. English public policy contains some universal rules which may prevent enforcement regardless of the applicable law or place of performance, but the appellant identified no such rule.
5. Economic equivalence did not establish legal identity. The parties, legal obligations and legal sources differed: the contractual payment guarantee was distinct from Mr Puri’s statutory liability under Dubai law. Heald v O’Connor [1971] 1 WLR 497 and Azimut-Benetti SpA v Healey [2010] EWHC 2234 (Comm) therefore did not assist the appellant.

1. High Court (Queen’s Bench Division): Master Davison granted summary judgment to Lenkor Dubai on 23 January 2020.
2. High Court (Queen’s Bench Division): permission to appeal was granted by Julian Knowles J on 5 March 2020. Murray J dismissed the appeal on 4 June 2020.