A Company, Re

An unregistered and unrecognised foreign judgment may constitute a debt for the purposes of insolvency proceedings. No English judgment, registration or recognition is required before it can found a winding-up petition, provided the debt is incontrovertibly owed.

For limitation purposes, a foreign judgment falls into the same category as an English judgment, rather than a simple contract. Section 24(1) of the Limitation Act 1980 does not apply to insolvency proceedings based on a judgment debt, and no separate limitation period applies at common law. Alternatively, an unsuccessful appeal may restart time, and an unequivocal payment intended to satisfy the debt may amount to acknowledgment.

The Respondent held a Lebanese money judgment for USD $776,907.51, obtained in 2010 and upheld on appeal in 2014 and 2017. The Applicant sought to restrain presentation of a winding-up petition founded on that judgment.

The Applicant argued that the judgment was time-barred, that acknowledgment was uncertain, that the debt had been satisfied by a payment into court in Lebanon, and that the Applicant was solvent. It also alleged that presentation of a petition would be inappropriate or abusive. The central issues were whether an unregistered foreign judgment constituted a debt for insolvency purposes, whether limitation applied, and whether the payment discharged or acknowledged the debt.

1. The application was not an abuse of process. A statutory demand was not a necessary precondition to presentation of a winding-up petition, and bringing the application was not impermissibly premature in the circumstances (paras [95]-[96]).
2. The court adopted the approach in Re Drelle. An unregistered and unrecognised foreign judgment which is final and conclusive, and which requires payment of a liquidated sum not subject to contingency, constitutes a debt for the purposes of the Insolvency Act 1986. Registration, recognition or conversion into an English judgment is unnecessary. The same reasoning applies to winding-up proceedings as to bankruptcy proceedings (paras [29]-[39]).
3. The foreign judgment was not a simple-contract debt for the purposes of section 5 of the Limitation Act 1980. The better analysis, supported by Ridgeway Motors and Tasarruf Mevduati Sigorta Fonu, was that it belonged in the same category as an English judgment. Section 24(1) did not apply because a winding-up petition is not an action on a judgment. Accordingly, there was no statutory or common-law limitation defence to the petition (paras [56]-[70]).
4. Alternatively, if a six-year period applied, the dismissal of the final Lebanese appeal affirmed and restated the original judgment, so time would run from 23 March 2017. The payment into the Lebanese court was an unequivocal payment intended to satisfy the debt. Made through an agent and recorded in writing, it amounted to acknowledgment under sections 29(5) and 30 of the Limitation Act 1980, regardless of whether the payment was valid under Lebanese law (paras [71]-[81]).
5. The court could not go behind the Lebanese Enforcement Bureau’s determination that the payment was invalid. The debt had not therefore been satisfied. Failure to pay the debt was itself an act of insolvency, making the Applicant’s underlying solvency irrelevant (paras [82]-[83], [97]).
6. The possible Lebanese appeal concerning the payment remained a live issue. The court therefore adjourned consequential submissions concerning any time-limited injunction or undertaking, interest, costs and further directions (paras [98]-[100]).