Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors

A final English judgment founded on a foreign judgment may exceptionally be set aside under CPR r.3.1(7) where the foreign judgment is subsequently undermined by an appeal in the foreign jurisdiction. The power is subject to the strong principles of finality and the avoidance of appeals to the first-instance judge, but those principles do not prevent relief where the judgment’s foundation has disappeared and no other realistic procedural route exists. Where the foreign court has remitted quantum and no definite sum is presently enforceable, the English court should set aside the judgment rather than preserve it pending reassessment. Security ordered as the price of a stay of enforcement should ordinarily be released when the judgment and stay cease to exist.

Hytera applied to set aside or permanently stay a summary judgment obtained by Motorola in England for US$136.3 million. The judgment enforced the copyright damages component of an Illinois judgment.

After the English judgment was entered, the United States Court of Appeals for the Seventh Circuit vacated that component of the Illinois judgment and remitted the issue of damages for reassessment. Liability remained established, but the amount was no longer fixed. Hytera had paid US$25 million into court as security for a stay of enforcement.

The issues were whether the English judgment could be set aside under CPR r.3.1(7), whether it should instead remain in force or be stayed pending reassessment, and whether the security should be retained.

1. Adjournment. The application to adjourn was dismissed. The foreign court’s future assessment of damages did not justify postponing determination of the issue of principle or holding the matter over for a later hearing.
2. Power under CPR r.3.1(7). CPR r.3.1(7) can, in a sufficiently exceptional case, be used to set aside a final order. The usual restrictions identified in Roult, Tibbles, Terry and Vodafone protect finality and prevent a judge from effectively hearing an appeal from himself. They do not create an absolute prohibition.
3. The present case was exceptional. The English judgment was wholly premised on a foreign judgment which the foreign appellate court had vacated in material part. Hytera had no realistic means of protecting itself at the summary judgment stage. An appeal out of time or fresh proceedings would be unsatisfactory, and a permanent stay would be functionally equivalent to setting the judgment aside.
4. No definite enforceable debt presently existed. A foreign judgment can be enforced in England only for a definite sum. The court therefore rejected the proposal to leave judgment in place with quantum to be assessed later, or to impose an interim stay while the Illinois proceedings continued.
5. The English judgment was set aside. Since the stay of enforcement was no longer required, the associated security had no continuing legal basis and was ordered to be released. It could not be retained as substitute security for a possible future judgment or on the basis of dissipation risk where the requirements for a freezing injunction were not met.

The judgment describes earlier decisions in the same litigation, including the summary judgment and stay orders, but this was a first-instance determination of Hytera’s application to set aside the English judgment.