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The Oram Case: Enforcing the judgment in the United Kingdom

This article covers the procedure to be followed in enforcing a foreign judgment in the UK, and the problems and pitfalls facing a judgment creditor in, say, the Oram Case. The Oram case is used merely as an example.

In the Oram case, it is generally accepted that the judgment obtained by the claimant is worthless unless it can be enforced against the assets of the Orams in the UK.

As the judgment was obtained in the Republic of Cyprus, a member of the EU, the claimant would seek to rely on Council Regulation (EC) No. 44/2001 Article 38.2, which provides:

“ in the UK a (foreign) judgment shall be enforced in England and Wales, in Scotland or in Northern Ireland when, on the application of any interested party, it has been registered for enforcement in that part of the UK.”

The procedure for enforcement of foreign judgments obtained in EU countries is set out in the Civil Jurisdiction and Judgments Act 1982 (as amended) (“CJJA”)

Under the CJJA the foreign judgment must be registered at the Central Office of the High Court in London. Application must be made without notice (ie. without informing the other party) to a Master in the High Court.

Once a Master has made an Order for registration, the judgment will be registered at the Central Office and a Notice of Registration drawn up. The Notice must be personally served upon or delivered to the last known address of the party against whom the judgment was made. It must state the particulars of the judgment, the names and addresses of the relevant parties and the right of appeal against the registration and the period during which an appeal against registration can be made. This period will be one month from the date of service of the Notice unless the party to be served is not domiciled within the jurisdiction, in which case the period is extended to two months.

This is the time when a judgment debtor (eg. The Orams) must act, by filing Notice of Appeal. The grounds of appeal would be that the judgment (which the judgment creditor is seeking to enforce) is manifestly contrary to public policy in the UK. See Council Regulation (EC) No. 44/2001 Article 34 which provides:

“ that a judgment shall not be recognised if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought (Article 34.1)”.

In English law it is accepted as being contrary to public policy to recognize a judgment which would not be valid in the country where the events giving rise to that judgment occurred.

In English Law public policy adopts the general rule that the law to be used for determining issues relating to tort is the law of the country in which the events constituting the tort occurred; see sections 9(i) and 11(i) of the Private International Law (Miscellaneous Provisions) Act 1995.

The issues to be determined on appeal would be:

(i) that Northern Cyprus is a separate country with its own established laws and system of government (the TRNC)

(ii) that the events occurred in Northern Cyprus (the TRNC)

(iii) that the facts complained of (resulting in the judgment) would not give rise to a cause of action in the TRNC

Clearly, the major issue is the status of the TRNC.

Turkey and the Republic of Cyprus are both members of the UN. Article 2(4) of the United Nations Charter provides that in their international relations all members shall refrain from the use of force against the territorial integrity of any state. This is also a principle of customary international law binding on states.

Further, Article 25 of the UN Charter provides that the members of the UN agree to accept and carry out the decisions of the Security Council in accordance with the Charter. Chapter VII of the Charter empowers the Security Council to determine that there exists a breach of the peace. The Council may decide upon measures to restore international peace and security. Decisions of the Security Council taken under Chapter VII powers are legally binding upon all members of the United Nations.

The United Nations, by resolutions of the Security Council, does not recognize the TRNC. Accordingly, the UK Government does not recognize the TRNC.

This is not to say an English Court is disabled from ever taking cognisance of international law or from ever considering whether a violation of international law has occurred. In appropriate circumstances it is legitimate for an English Court to have regard to the content of international law in deciding whether to recognize a foreign law.

Lying at the heart of the present question (whether a Republic of Cyprus order will be given effect by English Courts) – and of the general question of the correct attitude in law to be taken to the orders of courts exercising “de facto power” without “de jure authority” – is the passage in Lord Wilberforce’s speech in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No2)[1967] AC 853 at page 954 C-E where he famously said:

“In the United States some glimmerings can be found of the idea that non-recognition cannot be pressed to its ultimate logical limit, and that where private rights, or acts of everyday occurrence, or perfunctory acts of administration are concerned (the scope of these exceptions has never been precisely defined) the courts may, in the interests of justice and common sense, where no consideration of public policy to the contrary has to prevail, give recognition to actual facts or realities found to exist in the territory in question.”

What Lord Wilberforce contemplated was recognition of particular acts of governments recognized neither “de jure” nor “de facto”. Decisions relating to private rights, given by courts established by rebellious or usurping governments, are plainly within this concept.

Lord Wilberforce’s statement supports the view that, with the proper safeguards in place and in appropriate circumstances, there is no reason to be less willing to give effect to the orders of non-recognized foreign governments.

Such view also finds support in Grotius’s statement in “De Jure Belli ac Pacis”, Book 1, Chapter IV, Section XV that:

“We have spoken of him who possesses, or has possessed, the right of governing. It remains to speak of the usurper of power, not after he has acquired a right through long possession or contract, but while the basis of possession remains unlawful. Now while such a usurper is in possession, the acts of government which he performs may have a binding force, arising not from a right possessed by him, for no such right exists, but from the fact that one to whom the sovereignty actually belongs, whether people, king, or senate, would prefer that measures promulgated by him should meanwhile have the force of law, in order to avoid the utter confusion which would result from the subversion of laws and suppression of the courts”.

No useful purpose would be served by referring to all the cases in which Lord Wilberforce’s statement in Carl Zeiss (No. 2) has been cited – never with disapproval.

But it is worthwhile quoting what Scarman LJ said in Re James [1977] Ch.42 and what Sir John Donaldson MR said in Gur Corp. v. Trust Bank of Africa Ltd. [1987] 1QB 599. In Re James – a bankruptcy case in the context of Southern Rhodesia’s 1965 unilateral declaration of independence – Scarman LJ said this (at page 70G):

“I do think that in an appropriate case our courts will recognize the validity of judicial acts, even though they may be the acts of a judge not lawfully appointed or derive their authority from an unlawful government.”

In Gur Corp. v. Trust Bank of Africa Ltd. – which involved the question of whether the Republic of Ciskei had standing to sue or be sued – Sir John Donaldson MR said this (at page 622 D-F):

“Lord Wilberforce, at page 954, reserved for further consideration whether the non-recognition of a government or, I think, a state, would necessarily lead to the English Courts treating all its legislative activities as being a nullity or whether, in the interests of justice and common sense, where no consideration of public policy to the contrary has to prevail, it might not be possible to take cognizance of the actual facts or realities found to exist in the territory in question and he instanced private rights, or acts of everyday occurrence or perfunctory acts of administration. I see great force in this reservation, since it is one thing to treat a state or government as being “without the law”, but quite another to treat the inhabitants of its territory as ‘outlaws’ who cannot effectively marry, beget legitimate children, purchase goods on credit or undertake countless day-to-day activities having legal consequences.”

Furthermore, in Hesperides Hotels Ltd. v. Aegean Turkish Holidays Ltd. [1978] 1QB 205 – a case relating to the seizure of hotels in North Cyprus by the government of the Turkish Federated State of Cyprus (forerunner of the TRNC) – no such government or state was recognized “de jure” or “de facto” by the United Kingdom government. After reviewing various authorities Lord Denning MR said this (at page 218):

“If it were necessary to make a choice between these two conflicting doctrines, I would unhesitatingly hold that the courts of this country can recognize the laws or acts of a body which is in effective control of a territory even though it has not been recognized by Her Majesty’s Government de jure or de facto: at any rate, in regard to the laws which regulate the day-to-day affairs of the people, such as their marriages, their divorces, their leases, their occupations, and so forth: and furthermore that the courts can receive evidence of the state of affairs so as to see whether the body is in effective control or not.”

This case was decided on grounds not relevant to Lord Denning’s comments, but no criticism of his comments has been reported.

All of these statements, including Lord Wilberforce’s, are, admittedly, “obiter” (ie. not central to the matter in issue) but they constitute “dicta” (judicial opinion) of the most carefully considered kind, and are wholly persuasive in favour of the argument for the recognition of the TRNC.

The case of Emin v. Yeltag [2002] 1FLR 956 has been reported as a breakthrough in showing that the UK courts now recognize the TRNC as a country. Unfortunately that is not so, because the Learned Judge deliberately stopped short of making such a finding.

The issue before the court was whether the fact that the British Government did not recognize the TRNC affected the validity of a divorce decree granted by the TRNC. The Attorney General and the Secretary of State for Foreign and Commonwealth Affairs on behalf of the present British Government intervened in the case and submitted that the English Courts should respect the acts of the TRNC authorities in relation to private rights. After reviewing all the above authorities Mr. Justice Sumner concluded:

“That recognition is possible because the Republic of Cyprus is one country but with 2 territories, each with their own legal system”.

However, this judgment must be treated cautiously, as the learned judge went on to emphasise that his decision was limited only to the recognition of the TRNC divorce decree (as a private right) by saying:

“But the validity given to such decisions of a court of an unrecognized state must however be limited in scope. It must never be inconsistent with the foreign policy or diplomatic stance of the United Kingdom Government”.

His decision was based on the fact that he was able to find that the particular English law in question applied to both territories and countries. Accordingly he was able to decline to follow the argument that the TRNC was a country, as opposed to being merely a territory (albeit with its own laws) saying:

“It can be seen immediately that given the history and present administration of the TRNC, there is an argument that, if it is not a territory, it is a country. However to make that finding might well lead to the court acting inconsistently with the foreign policy of the United Kingdom. I therefore decline to follow that argument.”

He did not determine whether the TRNC was or was not a country, simply because he was not required to do so. In submitting their arguments the Attorney General and the Foreign Secretary reminded the Court that the diplomatic stance of the UK Government was not to recognize the TRNC. However, having intervened on this occasion to support the acts of the TRNC, by showing that the courts could accept the obiter statements reviewed above, it may prove very difficult for the British Government to adopt a different stance or “cherry pick” on any future case which comes before the courts.

Perhaps the most compelling evidence for the recognition of the TRNC can be found in the reports and actions of the United Nations itself.

In his report to the United Nations on 1st. April 2003, Secretary General Kofi Annan stated: “The Greek Cypriot and Turkish Cypriot parties have been participating, since December 1999, in proximity talks to prepare the ground for meaningful negotiations leading to a comprehensive settlement. I believe the time has now come to move ahead. In the course of these talks I have ascertained that the parties share a common desire to bring about, through negotiations in which each represents its side — and no one else — as the political equal of the other, a comprehensive settlement enshrining a new partnership on which to build a better future in peace, security and prosperity on a united island. In this spirit, and with the purpose of expediting negotiations in good faith and without preconditions on all issues before them, I have concluded that the equal status of the parties must and should be recognized* explicitly in the comprehensive settlement, which will embody the results of the detailed negotiations required to translate this concept into clear and practical provisions”. (* my emphasis).

Addressing the Turkish Cypriot Nicosia Bar Association on 30th. September 2003, the Ambassador to the United States of America said:

The (Annan) Plan explicitly enshrines the principle of bi-zonality, asserts the political equality of Greek Cypriots and Turkish Cypriots, and declares the two constituent states of the United Cyprus Republic are of equal status. The plan is based on a partnership of equals.

Although North Cyprus is part of the European Community, European Laws are suspended there by Article 1 Protocol 10 of the Act of Accession 2003 pursuant to which Cyprus joined the EU. This imposition by the EU recognizes the two separate territories (albeit within one country) and that the TRNC has a separate, distinct and effective legal system.

Under the laws of the TRNC the Orams are the lawful registered proprietors of the property in question. Accordingly it would appear that the correct approach for the claimant in that case would be to pursue a claim, in Northern Cyprus, for compensation against the TRNC government, for which purpose the government has apparently set up a compensation fund. Indeed, such an approach would sit squarely with the position in English Law.

In England and Wales, where a proprietor of land has been registered with absolute title at the Land Registry, an aggrieved person’s cause of action lies in a claim for compensation against the Land Registry, not against the registered proprietor.

In conclusion, having a judgment may be one thing; the risk of failure of an application to enforce that judgment in the United Kingdom may be something which the Republic of Cyprus government consider, politically, very unpalatable.

Kevin Ryan LL.B
Solicitor (non-practising). 

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