Role of public policy and illegality in the enforcement of foreign judgments

26 May, 2021

On Friday 21 May the Court of Appeal handed down judgment in Lenkor Energy Trading DMCC v. Puri [2021] EWCA Civ 770.

The Claimant (“Lenkor”) sought to a enforce a Dubai judgment against the Defendant (“Mr Puri”). The Dubai judgment held Mr Puri personally liable in the sum of about AED123m (about $34m) for drawing company cheques on an account that held insufficient funds to honour them. Mr Puri resisted the application on several grounds, but by the time it got to the Court of Appeal only one remained: Mr Puri asserted that it would be contrary to public policy to enforce the judgment because the underlying contract (pursuant to which the cheques were issued) was tainted by illegality. In particular, Lenkor’s sister company had deceived the buyer about the nature of the product (HEP) and its origin (Iran) and had falsified documents.

The Master ([2020] EWHC 75; [2020] 2 Lloyd’s Rep 647) dismissed this defence and entered judgment. The Judge ([2020] EWHC 1432; [2021] Lloyd’s Rep 47) and then the Court of Appeal ([2021] EWCA Civ 770) both dismissed Mr Puri’s appeals on a number of grounds. Lord Justice Lewison gave the lead judgment, with which Arnold LJ and Edis LJ agreed.  The Court of Appeal emphasised, in particular, (1) that the approach taken by the Court in enforcement claims is different from that taken in substantive claims; and (2) that the degree of connection between the claim and the illegality has to be weighed against the strong public policy in favour of finality and enforceability.

A copy of the Judgment can be found here.

James Collins QC (leading Philip Jones of Savoy Hill Chambers) was instructed by James Atton of Mackrell Solicitors on behalf of the Respondent.