How our Disputes team successfully enforced a US$2.27m judgment debt

We were instructed to enforce an English judgment in the sum of US$2,268,475.07 (approximately £1,700,000) in this country. The debtor company was a BVI registered company, however its main director resided in Dubai.  Our client was also a BVI registered company, and the debt arose from a loan agreement which required payment in US Dollars, but gave the English court’s jurisdiction to deal with any dispute which arose between the parties.   

Discussions with our client and investigations into the debtor company revealed that it was the owner of some valuable artwork and also a property based in central London.

Based on this information there were a number of enforcement options open to us and we took a multi-pronged approach to enforcement.

1. Applying for a Charging Order/Order for sale over a high-value property in London

The debtor company owned a high-value residential property in central London, which was valued in the region of £15,000,000.  We immediately applied to the court for a charging order over the property as a way of securing the judgment debt on a long-term basis. 

The charging order application itself was relatively straight forward; however, the added complication was that there was a mortgage registered against the property, with the mortgage company being a Swiss company.  This meant that we had to take steps to serve the mortgage company with all relevant documents relating to the charging order application in accordance with the Hague Convention.  Service in Switzerland was successfully actioned, and a final charging order was successfully obtained. 

Whilst the charging order secured the debt on a long-term basis, it did not result in immediate payment and further enforcement action was therefore required. 

2. Applying for a Writ of Control over valuable artworks

At the same time as applying for the charging order, we also took steps to try and seize possession of valuable artwork owned by the debtor company.  Under the terms of a loan agreement entered into between the parties, the debtor company was under an obligation to keep certain artwork at the central London property. The artwork was valued at US$3,000,000. 

High Court Enforcement Officers (HCE) were instructed to obtain a writ of control and attend the property to seize the artwork and any other valuable assets owned by the company, with a view to it being sold to pay off to settle the sums due to our client.  HCE was not able to obtain access to the property, as there were no permanent residents, and the property had a manned security post and a perimeter fence.  Also, as the property was a residential premises, HCE could not force entry and could only access the property via an open door or if invited to do so.

However, in this case, we were able to show that the property was only being used for business purposes and was only occupied by employed staff.  We made a successful application to the High Court for an order that the enforcement officers be allowed to force entry to the property.  We were successful in obtaining the required order, despite the protection given by the court rules to residential premises, and without this order, we would never have been able to access the property to try and seize assets. 

HCE subsequently obtained access to the property only to find all assets, including the valuable artwork had been removed from the property.  However, this was not an end of the matter, even though we had already taken enforcement action against the known assets of the debtor company.

3. Applying for an Order to obtain further information from a company director

In order to explore further enforcement options, we sought a court order requiring the director of the debtor company (who resided in Dubai) to provide information about its assets, along with further details of the central London property and the current location of the artwork.

The fact that the main director of the debtor company was a resident of Dubai meant that this was not a straightforward application.  In order to obtain an order from the English courts requiring a director to attend before it and provide information about the finances of a company and its assets, the director in question has to be within the court’s jurisdiction (i.e., in England) at the time: i) the application is made, ii) the order is made and ii) the order is served on them. 

Before the application was made in our case, we needed to wait for the director to come to England and then act fast to make the application and get the required order from the Court before the director left England again.  Our client was able to obtain information which indicated the director would be in England on business for a short period of time, along with details of what hotel he would be staying at.  We therefore urgently obtained evidence that the director was in England (photographic evidence was obtained), issued the application, obtained the required order, and served it on the director in less than 72 hours.  The director was then required to attend court and provide additional useful information about the assets of the debtor company. This application also kept the pressure on the debtor company – by this stage, the debtor company was under no illusion that it needed to make arrangements to pay the sums due to our client and that our client was not going to give up on obtaining the return of the monies owed.

4. Order for Sale

We then turned our attention back to the central London property and we started the process of applying to the court for an order that there be a forced sale of this property.  Luckily, we did not have to complete this application as, by this stage, the debtor company knew that our client was not going to give up and they voluntarily sold the central London property to raise the funds required to settle the sums owed to our client.

As a result of the pressure put on the debtor company (and its director) by all the above enforcement actions we took and our persistence, our client recovered all of the monies owed under the judgment debt.

We have registered and enforced foreign judgments obtained in countries such as the US, Liechtenstein, New Zealand, and Spain in the English Courts. We have previously written about enforcing a foreign judgment when it is unenforceable in the jurisdiction of origin here: Unenforceable foreign judgments can still be enforced in England and Wales.

If you need help enforcing a foreign judgment in the English courts or enforcing an English judgment overseas, please get in touch with a member of our Disputes team.