The appeal concerned a final third party debt order (formerly a garnishee order). A judgment in France was registered here for enforcement. That jurisdiction was now challenged.
Held: A third party debt order is a proprietary remedy operating by attachment against the property of the judgment debtor. The property so attached is the chose in action represented by the debt of the third party to the judgment debtor. On the making of the interim order that chose in action is bound, frozen, attached or charged in the hands of the third party. Subject to any monetary limit which may be specified in the order, the third party is not entitled to deal with that chose in action by making payment to the judgment debtor or any other party at his request. When a final or absolute order is made the third party is obliged (subject to any specified monetary limit) to make payment to the judgment creditor and not to the judgment debtor, but the debt of the third party to the judgment debtor is discharged pro tanto. That discharge is central to the jurisdiction, and an order cannot be made where a discharge is not obtained.
Lord Hoffmann said: ‘it is a general principle of international law that one sovereign state should not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state or compelling its citizens to do acts within its boundaries.’
Judges:
Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hobhouse of Woodborough Lord Millett
Citations:
Times 13-Jun-2003, [2003] UKHL 30, Gazette 17-Jul-2003, [2003] 3 WLR 21, [2003] 3 All ER 465, [2003] 2 Lloyd’s Rep 405, [2003] ILPr 36, [2003] 2 All ER (Comm) 65, [2004] 1 AC 260, [2003] 1 CLC 1163, [2003] 2 LLR 405
Links:
Statutes:
Civil Jurisdiction and Judgments Act 1982, Civil Procedure Rules 72
Jurisdiction:
England and Wales
Citing:
Cited – Re General Horticultural Company, Ex parte Whitehouse ChD 1886
Wills, to whom a sum had been allowed in a winding up for work done for the liquidator, charged the amount due to him as security for the payment of three debts, the total amount of which exceeded the sum due to him from the company. Notice of the . .
Cited – Rogers v Whiteley HL 1892
Discussing an order attaching all debts, the House held: The effect of an order attaching ‘all debts’ owing or accruing due by [the garnishee] to the judgment debtor is to make the garnishee custodier for the Court of the whole funds attached; and . .
Cited – Choice Investments Ltd v Jeromnimon CA 1981
‘[Service of the order nisi] prevents the bank from paying the money to its customer until the garnishee order is made absolute, or is discharged . . The money at the bank is then said to be ‘attached’ . . But the ‘attachment’ is not an order to . .
Cited – Galbraith v Grimshaw and Baxter CA 1910
A garnishee order nisi does not operate as a transfer of the property in the debt, but it is an equitable charge on it, and the garnishee cannot pay the debt to any one but the garnishor without incurring the risk of having to pay it over again to . .
Cited – Joachimson v Swiss Bank Corporation CA 1921
The service of the order nisi binds the debt in the hands of the garnishee – that is, it creates a charge in favour of the judgment creditor. No cause of action for non payment arises in respect of money standing on a current account until the . .
Cited – Ellis v M’Henry CCP 1871
A debt or liability arising in any country may be discharged by the laws of that country, and such a discharge, if it extinguishes the debt or liability, and does not merely interfere with the remedies or course of procedure to enforce it, will be . .
Cited – Martin v Nadel CA 17-May-1906
A garnishee order was sought in England against the London branch of a German bank to attach a balance owed to the judgment debtor by the Berlin branch of the bank.
Held: A garnishee order is of the nature of an execution, and is governed by . .
Cited – Deutsche Schachtbauund Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd HL 1990
The case concerned a garnishee order absolute made in respect of a debt situated in England, and the House was not called upon to consider the position where foreign debts were in issue.
Held: (Majority) The court has a ‘discretionary power to . .
Cited – Zoneheath Association Ltd v China Tianjin International European Community Economic and Tech Co-Op Corporation QBD 8-Apr-1994
A garnishee order was not available against a foreign account through a UK branch. The English court continued to exercise its discretion against the making of orders in relation to debts with a foreign situs . .
Approved in part – Regina v Grossman CA 1981
An application was made against Barclays Bank in London to obtain inspection of an account held at a branch of the bank in the Isle of Man.
Held: The Civil Division of the Court of Appeal which determined the application was later held to have . .
Cited – Bonalumi v Secretary of State for the Home Department CA 1985
In the course of extradition proceedings, an order was obtained under the 1879 Act. The defendant sought to appeal against the order, and applied to the Court of Appeal.
Held: The procedure under the 1879 Act was in the course of criminal . .
Cited – MacKinnon v Donaldson, Lufkin and Jenrette Securities Corporation ChD 1986
A plaintiff in an English action had obtained an order against an American bank, served on its London office, requiring production of books and papers at its New York head office.
Held: The court pointed out the distinction between ‘personal . .
Cited – Babanaft International Co SA v Bassatne CA 30-Jun-1988
The court considered whether the state in which enforcement of a judgment will take place should be the place where the debt is situated upon which it is sought to execute.
Held: There was nothing to preclude English courts from granting . .
Cited – Baltic Shipping Co v Translink Shipping Ltd 1995
Further protection was afforded to those holding overseas assets of persons subject to Mareva injunctions. . .
Cited – Richardson v Richardson KBD 1927
A bank owed debts to a judgment debtor customer on accounts held both in London and in Africa. It was accepted that the former were subject to a garnishee order. The dispute concerned the latter.
Held: The bank is no doubt indebted to the . .
Cited – SCF Finance Co Ltd v Masri (No 3) 1987
The court accepted that in a case where the garnishee was not indebted within the jurisdiction that might be relevant to the exercise of the court’s discretion. Since, in this case, the debt in question was an English debt, the court’s jurisdiction . .
Cited – Rasu Maritima v Pertamina CA 1977
Foreign attachment as an interlocutory process is the origin of the Mareva injunction . .
Cited – Mayor etc of London v Cox HL 1867
The procedure called foreign attachment, on which the procedure under the 1854 Act was modelled, had existed by immemorial custom in London and other cities. The custom had been certified by the Recorder of London in 1481 but went back much further; . .
See Also – Societe Eram Shipping Company Ltd v Compagnie Internationale De Navigation and others ComC 23-Jan-2001
. .
See Also – Societe Eram Shipping Co Ltd v Compagnie Internationale De Navigation and others CA 6-Apr-2001
. .
Cited by:
Cited – Kuwait Oil Tanker Company SAK and others v UBS AG, Qabazard HL 12-Jun-2003
Mr Qabazard conspired with others to defraud the Kuwait Oil Tanker Company SAK and Sitka Shipping Inc of large sums of money. On 16 November 1998 Moore-Bick J gave judgment against him for over US$130m. Historically sums had been placed with the . .
Cited – BAS Capital Funding Corporation, Deutsche Bank Ag London, Paine Webber Capital Inc, PW Exe Lp, Pw Partners 1999 Lp v Medfinco Limited, Abacus Holdings Limited, Andreas W Gerdes, HTC Inc, etc ChD 25-Jul-2003
The claimants wanted to bring actions in respect of various matters under shareholders agreements in complex international joint ventures. Leave was given to serve English proceedings in Malta, and the claim form and particulars of claim were faxed . .
Cited – FG Hemisphere Associates LLC v Republic of Congo QBD 9-Dec-2005
The claimant judgment creditor sought a third party payment order. An interim third party payment order had already been obtained byanother party. The claimant sought payment pari passu.
Held: The other party had priority once their interim . .
Cited – Masri v Consolidated Contractors International Company Sal and Another CA 4-Apr-2008
The court was asked whether the Commercial Court had international jurisdiction to make an order for the appointment of a receiver by way of equitable execution, and a freezing order, in relation to the judgment debtors’ interest in the concession . .
Cited – Masri v Consolidated Contractors International Co Sal and Others HL 30-Jul-2009
The claimant sought to enforce a judgment debt against a foreign resident company, and for this purpose to examine or have examined a director who lived abroad. The defendant said that the rules gave no such power and they did, the power was outside . .
Cited – Perry and Others v Serious Organised Crime Agency SC 25-Jul-2012
The first appellant had been convicted of substantial frauds in Israel. He appealed against world wide asset freezing (PFO) and disclosure (DO) orders made against him. Neither the appellant, nor his offences were connected with the UK. A bank . .
Cited – Taurus Petroleum Limited v State Oil Marketing Company of The Ministry of Oil, Republic of Iraq SC 25-Oct-2017
The parties disputed their contract arrangements. It was referred to an arbitration in London, but applying Iraqi law. The respondent failed to meet the award made against it, and the claimant sought to enforce the award here by means of third party . .
Lists of cited by and citing cases may be incomplete.
Jurisdiction, Civil Procedure Rules
Updated: 23 March 2022; Ref: scu.183382