Federal Court provides guidance on proving a foreign judgment in a common law enforcement action
10 March 2023
In
Pembinaan SPK Sdn Bhd v Conaire Engineering Sdn Bhd-LLC & Anor and Another Appeal [2023] 3 MLRA 287, the Federal Court has provided guidance on proving a foreign judgment in a common law action to enforce the foreign judgment.
Background facts
The respondent, Conaire Engineering Sdn Bhd-LLC, is registered as a foreign company under the laws of Abu Dhabi, United Arab Emirates. The appellants in both appeals are registered companies in Malaysia.
The respondent was appointed by the main contractor, SPK-Bina Puri JV (‘
JV’), as the subcontractor for mechanical, electrical and plumbing works of a construction project in Abu Dhabi, United Arab Emirates. After the project was completed, the respondent commenced legal proceedings against the JV and the employer at the Abu Dhabi Plenary Commercial Court, a Court of First Instance.
The respondent obtained judgment in default against the JV for AED20,718,958.25 (‘
the Foreign Judgment’) and thereafter commenced proceedings against the two appellants in the High Court in Malaysia to enforce the Foreign Judgment.
In support of its claim at the High Court, the respondent tendered an English translation of the Foreign Judgment which was handed down wholly in the Arabic language by the Abu Dhabi Plenary Commercial Court. The first translation was vigorously challenged, particularly on the identity of the parties sued, resulting in three other translations being tendered in the High Court.
The first three translations each had a copy of the Foreign Judgment attached, but the fourth did not. However, the fourth translation was incomplete as it translated only the first page of the Foreign Judgment.
None of the translations had the original copy of the Foreign Judgment attached. In fact, an original copy of the Foreign Judgment was never produced.
The respondent’s claim was allowed by the High Court and affirmed by the Court of Appeal albeit with a variation of the interest rate awarded.
The Questions of Law
The appellants were granted leave to appeal to the Federal Court on six questions of law, of which the following were answered by the Federal Court:
Question 1 : Whether a foreign judgment is enforceable by a common law action in Malaysia (the foreign country not being a First Schedule country under the Reciprocal Enforcement of Judgments Act 1958 (‘REJA’)) if the judgment is not proved as a foreign judgment or order in accordance with the Evidence Act 1950 (‘EA’)?
Question 3 : In a common law action to enforce a foreign judgment (not being a First Schedule country under REJA), without the foreign judgment being proved in accordance with Chapter V of the EA, whether there is a sustainable cause of action for other evidence to be admitted and weighed?
Decision of the Federal Court
Relevant principles of common law action on a foreign judgment
Before considering the questions of law, Dato’ Mary Lim Thiam Suan, FCJ who delivered the unanimous decision of the Federal Court, outlined the relevant principles governing a common law action on a foreign judgment:
- While REJA facilitates direct execution of foreign judgments, it is only in respect of the reciprocating countries listed in the First Schedule to that Act. Nevertheless, the right to sue in common law upon a judgment obtained in another jurisdiction nevertheless, remains. It is also open to a claimant to sue upon the underlying cause, be it in tort, contract or for any other complaint without relying on the foreign judgment.
- At common law, a foreign judgment creates a debt between the parties and provides a cause of action on which the debtor can be sued.
- In order to be enforceable, the foreign in personam judgment must be final and conclusive between the same parties and must be rendered by a Court of competent jurisdiction. Consequently, it is imperative that the foreign judgment is produced to prove the claim by reason that the principle of merger does not apply in the case of a cause of action founded on foreign judgments.
Proving a foreign judgment
The EA contains provisions as to how a foreign judgment is to be admitted to the Malaysian Courts.
- The original judgment is primary evidence which must be proved under section 62 of the EA by producing the document itself for inspection of the Court.
- Secondary evidence of the original judgment may be accepted under section 65 of the EA but must be in accordance with sections 74(a)(iii), 78(1)(f) and 86 of the EA, which, inter alia, provide as follows:
- the Foreign Judgment is a public document under section 74(a)(iii) by reason that it is a document forming the act or record of judicial officers of a foreign country;
- a public document in a foreign country (i.e. the Foreign Judgment) is proved under section 78(1)(f) by producing the original or a copy certified by the lawful keeper thereof, with a certificate under the seal of a notary public or of a consular officer of Malaysia that the copy is duly certified by the officer having the lawful custody of the original and upon proof of the character of the document according to the law of the foreign country;
- alternatively, the Foreign Judgment is admissible under section 86 if the document purports to be certified in any manner which is certified by any representative of the Yang di-Pertuan Agong in or for such country to be the manner commonly in use in that country for the certification of copies of judicial records.
Analysis of the facts
Her Ladyship made two observations on the copies of the Foreign Judgment that were attached to the translations. First, the Foreign Judgment was not tendered to the Court. Instead, it was merely exhibited as an attachment to another document, the translation. Second, while a copy of such a judgment may be admitted as secondary evidence, the copy in question is inadmissible as it was not certified in accordance with the requirements of either section 78(1)(f) or section 86 of the EA.
The Federal Court added that the admission of a translation, or of any of the four translations required under Order 92 of the Rules of Court 2012 (‘
RC’) does not
ipso facto admit the copy of the Foreign Judgment which remains intrinsically inadmissible for want of compliance with section 78(1)(f) or section 86 of the EA. Citing the Supreme Court decision in
Malaysia National Insurance Sdn Bhd v Malaysia Rubber Development Corporation [1986] 1 MLRA 103, the Court said that it is settled law that inadmissible evidence remains inadmissible even if no objections were taken by the parties.
The Court noted that the copy of the Foreign Judgment is not certified, verified or authenticated. The Court observed that Order 67 of the RC read with section 11 of REJA contains specific procedural requirements on how applications for the registration of judgments under REJA are to made. Order 67 rule 3 requires the foreign judgment to be exhibited; and where a copy is tendered, that copy must be verified, certified or authenticated. Further, where the foreign judgment is not in the English language, a translation that is certified by a notary public or authenticated by affidavit is further required. Both the original or a certified copy of the original must be tendered together with a certified copy of the translation. Although the foregoing requirements pertain to the registration of foreign judgments under REJA, their Lordships were of the view that there is no reason why evidentiary rules should be any different in the case of a common law action upon a foreign judgment, particularly in the face of the specific provisions of the EA mentioned by their Lordships.
As only a copy and not the original of the Foreign Judgment was exhibited, and that copy exhibited was not certified, verified or authenticated in the manner prescribed under the EA, the Court concluded that there is actually no proof of the document central and critical to the underlying cause of action. Consequently, absent the Foreign Judgment, the claim of the respondent remains unproved and should have been dismissed by the High Court.
The Court then answered Questions 1 and 3 in the negative and declined to answer the remaining four questions of law. In conclusion, the Federal Court allowed the appeals and set aside the decisions of the Court of Appeal and High Court.
Comments
The Federal Court has provided helpful guidance on the requirements that have to be satisfied in proving a foreign judgment in a common law action upon that foreign judgment. First, the original of the foreign judgment
or a copy thereof that has been certified in accordance with the requirements of section 78(1)(f) or section 86 of the EA must be produced for inspection of the Malaysian Court. Second, if the foreign judgment is in a language other than the English language, an English translation thereof certified by a notary public or authenticated by affidavit must be tendered together with the original or the certified copy of the foreign judgment.
Although the requirements contained in the EA and the RC are procedural, non-compliance has a substantive effect as it may, as in the present case, result in the dismissal of the action for enforcement of the foreign judgment. While this will not preclude a party from commencing action on the underlying cause of action that gave rise to the foreign judgment, it means that the party will have to re-litigate the case in its entirety.
Case note by Kok Chee Kheong (Partner) and Tan Wei Liang (Senior Associate) of Skrine.
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.