Did enforcing foreign judgments by winding up just get easier? In this case, the court held that insolvency proceedings were not an "action on a judgment" for the purposes of section 24 of the Limitation Act 1980. This meant that they did not fall within the scope of the Limitation Act, and nor was there any common law limitation period.

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The importance of this judgment is that it brought the principles in Re Drelle v Servis-Terminal LLC (which also appears in this blog) into the wider corporate sphere. The issue of whether any limitation period would apply to prevent the presentation of a winding up petition based upon a foreign judgment was considered here.

The present case was essentially an application to restrain presentation of a winding up petition on five grounds. These were:

1. That the judgment debt was time-barred.
2. That it was unclear if there had been an acknowledgment of the debt within the limitation period.
3. That there was a substantial dispute as to whether the judgment debt had been satisfied.
4. That the company was solvent.
5. That it may be appropriate to grant an injunction.

The High Court considered whether any limitation period applied to prevent the presentation of a winding up petition based upon a foreign judgment debt that was not subject to the judgment registration schemes under the Administration of Justice Act 1920 or the Foreign Judgments (Reciprocal Enforcement) Act 1933, and was not the subject of a Part 7 claim under the CPR. That would have converted the foreign debt into an English judgment debt.

It confirmed the fact that a judgment can be the subject of a petition without such registration or recognition under the Administration of Justice Act 1920 or the Foreign Judgments (Reciprocal Enforcement) Act 1933. In the similar case of Drelle, which is referred to in this blog, whether it was necessary to first seek recognition of a foreign judgment under Part 7 CPR before issuing a bankruptcy petition which was founded upon it was also considered - but in that case the court looked at the similar position arising in the arena of personal insolvency.

Crucially, in this case, the court held that the foreign judgment debt could serve as the basis for the presentation of the winding up petition as a matter of English common law. It also held that insolvency proceedings were not an "action on a judgment", so they were not within the scope of the Limitation Act 1980; and that there was no common law limitation period in any case. This meant that the avoidance of 'normal' limitation restrictions in relation to a winding-up petition was an important aspect of this case.

The court also found that even if the Limitation Act had applied, the company had acknowledged the judgment debt through its agents within the six year period from the date of the final judgment. It also acknowledged that there was no substantial dispute of a nature which required evidence or hearing. However the court rejected a claim that a payment had been made in satisfaction of the judgment debt.

The failure to pay the debt was seen as being of itself an act of insolvency, so the court noted that the underlying solvency of the Applicant was not relevant in this matter.

As regards whether it was appropriate to grant an injunction, the court stated that it was likely that a stay in a foreign court, being procedural, would not, in and of itself, stop time running in the English and Welsh jurisdiction.