Re-Litigating a Foreign Judgment : Is It Even Possible?
A and B fought out a dispute in a foreign court. At the end of it, one party won, while the other is left to sulk in a corner. Can the party who is sulking relitigate the matter locally? Let us find out by briefly looking at the recent High Court (Sibu) case of Wong Hou Liang & Anor v Wong Kie Yik & Ors.
Brief facts of the case
Hou Liang and his mother, Kathryn Ma, brought an action against Kei Yik and the rest of their relatives (the relatives) and the company that Hou Liang’s grandfather started (the flagship company) in the High Court of Sabah and Sarawak in Sibu for a declaration to declare the corporate exercise carried out by Kie Yik and Co to dilute their shares in the company null and void. In this regards:
- There was a breach of a shareholder’s agreement between the parties involved; and
- The scheme of dilution was engineered through the unlawful conversion of convertible preference shares (“CPS”) from a British Virgin Islands company into new ordinary shares in the flagship company
While all this transpired in the High Court in Sibu, Kathryn Ma instituted a similar legal proceedings against her relatives (the same relatives) and the British Virgin Islands company in the East Caribbean Supreme Court in the British Virgin Islands (the BVI Court). That matter was subsequently dismissed. That said, Kathryn Ma duly filed an appeal against the decision.
Based on the decision of the BVI Court, the relatives and the flagship company took out an application to prevent Hou Liang & Kathryn Ma to relitigate the matter in the Sibu High Court, pointing out that issues/ contention before the Sibu High Court has already been determined by the BVI Court.
The court’s decision
Hou Liang and Kathryn Ma’s application was dismissed on the ground that the issues posed in the Sibu High Court have been determined by a court of competent jurisdiction i.e. the BVI Court and therefore cannot be relitigated before the local courts.
- The judgment (subject to any appeals and the decision from such appeals) has become the truth between parties. In other words, the parties have no choice but to accept it as a gospel truth.
- Public policy dictates that there should be finality in litigation i.e. there should be an endpoint and no one ought to be allowed to relitigate their matter over and over again until the win merely because they do not like the outcome of the litigation.
- It encourages the parties to put their best foot forward when they litigate their matters/ dissuades the parties from doing a botch job and expects the court to give them a second chance to litigate the matter.
When a foreign judgment cannot be relitigated locally
In an English case called The Sennar. the court noted that unless there are special circumstances the warrant a matter to be relitigated in a local court, the matter cannot be relitigated unless a party disprove/ displace the three requirements below:
- The judgment from the foreign court:
- stems from a court of competent jurisdiction;
- is final and conclusive; and
- is based on merits.
- Same parties fought it out in both the earlier and current matter; and
- The issues from the earlier and current matters are the same issues.
Based on the three requirements above, the Sibu High Court noted that:
- The requirement of “final and conclusive” does not mean that the matter is not appealable. What the court meant is that in the judgment cannot be varied, reopened, or set aside by the court that delivered it or any other court of coordinate jurisdiction.
- Even though in the BVI suit, only Kathryn Ma was involved (unlike the present case), the court held that just because the parties are slightly different does not discount the fact that the issues at hand are identical and have been dealt with previously, and it applies especially against parties who have interest in the previous litigation.
- The issues submitted in the current litigation are the same as that of the previous suit.
In short, the answer is no, a party cannot relitigate a foreign judgment unless the above three requirements are disproved by an aggrieved party.