Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION
	[2013] CSOH 162
CA38/13	OPINION OF LORD HODGE in the cause SERVICE TEMPS INC Pursuer; against (1) INNES NICOLSON MACLEOD and (2) DONALD McCORQUODALE Defenders; ________________

Pursuer: McBrearty and E Campbell; Wright, Johnston and Mackenzie LLP

First Defender: Cowan, Solicitor Advocate; Simpson & Marwick LLP

Second Defender: Davies; Drummond Miller LLP

9 October 2013

[1] In this action Service Temps Inc ("STI") seeks a joint and several decree for $3,505,848.21 against the defenders ("Mr MacLeod" and "Mr McCorquodale" respectively). STI wishes to enforce in Scotland a decree of the district court in the 68^th Judicial District of Dallas County, Texas dated 14 February 2012 ("the final judgment") for $2,804,678.57, together with $701,169.64 in respect of attorney's fees. STI seeks decree de plano. The defenders seek dismissal of the action.

The factual background

[2] STI is a personnel company which provided HDL International Inc ("HDL") with temporary personnel to allow HDL to perform a contract with Motorola Inc.. STI raised proceedings against HDL in the Tarrant County District Court, Texas seeking payment of sums due under a contract. In its defence HDL asserted that STI was in breach of contract and STI responded by pleading that HDL was in breach of anti-trust legislation. On 16 February 2010 the court issued a final default judgment against HDL in the sum of $4,285,128.21. The final default judgment stated that that sum:

"consists of the principal amount of $1,428,376.07 (one million, four hundred and twenty-eight thousand, three hundred and seventy-six dollars and seven cents) in connection with its claims for breach of contract and claims for violation of the Texas Free Enterprise and Antitrust Act of 1983 ('the Act') [Tex. Bus. & Comm. C. section 15.001 et. seq.], trebled pursuant to the Act for defendant's wilful conduct."

[3] Mr MacLeod and Mr McCorquodale are the directors and shareholders of HDL. STI alleged that they had instructed payments from HDL's United States bank account to various bank accounts in Scotland in order to defeat its claims. In 2011 STI raised proceedings against the defenders in the District Court in the 68^th Judicial District of Dallas County, Texas. In those proceedings STI pursued a claim against the defenders under the Texas Uniform Fraudulent Transfer Act ("UFTA"). In substance it alleged that HDL had transferred funds to or for the benefit of insiders or affiliates with the intention of hindering, delaying or defrauding STI or without receiving a reasonably equivalent value in exchange. STI sought judgment against the defenders up to the full amount of the judgment it had obtained against HDL.

[4] The Dallas court asserted its jurisdiction based on the place of commission of a tortious act. On 24 October 2011 it granted a partial interlocutory judgment against Mr MacLeod, whom it treated as having failed to appear, for $2,804,678.57, together with the sum of $701,169.64 in respect of attorney's fees. On 14 February 2012 the court granted a final judgment ("the final judgment") which incorporated the partial judgment and decreed that STI was entitled to payment by Mr MacLeod and Mr McCorquodale of those sums. On 5 February 2013 the Fifth Circuit Court of Appeals of the State of Texas gave a default judgment refusing the defenders' appeals against the judgment of the district court.

The defences to the action

[5] Mr MacLeod and Mr McCorquodale raised three principal defences against STI's claim to enforce the final judgment in this jurisdiction. First, they submitted that the Dallas District Court did not have jurisdiction in the international sense against them because they had not been resident in Texas and had not submitted to its jurisdiction. Secondly, they submitted that the decree was not enforceable against them because the decree against HDL was a judgment for multiple damages within the meaning of section 5 of the Protection of Trading Interests Act 1980 ("the 1980 Act"). Thirdly, they submitted that, in any event, it was contrary to public policy to enforce that judgment. Mr Cowan for Mr MacLeod advanced a further submission under the third defence that enforcement of the judgment would be contrary to his rights under Article 1 of Protocol No 1 of the European Convention on Human Rights ("AIPI"). I consider each defence in turn.

(i) Submission to the jurisdiction of the Dallas District Court

[6] It was not disputed that under the rules of Scottish public international law the only basis on which STI could assert the international jurisdiction of the Dallas District Court was that the defenders had submitted to its jurisdiction.

[7] STI's case was that the letters which the defenders wrote to the Dallas District Court amounted to a submission to its jurisdiction. The first letter, on which STI founded, was from Mr McCorquodale and was dated 23 May 2011. It was addressed to the deputy clerk of Dallas District Court. It stated:

"Case No; DC-10-16304-C

I refer to the above case number.

I received a copy of some papers relating to the above case on the 21^st April 2011.

For the record, I totally refute all allegations made against me in this case.

All transactions relating to the business of "Texas HDL" were carried out in line with instruction and approval of Weaver and Tidwell.

At no time did I receive any monies from HDL Texas, other than those declared in a proper manner, for which all taxes in the USA were paid.

Donald McCorquodale"

It seems that the Texas Court treated this letter as an appearance in court as the initial partial interlocutory judgment for non-appearance was directed only against Mr MacLeod.

[8] The second letter followed the final judgment against both defenders. It was written by Mr McCorquodale to the clerk to the Dallas district court and was dated 7 March 2012. It stated:

"Case number: DC-10-16304-C

I refer to the above case.

It is my understanding that default judgement was passed against me on 14^th February 2012.

I wish to appeal to the court in the strongest possible terms against the said judgement.

The grounds for this appeal are as follows;

1 I was not given notification from the court of the hearing on 14^th February. I was therefore unable to attend the court and plead my defence.

Failure to file an answer or appear was not intentional or the result of conscious indifference.

2 The transactions in question were not of a fraudulent nature as evidenced by the submitted documents of Weaver and Tidwell and the continuing willingness on our part to provide any documentation requested by the court.

3 In granting this appeal, the other parties in this case will not be treated prejudicially.

General

This appeal is submitted in this format directly to the court as I can not afford to pay $40,000 up front fees as requested by all attorneys in Texas, with whom we have discussed this matter.

A copy of this letter has been mailed to the court from Scotland by Registered Post.

Signed

Donald McCorquodale"

[9] The third letter, which was dated 9 March 2012, was from Mr MacLeod and was substantially in the same terms as the second letter which Mr McCorquodale had sent.

Counsel's submissions

[10] Mr Davies for Mr McCorquodale submitted that there had been no voluntary submission to the Texas court because (i) Mr McCorquodale did not appear before and make submissions go the court, (ii) he as a party litigant was not aware that the Texas court did not have jurisdiction in the international sense and so could not have waived his right to challenge its jurisdiction and (iii) the Texas courts never addressed the contents of the defenders' letters when they pronounced decree by default or refused the appeal.

[11] He referred to the Australian case of De Santis v Russo (2001) QCA 457, William & Glyns Bank plc v Astro Dinamico Compania Naviera SA [1981] 1 WLR 438, Adams v Cape Industries plc [1990] 1 Ch 433, Akai Pty Ltd v People's Insurance Co Ltd [1988 1 Ll Law Rep 90, Advent Capital plc v GN Ellinas Imports-Exports Ltd [2005] 1 CLC 1058, and Rubin v Eurofinance SA [2013] 1 AC 236. He accepted that the lodging of an appeal on the merits could amount to a submission to jurisdiction: Guiard v De Clermont [1914] 3 KB 145, S.A. Consortium General Textiles v Sun and Sand Agencies Ltd [1978] 1 QB 279 and Dicey, Morris and Collins at para 14.069. But the cases which vouched that proposition involved appeals in which the court considered the merits.

[12] He submitted that in Scotland it was not enough to enter appearance or give notice of intention to defend; until defences were lodged a decree against a defender would be a decree in absence. He equated Mr McCorquodale's second letter with the mere entering of an appearance if it had been in the correct form, which it was not. He cited the Rules of the Court of Session, rules 17, 18 and 19, the Sheriff Court Ordinary Cause Rules, rules 7.2, 9.2 and 16.2 and the Court of Session Fees etc. Order 1997, para 3.3. More generally, he referred to the leading textbooks on private international law: Anton (3^rd ed.) at paras 9.16 - 9.22; Dicey, Morris & Collins (15^th ed.) Rule 43 and its commentary; and Cheshire, North & Fawcett (14^th ed.) at p 521.

[13] Mr Cowan for Mr MacLeod argued that Mr MacLeod also had not submitted to the jurisdiction of the Texas court. He submitted that STI had failed to meet the burden of showing that the Texas court had jurisdiction in the international sense. He generally adopted Mr Davies's submission, commented on certain of his cases and also referred to Desert Sun Loan Corp. v Hill [1996] 2 All ER 847 CA at 861-862. It was necessary for STI to show by reference to the Scottish rules that the defenders had voluntarily submitted to the Texas court. The question was whether they had acted in a way which would constitute a voluntary appearance in Scotland. The defenders had written informal letters and had not reached the stage at which they had committed themselves to pursue the appeals.

[14] Mr McBrearty in reply submitted that Lord Collins had set out the test for submission to jurisdiction in the international sense clearly in Rubin in paras 159 to 163. The defenders had chosen to initiate an appeal on the merits. Their submission should be assessed at the time they so acted. The fact that they chose to take no further steps in the appeal was immaterial. The court must analyse what they did and not speculate on what they might have done in future. If the defenders took an effective step which made it plain that they did not contest the court's jurisdiction, that was sufficient to constitute a submission. He compared the circumstances of this case with other cases which illustrated the application of the correct approach. In particular he discussed De Santis v Russo; Overseas Food Importers & Distributors Ltd v Brandt [1981] 126 DLR (3d) 422; and Von Wyl v Engeler [1998] 3 NZLR 416. He also referred to Triad Realty Services Ltd v Green 2008 WL 4743492, which is a decision of the Court of Appeals of Texas, and shows the distinction in Texas law between a special appearance to challenge jurisdiction and a general appearance which excludes such a challenge. In the present case the Texas Court of Appeal treated each of the letters of March 2012 as initiating an appeal and granted decree by default against both defenders when they did not persist in their appeals.

Discussion

[15] Before discussing the law, it is necessary to set out the circumstances of the Texas proceedings in more detail. Counsel agreed that for the purposes of the debate I could have regard to the helpful affidavit of Mr Todd Tinker, a member of the State Bar of Texas, who set out the factual background to the dispute between STI and HDL and explained the court procedures in the actions which took place in Texas. He explained that under Texas law, the courts had jurisdiction over the defenders on the basis of a tortious act that caused harm in Texas. He stated that the Texas courts allowed a defendant to make a "special appearance" to challenge jurisdiction; otherwise an appearance by the defendant was treated as a "general appearance" which amounted to an acceptance of the court's jurisdiction. The Texas court treated Mr McCorquodale's letter of 23 May 2011 as a general appearance. The defenders' letters of 7 and 9 March 2012 to the Dallas District Court, which it forwarded to the Fifth Circuit Court of Appeals for the State of Texas, were treated by the latter court as appeals against the trial court's judgments. The Court of Appeals gave the defenders notice of the need to submit filings and to pay the fee for instituting an appeal. On their failure to do so, the Court of Appeals dismissed the appeals in an order dated 5 February 2013.

[16] From this account I conclude that as a matter of domestic jurisdiction the Texas courts (i) treated Mr McCorquodale as having engaged in the legal proceedings through his letter of 23 May 2011 and (ii) viewed both defendants as having initiated appeals. Because the defenders did not make a special appearance to challenge the jurisdiction of the Texas courts, the defenders were treated as having instituted appeals on the merits of the district court's decision. The facts that they did not make the needed filings or pay the appeal fee do not alter that conclusion. While the Texas courts did not have to address issues of conflict of laws, it is clear that the Court of Appeals considered that the defenders had invoked its jurisdiction.

[17] If the Scottish courts had received letters from unrepresented persons in which they intimated a desire to appeal and set out grounds of appeal, I think that it is likely that the court officials would write to those persons to explain the procedures to be followed in pursuing an appeal. I do not think that the court would ignore such letters or treat them as invalid because the appellants had not yet paid a court fee. Certainly, if such a letter were to come before me, I would treat it as intimation of an appeal and I would ask court officials to assist the appellant to prepare the needed documents and to instruct him on the payment of the court fees due, if any. It is correct, as Mr Davies submitted, that a party could not require an officer of court or another party to a case to take any action until the relevant court fee had been paid. But that has in my view little bearing on whether the court would treat such letters as instituting an appeal.

[18] Counsel agreed that the question whether the defenders had submitted to the jurisdiction of the Texas courts was to be determined according to the rules of Scottish private international law (Pick v Stewart, Galbraith & Co Ltd (1907) 15 SLT 447 and Wendel v Moran 1993 SLT 44; see also Rubin v Eurofinance SA, Lord Collins at para 161). They agreed also that the pursuit of an appeal against a decision at first instance was capable of amounting to a submission to the jurisdiction of the court of first instance (Guiard v de Clermont [1914] 3 KB 145; and S. A. Consortium). They agreed that the approach of Scots law and English law was essentially the same. They also agreed that it was not a question of a party's subjective intention. The court had to look objectively at what the party had done when deciding whether the steps which he took amounted to a submission to the court's jurisdiction (Akai Pty Ltd, Thomas J at 97).

[19] The most modern authoritative statement of the relevant test can be found in the judgment of Lord Collins in Rubin v Eurofinance SA. He stated (at paras 159 and 160):

"159. The general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the English court must have 'taken some step which is only necessary or only useful if' an objection to jurisdiction 'has been actually waived, or if the objection has never been entertained at all': Williams & Glyn's Bank plc v Astro Dinamico Cia Naviera SA [1984] 1 WLR 438, 444(HL) approving Rein v Stein (1892) 66 LT 469, 471 (Cave J).

160. The same general rule has been adopted to determine whether there has been a submission to the jurisdiction of a foreign court for the purposes of the rule that a foreign judgment will be enforced on the basis that the judgment debtor has submitted to the jurisdiction of the foreign court. ..."

[20] In his discussion of the rule (in paras 161-165) Lord Collins explained the broad approach which the court must take:

"the question whether there has been a submission is to be inferred from all the facts." (para 161)

It is not enough that the steps taken abroad would amount to a submission if taken in Scottish proceedings. Nor is the Scottish court required to regard as a submission the steps in the foreign proceedings which the foreign court would treat as a submission. But it is not necessary in every case that both the Scottish court and the foreign court would regard the steps as a submission. When deciding whether there has been a submission to a foreign court for the purpose of enforcing in Scotland that court's judgment, the Scottish court may conclude that there has been such submission although the foreign court would not have regarded such steps as a submission. The court would rarely reach such a conclusion (Adams v Cape Industries plc Scott J at 461; Akai Pty Ltd Thomas J at 971). But it is a possibility which is open if the circumstances justify such a decision. Scots private international law will take into account the position under foreign law, but that position will not answer the question which the Scottish court is addressing. In my opinion the test, which lord Collins has set out, is a flexible one. The weight to be attached to the domestic approach of the Scottish court and that of the foreign court will vary according to the circumstances of the case.

{21] Applying that guidance in this case, I consider that the two letters of appeal from Mr McCorquodale and from Mr MacLeod were treated by the Texas Court of Appeals as initiating an appeal. See paragraphs [15] and [16] above. I consider that the Scottish courts would similarly have treated such letters as initiating an appeal. See paragraph [17] above.

[22] In my view the various cases which counsel cited are merely illustrations of circumstances in which the court has decided one way or another. I see no benefit in examining their particular facts to distinguish them, when the court must decide on the facts of the particular case. Applying the test which Lord Collins cited and which originated in Rein v Stein, the appeal letters were necessary or useful only if the authors were not challenging the jurisdiction of the Texas courts. Indeed, they were designed to initiate an appeal on the merits. It does not matter that the authors were not legally represented and were unaware that, if they did nothing, the District Court's judgment could not be enforced against them in Scotland. There may not have been waiver, because the defenders were not aware that there was no jurisdiction in the international sense. But the case comes within the second aspect of Rein v Stein because the defenders never entertained the objection to jurisdiction at all. It cannot be that there is submission only where a person knows of the objection and waives it. The court must judge what he has done in the proceedings objectively, regardless of his actual knowledge.

[23] I do not accept that a person must appear or be represented in court before he is taken to have submitted to that court's jurisdiction (Overseas Food Importers; Von Wyl). Were it otherwise, engaging in a court process which involved only written submissions could never amount to submission. Nor am I persuaded that it is necessary that a court consider the merits of a person's submission (Overseas Food Importers). Were it otherwise, a person could engage in a court process up to a hearing on the merits and then withdraw at the last minute. It would be a harsh decision to hold that such a person had not submitted to the court's jurisdiction and that the court when issuing a decree by default did not have jurisdiction in the international sense. The fact that the defenders did not take legal advice and did not have legal representation is undoubtedly very unfortunate for them. But the court must make an objective assessment of whether, as unrepresented persons, they have by their acts submitted to the jurisdiction of the Texas courts.

[24] In my view the defenders submitted to the jurisdiction of the Texas District Court and the Court of Appeals by sending their letters of appeal with grounds of appeal. The Texas Court of Appeals treated the letters as instituting a valid appeal. The Scottish courts would in my view have acted similarly. In this respect the case is clearly to be distinguished from De Santis and Von Wyl. On an objective reading of the letters of 7 and 9 March 2012 the defenders wished to appeal the merits of the district court's decision and set out their grounds of appeal. That was sufficient in all the circumstances to amount to a submission to the jurisdiction of the Court of Appeals.

[25] It is not necessary for me to decide whether Mr McCorquodale's earlier letter to the Dallas District Court amounted to a submission to the jurisdiction of that court. The district court appears to have treated it as a general appearance and have later granted decree by default. But counsel did not discuss how the Scottish courts would have dealt with such a letter.

(ii) The Protection of Trading Interests Act 1980

[26] The second distinct line of defence was that the final judgment was not enforceable because it was a judgment for multiple damages under section 5 of the Protection of Trading Interests Act 1980 ("the 1980 Act").

[27] This remarkable Act was enacted to discourage the United States from seeking to enforce its competition policies by, among other means, making awards of multiple damages against persons in the United Kingdom. Section 5 of the 1980 Act provides:

"(1) A judgment to which this section applies shall not be registered under Part II of the Administration of Justice Act 1920 or Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and no court in the United Kingdom shall entertain proceedings at common law for the recovery of any sum payable under such a judgment.

(2) This section applies to any judgment given by the court of an overseas country, being -

(a) a judgment for multiple damages within the meaning of subsection (3) below;

(b) a judgment based on a provision or rule of law specified or described in an order under subsection (4) below and given after the coming onto force of the order; or

(c) a judgment on a claim for contribution in respect of damages awarded by a judgment falling within paragraph (a) or (b) above.

(3) In subsection (2)(a) above a judgment for multiple damages means a judgment for an amount arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained by the person in whose favour the judgment is given. ...."

[28] Counsel for the defenders submitted that the final judgment fell within the prohibition in section 5(1) as STI was seeking at common law to recover from the defenders a sum payable under a judgment for multiple damages against HDL. Separately, and in any event, the enforcement of the judgment was prohibited under subsection (2)(c) as it was a claim for contribution in respect of damages awarded in a judgment for multiple damages. I was referred to British Airways Board v Laker Airways Ltd [1984] 1 QB 142 and [1985] 1 AC 58 and Cheshire, North & Fawcett at pp 561-564. In the Act Parliament had shown a clear hostility towards awards of multiple damages and had barred the recovery of the compensatory element of such awards as well as the excess: British Airways, Parker J at p 161 in the Queens Bench report and Lord Diplock at p 85 in Appeal Cases; Lewis v Eliades [2004] 1 WLR 692 (CA) Potter LJ at para 41; and Dicey, Morris and Collins, Rule 59 and the commentary, especially para 14.274.

[29] Mr McBrearty submitted that the prohibitions of the 1980 Act did not bite. The UK Parliament had no interest in the enforcement of antitrust legislation against HDL in the United States. The action against the defenders was not a claim for multiple damages but an attempt by a creditor of HDL to obtain payment from those persons who had allegedly alienated HDL's assets in order to defeat STI's claims. Accordingly, the judgment to be enforced did not fall within the definition in section 5(2)(a) of the 1980 Act. Section 5(2)(c) should be given its normal meaning. It referred to a right of contribution among wrongdoers such as is regulated by section 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 or, in England and Wales, the Civil Liability (Contribution) Act 1978. Section 8(4) of the 1980 Act defined the claim thus:

"References in this Act to a claim for, or to entitlement to, contribution are references to a claim or entitlement based on an enactment or rule of law."

If there were any doubt about the scope of section 5(2)(c), the Parliamentary statements by Lord Hacking, who proposed as an amendment to the Bill an earlier version of section 5(2)(c), and Lord Mackay of Clashfern, the Lord Advocate, in response made it clear that the sub-section was concerned with contributions among joint wrong-doers or co-obligants.

[30] As a fall back, Mr McBrearty submitted that, if the 1980 Act applied, the court could sever the offending excess and award the sum that was the compensatory multiplicand. He recognised the weight of judicial comments against this submission but pointed out that the comments were obiter. He observed that in Lewis v Eliades Jacob LJ (at para 62) had left open the possibility that one might enforce the compensatory element in a judgment.

Discussion

[31] I am persuaded that section 5 of the 1980 Act prohibits the enforcement of the judgments in issue in this case.

[32] The 1980 Act seeks by various means to prevent the enforcement against persons in the United Kingdom of legal measures and court judgments under United States antitrust legislation. Section 1 enables the Secretary of State to prohibit any person in the United Kingdom from complying with a requirement or prohibition in an official measure that has extra-territorial effect and threatens to damage the United Kingdom's trading interests. Section 2 empowers the Secretary of State to prohibit a person in the United Kingdom from complying with an order, which has extra-territorial effect, to produce commercial documents or information to an overseas court, tribunal or authority.

[33] It is clear in my view that Parliament sought to discourage what it considered to be the exorbitant effects of United States antitrust laws. The Act is concerned not only with the extra-territorial effect of such laws but also with preventing the recovery of multiple damages. Hence section 5. Further, section 6 enables a defendant, such as a citizen of the United Kingdom or a person carrying on business in the United Kingdom, who has paid multiple damages, to recover from the payee by legal process in the United Kingdom the excess over what would have been compensatory damages. The right is excluded only (i) where the defendant, if an individual, is ordinarily resident or, if a corporation, has its principal place of business in the overseas country or (ii) if the defendant carries on business in that country and the legal proceedings are concerned with activities exclusively carried out in that country (section 6(3) and (4)).

[34] Section 5 similarly does not protect only UK citizens or businesses. Parker J in British Airways (at 162 D-E) stated:

"It is in my view clear that section 5 has nothing to do with sovereignty. It would, for example, prevent one United States corporation enforcing in this country a judgment in an antitrust suit against another United States corporation which had assets and a place of business here, notwithstanding that the antitrust infringements took place wholly within the United States. In such a case no question of any invasion of sovereignty could arise."

[36] The rationale of that section is akin to the prohibition from the enforcement of foreign penal laws (British Airways, Parker J at 163, and Cheshire, North & Fawcett at p 563).

[37] It is consistent with the purpose of the 1980 Act to give a wide meaning to the words at the end of section 5(1): "proceedings at common law for the recovery of any sum payable under such a judgment". I acknowledge that the judgment against the defenders, which STI seeks to enforce, relates to a claim under the UFTA and is not a direct claim for multiple damages. But it is a judgment against United Kingdom citizens resident in the United Kingdom which orders them to pay a creditor of HDL, whose only claim for such an order is a judgment against HDL for multiple damages under US anti-trust legislation. That in my view involves the recovery of a sum payable under a judgment for multiple damages within the meaning of section 5(1). The fact that the claim under UFTA arises from an alleged transfer of assets to defeat STI's claim is not material. As STI accepts, the 1980 Act prevents it from suing HDL in the United Kingdom to recover multiple damages. It would be contrary to the broad intention of the legislation, which is to discourage the extra-territorial enforcement of anti-trust judgments and measures, for the court to order HDL's directors in the United Kingdom to pay sums to STI, an anti-trust claimant, to enable it to recover its award of multiple damages.

[38] In my opinion the wide scope of the concluding words of section 5(1) points towards a narrower interpretation of section 5(2)(c). I do not see any ambiguity in the words of section 5(2)(c) that would justify recourse to the parliamentary debates in accordance with the rules set out in Pepper v Hart [1993] AC 593. I give the words of that sub-section their natural meaning in its statutory context and consider that Mr McBrearty is correct that the sub-section addresses the contribution between wrongdoers or co-obligants.

[39] Finally, I am not persuaded that there is any basis for severing the compensatory element of a judgment from its excess. Section 5(1) is clear in its terms. It prohibits the statutory registration of a judgment which falls within section 5(2) or common law proceedings for the recovery of sums payable under such a judgment.

(iii) Public policy and human rights

[40] Mr Davies submitted that, in any event, it was contrary to public policy for the court to enforce the judgment because it was in substance a claim for penal damages. He referred to SA Consortium, Lewis v Eliades and Dicey, Morris and Collins at para 14.157. Mr Cowan expanded this argument by submitting that enforcement of a penal judgment, which awarded a sum which was manifestly excessive when measured against what a British court would award as compensation would be contrary to Article 1 of Protocol number 1 ("A1P1") of the European Convention on Human Rights. He submitted that the Texan antitrust legislation, while pursuing a legitimate aim of encouraging competition and discouraging restrictive trade practices, adopted a disproportionate method, namely multiple damages, to achieve that aim. He referred for a description of the general approach of the courts to A1P1 to AXA General Insurance Ltd v H M Advocate 2012 SC (UKSC) 122, [2012}] 1 AC 868, Lord Reed at para 108.

[42] Mr McBrearty accepted that A1P1 was engaged by STI's claim. But he submitted that there was no disproportion in the means used to achieve the legitimate aim, which he characterised as the enforcement in the United Kingdom of the Texan court's compensatory award to a creditor for the alienation of a debtor corporation's assets. He referred to Anton at paras 9.05 to 9.18 on the principle of comity and the legitimate expectation of a party that the judgment of a competent foreign court would be enforced. It was wrong to see the judgment as penal as it involved no payment to the State but was merely a form of exemplary damages which was a familiar remedy in the United States and in some Commonwealth countries (S A Consortium, Lord Denning at 299-300).

Discussion

[43] As I have decided that section 5 of the 1980 Act applies to prohibit the enforcement of the final judgment, it is not necessary to express a concluded view on this point. It is sufficient to record my view that, if the 1980 Act did not exist, the common law, bolstered by A1P1, would have rendered unenforceable a claim for multiple damages and that it would also have rendered unenforceable an ancillary claim under UFTA. I do not see the claim under UFTA to be so distinct from the claim for multiple damages that one can ignore the latter when considering the nature of STI's claim. The UFTA action was an indirect attempt to recover sums due on an award of multiple damages. I consider that there is a strong argument that an award of triple damages is a disproportionate means of enforcing competition policy and that the ancillary UFTA action is tainted by that disproportion.

Conclusion

[44] As I have held that the prohibition in section 5 of the 1980 Act against the recovery of sums payable under a judgment for multiple damages extends to STI's claim under UFTA, it follows that the action is irrelevant. I therefore sustain first pleas in law for each of the defenders, repel the first, second and fourth pleas in law for the pursuer and dismiss the action, and reserve all questions of expenses.