Universal cross-border enforcement of insolvency proceedings fails to take flight in Ireland

In February this year, the Supreme Court of Ireland handed down the decision of Flightlease (Irl) Ltd (In Vol Liq) & Cos Act [2012] IESC 12 which considered the enforceability of foreign insolvency related judgments in Ireland. The Supreme Court confirmed that a judgment from an action in personam will only be enforceable if, at the time the proceedings were instituted, the judgment debtor was present in the foreign country or if they submitted to the jurisdiction of the courts of the foreign country. The court rejected an application to accept the Canadian 'real and substantial connection' test between the proceedings and the country of enforcement.

Although not the focus of the decision, the Supreme Court decided not to adopt the principle of universal enforceability of insolvency proceedings underpinning the UK Court of Appeal decision in Rubin & Anor v Euro Finance SA [2010] E.W.C.A Civ (see our November 14, 2011 blog entry).The Rubin decision and a later decision involving the enforcement of an Australian unfair preference judgment obtained against foreign defendants who did not appear in the Australian proceedings (New Cap Re v A.E.Grant [2001] EWCA Civ 971 - see our April 27, 2011 blog entry) are the subject of appeals which will be heard by the UK's highest Court of Appeal - the Supreme Court - later this year. In Ireland at present, the common law has not expanded in the way that it has (subject to the appeals just mentioned) in the UK and the Irish common law continues to exclude the enforceability of foreign bankruptcy and insolvency judgments. However, in a separate judgment, Mr Justice O'Donnell did not rule out the possibility of the Supreme Court developing such a principle in the future.