Enforcement of awards and judgments
Third party debt orders
Two recent decisions of the House of Lords, Société Eram Shipping Company Ltd v Hong Kong and Shanghai Banking Corporation Ltd  UKHL 30 and Kuwait Oil Tanker Company SAK v UBS AG  UKHL 31, have clarified the circumstances in which the English courts can make third party debt orders – previously known as garnishee orders – divert to the judgment creditor sums due from a third party to the judgment debtor. The issue in each of these cases is whether the English court has the power to make such an order where the debt to be diverted is governed by a law other than English law. The further question in the Kuwait case was whether the position is affected where the judgment debtor is domiciled within the EC or EFTA and thus is subject to Council Regulation 44/2001/EC or the Lugano Convention 1989. These decisions are of some significance as they make it clear that the English courts may not be of great help to a judgment debtor who has obtained a judgment or arbitration award and wishes to enforce it by attaching a foreign debt.
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Professor R Merkin, LLB, LLM
Aug 1 2003