Sep 2023

Guernsey

Law Over Borders Comparative Guide:

Commercial Litigation and Cross-border Enforcement

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Contributing Firm

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1 . What is the structure and organisation of local courts dealing with commercial claims? What are the main procedural rules governing commercial litigation?

Most commercial disputes are litigated in the Royal Court of Guernsey, with claims under GBP 10,000 being dealt with under a simplified Petty Debts process. Where a right of appeal exists, this lies in the first instance to the Guernsey Court of Appeal and from there to the Judicial Committee of the Privy Council. 

Most civil litigation is governed by the Royal Court Civil Rules, 2007 (RCCR). The RCCR reflect Guernsey’s distinct legal system, whilst containing many provisions that are similar to those found in the English Civil Procedure Rules (CPR). However, there is no separate or distinct court or rules for commercial litigation, with the RCCR being flexible enough to accommodate any specific issues arising in commercial matters.

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2 . What pre-action considerations apply?

There are currently no formal pre-action protocols in Guernsey. However, the RCCR lays down as the overriding objective that parties shall deal with matters expeditiously and take a proportionate approach to save expense. In practice, parties will generally seek to engage in pre-action discussions with a view to resolving their dispute and/or narrowing the matters in dispute; a failure to do so is likely to result in a liability in costs. 

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3 . What are the main alternative dispute resolution (ADR) methods used to settle large commercial disputes?

ADR is common in Guernsey. ADR in practice varies from the simple party to party negotiation, through to mediation with accredited mediators, and includes binding expert determinations. In addition, the Arbitration (Guernsey) Law, 2016 (the Arbitration Law) provided an updated framework for arbitration cases in the jurisdiction, leading to this method of ADR becoming more popular in commercial disputes.

In addition to providers in the Channel Islands, Guernsey ADR will often involve mediators or experts from the UK or worldwide. 

At present there is no specific provision in the RCCR for any form of online dispute resolution. 

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4 . How long, on average, do court proceedings take to reach trial?

There is no fixed timeframe in place for progression of a case from commencement of proceedings to a trial and the duration will depend on the complexity and value of the case, and the court’s workload. It is possible to get to trial within 6 months for a simple dispute but in the majority of commercial cases it would generally take at least 12, and up to 24 months, to trial. In complex cases the timing can be longer. 

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5 . What disclosure obligations apply? Are parties required to disclose unhelpful documents as well as those on which they rely?

Guernsey’s disclosure obligations are broadly similar to those which apply in the English courts. Unless some alternative order is made (e.g. in simple claims), the parties are generally ordered to provide disclosure of documents in their possession, custody or control:

  • on which they rely;
  • which adversely affect or support a party’s case; and
  • the disclosure of which is required by a relevant practice direction.

Accordingly, even if a document is unhelpful, it must be disclosed. A party can, however, withhold inspection, for example, of a document which is privileged. A party cannot rely on a document it failed to disclose or where it failed to permit inspection.

Once litigation is in contemplation or likely, parties should ensure that all potentially relevant documents are preserved so that, in due course, they are able to conduct a reasonable search for disclosable documents. The duty of disclosure is a continuing one.

Parties are generally ordered to give standard disclosure (as set out above) but the court can order (or the parties may agree) that a more limited disclosure order is given, or that it is dispensed with entirely. A party who considers that the disclosure that a party has given is inadequate or incomplete may make an application for specific disclosure. 

There is no regime in the CPR for third party disclosure but there remains scope for this to be obtained through measures such as a Norwich Pharmacal order.

In practical terms, when disclosure is ordered the court will generally set a timetable for the various steps in collaboration with the parties. E-disclosure is commonplace and although there are no specific rules governing this, in practice the court looks to how this is done in England. 

Once disclosure is given, parties are generally given a right of inspection. There is also a right to inspect any documents which are referred to in any pleadings, witness statement, affidavit or expert reports. A party cannot rely on any document which they have failed to disclose or permit inspection of without the leave of the court. 

There is no pre-action disclosure in Guernsey, save in personal injury cases.

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6 . Can witnesses be required to attend trial and face cross-examination?

Written witness statements are typically used in proceedings and these commonly stand as evidence in chief. Witnesses are generally expected to give live evidence and will commonly be cross-examined and subject to re-examination. Witness summons can be issued, but attendance of an off-island witness cannot generally be compelled and accordingly, if in doubt, an order for evidence to be taken on commission via a foreign court may be necessary. Evidence of witnesses who are resident abroad and who cannot readily attend may be permitted to give evidence by video link. 

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7 . What discretion do the courts have in making costs orders?

The court has an overall discretion to make costs orders as it thinks just, in relation to the costs of the proceedings or any stage thereof or indeed of any specific application.[1] The general starting point is that costs follow the event, but that rule is subject to exceptions and the court will consider issue-based costs orders where that is deemed appropriate. Interim costs orders are increasingly being made, thereby providing scope for interim payments during the currency of the proceedings.


[1] RCCR, Rule 82(1).

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8 . What are the main types of interim remedies available?

The most frequent form of interim remedy is the freezing injunction. There is statutory provision enabling the courts to grant interim injunctions, including in support of foreign proceedings. This regime sits alongside Guernsey’s customary law interim remedies (the arrêt conservatoire or arrêt simple, which apply to personal property and are intended to preserve assets pending judgment in the proceedings). These are rarely used now in commercial litigation, where the prevalent remedy is generally a freezing injunction. The test for the grant of an interim injunction is closely modelled on the English position and requires the applicant to have a good arguable case in proceedings afoot in Guernsey or elsewhere. There must be assets in Guernsey and it must be just and convenient for a freezing order to be made. 

In addition to freezing orders, other interim remedies that may be available include:

  • Anti-suit injunctions, to prevent proceedings being brought or pursued in this or another jurisdiction.
  • General injunctions to prevent another party from taking a particular step; while it is generally considered that a mandatory injunction may be ordered by the courts, there is limited authority on this topic. 
  • The customary law remedy called the Clameur de Haro, which prevents an imminent wrong in relation to property. 
  • Norwich Pharmacal orders, enabling a party to obtain disclosure from third parties, such as banks or administrators.
  • Search orders, enabling a search of premises to recover and preserve evidence.
  • Bankers Trust orders, enabling provision of bank account information.
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9 . What approach do the local courts adopt with respect to arbitration? What arbitration law applies and is it based on the UNCITRAL Model Law?

The Arbitration Law provides a framework for arbitration of disputes in Guernsey. The structure of the Arbitration Law broadly follows the English Arbitration Act 1998 and the UNCITRAL Model Law on International Commercial Conciliation, 2002. Where parties have agreed that their dispute should be settled by arbitration, the Guernsey courts will generally uphold this and be willing to order a stay of any court proceedings, pending the conclusion of the arbitration.

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10 . Can arbitrators grant interim relief?

An arbitrator can order that a claimant provides security for costs, or make orders restricting a party’s ability to deal with its assets during the course of the proceeding. Arbitrators also have the power to make provisional awards and/or dismiss a claim if satisfied that there has been an inexcusable delay on the part of the claimant in pursuing the claim.

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11 . On what grounds can an arbitration award be appealed?

A dissatisfied party can apply to the court to challenge an arbitral award within 28 days thereof, giving notice to the other party and the tribunal. The grounds for so doing include where the court has substantive jurisdiction (to confirm/vary set aside the award in whole/part) or where there is a serious irregularity affecting the tribunal/proceedings/award.

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12 . What international conventions and agreements on enforcement of judgments or arbitral awards is your jurisdiction a party to?

Guernsey has a statutory and common law regime for recognition and enforcement of judgments and awards. Pursuant to the statutory scheme, a foreign judgment from specified territories will be recognised and enforced by the Guernsey court provided certain threshold conditions are met. The territories with whom these reciprocal arrangements exist are England and Wales, Isle of Man, Israel, Jersey, Kingdom of the Netherlands, Curacao and St. Maarten (previously known as the Netherlands Antilles), Northern Ireland, Italy, Scotland and Surinam.

Recognition and enforcement is also possible at common law. In this scenario, the foreign judgment is essentially treated as a debt, with proceedings commenced in Guernsey against the debtor under the judgment and seeking summary judgment thereon. This then enables enforcement against assets located in Guernsey.

In terms of international conventions, Guernsey is not a signatory to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial matters. 

In terms of arbitration awards, the Arbitration Law makes provision for the recognition and enforcement of arbitration awards made pursuant to a written arbitration agreement in a territory of a state which is a party to the New York Convention on the recognition and enforcement of foreign arbitral awards.

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13 . What types of judgments in commercial matters are enforceable and what types are excluded?

Domestic

In principle, a judgment from a Guernsey court which is for payment of a sum of money (save in respect of taxes, fines or other penalties) will be enforceable. 

A judgment will be excluded from enforcement where it is not a money judgment and it is:

  • impeachable, subject to appeal and/or where a stay of execution pending appeal has been granted; and/or
  • barred by the passage of time (the period being six years or more in relation to judgments by consent or following a hearing (an acte d’amerci) or three years for judgments by default (acte de vers arrêt)).

Foreign

As noted above, Guernsey has a statutory scheme for the recognition and enforcement of foreign judgments, contained within the Judgments (Reciprocal Enforcement) (Guernsey) Law, 1957, as amended (the Reciprocal Law). In summary, this scheme provides that:

  • For a judgment of a foreign court to be capable of registration, it must be for a definite sum of money.
  • A judgment debt for taxes or other similar charges or a fine or other penalty will not be enforceable, if made after the scheme came into effect.
  • The foreign judgment can be in personam or in rem but will usually be in personam.

At common law, Guernsey courts will recognise and enforce foreign judgments in personam and in rem. Accordingly, subject to certain qualifications (for example, judgments obtained by fraud, judgments contrary to public policy and proceedings contrary to natural justice) a judgment in personam from a foreign court with jurisdiction to give that judgment is capable of both recognition and enforcement. Similarly to the statutory scheme:

  • The judgment must be for a debt or definite sum of money, other than a sum payable in respect of taxes or penalties.
  • An order for the payment of costs is not enforceable until the costs have been taxed.
  • A sum is sufficiently certain if it can be ascertained by simple arithmetical process.
  • The judgment must be final and conclusive.
  • The foreign court which granted the judgment must have had jurisdiction; Guernsey courts will apply conflict of laws rules when determining this.

A judgment will be excluded on similar grounds as set out above in relation to domestic judgments.

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14 . What is the process for registration of foreign judgments and arbitral awards?

In order to obtain the registration and/or enforcement of a foreign judgment or arbitral award under the Reciprocal Law, an application must be filed with the court together with a supporting affidavit and the necessary court fee. A defendant who wishes to challenge the registration and have it set aside must generally do so within 14 days of service upon them. 

Under the common law process, the judgment creditor would issue proceedings for payment of the debt represented by the foreign judgment. These would be served on the debtor who would then have to state whether or not the judgment was disputed. Unless any of the recognised exceptions to recognition were made out, it would be possible to proceed with a summary decree application in early course and seek the grant of a judgment from the Guernsey court, which could then be enforced in the normal way. 

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15 . Once the judgment or award is registered, what are the available methods of execution?

The main options available in relation to execution or enforcement of a judgment, are as follows:

  • Arrêt conservatoire, used to freeze assets pending the determination of a claim.
  • Arrêt execution, used to arrest the assets of a judgment debtor pending sale, towards satisfaction of a judgment debt.
  • Registration (with leave) against the judgment debtor (or its interest in any realty).
  • Arrêt de gages (wages), used to arrest wages (a Guernsey form of an attachment of earnings order).
  • Arrêt de personnes, used to arrest a person to increase the chances of a debt being paid. This is theoretically still available but has not been used in many years.
  • Licitation, which is a customary law enforcement procedure against jointly owned property.
  • Saisie proceedings for the seizure (and ultimate realisation of) the judgment debtor’s Guernsey realty.

Once a foreign judgment is reciprocated or successfully sued on, it becomes enforceable as though it were an originating Guernsey judgment.

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16 . What interim measures are available pending enforcement?

Interim relief such as a freezing order (Mareva injunction) can, in appropriate circumstances, be obtained to support an application. Where this occurs, the claimant may need to give security for costs. 

EXPERT ANALYSIS

Chapters

Bermuda

Charlotte Donnelly
Keith Robinson
Mahogany Bean

British Virgin Islands

Kate Lan
Nicholas Lee
James Noble

Canada

Robert J.C. Deane
Sean Gallagher

Cayman Islands

Amelia Tan
Joni Khoo
James Noble

China

Jessica Fei

England and Wales

Ben Bruton
Jake White
Suzanne Labi

Germany

Dr. Justus Jansen
Jamsched Amiri

Hong Kong

Ian De Witt
Natalie Lam

Japan

Claire Chong
Kaori Sugimoto

Jersey

Christopher Tan
John Kelleher

Malaysia

Janice Ooi Huey Peng
Sharon Chong Tze Ying

Norway

Carl E. Roberts
Eline Hellem Langeland

Pakistan

Mansoor Hassan Khan

Saudi Arabia

Fahad AlDehais AlMalki
Salman AlAnazi
Talal AlOtaibi

Singapore

Calvin Ong
Monisha Cheong
Wendy Lin
Josephine Choo

South Korea

Daniel Chua
SeungMin Lee
Youjoun Ha

Taiwan

Angela Y. Lin
Joyce N. Chang

Thailand

Jittipong Champreechar
Napassorn Panitchewakul
Sarocha Thongperm

United Arab Emirates

Ayman Ibrahim
Hassan Al Shaqsi
Nasser Al Osaiba
Sleiman Jorr

United States

Arthur Schoen
Julia Mano Johnson
Natalie Holden

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