Motorola v Hytera: Court of Appeal rules on the enforcement of foreign judgments

Summary

In Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors [2025] EWCA Civ 1667, the Court of Appeal ruled that:

i) Where a foreign judgment contains “multiple damages” (which is essentially a judgment for an amount containing a compensatory and punitive element, calculated by applying a multiplier to the compensatory element), the entire judgment is unenforceable, not just the punitive element, pursuant to section 5 of the Protection of Trading Interests Act 1980 (“PTIA”); and

ii) Where an English judgment has been entered to enforce a foreign judgment which itself has subsequently been overturned on appeal, the appropriate route to granting relief to the party against whom the English judgment was granted is via CPR 40.8A rather than CPR 3.1(7). A stay of the English judgment was deemed to be appropriate rather than revocation, in circumstances where the foreign proceedings were still at an interim stage.

This is an important decision by the Court of Appeal which will have significant implications for the enforcement of foreign judgments in England and Wales.

Background

Motorola brought proceedings against Hytera in the US, alleging theft of intellectual property, trade secret misappropriation and copyright infringement. In 2021, Motorola obtained judgment in the US against Hytera (the “US Judgment”), comprising i) compensatory damages under the Copyright Act (the “Copyright Damages”); ii) compensatory damages under the Defend Trade Secrets Act (the “DTSA”); iii) punitive damages under the DTSA (which were double the compensatory damages under the DTSA); and iv) various other awards for interest, legal fees and disbursements.

In April 2022, Motorola brought proceedings in the English Commercial Court to enforce the US Judgment; it did not originally seek to enforce the compensatory or punitive damages awarded under the DTSA, although it did later amend its claim to enforce the DTSA compensatory damages. In August 2022, Hytera appealed the US Judgment to the US Court of Appeals for the Seventh Circuit (the “USCA”). In 2023, whilst the US appeal was pending, Motorola successfully obtained summary judgment in the English High Court to enforce the Copyright Damages element of the US Judgment (the “English Judgment”). Whilst Hytera consented to the summary judgment, recognising the well-established principle that a pending appeal against a final foreign first-instance judgment is not a bar to it being enforced in England and Wales, it sought a stay of the English Judgment pending the appeal of the US Judgment, which was granted in January 2024 on the condition that Hytera paid $25 million into Court by way of security.

On 2 July 2024, the USCA reversed the award of the Copyright Damages plus interest and remitted the matter to a lower US Court to reassess the damages to which Motorola was entitled under the Copyright Act. As a result, on 15 July 2024 Hytera applied to the English High Court for an order to set aside or permanently stay the English Judgment and for the return of the $25 million paid into Court (the “Revocation Application”).

Prior to the hearing of the Revocation Application, the trial of the remainder of Motorola’s claim took place in England in November 2024 (namely, in respect of the enforcement of the interest, legal fees and disbursements awarded in the US Judgment, with its claim in respect of the DTSA compensatory damages not having been pursued to trial). The Court held that section 5 of PTIA barred enforcement of the whole of the DTSA damages awards, including both the compensatory and punitive elements, as well as the awards for interest, legal fees and disbursements because they were all in part awarded as ancillary to the DTSA damages. Motorola appealed to the Court of Appeal (the “First Appeal”).

In January 2025, the Court granted the Revocation Application; we discussed that decision previously here. The deputy judge set aside the English Judgment using CPR 3.1(7), that having been the only jurisdictional route presented by the parties to set aside the English Judgment, and ordered the return of the $25 million security to Hytera. The deputy judge granted permission to appeal and stayed the return of the security pending appeal, although reduced the amount to $20 million to reflect the maximum which Motorola could expect to recover in relation to the Copyright Act plus interest and costs. Motorola appealed to the Court of Appeal (the “Second Appeal”).

Court of Appeal’s Decision: First Appeal

The First Appeal concerned the proper construction of section 5 of PTIA, which precludes recovery of “any sum payable” under a foreign “judgment for multiple damages”, which is defined as “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”. The key question for the Court of Appeal was whether section 5 of PTIA prohibits enforcement of only the additional multiple element of a damages award (i.e. the punitive element) or also prohibits enforcement of the compensatory element of the damages award.

The Court of Appeal held that section 5 of PTIA prohibits the enforcement of the whole of a judgment for multiple damages, including any compensatory element and any ancillary award of interest, legal fees or disbursements. The Court of Appeal considered that the language of section 5 is “clear and unambiguous”. It explained that what is barred under section 5 is “any sum payable” under a judgment for multiple damages which is the amount arrived at by applying the multiplier (i.e. double, treble etc) to the multiplicand (i.e. the compensatory amount); section 5 does not define the multiple damages judgment as only the amount arrived at after deducting the compensatory amount. Further, the Court of Appeal’s view was that its interpretation was the only one that is consistent with the wording of section 6 of PTIA, which provides for clawback of sums paid under certain judgments.

The Court of Appeal’s view was that a prohibition on enforcement of any part of a multiple damages judgment including the compensatory element is not in any sense a penalty but gives effect to the statutory purpose of section 5 of PTIA in two ways: firstly, it acts as a discouragement to the claimant from seeking an award of multiple damages in the first place; and secondly, it ensures that the English Courts are not lending their assistance to the enforcement of the penal element of a multiple damages award.

Accordingly, the First Appeal was dismissed; the Court of Appeal concluded that section 5 of PTIA precluded Motorola’s recovery of the compensatory and punitive damages under the DTSA as well as its claims for interest, fees and costs.

Court of Appeal’s Decision: Second Appeal

The Second Appeal concerned the Court’s power to revoke a final judgment granted in England and Wales to enforce a foreign judgment when that foreign judgment itself is overturned on appeal.

The Court of Appeal held that the deputy judge’s decision to revoke the English Judgment should have been made under CPR 40.8A rather than CPR 3.1(7) and therefore could not stand. CPR 40.8A provides that “a party against whom a judgment has been given or an order made” may apply for “a stay” or “other relief” on the ground of “matters which have occurred since the date of the judgment or order” and the Court may “grant such relief, and on such terms, as it thinks just”. The Court of Appeal explained that this is a very different power to the case management power in CPR 3.1(7), which provides that “[a] power of the court under these Rules to make an order includes a power to vary or revoke the order”. The Court of Appeal highlighted various authorities which circumscribed the power in CPR 3.1(7) and explained that it will only rarely be used to revoke a final order and should not be taken as a power to revoke a final order where CPR 40.8A is applicable. The Court of Appeal accepted that the revocation of a foreign judgment on which an English judgment is based is one circumstance in which it may be appropriate to revoke or vary a final order. However, CPR 40.8A is the power under which any such application should routinely be made.

The Court of Appeal went on to remake the decision of the deputy judge under the correct CPR 40.8A power and held that the English Judgment should not be revoked at what was still an interim stage in the US proceedings. The outcome of the reassessment in the lower US Court of the damages to which Motorola was entitled under the Copyright Act was awaited and it was not known whether there would be further appeals or hearings following that reassessment. The Court of Appeal’s view was that this was not an unusual or exceptional situation. It is undesirable for the English Court to have to react to the twists and turns of the foreign judicial process by repeatedly having to grant and revoke final judgments and the rapidly changing circumstances of litigation of this kind are better catered for by the grant of appropriate stays, if necessary on terms as to security, to achieve just interim solutions. Whilst the Court of Appeal decided not to revoke the English Judgment, it instead granted a stay of the English Judgment and ordered that the sum of $20 million should remain in Court by way of security pending the reassessment of damages in the lower US Court and future developments.

Accordingly, the Second Appeal was allowed.

Key Takeaways

Parties who intend to enforce a foreign judgment in England and Wales should be aware that they will be unable to enforce any element of the judgment if it is a judgment for “multiple damages”. This may influence the strategy adopted and damages pursued in the underlying foreign proceedings themselves, so as to ensure any judgment obtained is enforceable in England and Wales if there are assets located there against which enforcement is planned.

Equally, for those seeking to resist enforcement of a foreign judgment in England and Wales, section 5 of PTIA may provide a useful shield against enforcement where the judgment contains “multiple damages”.

In circumstances where the English Court grants an order enforcing a foreign judgment but the foreign judgment is subsequently overturned on appeal, any application to revoke the English judgment should be made under CPR 40.8A, rather than CPR 3.1(7). However, the Court is likely to prefer to grant a stay of the English judgment rather than a revocation where the foreign proceedings remain ongoing and/or further appeals remain possible.

This is a significant judgment and highlights how important it is for parties and practitioners involved in multi-jurisdictional disputes to carefully consider the requirements for and challenges associated with enforcing foreign judgments in England and Wales.

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