Summary
In Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors [2025] EWHC 257 (Comm) (23 January 2025), the Court considered what should happen to an English judgment which enforces a foreign judgment if the foreign judgment is subsequently appealed successfully.
The Court found that it had the ability to set aside the order enforcing the English judgment under CPR 3.1(7) and exercised its discretion to do so. The Court recognised that the circumstances in which it would be able to set aside or vary a final order are very rare but was satisfied that given the "very specific and limited circumstances" in the present case, namely where that final order was premised upon a foreign judgment which has been undermined by an appeal in another jurisdiction, it was appropriate for the order to be set aside.
This is an important decision with significant ramifications for the enforcement of foreign judgments in England. An appeal of this judgment is due to be heard by the Court of Appeal by January 2026.
Background
Motorola brought proceedings against Hytera in the US, alleging theft of intellectual property, trade secret misappropriation and copyright infringement. In January 2021, Motorola obtained judgment in the US against Hytera in the sum of $543.7 million, comprising, amongst other elements, $136.3 million in "disgorged profits" under the US Copyright Act 1976. Hytera subsequently appealed the US judgment.
In July 2023, Motorola amended its claim in England to claim, amongst other relief, the sum of $136.3 million premised upon the relevant part of the US judgment. In its defence, Hytera admitted Motorola's claim to the partial enforcement of the US judgment in the sum of $136.3 million; Hytera's position was that it had no choice but to make this admission because it is well-established as a matter of English law that a pending appeal does not prevent a foreign judgment being "final and conclusive" for the purpose of enforcement at common law. Later in 2023, Hytera consented to Motorola's application for summary judgment on its claim to enforce part of the US judgment and an English judgment was entered in the sum of $136.3 million. However, Hytera also applied for a stay of execution of the English judgment which was granted on the basis that the US judgment might be set aside on appeal and that Hytera would suffer irremediable prejudice if it had been required to pay Motorola the sums due under the English judgment in the meantime. Hytera was required to pay $25 million into Court by way of security as a condition of the stay continuing until the outcome of the appeal of the US judgment was determined.
On 2 July 2024, the part of the US judgment upon which the English judgment was based was vacated and Motorola's claim in the US was remitted to a lower court to reassess the damages award. On 15 July 2024, Hytera applied to the English Court to set aside or permanently stay the English judgment in the light of the successful appeal of the US judgment.
The Court's decision
The Court explained that the essential point of principle arising on Hytera's application was what should happen to an English judgment which is premised upon a foreign judgment if the foreign court subsequently allows the judgment debtor's appeal. Noting its surprise at the absence of authority on the specific point in issue, the Court found that it had the ability to set aside the English judgment under CPR 3.1(7) and concluded that the exceptional circumstances in the present case were appropriate for the Court's discretion to be exercised. The Court further found that in the light of its decision to set aside the English judgment, it followed that the security that Hytera had paid into Court should be released to it.
The Court's view was that the English Courts assume that a successful appeal in relation to a foreign judgment will be relevant to the enforcement of that foreign judgment in England, even if an English judgment enforcing that foreign judgment has already been granted. The Court was also of the view that, in the exercise of its discretion and its analysis of what is just, it could choose to uphold an English judgment enforcing a foreign debt notwithstanding the outcome of a foreign appeal.
The Court commented that the need for a procedural mechanism so as to take into account the effect of an appeal of a foreign judgment, which has itself been relied upon to obtain an English judgment, was "perfectly obvious". In considering the appropriate mechanism, the Court was not convinced that an appeal of the English judgment would be a satisfactory solution. Instead, the Court considered the use of its discretion under 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". Whilst it will be "very rare" that a final order can properly be reopened, it may be justified in a sufficiently exceptional case.
In deciding whether to exercise its discretion under CPR 3.1(7), the Court drew a comparison to the analogous case of Vodafone Group Plc v IPCom GmbH & Co KG [2023] EWCA Civ 113, in which IPCom had succeeded on its claim that its patent had been infringed by Vodafone. However, whilst that decision was being appealed, the underlying patent was revoked by the European Patent Office with the effect that the patent was retrospectively invalidated. The Court noted that in Vodafone, the Court of Appeal found that an important reason as to why the final order was not set aside was because Vodafone was "the author of its own misfortune" through failing to take steps which were open to it to protect itself (by, for example, seeking a stay of the trial or obtaining an undertaking from IPCom to repay in the event the underlying patent was invalidated). In contrast, the Court found it difficult to see what Hytera could have done differently in relation to Motorola's summary judgment application and could not see what steps were open to Hytera to protect itself. The Court was further of the view that setting aside the English judgment could not sensibly be said to offend the principle of finality and could not be said to cut across or undermine the concept of an appeal – if anything, setting it aside is respecting the concept of an appeal. The Court noted that "it is hard to think of a more fundamental change of circumstances, in a case where the whole claim is premised upon a foreign judgment, than for that judgment to be reversed on appeal". The Court also highlighted that, most importantly, unlike in Vodafone, neither party was able to identify any better means by which the summary judgment order might be set aside.
Key takeaways
The Court's judgment makes it clear that in circumstances where the English Court has issued a judgment enforcing a foreign judgment, it is possible for the English judgment to be set aside if the foreign judgment is subsequently appealed. However, there is no guarantee that an English judgment will be set aside where the foreign judgment upon which it is based has been successfully appealed. There may be scenarios that are not sufficiently exceptional and where it would not be just for the Court to exercise its discretion to set aside the English judgment, particularly if the party seeking to set aside the judgment could have taken steps to better protect itself.
It is also clear that in circumstances where a foreign judgment is successfully appealed in respect of quantum alone, it is not possible for the English Court to simply vary the English judgment enforcing the foreign judgment to provide for damages in a sum to be assessed once the final decision of the foreign court on appeal has been granted.
This judgment highlights how important it is for parties to ensure they are alive to the enforcement consequences of and challenges associated with judgments that are obtained against them or in their favour and to carefully consider with their legal advisors all of the options available to best protect themselves where enforcement of a foreign judgment in the English courts is, or may be, in issue.
