Ruling clarifies foreign-judgments test
Lawyers at Mason Hayes & Curran (MHC) have highlighted a recent High Court decision that confirms that, for a foreign judgment to be enforced in Ireland, there must be a solid practical benefit arising from doing so.
According to the business-law firm, the ruling also clarifies that for assets, or a likelihood of assets, within the jurisdiction to constitute a practical benefit, they must be amenable to an effective enforcement mechanism.
In a note on the firm's website, the MHC lawyers explain that underlying proceedings in England and Wales in 2025 resulted in a judgment of approximately $181.5 million being entered against the defendant VietJet, an airline incorporated in Vietnam.
Of that sum, a part-payment of only $2 million had been made. The plaintiff, FW Aviation (FWA), sought recognition and enforcement of the English judgment in several other jurisdictions, including in Ireland.
Three types of assets
VietJet argued that it had no assets in Ireland – or, at least, none that were amenable to enforcement mechanisms. Consequently, it argued that recognition would be of no benefit and that the order should be set aside.
The MHC lawyers say that FWA focused on three types of assets it claimed the defendant had in Ireland:
- FWS identified that maintenance reserves – sums paid to cover the costs of required maintenance – had been paid by VietJet to aircraft lessors in Ireland,
- Lease deposits were held by aircraft lessors for VietJet’s leased aircraft. The deposits, however, would only be refundable at the end of the lease term, the earliest expiry being 2029, and
- VietJet had Irish subsidiaries that sub-let aircraft to other airlines.
Mr Justice Rory Mulcahy noted that the mere presence of assets would not, of itself, enable the plaintiff to obtain a practical benefit from the proceedings; there must be a prospect that those assets would be capable of being subjected to some enforcement mechanism.
'Realistic prospect' of enforcement
The judge stated, however, that applicants did not need to show that there were sufficient assets to satisfy the judgment; they needed only to show that there was a practical benefit.
This requirement would be met if there was a prospect of successfully enforcing the judgment against even one class of assets, he said.
Referring to the three asset classes identified by FWA, Mr Justice Mulcahy concluded that there was a “realistic prospect that one or more of those classes of assets may be amenable to enforcement”.
Practical benefit
"The decision usefully confirms that a practical benefit is required as a matter of Irish law for enforcement of a foreign judgment," the MHC lawyers say.
They add that, while there is no definitive statement on what will constitute a practical benefit, assets or the likelihood of assets within the jurisdiction is "one clear route" to demonstrate a practical benefit.
"The decision also suggests that assets do not need to be within the jurisdiction imminently for a practical benefit to arise," the MHC lawyers state.
'Useful guidance'
William Fry, which acted for FWA, says that the decision provides "useful guidance" on the types of interests that may be relevant when assessing whether a foreign-judgment creditor can satisfy the practical-benefit requirement in Ireland.
"The judgment demonstrates a willingness on the part of the Irish courts to consider the commercial rights generated by modern aviation-leasing structures when assessing whether recognition proceedings are capable of conferring a practical benefit," the firm states.
Its lawyers also point out that the court did not determine whether such rights could ultimately be attached, realised, or otherwise made available to a judgment creditor, as this remains to be decided in any future enforcement proceedings.