Lindsey and Others v Conteh

The first to fifth appellants were shareholders of African Wireless Incorporated (AWI), the sixth appellant, a Delaware-registered corporation. They instituted a derivative suit in the Superior Court of California against the respondent, Alieu Badara Mohamed Conteh, a US citizen residing in Johannesburg, alleging he unlawfully transferred 51 shares of Resotel SPRL and 2 shares of Congolese Wireless Network SPRL to companies he owned, without AWI's permission. The California court granted a default judgment on 13 May 2016, followed by a default prove-up hearing on 10 June 2016. On 6 July 2016, the court ordered a constructive trust over the shares. On 29 August 2016, the court ordered Mr Conteh to turn over the shares and valued them at US$84,963,329 (Resotel) and US$8,329,738 (CWN) for bond purposes. The appellants sought to convert the judgment to a monetary judgment, which was dismissed on 15 September 2016. A writ of possession was issued on 11 October 2016. When the shares could not be obtained, the writ of possession was converted to a writ of execution for US$93 million on 28 February 2017. The appellants then sought provisional sentence in South Africa based on the California court orders, claiming they constituted a liquid document enforceable as a money judgment under Californian law.

• Whether a series of orders and writs granted by a foreign court (California Superior Court), including orders for turnover of property and writs of possession and execution, cumulatively constitute a liquid document enforceable by provisional sentence in South Africa
• Whether a foreign judgment that is not a money judgment, but is enforceable as a money judgment under the laws of the foreign jurisdiction, can form the basis for provisional sentence proceedings in South Africa
• Whether South African courts can apply foreign procedural rules for the enforcement of foreign judgments
• The requirements for enforcing a foreign judgment in South Africa
• The requirements for provisional sentence proceedings, particularly the requirement that the debt be liquid and unconditional

The appeal was dismissed with costs, including the costs of two counsel where so employed. The high court's order refusing provisional sentence was upheld.

The binding legal principles established are: (1) A foreign judgment that is not itself a money judgment cannot form the basis for provisional sentence proceedings in South Africa, even if the law of the foreign jurisdiction permits such a judgment to be enforced in the same manner as a money judgment. (2) South African courts do not apply foreign procedural rules for the enforcement of judgments. The process of a foreign court does not run through the territory of South Africa. While South African courts will recognize and enforce foreign judgments that meet the requirements set out in Jones v Krok, they do not serve as instruments for executing the procedural enforcement mechanisms of foreign jurisdictions. (3) For purposes of provisional sentence, a liquid document must evidence an unconditional acknowledgement of indebtedness in a fixed sum of money. A judgment for the delivery or turnover of property, even with a specified value, does not constitute a liquid document for purposes of provisional sentence. (4) The California Court Orders, which required the turnover of shares and specified their value, but which could only be enforced as a money judgment under Californian law after specified enforcement steps were taken and failed, do not constitute a money judgment for purposes of South African provisional sentence proceedings.

The court made several non-binding observations: (1) It acknowledged the evolution of the law regarding extrinsic evidence in provisional sentence proceedings, noting a move away from the stringent principle that 'the document must speak for itself,' particularly in the context of foreign judgments where some reference to the law of the foreign jurisdiction may be necessary to establish the cause of action. (2) The court observed that it was doubtful whether a cause of action seeking to have a South African court execute the enforcement procedures of foreign law would be good in law, though the court did not definitively decide this point as it was not necessary for the appeal. (3) The court emphasized the importance of international comity and the recognition of foreign judgments in an era of increased international commerce, citing Richman v Ben-Tovim for the proposition that a 'common-sense' and 'realistic approach' should be adopted, but ultimately found this did not extend to the circumstances of this case. (4) The court noted that provisional sentence proceedings for the enforcement of a foreign judgment may be a step towards eventual execution but cannot be regarded as part of the process of execution itself (citing Society of Lloyd's v Price). (5) The court distinguished its reasoning from that of the high court, noting that the problem was not the recourse to extrinsic evidence but rather that the foreign judgment was not a money judgment. (6) The court explained the difference between enforcement 'in the same manner' as a money judgment (which Californian law permitted) and being an actual money judgment, describing this as more than a 'semantic quibble' because the orders remain unchanged even though enforcement mechanisms become available.

This judgment is significant in South African private international law and civil procedure for several reasons: (1) It clarifies the distinction between a foreign money judgment and a foreign judgment that may be enforced as a money judgment under the foreign jurisdiction's procedural law. (2) It reaffirms the principle that South African courts will not apply foreign procedural rules in the exercise of their own adjudicative functions, as this would compromise sovereignty. South African courts recognize and enforce foreign judgments as causes of action, subject to the requirements set out in Jones v Krok, but do not serve as instruments for executing foreign procedural processes. (3) It reinforces the strict requirements for provisional sentence proceedings, particularly that the document relied upon must constitute a liquid document—a written acknowledgement of unconditional indebtedness in a fixed sum of money. (4) The judgment demonstrates that while South African law recognizes the importance of enforcing foreign judgments to facilitate international commerce (citing Richman v Ben-Tovim), this does not extend to importing foreign enforcement procedures into South African law. (5) It provides guidance on the nature of derivative shareholder suits and constructive trusts in the context of international enforcement. (6) The judgment shows flexibility regarding extrinsic evidence in foreign judgment enforcement—acknowledging that some greater flexibility may be needed when making out a cause of action based on a foreign judgment—but confirms that this flexibility does not extend to converting non-money judgments into money judgments merely because foreign law permits enforcement as such.