English Judgments in Foreign Currency: A "Procedural" Revolution

Abstract

Prior to 1975 it had been regarded as settled law for at least 350 years that an English court could not give judgment for the payment of an amount expressed in foreign currency.1 The reason for this rule was that the sheriff could not be expected to know the value of foreign currency and thus could not enforce any judgment by execution unless it was expressed in pounds sterling. The rule was re-asserted by the Court of Appeal in 18982 and by an unanimous House of Lords in 1960.3 But in 1975, after a chapter of accidents in the Court of Appeal, the House of Lords overruled its own previous decision and held that judgment could be given for an amount expressed in foreign currency the sterling equivalent thereof at the date when the court authorises enforcement of the judgment in terms of sterling.4 It is the object of this paper to explain how this traumatic event came about. Given the existence of the rule that English judgments cannot be expressed in foreign currency, it is obvious that there must be subsidiary rules laying down at what date damages or debts expressed in foreign currency must be converted into sterling for purposes of an English judgment. It is at first sight surprising that these subsidiary rules did not become articulate until just after the first world war. The explanation is, of course, that in the nineteenth century and until 1914 the currencies of the major trading nations of the world remained relatively stable in relation to each other, and so the problems did not arise. A convenient starting-point is the decision of the House of Lords in S.S. Celia v. S.S. Volturno.5 A collision occurred in the Mediterranean in December