LAWS3171 Commercial Conflict of Laws and International Litigation

Tutorial 5 (Additional Question)

Recognition and Enforcement of Foreign Judgments

Key Reading

J Hill and M Shúilleabháin, Clarkson and Hill’s Conflict of Laws (Oxford University Press;
5th edition; 2016), Chapter 3 (available on Law Trove); OR
T Hartley, International Commercial Litigation (CUP, 2nd edn., 2015), Chapter 14; (CUP,
3rd edn, 2020), Chapter 13 and Chapter 14 OR
P Rogerson, Colliers’ Conflict of Laws (CUP, 4th edn., 2013), Chapter 8

Additional reading:
P Beaumont and L Walker, ‘Recognition and Enforcement of Judgments in Civil and
Commercial Matters in the Brussels I Recast and Some Lessons From It and the Recent
Hague Conventions for the Hague Judgments Project’ (2015) 11 Journal of Private
International Law 31.

*Case C-7/98 Krombach v Bamberski EU:C:2000:164

Problem Question

Mr Richard had been charged in criminal proceedings in Ruritania (a fictional EU MS) in

relation to fraud committed against his business, in which he was in partnership with Mr
Hess. Mr Richard refused to appear in the Ruritanian criminal proceedings. Mr Hess
then brought a civil claim against him for breach of contract, in relation to the fraud
committed. As Mr Richard did not appear in the criminal proceedings, under Ruritanian law,
he was not entitled to appear before the civil proceedings through his lawyer alone but was
required to appear in person. This would have likely led to his arrest. The civil judgment
was therefore given in his absence and without an intervention from his lawyer.

I. Can this civil judgment against Mr Richard be recognized and enforced in the
(fictional) EU MS of Aldovia? Does he have any defence that can be advanced
against recognition?

II. Imagine that a judgment had already been given in Aldovia, in which a
declaration of Mr Richard’s non-liability had been rendered, also in
proceedings concerning Mr Hess, the alleged fraud and their partnership? Could
the judgment be enforced? If not, why not?

Again – follow the IRAC method.

Preliminary considerations - for both parts I and II:

What is recognition and enforcement? What are the relevant values underpinning the
recognition and enforcement of judgments?

What provisions of the Brussels Ibis Regulation are relevant? Firstly to recognition and then
to enforcement?

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To force the other party (defendant or your debtor) to comply with the judgment against
him/her (for example to pay up), you will have to go to the enforcement authorities. They
alone have the power to force the debtor to pay, calling on the forces of law and order if need
be.

Under the Brussels Ibis Regulation which governs the recognition and enforcement of
judgments in cross border cases, if you have an enforceable judgment issued in the Union
Member State, you can go to the enforcement authorities in other Member State where e.g.
the debtor has assets without any intermediary procedure being required (the Regulation
abolishes the 'exequatur ' procedure). The debtor against whom you seek the enforcement
may apply to the court requesting refusal of enforcement. The names and location of those
competent courts and courts for further appeals are provided here.

The purpose of enforcement is generally to recover sums of money, but it may also be to have
some other kind of duty performed (duty to do something or refrain from doing something,
such as to deliver goods or finish work or refrain from trespassing).

In practice, you need to have an enforceable document (a court judgment or a deed) if you
wish to apply for enforcement. The enforcement procedures and the authorities who handle
them (courts, debt-collection agencies and bailiffs) are decided by national law of the
Member State where enforcement is sought.

A judgement which cannot be recognised and enforced is not really worth anything – it might
be that it is not possible in the state of the court that granted it (eg due to a lack of assets
there) but that it is possible elsewhere, ie recognition as a foreign judgment.

Recognition must be sought before the court for it to be enforced; Recognition is automatic
and no special procedure is required to achieve it. However, under (Art 36(2) Brussels Ibis
Regulation), it is possible for “any interested party” to get a judgment in the recognising State
confirming that the judgment is recognised there.

NB: The abolition of exequatur dictates that the declaration of enforceability is abolished in
the Brussels Ibis Regulation (Art 39). This means that from the moment a person receives an
enforceable judgment in the court of origin he is able to “proceed to any protective measures
which exist under the law of the Member State” where he hopes to enforce the judgment
(new Art 40). Thus he can take the local law measures to ensure that there will be sufficient
assets in the jurisdiction to enforce the judgment.

Under Brussels Ibis Regulation (Art 37) the party invoking recognition must submit to the
court (designated under Art 75 in a communication from the Member State of enforcement to
the Commission) an authentic copy of the judgment from the State of origin and a certificate
from the court of origin (in the form set out in annex I). The court addressed will almost
certainly at least require a translation of the certificate but it may instead require a translation
of the judgment “if it is unable to proceed without such a translation.”

The only way for a party to oppose recognition when an interested party invokes recognition
is if that party becomes aware of it and gets involved in the recognition proceedings (there is
no guarantee that any party will become aware of the recognition proceedings). If a Member
State wants to ensure that any particular party whose rights will be affected by the
recognition of a judgment has the opportunity to oppose the recognition, this is done in line

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with national rules of civil procedure in light of the procedure set out in the Brussels Ibis
Regulation.

What issues can be identified here?

- Key issue: Recognition and enforcement of a civil judgment – recognition (Art 36);
enforcement (Art 39)
- Recognition – in subquestions 1 and II;
- Enforcement – no longer a need for a declaration of enforceability (abolition of
exequatur process following reform of the previous Brussels I Regulation) – however,
there are still grounds on which recognition and enforcement can be refused.
- The actual enforcement stage under the new Brussels I is largely concerned with
grounds for the refusal of enforcement (Art 45).

The procedure for the enforcement of judgments given in another Member State is governed
by the law of the Member State addressed subject to the procedural provisions set out in
Section 2 of Chapter III of the Recast (Art 41(1)). The procedure for the refusal of
enforcement is governed by the law of the Member State addressed in so far as it is not
covered by the new Brussels I Regulation (Art 47(2)).

Question: are there defences to recognition and enforcement? Ie the grounds on which
recognition (and enforcement) of a foreign judgment can be refused?

- Refusal of recognition – Art 45 (and same defences in Art 46 for refusal of

enforcement)
- If so, what are they? What are the bases upon which recognition and enforcement can
be challenged?
- Name all – then focus on the most relevant for I, and for II;
- For I? public policy - default – Art 45(1)(a) Brussels Ibis Regulation
- For II? Irreconcilable judgments – with a judgment given in another MS – Art 45(1)
(c) Brussels Ibis Regulation

Public policy – also arguably default of appearance?

- Explain the provision on public policy, and how the courts have interpreted this
provision;
- Similar facts to Krombach – refer to ECJ case law concerning the right to a fair trial
falling under the public policy exception is the famous case of Case C-7/98
Krombach v Bamberski EU:C:2000:164 and C-394/07 Gambazzi v Daimler Chrysler
Canada Inc EU:C:2009:219;

From this it is clear that the right to a fair trial is covered by the public policy defence. It is
also a clear indication why the public policy defence is necessary in exceptional situations.

Further evidence for this can be seen in the Gambazzi decision, where the defendant entered
an appearance but was precluded from appearing in the main proceedings because he had not
complied with obligations imposed by an earlier order.

Challenge to default of appearance defence? One could go further and say that on the basis of
the preliminary rulings of the CJEU, on the “default of appearance” exception as appearing in

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the Brussels Convention and developed in Brussels I, the precise meaning of the exception is
unclear to Member States and adds unnecessary confusion.

The more recent decision in Case C-619/10 Trade Agency v Seramico Investments
EU:C:2012:531 again shows the cross-over between the two defences/grounds for refusal but
highlights the inadequacies of the default of appearance defence in covering all aspects of the
right to a fair trial. The judgment concerned two issues, the first was the fact that the decision
was taken in “default of appearance”, the second was that the written judgment lacked
reasons. The facts suggest that the defendants were notified about the case against them, but
because they did not respond a decision was taken, in line with the summary procedures of
the High Court of England and Wales. Elaborate on how this case might apply to the facts of
the question. Read this case and elaborate on the ECJ’s interpretation of the relationship
between the two grounds for refusal of recognition.

Subquestion II

Irreconcilable judgments - It is also important to maintain an irreconcilable judgments ground

because it is impossible to prevent irreconcilable judgments from occurring (even more so
where there are no direct rules on jurisdiction) so the exception needs to be retained to have a
rule determining which judgment has priority in order to uphold the proper administration of
justice.

Explain the provision on avoiding conflicting jurisdiction (and thus irreconcilable

judgments).

The jurisdiction provisions of Chapter II aim to reduce the possibility of or incidence of

conflicting judgments. The rules in Art 8 and Arts 29–34—even if they are applied
consistently and correctly by the courts of all the Member States, are limited however.
Although Arts 33 and 34 allow a Member State court to stay its proceedings on the basis of
parallel or related proceedings in a non-Member State, the Recast cannot prevent litigation
involving the same issues being conducted in the courts of a non-Member State. In addition,
because the material scope of Brussels Ibis Regulation is limited by Art 1, it is possible for
there to be a conflict between a judgment of one Member State in a matter falling within the
scope of Art 1 and a judgment of another Member State in a matter falling outside its ambit.
Points (c) and (d) of Art 45(1) are designed to deal with the problems posed by irreconcilable
judgments.

Art 45(1)(c) provides that a judgment shall not be recognised if the judgment is irreconcilable
with a judgment given in a dispute between the same parties in the state in which recognition
is sought. Two judgments are irreconcilable for the purposes of this provision if they entail
legal consequences that are mutually exclusive - Case 145/86 Hoffmann v Krieg [1988] ECR
645, para 22.

Similarly, an Italian decision on interim measures ordering the defendant not to carry out
certain acts is irreconcilable with a German decision on interim measures refusing to grant
such an order in a dispute between the same parties - Case C–80/90 Italian Leather SpA v
WECO Polstermöbel GmbH & Co [2002] ECR I–4995.

- Conclusion - that there is or there is no basis upon which recognition and thus
enforcement can be refused?

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If there is no ground on which recognition can be refused, then the judgment can be deemed
to be enforceable – it is necessary to ask what is enforcement?

To force the other party (defendant or your debtor) to comply with the judgment against
him/her (for example to pay up), you will have to go to the enforcement authorities. They
alone have the power to force the debtor to pay, calling on the forces of law and order if need
be.

Under the Brussels Ibis Regulation, if you have an enforceable judgment issued in the Union
Member State, you can go to the enforcement authorities in other Member State where e.g.
the debtor has assets without any intermediary procedure being required (the Regulation
abolishes the 'exequatur ' procedure). The debtor against whom you seek the enforcement
may apply to the court requesting refusal of enforcement.

Enforcement is court-sanctioned action taken to compel judgment debtors to comply with the
th orders of the court.
Under the legal system of England and Wales the choice of enforcement method lies entirely
with the judgment creditor.

When choosing which method to use a creditor must consider whether:

 he/she is likely to get their money and court fee from the defendant;
 the defendant owes other people money or has other county court judgments;
 the defendant owns any goods or assets which can be taken and sold at auction;
 the defendant is working;
 the defendant has other earnings, such as income from investments;
 the defendant has a bank, building society or other account;
 the defendant owns property (a house); or
 anyone else owes the defendant money.

Different types of measures that a judgment creditor might take. And enforcement agents will
depend on the nature and amount of the debt - High Court Enforcement Officers, county
court bailiffs, Certificated enforcement agents (private) and magistrates courts.