Tag: Judgment

Posted on

Brussels Ia and arbitration. The Prestige aka London Steam-Ship Owners’ Mutual Insurance Association Limited v Spain. Time for the EU to decide its direction of travel on commercial arbitration.

I have a bit of catching up to do with the blog and I shall start with the case that is currently also being discussed over at the EAPIL blog. The CJEU has held in C-700/20 London Steam-Ship Owners’ Mutual Insurance Association Limited v Spain (re: the Prestige oil spill). I have further background and links to the English judgments that preceded the reference in my review of the AG Opinion. In that review, I predicted the Court would probably not follow its Advocate General and I should have betted on it for the Court, in Grand Chamber no less, did indeed largely not follow its Advocate General.

Had it been up to the Court of Appeal, the case should have not been referred at all, and given the consequences of the CJEU’s judgment, the referral may come to be regretted.

Essentially, the question at issue is whether an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia (the case is formally subject to its predecessor, the Brussels I Regulation – see here for a BI- BIa table of equivalence which will make reading of the judgment easier)? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

Of note is that the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG, despite his broad interpretation of the arbitration exclusion in the case at issue, suggests the proceedings are not caught by the arbitration exception, for reasons I discuss in my earlier post. The Court disagrees all in all in succinct terms.

It is worth relisting the 3 issues which the High Court is unsure about, followed by the CJEU’s answer to each:

First, whether a judgment such as its judgment given under Section 66 of the Arbitration Act 1996 qualifies as a ‘judgment’, within the meaning of Article 34(3) of Brussels I, where that court has not itself heard all the substantive merits of the dispute which had been heard by the arbitration tribunal.  Secondly, it has doubts whether a judgment falling outside the material scope of BI  by reason of the arbitration exception may nevertheless be relied on to prevent recognition and enforcement of a judgment from another Member State pursuant to Article 34(3).

Answering these together, the Court [44] kicks off with a curt reference to a fairly unqualified statement in CJEU Rich [18]: ‘the Contracting Parties [to the Brussels Convention, GAVC] intended to exclude arbitration in its entirety, including proceedings brought before national court’.  Further support is found in the 4th (!) para of recital 12 of Brussels Ia, referring specifically to recognition and enforcement proceedings as being excluded from Brussels Ia: [the Regulation does not apply] ‘nor to any action or judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral award.’

With reference to CJEU Gazprom, the Court [45] notes that the lex causae for recognition and enforcement of arbitral awards is national law, including the international law obligations the Member State may have adhered to. As noted however, the New York Convention does not apply to the recognition of the award at issue.

[48] ff the CJEU however concedes, partially with reference to earlier case-law, that judgments on issues carved out from the Regulation, may nevertheless qualify as a ‘judgment’ as meant in Article 34(3) [‘a judgment shall not be recognised’ ‘3. if it is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought’]. This is mostly meant to protect Member State’s internal legal order and ensure that its rule of law is not disturbed by the obligation to recognise a judgment from another Member State which is inconsistent with a decision given, in a dispute between the same parties, by its own court.

This recycling of a carved-out subject-matter, via the enforcement title remains awkward to me, and is a similar back-door entry into BIa as for ex-EU judgments in C-568/20 J v H Limited.

[54] the Court then makes a leap which is reminiscent of its effet utile (safeguarding the overall objectives of the Brussels regime) approach viz anti-suit and arbitration in CJEU West Tankers : ‘the position is different where the award in the terms of which that judgment was entered was made in circumstances which would not have permitted the adoption, in compliance with the provisions and fundamental objectives of that regulation, of a judicial decision falling within the scope of that regulation.’

[59] it lists the two cardinal sins under Brussels I which the award, had it been a judgment covered by the Regulation (but surely it is not!), would have committed: it would have infringed ‘two fundamental rules of that regulation concerning, first, the relative effect of an arbitration clause included in an insurance contract [here the CJEU refers to Assens Havn, GAVC; update 1 December 2022 someone close to the judgment (in a meeting I think but am not sure was subject to Chatham house rules) also referred to the fact that thousands of victims should not be constrained in their remedies as a result of a contract in which they had no part] and, secondly, lis pendens [here, [64] ff, the Court finds the lis pendens conditions would have been met had the two sets of proceedings both been included in the Regulation, GAVC; update 1 December 2022 the same aforementioned person called this an expression of the clean hands principle].’

This whole construction requires a parallel universe being built next to BIa (or it is effectively nonsense, as prof Briggs puts it).

[71] the CJEU formulates an instruction for courts faced with request for arbitral awards:

It is for the court seised with a view to entering a judgment in the terms of an arbitral award to verify that the provisions and fundamental objectives of Regulation No 44/2001 have been complied with, in order to prevent a circumvention of those provisions and objectives, such as a circumvention consisting in the completion of arbitration proceedings in disregard of both the relative effect of an arbitration clause included in an insurance contract and the rules on lis pendens laid down in Article 27 of that regulation

The UK courts not having so verified, [72] ‘a judgment entered in the terms of an arbitral award, such as that at issue in the main proceedings, cannot prevent, under Article 34(3) of Regulation No 44/2001, the recognition of a judgment from another Member State.’ As Gilles Cuniberti notes, this instruction, effectively to arbitral tribunals (for if they ignore them, their award risks becoming unenforceable) to verify lis pendens requirements  is at odds with CJEU Liberato, and an extraordinary extension of the BIa rules to arbitral tribunals.

Thirdly, is it permissible to rely on Article 34(1)’s orde public exception as a ground for refusing recognition or enforcement of a judgment from another Member State, on the basis that such recognition or enforcement (of the Spanish judgment) would disregard the force of res judicata acquired by a domestic arbitral award or a judgment entered in the terms of such an award. Here, the CJEU [74] ff answers that the issue of the force of res judicata acquired by a judgment given previously is already exhaustively dealt with under Articles 34(3) and (4) of Brussels Ia and cannot therefore be resurrected under the ordre public exception.

The judgment is concocted reality, but not one which surprises me as I already indicated in my post on the AG’s Opinion. It is time the EU have a fundamental reflection on its relation with commercial arbitration. Treated with odd deference in the discussions on investor-state dispute settlement (think: CJEU Achmea, Komstroy etc) yet seriously obstructed in the case-law on the Brussels regime.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

Posted on

The Prestige litigation before the CJEU. A tricky Opinion on court-sanctioned arbitral awards as judgments under Brussels Ia.

I give background to Collins AG’s Opinion in C-700/20 The London Steam-Ship Owners’ Mutual Insurance Association Limited v Kingdom of  Spain here. The Court of Appeal nota bene in the meantime has held that the High Court should have never referred, as I report here.

Does an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

The case at issue in essence enquires how far the arbitration exception of Brussels Ia stretches. Does the arbitration DNA of the case once and for all means any subsequent involvement of the courts is likewise not covered by Brussels Ia (meaning for instance that it must not have an impact on the decision to recognise and enforce an incompatible judgment issued by another Member State in the case); or should the  involvement of the courts in ordinary be judged independently against the Regulation’s definition of ‘judgment’.

The case therefore echoes the High Court’s later intervention in the infamous West Tankers case, and the recent CJEU judgment in C-568/20 J v H Limited (on third country judgments).

(44) the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG suggests a broad scope of the exclusion, seeking support in the Jenard and Schlosser Reports. He also confirms the exclusion of arbitration has the effect, in particular, of making it impossible to use that regulation to enforce an arbitral award in another Member State by first turning it into a judgment and then asking the courts of the other Member State to enforce that judgment under Chapter III.

However, in the case at issue he suggests the proceedings are not caught by the arbitration exception, for 3 reasons:

(53) the notion of ‘judgment’ needs to be interpreted broadly;

(54) CJEU Solo Kleinmotoren instructs that for a finding to be a ‘judgment’,  ‘the decision must emanate from a judicial body of a Contracting State deciding on its own authority on the issues between the parties’;  that is the case here for (55) the S66 court does not rubberstamp; it discusses and settles a range of substantive issues between the parties;

(57) there is no requirement that a court must determine all of the substantive elements of a dispute in order to deliver a judgment that satisfies the purposes of that provision; reference here is made to CJEU C-394/07 Gambazzi (see the Handbook 2.576).

In the view of the AG (62) A1(2) is not determinative as to whether a judgment under the recognition and enforcement Title comes within the scope of the Regulation. Those provisions, he suggest, were enacted for different purposes and pursue different objectives: they aim to protect the integrity of a Member State’s internal legal order and to ensure that its rule of law is not disturbed by being required to recognise a foreign judgment that is incompatible with a decision of its own courts. A1(2) on the other hand is firmly part of the free movement of judgments rationale of the Regulation (and limitations thereto).

I think the CJEU judgment could go either way and if I were a betting man (which I am not) I suspect the Court will not follow and instead will take the same holistic approach towards protecting the application of Brussels Ia by the courts in ordinary, as it did in CJEU West Tankers. By the very nature of s66 (and similar actions in other Member States), the ‘issues between the parties’ are different in actions taking place entirely in courts in ordinary, and those in arbitration awards which are subsequently sanctioned (in the sense of ‘approved’) by a court. The latter proceedings do not discuss ‘the issues’ between the parties. They only engage a narrow set of checks and balances to  ensure the soundness of the arbitration process.

Neither do I follow the logic (63) that if the UK were not allowed to take account of the s66 judgment in its decision to recognise, it would mean that Member States would have to ignore all internal judgments with res judicata in an excluded area, including insolvency, social security etc., in favour of other Member States judgments ‘adjudicating upon the same issue’ (63): if they truly adjudicate upon ‘the same issue’, the judgment of the other Member State will be exempt from Brussels Ia. This is unlike the case at hand which clearly did involve a Spanish judgment on a subject matter covered by the Regulation. The arbitration exemption is the only exemption that relates to a modus operandi of conflict resolution: all the others relate to substantive issues in conflict resolution.

Commercial arbitration enjoys a peculiar privilege in the CJEU’s view on ADR (see CJEU Komstroy). I do not think however the Court will give it a forum shopping boost in the context of Brussels Ia.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

 

Posted on

Strategic Technologies v Taiwan MOD (formally Procurement Bureau of the Republic of China Ministry of National Defence). High Court sets aside earlier integration of ex-EU judgment into Brussels Ia.

In Strategic Technologies v Procurement Bureau of the Republic of China Ministry of National Defence [2020] EWHC 362 (QB), Carr J i.a. set aside a November 2016 order by Supperstone J granting a certificate under Article 53 Brussels Ia.

Justice Carr adopts the routine approach of former English case-law calling the Brussels regime the ‘Judgments Regulation’. The certificate was issued  in relation to a default judgment issued in 2009 by Claimant, Strategic Technologies against Defendant, the Ministry of National Defence (“the MND”) of the Republic of China (“ROC”), also and better known as Taiwan.

Carr J is right when at 134 ff she rejects the route taken by claimants (and adopted by Supperstone J) that the principle in CJEU C-192/92 Owens Bank v Bracco (that the Brussels Convention does not apply to proceedings for the enforcement of judgments given in civil and commercial matters in non-contracting states) has no application where, as here, the judgment of a non-contracting state (ie Cayman) has become a judgment of a Member State (ie the United Kingdom).

She refers to the clear language in formerly A25 Brussels Convention, now Article 2 Brussels Ia, that for a ruling to be a judgment it must be given by a court or a tribunal of a Member State. Adoption of a judgment by another State is not covered. She notes the CJEU referred to this definition in its Owens Bank v Bracco ruling. She also notes that the St. Vincent judgment in Owens v Bracco had in fact also been registered in England by the time that the House of Lords referred the matter to the CJEU.

Other issues in the judgment are less relevant to the blog. Do note that Taiwan does not call upon sovereign immunity: at 3: ‘The MND is an arm of the government of the ROC. Although it is by its own law a state, the ROC has an unusual status in international, and English, law: although it has all the generally recognised characteristics of statehood, and is often treated as a country, it is not recognised as a state by the United Kingdom and there are no formal diplomatic relations between the two. For the purpose of these proceedings only, and without making any wider concession, the MND does not rely on the State Immunity Act 1978.’ Clearly this case was not considered by Taiwan to be a case to force the recognition issue.

Geert.

 

Posted on

The Irish High Court in Albaniabeg v Enel: enforcement of ex-EU judgments.

Reminiscent of the decision in Yukos v Tomskneft, which concerned recognition of an arbitral award in Ireland even though there were no relevant assets to exercise enforcement against, the Irish Court of Appeal earlier this year in [2018] IECA 46 Albaniabeg v Enel upheld [2016] IEHC 139 Albaniabeg Ambient Sh.p.k. -v- Enel S.p.A. & Anor . (See my tweet below at the time – the case got stuck in my blog queue).

Thank you to Julie Murphy-O’Connor, and Gearóid Carey for flagging the case earlier in the year. The High Court had refused to grant plaintiff, Albaniabeg, liberty to serve out of the jurisdiction to seek to enforce a judgment of an Albanian court in Ireland against the two defendants, ENEL S.p.A. and ENEL Power S.p.A. (“ENEL”). The judgment therefore is ex-EU.

Enforcement proceedings were commenced in New York, The Netherlands, Luxembourg, France and Ireland in relation to the Judgment.  [I have not been able to locate outcome in those cases]. Notably no enforcement proceedings were brought in Italy. Presumably plaintiff’s motif is to obtain enforcement in one Member State, to ease the enforcement paths in other Member States (including Italy).

McDermott J at the High Court refused the application on the basis that the defendants had no assets within the jurisdiction and were not likely to have such assets in the near future. As the judge concluded that the plaintiff did not stand to gain any practical benefits if enforcement proceedings were to be commenced within this jurisdiction, he refused to grant them leave to serve such proceedings out of the jurisdiction on the defendants.

Hogan J at the Court of Appeal upheld. At 59 he notes ‘I should state in passing that it was not suggested that if an Irish court were to grant an order providing for the recognition or enforcement under own rules of private international law of the Albanian judgment, this then would be a “judgment” for the purposes of Article 2(a) of the Brussels Regulation (recast) which could then be enforced in other Member States under the simplified enforcement procedure provided for by Chapter III of that Regulation. As this point was not argued before us, it is not necessary to express any view on it.‘

In my Handbook I suggest such order is not a ‘judgment’ within the meaning of the Brussels I Recast Regulation.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

 

Posted on

The High Court in Midtown. This is what recognition and enforcement looks like ex-EU.

Don’t it always seem to go, you don’t know what you’ve got till it’s gone. Recognition and enforcement intra-EU goes smoothly in civil and commercial matters. So smoothly in fact, the European Commission wanted to abolish the potential for refusal altogether in the Brussels I Recast (regular readers are aware I reported on it at the time of negotiation).

Thank you Clyde & Co for alerting me to a case which highlights how complicated things can get outside of the EU context. In [2017] EWHC 519 (Comm) Midtown Acquisitions v Essar Global parties settled their dispute in an agreement, under which the defendant accepted liability and “confessed to judgment”. The New York courts then entered a Judgment by Confession (similar to an English consent judgment). Recognition and enforcement was sought in England.

In the Brussels system, discussion is still possible on the very notion of ‘judgment’ as I have recently reported (see my postings on Pula Parking and Zulfikarpašić). Refusal of recognition is possible on very narrow grounds. Famously, under the Brussels regime, recognition does not require res judicata of the foreign (intra-EU) judgment. (A misleadingly simple statement made in all Reports. But I’ll leave the detail for another time (see eg Gothaer for earlier analysis).

Outside the Brussels regime however (lest the Brexit negotiations yield a continuing bridge between civil procedure in the UK and EU this will also apply to judgment issued by UK courts), discussion on these two points re-emerges: when can a ruling be considered a ‘judgment’, and does it have res judicata? Defendant in Midtown argues that the New York judgment was not a “judgment” as that expression is used in English law because (i) there was no lis between the parties in New York, (ii) the New York judgment was not final and conclusive and (iii) the New York judgment was not on the merits.

Teare J rejected all three arguments on the basis of relevant precedent. The judgment merits reading for it is a good reminder of the extent of argument ensuing when one is not covered by the umbrella of EU or international harmonisation of recognition and enforcement.  Complications which are not likely to assist the London legal market in maintaining its attraction post Brexit.

Geert.

(Handbook of) European Private International Law, Chapter 2, Heading 2.2.16.

Posted on

CJEU in Zulikarpašić: Suggest generic criteria for ‘courts’; completes the analysis for the notarial question at issue.

The Court held  yesterday in Zulikarpašić Case C-484/15. I review Bot AG ‘s Opinion here.  At issue is the interpretation of ‘court’ and ‘judgment’ in the European enforcement order Regulation. Mutatis mutandis therefore the case has implications for most other EU private international law instruments, which employ similar terms. In all of these Regulations, the terms ‘court’ and ‘judgment’ are under- or not at all defined. The CJEU in fact refers to considerations under the Brussels I Recast in its judgment yesterday. And indeed its approach in Zulfikarpašić was confirmed on the same day for the Brussels I Recast, in Pula Parking.

For the determination of a ‘court’ the AG had emphasised guarantees as to independence and impartiality; the power to decide on one’s own authority; leading to a finding which was or may be subject to an exchange of arguments and may be challenged before a judicial authority. The AG had suggested that whether these conditions are fulfilled is for the national courts to assess.

The Court itself referred to a number of classic principles for the interpretation of EU private international law: autonomous interpretation; mutual trust; legitimate expectations. It then reformulated but essentially suggests similar criteria as its AG: for a finding to be qualified as a judgment, it must have been delivered in court proceedings offering guarantees of independence and impartiality and of compliance with the principle of audi alteram partem (at 43).In the Croatian procedure at issue, the notary issues an authentic instrument which, if it is challenged as to its content, is moved up the pecking order to court proceedings. The proceedings before the notary not meeting with the Court’s generic criteria, in contrast with the AG the Court itself already holds that the notaries at issue do not act as courts and their decisions are not ‘judgments’.

Geert.

European private international law, second ed. 2016, Chapter 2, Heading 2.2.16.1.1. Chapter 6, Heading 6.2.1.

 

Posted on

Bot AG in Zulikarpašić: Are notaries ‘courts’ and do they issue ‘judgments’?

Postscript 9 March 2017. The Court held today. Post here.

In Zulikarpašić Case C-484/15, Bot AG opined on 8 September. At issue is the intepretation of ‘court’ and ‘judgment’ in the European enforcement order Regulation. Mutatis mutandis therefore the case has implications for most other EU private international law instruments, which employ similar terms. In all of these Regulations, the terms ‘court’ and ‘judgment’ are under- or not at all defined.

The question was submitted in the context of a dispute between Ibrica Zulfikarpašić, a lawyer established in Croatia, and Slaven Gajer, who is also domiciled in Croatia, regarding the certification as a European Enforcement Order, of a writ of execution issued by a notary based on an authentic document.  The referring court essentially inquires whether a notary who, in accordance with Croatian law, has issued a definitive and enforceable writ of execution based on an authentic document has the power to certify it as a European Enforcement Order where it has not been opposed. If the answer is no, the referring court asks whether a national court can carry out that certification where the writ of execution concerns an uncontested claim.

Article 4(1) of Regulation 805/2004 defines ‘judgment’ as ‘any judgment given by a court or tribunal of a Member State, whatever the judgment may be called, including a decree, order, decision or writ of execution, as well as the determination of costs or expenses by an officer of the court’. Article 2(a) of the Brussels I Recast Regulation now includes exactly the same definition. Yves Bot himself summarised the CJEU’s case-law on the notion of ‘judgment’ in the Brussels I Regulation in Gothaer. He reiterates that Opinion here and I should like to refer readers to my earlier summary of the Opinion in Gothaer.

After a tour de table of the various opinions expressed ia by the EC and by a number of Member States, the Advocate General submits that the concept of ‘court’ should be interpreted, for the purposes of Regulation No 805/2004, as covering all bodies offering guarantees of independence and impartiality, deciding on their own authority by a judgment which, first, was or may be subject to an exchange of arguments before being certified as a European Enforcement Order and, second, may be challenged before a judicial authority (at 108). A functional approach, therefore (at 109).

Advocate General Bot submits therefore that an enforcement title such as a writ of execution issued by a notary based on an authentic document constitutes a judgment within the meaning of Article 4(1) of Regulation No 805/2004, provided that the notary with power to issue that writ adjudicates, in the exercise of that specific function, as a court, which requires him to offer guarantees as to his independence and impartiality and to decide on his own authority by a judgment which, first, was or may be subject to an exchange of arguments before being certified as a European Enforcement Order and, second, may be challenged before a judicial authority. 

Whether these conditions are fulfilled is for the national courts to assess.

This Opinion and the eventual judgment by the Court will also be relevant for the application of the Succession Regulation, 650/2012. In matters covered by that Regulation, notaries throughout the EU have an important say and may quite easily qualifies as a ‘court’. Bot AG refers to the Regulation’s definition of ‘court’ at 71 ff of his current Opinion.

Geert.

European private international law, second ed. 2016, Chapter 2, Heading 2.2.16.1.1. Chapter 6, Heading 6.2.1.

 

Posted on

Meroni: Mareva orders are compatible with EU law (ordre public).

For the facts of the case, and the reasoning of the AG in C-559/14 Meroni, I refer to my earlier posting. At the end of May (I am indeed still hoovering up the queue) the Court held very much alongside Kokott AG’s Opinion, I shall therefore not repeat its reasoning here. The CJEU does insist that if third parties rights are directly affected with the intensity as in the case at issue, that third person must be entitled to assert his rights before the court of origin (which English courts provide for), lest one runs the risk of the injunction being refused recognition under ordre public. As I had feared, the Court does not address the AG’s concern whether Mareva orders actually constitute a ‘judgment’ for the purposes of the Regulation.

Post Brexit, this considerable attraction of English courts in interlocutory proceedings might become a lot less real. (Like many of us, I am working on a short review of Brexit consequences for European private international law).

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 2, 2.2.16.1.1, 2.2.16.1.4

Posted on

Kokott AG on the notion of ‘judgment’ and the compatibility of Mareva orders with EU law (ordre public).

In Kokott AG’s words, ‘following the West Tankers case…in the present case the Court is once again confronted with a specific procedural feature of the Anglo-American legal system.’

Article 34 of the Brussels I Regulation (Article 35 in the recast) enables a court, by way of derogation from the principles and objectives of the Regulation, to refuse to recognize a judgment given by a court of another Member State. The whole starting point of the Regulation and its antecedents was to avoid much recourse to refusal of recognition. Free movement of judgments lies at the very core of the foundations of European private international law.

Little wonder then that the Regulation leaves limited freedom for Member States authorities (including courts) who are asked to recognise and enforce another State’s judgment. As I noted at the time, in Trade Agency the CJEU insisted that refusal of recognition on the basis of ordre public is only possible after review of the individual merits of the case. Courts in other EU Member States may not decide that the English system as such as contrary to public policy in the state of enforcement. Relevant case-law was most recently summarised by (the same) Kokott AG in fly LAL and also in Diageo.

The exequatur procedure of the Brussels I Regulation has been amended in the Brussels I Recast. However it is exactly on issues of the rights of the defence that exequatur can never be entirely automatic, even among EU Member States.

In Case C-559/14 Meroni, at issue are Mareva injunctions: (sometimes) worldwide freezing orders issued by English courts (among others), designed to prevent a creditor being deprived of access to the debtor’s assets as a result of a prior disposal of those assets. However, as is often the case, the reputation of Mareva injunctions far exceeds their actual bite. There is no one size fits all such injunction and a number of tools are at the disposal of both the debtor affected, and third parties, to have the order varied or indeed lifted. The rights of third parties in particular are quite relevant in the current review with the CJEU. Part of the injunction are often the debtor’s participations in companies: for the recalcitrant debtor may find all sorts of useful ways to spirit value away from his companies and into vaults safe from prying English or European eyes – especially if the debtor is sole or majority shareholder.

In the case at issue, Mr A.L. is prohibited, inter alia, from disposing of assets which can be attributed directly or indirectly to his property. The injunction extends to  interests in the Latvian company VB. Mr A.L. has a direct interest in that company with only one share. According to the referring court, however, he is also the ‘beneficial owner’ of shares in at least one other company (‘Y’), which itself has substantial interests in VB. Mr Meroni is part of the management of Y. Following a seizure ordered by the relevant Latvian office, he also acts as the bailee for the interests in Y. for which Mr A.L. is the beneficial owner. Mr Meroni claims that the freezing injunction prevents the shareholder Y. from exercising its voting rights in respect of VB. This affects constitutionally protected property rights, especially since the company was not heard in the English proceedings. This, it is argued, is contrary to the principle of the right to a fair trial.

The AG Opined differently. At 44, she argues that it is not clear to what extent that injunction might be contrary to basic principles of Latvian substantive law or procedural law, especially since, as the referring court acknowledges, the Latvian legal order does permit judgments as provisional measures without a prior hearing of the party against whom enforcement is sought. Consequently measures such as Mareva orders cannot be said to be fundamentally against the Latvian ordre public. At 45: ‘ Aside from this, the English freezing injunction at issue does not provide for any irreversibly drastic measures for its enforcement overseas, in particular in so far as third persons who were not parties to the proceedings in England are concerned. Rather, the freezing injunction claims legal effects on third persons resident in other countries — and thus the companies controlled by Mr A.L. — only subject to strict requirements: first, it is to have legal effects on a without notice basis only where this is permitted by the foreign law; second, anyone served with the freezing injunction may apply to the court to vary or discharge it; and, third, compliance with contractual obligations in other countries is still to be possible notwithstanding the freezing injunction.‘ (footnotes omitted)

There is no evident breach of basic principles of the legal order of the State in which enforcement is sought – breach of ordre public must therefore be rejected.

Now, earlier in the judgment, the AG also considers albeit more or less obiter (the CJEU is certain not to entertain it) what may in fact be the more important (for it tends to be less sub judice at the CJEU) part of her Opinion: whether the Mareva orders actually constitute a ‘judgment’ for the purposes of the Regulation. Ms Kokott suggests that the Denilauler criteria (easily fulfilled in the case at issue: see para 31) ought to be relaxed under the Regulation, as opposed to the stricter approach under the 1968 Convention. That is because following judgment in ASML, notwithstanding defects in service, if the person concerned fails to commence proceedings in the State of origin of the judgment to challenge the judgment issued upon default, when it was possible for him to do so, recognition may not be refused. The AG suggests to extend the ASML rule to provisional measures.

Geert.

European private international law, second ed. 2016, Chapter 2, 2.2.16.1.1, 2.2.16.1.4

%d bloggers like this: