Posts Tagged Recognition and enforcement
A short update on the Prestige litigation. I reported earlier on the disclosure order in the recognition leg of the case. In that review I also listed the issues to be decided and the preliminary assessment under Title III Brussels Ia. That appeal is to be heard in December 2020 (see also 21 ff of current judgment). In The London Steam-Ship Owners’ Mutual Insurance Association Ltd v Spain (M/T “PRESTIGE”)  EWHC 1582 (Comm) Henshaw J on 18 June held on yet another set of issues, related to arbitration and State Immunity.
He concluded after lengthy analysis to which it is best to refer in full, that Spain does not have immunity in respect of these proceedings; that the permission to serve the arbitration obligation our of jurisdiction, granted earlier to the Club should stand; and that the court should appoint an arbitrator.
I am pondering whether to add a State immunity chapter to the 3rd ed. of the Handbook – if I do, this case will certainly feature.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 18.104.22.168, Heading 22.214.171.124, Heading 2.2.16.
Alexander bros v Alstom. A reminder of the relevance of EU law for New York Convention refusal of recognition of arbitral awards on ordre public grounds.
In Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA & Anor  EWHC 1584 (Comm) Cockerill J discussed inter alia (at 177 ff) the impact of EU law on the ordre public assessment for potential refusal of recognition of an arbitral award under section 103 of the 1980 New York Convention.
CJEU authority are C-126/ 97 Eco Swiss (concerning EU competition law) and C-168/ 05 Claro (unfair terms in consumer contracts). At 183 Cockerill J does not suggest the CJEU authority should no longer stand. Indeed she suggests obiter that there is no reason to suggest the CJEU’s line of reasoning should not apply to wider issues than just competition law or consumer law. However, the burden of proof of showing that particular parts of EU law are of a nature to justify the ordre public exception, lies upon the party objecting to recognition. In casu Alstom have fallen short of that duty. Yes, there is scant reference to anti-corruption in the private sector; and yes there is EU money laundering law. However (at 186) ‘the EU has, in general terms, set its face against corruption. But aside from the area of money laundering it has not put in place mandatory laws or rules. In the context of international corruption of the kind in focus here it has left it to the individual member states to adopt what measures seem good to them. There is, in short, no applicable mandatory rule or public policy.’
An interesting discussion.
Henshaw J in DVB Bank SE v Vega Marine Ltd & Ors  EWHC 1494 (Comm) (on substance a straightforward case on sums loaned) made some important observations on the benefits of summary judgment as opposed to a default judgment in the context of recognition and enforcement.
There is no doubt the English courts have jurisdiction per a valid choice of court clause under A25 BIa. Claimants are pressing for summary judgment, citing
- Brexit. The Withdrawal Agreement extends EU law in civil procedure to proceedings issued before the end of the transition period, however claimants express anxiety over the speed of Greek enforcement proceedings given courts’ shutdown in the Covid19 era. At 61: ‘Greek counsel has advised the Claimants that the Greek courts shut down earlier this year for an indefinite period, so that obtaining an enforcement order in Greece would be likely to be delayed;’.
- More crucially however, Henshaw J notes at 61, correctly, that even under BIa, default judgments are more vulnerable: ‘there is a risk that an enforcement order based on a simple default judgment, even if obtained before 31 December 2020, might be set aside on public policy grounds. Greek counsel advised that the Greek courts would be much less likely to refuse to recognise and enforce a reasoned English judgment following a hearing on the merits.’
Summary judgment was given against the defendants.
A short note on Public Joint Stock Company (Rosgosstrakh) v Starr Syndicate Ltd & Ors  EWHC 1557 (Comm) just to illustrate the complications for recognition and enforcement in the absence of a near-automated process such as under Brussels IA (the Hague Judgments Convention is meant to lubricate the process internationally). Claimant applies for summary judgment on its claim for recognition and enforcement of three judgments obtained in its favour in the Russian courts in 2015 and 2016.
Moulder J first discussed the issue of lack of jurisdiction for the Russian courts and she finds at 93 after consideration that the discussions to and fro, and the evidence of Russian experts for each of the parties, necessitates proper discussion with oral evidence of the contractual construction, under Russian law, of the relevant choice of court clauses. Of course under BIa and other regimes operating with a certain amount of mutual trust, second-guessing jurisdiction is not part of the assessment.
Next, the allegations of bias are also discussed, with at 126 ia reference to an interference by President Putin, and at 138 a solid set of reasoning for Moulder J to dismiss the potential for summary judgment on this point, too. Of course bias is an ordre public issue which even under BIa’s rules for recognition of judgments from other Member States, might justify refusal of recognition.
GFH Capital v Haigh. Enforcement of DIFC judgment puts spotlight on international commercial courts.
DIFC Courts, the Dubai International Financial Centre’s Courts, is one of the new generation of international commercial courts. Its rulings piggyback unto recognition and enforcement treaties which the UAE concludes with third countries (India being a recent example).
In GFH Capital Ltd v Haigh & Ors  EWHC 1269 (Comm) Henshaw J first of all notes that there is no such treaty between the UK and the UAE hence he considers recognition of the July 2018 DIFC judgment by Sir Jeremy Cooke under common law principles. Helpfully, these principles have been summarised in a January 2013 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales. Under discussion in the case is mostly the condition that the foreign court be a court of competent jurisdiction; that the foreign judgment be not obtained fraudulently; and that its recognition be not incompatible with English ordre public.
The judgment is an extensive treatment of the relevant principles and therefore suited to comparative materials.
AB v EM  EWHC 549 (Fam) concerns for a large part the application of Brussels IIa’s traditional jurisdictional rules (habitual residence etc.) and I shall not comment on those.
Of interest to the blog are, first, at 37 ff the application of the Regulation’s forum non conveniens rules: in that respect, compare with my posts on V v M and W v L. Further, the question whether the order made by the Sunnite Sharia Court of Beirut on 6 February 2019 in proceedings commenced by the mother in Lebanon in November 2018, incorporating and approving an agreement between the parties to these proceedings regarding custody and access with respect to M, capable of recognition in the UK and, if so, what impact should this have on the UK courts’ welfare determination? The 2019 agreement established that the father would have custody of M and would reside with M in either the United Kingdom, Egypt or some other location of his choosing.
MacDonald J at 71-73, having referred to the spirit of comity, does not hold on what at 73 are briefly refered to as ‘wider criticisms’ of the February 2019 Order, or the allegations of durress in the coming to be of that order. He notes more as a matter of fact that circumstances in the child’s welfare have changed since the Order, and that the father did not at any rate honour elements of the agreement which the Order had confirmed.
No grand statement of principle, therefore. Rather, a measured practical approach.
Update 15 June 2020 as Gilles Cuniberti notes, enforcement jurisdiction (see towards the end of this post) ought to have involved some discussion of A24(5) Brussels Ia.
I reported earlier on complex enforcement issues concerning SAS Institute v World Programming. In  EWCA Civ 599 SAS Institute Inc v World Programming Ltd Flaux J gives an overview of the various proceedings at 4:
The dispute between the parties has a long history. It includes an action brought by SAS against WPL in this country in which SAS’s claims were dismissed; a decision by WPL, following an unsuccessful challenge on forum non conveniens grounds, to submit to the jurisdiction of the North Carolina court and to fight the action there on the merits; a judgment in favour of SAS from the North Carolina court for some US $79 million; an attempt by SAS to enforce the North Carolina judgment in this jurisdiction which failed on the grounds that enforcement here would be (a) an abuse of process, (b) contrary to public policy and (c) prohibited by section 5 of the Protection of Trading Interests Act 1980 (“the PTIA”); and a judgment from the English court in favour of WPL for over US $5.4 million, which SAS has chosen to ignore.’
A good case to use therefore at the start of a conflicts course to show students the spaghetti bowl of litigation that may occur in civil litigation. There are in essence
- English liability proceedings, decided in the end following referral to the CJEU (Case C-406/10);
- North Carolina liability proceedings, in which WPL submitted to jurisdiction after an earlier win on forum non grounds was reversed on appeal and the NC courts came to the same conclusions as the English ones despite a finding they were not (clearly) under an obligation to apply EU law;
- next, an SAS enforcement attempt in England which failed (with permission to appeal refused): my earlier post reviews it;
- next, enforcement proceedings of the NC judgment in California. That CAL procedure includes an assignment order and WPL sought an anti-suit injunction to restrain SAS from seeking assignment orders as regards “customers, licensees, bank accounts, financial information, receivables and dealings in England”: it was not given the injunction for there was at the time no CAL assignment order pending which could be covered by anti-suit.
- Currently, it seems, there is, and it is an anti-suit against these new assignment orders which is the object of the current proceedings.
At 59 ff follows a discussion of the situs of a debt; at 64 ff the same for jurisdiction re enforcement judgments, holding at 72
Applying these internationally recognised principles to the present case, the North Carolina and California courts have personal jurisdiction over WPL but do not have subject matter jurisdiction over debts owed to WPL which are situated in England. That is so notwithstanding that the losses for which the North Carolina court has given judgment were incurred by SAS in the United States. Nevertheless the effect of the proposed Assignment Order would be to require WPL to assign debts situated in England to SAS which would at least purport to discharge its customers from any obligation owed to WPL, while the effect of the proposed Turnover Order would be to require WPL to give instructions to its banks in England which would discharge the debts situated in England currently owed by the banks to WPL. In substance, therefore, the proposed orders are exorbitant in that they affect property situated in this country over which the California court does not have subject matter jurisdiction, thereby infringing the sovereignty of the United Kingdom.
Update 15 June 2020 as Gilles Cuniberti notes, enforcement jurisdiction ought to have involved some discussion of A24(5) Brussels Ia.
Which is later confirmed at 83. Consequently the earlier order is overturned: at 89: ‘it follows also that the judge’s conclusion that the Assignment and Turnover Orders were not “markedly exorbitant” was based upon a mistaken premise.’
The anti-suit and anti-enforcement applications are dealt with in particular with reference to comity, and largely granted with some collateral notices of intention by SAS not to seek a particular kind of enforcement.
Someone somewhere must have made partner on this litigation.
Enforcement of unfair trading practices and ‘civil and commercial’. Szpunar AG extensively in Movic (re ticket touts).
Advocate-General Szpunar in his Opinion in C-73/19 Belgische Staat v Movic BV et al refers in footnote to the comment made by Yours Truly (much humbled) on p.38 of the Handbook, that the seminal Eurocontrol and Steenbergen judgments on the concept of ‘civil and commercial’ in the Brussels regime, each posit dual criteria for the concept but only ever have one of their two legs applied. The Opinion in general testifies to the complex picture that emerges in case-law on the issue.
The issue is a knock-out point under Brussels Ia and the majority of EU private international law instruments. If the case is not civil and commercial, European PIL does not apply and residual national law takes over. Despite or perhaps because of this core relevance, the debate on the concept is far from settled. I reported on it as recently as a few weeks back (Øe AG in C-189/19 Supreme Site; and a little before that C-421/18 Dinant Bar v maître JN,) and I expressed a need for serious chewing over following different strands of focus among the CJEU’s chambers (my post on C-579/17 Buak).
The case at issue concerns enforcement of Belgium’s unfair trading act, not as in C‑167/00 Henkel by a consumer group but rather by the public authorities of the Member State.
Movic BV of The Netherlands and the others defendants practices ticket touting: resale of tickets for leisure events. Belgium in recent years has been cracking down on the phenomenon and in conflict terms, has expressed an eagerness to qualify big chunks of e-commerce laws as lois de police. One assumes this explains the reluctance of the defendants to be hauled in front of a Belgian judge.
At 12: what the Belgian authorities are seeking, is
first, findings of infringement in respect of conduct constituting, inter alia, unfair commercial practices, secondly, an order for the cessation of such infringement, thirdly, an order for publicity measures to be taken at the expense of the defendants; fourthly, the imposition of a penalty payment in a fixed sum, due in respect of each and every infringement which may be found to have taken place after service of the judgment, and fifthly, permission for the fact of such infringement to be certified simply by means of a report drawn up by a sworn official of one of the authorities in question.
At 16: arguments against the issue being of a civil and commercial nature, are
first, unlike any other person, the Belgian authorities are not required to demonstrate that they have an interest of their own in bringing proceedings of the kind illustrated by the main proceedings, secondly, their powers of investigation are not available to legal persons governed by private law, and thirdly, they also have enforcement powers which are not available to such persons.
As for the issue of lack of requirement of showing interest:
The first authority signalled is C‑551/15 Pula Parking: acting in the public interest does not equate acting in the exercise of State authority. Per the same case and per Fahnenbrock, and Kuhn, neither, the AG points out, does origin of authority in Statute, equate acta iure imperii. The fact that a power was introduced by a law is not, in itself, decisive in order to conclude that the State acted in the exercise of State authority (at 32). Neither does it follow from C-271/00 Baten that that the mere fact of exercising a power which the legislature has specifically conferred on a public authority automatically involves the exercise of public powers (at 34).
The AG then more specifically discusses the issue of lack of requirement to show interest to establish standing. Here there are plenty of similarities with the consumer organisations at issue in Henkel (37 ff). The exemption does not mean that the entity enjoys a prerogative under which it has powers altering the civil or commercial nature of its legal relationship with the private law entities, or the subject matter of the proceedings in which a cessation action is brought. Similarly, it has no such powers as regards the procedural framework within which the proceedings arising out of those relationships are heard, which is identical whatever the status of the parties to the proceedings may be.
Further, with respect to the powers of investigation: here the AG reads C‑49/12 Sunico as meaning that to exclude proceedings from the scope of ‘civil and commercial matters’, (at 53)
it is not sufficient to identify national provisions which, in abstracto, authorise a public authority to gather evidence through the use of its public powers and to use such evidence in legal proceedings. Equally, it is not sufficient to find that that evidence has in fact been used in the proceedings. In order to exclude the proceedings from the scope of that expression, it must also be determined, in concreto, whether, by virtue of having used that evidence, the public authority is not in the same position as a person governed by private law in analogous proceedings.
(In the case at issue there are no such indications). This reading of Sunico makes the exemption exercise very much a factual one – which is not in itself unusual in the context of the case-law on ‘civil and commercial’. One hopes the Court itself will give clear guidance on how Sunico must be read.
The AG also zooms in on the request for penalty payments. Here, the core reference is C‑406/09 Realchemie. At 72 (after having analysed the issue): a procedure in which such payment is sought, falls within the scope of ‘civil and commercial matters’ where,
‘first, the purpose of the penalty payment is to ensure the effectiveness of the judicial decision given in the proceedings, which fall within the scope of that expression, and secondly, the penalty payment is a normal measure of civil procedure which is also available to private individuals, or which is imposed without exercising special powers that go beyond those arising from the rules of general law applicable to relationships between private individuals.’
(With both these boxes ticked in casu). This I believe is most sound.
Within the same context, the last argument refers to the need or not to instruct a bailiff to certify the existence (and frequency) of continued infringement: the relevant Belgian authorities can suffice with an oath by a civil servant. This is in fact not a point signalled by the referring court however the Belgian Government at hearing seemingly sought insurance cover as it were, effectively seeking sanction of its use of a civil servant statement in lieu of what ordinary parties would have to do, which is to instruct a bailiff. This, the AG suggest (at 75), does amount to exercise of public authority, but only then for that part of the claim (the penalty payment( against the Dutch defendants): weapons which an ordinary person could not avail themselves of (I would refer to C-271/00 Steenbergen here).
All in all the case illustrates the relatively narrow room for abstract pondering of the issue of ‘civil and commercial’. The Opinion is highly factual, and admirably on point viz the extensive CJEU authority. The need for highly factual considerations sits uneasily with the Regulation’s expressed DNA of predictability. However this squares with the CJEU case-law on same. And it bodes interestingly when we will start applying the corresponding Hague Judgments Convention provisions…
(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2, Heading 2.2.
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  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.
The Prestige recognition tussle puts the spotlights on (now) Article 45 Brussels Ia, and on the relation between competing arbitral awards and judgments in ordinary.
Spain v The London Steam-Ship Owners’ Mutual Insurance Association Ltd  EWHC 142 (Comm) reports on the CMR (case management conference) re what promises to be interesting litigation. A Spanish judgment concerning liability for the pollution damage caused when the vessel PRESTIGE broke in two off the coast of Spain in 2002, needs to be enforced in the UK. Brussels Ia’s contestation of recognition is involved: particularly Articles 34(1) and (3).
At 2 Teare J summarises the story so far:
The parties have been in dispute about liability for many years. Criminal proceedings were brought against the master of PRESTIGE in Spain in 2002 and, after the conclusion of the investigative stage of the proceedings, civil proceedings were brought against the master, the Owners of PRESTIGE and the Club, as liability insurer of the Owners, in 2010. (I am told that in addition to Spain there are some 264 other claimants.) In 2012 the Club commenced arbitration proceedings in London against Spain and in February 2013 obtained an award from the sole arbitrator Mr. Alistair Schaff QC which declared that, as a result of the “pay to be paid” clause in the policy the Club had no liability to Spain. In this court Spain challenged the jurisdiction of the arbitrator but the court (Hamblen J. as he then was) held in 2013 that the arbitrator had jurisdiction. Later that year the court in La Coruna dismissed the civil claim against the master, Owners and Club but convicted the master of the crime of disobeying orders by the Spanish authorities to accept a tow of the vessel. In 2015 the English Court of Appeal upheld the decision of Hamblen J. In 2016 the Spanish Supreme Court reversed the decision of the court in La Coruna and held that the master had been seriously negligent and that the Owners and Club were liable for the damage caused. In execution proceedings in Spain, the court in La Coruna declared the Spanish State entitled to enforce a claim up to approximately €2.355 billion against the defendants in the Spanish proceedings and declared the master, Owners and the Club liable in respect of the claims, although subject (in the case of the Club) to a global limit of liability in the sum of approximately €855 million.’
Thus the Club has an arbitration award in its favour but Spain has a judgment of the Spanish Supreme Court in its favour. Spain obtained an order from Master Cook pursuant to which the Spanish judgment was registered so that it could be enforced here against the Club. The Club seeks to appeal from that order. One of the grounds on which it seeks to appeal is that the Spanish judgment is irreconcilable with the judgment of Hamblen J. and the Court of Appeal (A34(3) BIa). Another ground is that recognition of England is contrary to the public policy of England (A34(1)).
This particular CMS concenrs disclosure requirements: the Club’s seeking of disclosure from Spain is resisted by the latter on grounds that is clashes with BIa’s intention of swift recognition.
One of the issues on which disclosure is sought, is Spain’s position under the insurance title of BIa: “Are the English Judgments not qualifying judgments within article 34(3) because the English Judgments conflict with Section 3 of Chapter II of the Brussels 1 Regulation ? In particular …(b) Is the respondent [Spain] entitled to rely on the exclusive rules for jurisdiction in Section 3 of Chapter II. In particular: (i) Is the respondent [Spain] a qualifying party that is entitled to the protective rules in Section 3 ?” Reference is made to Aspen Underwiting: the Club states that it is necessary for Spain to show that it is a member of the class protected by Section 3, which (per Aspen Underwriting, GAVC] excludes “professionals in the insurance sector or entities regularly involved in the commercial or otherwise professional settlement of insurance related claims who voluntarily assumed the realisation of the claim as part of its commercial or otherwise professional activity”. Aspen Underwriting in the meantime (Teare J’s judgment was issued in January; it has been in the blog queue) has been varied by the Supreme Court.
It will therefore be necessary, submitted counsel for the Club, for Spain to disclose documents which show “the class of business” conducted by it. If it is a member of the relevant class it can rely on section 3. If it is not, it cannot.
The second class of document of which disclosure is sought is very different and relates to the public policy defence. Did the Spanish Courts refuse to allow the master to participate in an underwater investigation of the strength of the vessel’s hull and refuse to disclose the results of the investigation (so that there was a breach of the master’s right to equality of arms and to be able to prepare a defence) or were the results disclosed to the master in sufficient time to allow him to prepare his defence. The Club therefore seeks disclosure of the documents relating to that question held by Spain. Here Teare J at 21 assumes that Spain’s evidence can be expected to support its case and to rely upon the documents which show when the results were disclosed to the master and in what terms. If the evidence does not deal with this issue then Spain will be unable to advance its factual case. ‘I therefore consider it very likely that no disclosure under this head will be required. In the unlikely event that it is required a focused application can be made after Spain has provided its evidence.’
The Order eventually imposes a timetable for exchange of evidence (including expert reports) and later settlement of disclosure issues should they arise. Hearing in principle in December 2020.
This could turn out to be a most relevant case.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 126.96.36.199, Heading 188.8.131.52, Heading 2.2.16.