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European Business Law

Article 45 of Regulation No 1215/2012 lists a series of cases in which recognition is excluded, these exceptions applying to the enforcement procedure by referral in Article 46. Recognition or enforcement are impossible: (i) where they are contrary to public policy in the State in which they are sought ; (ii) where the document which instituted proceedings or an equivalent document was not served  …

Grounds for non-recognition or non-enforcement

Article 45 of Regulation No 1215/2012 lists a series of cases in which recognition is excluded, these exceptions applying to the enforcement procedure by referral in Article 46. Recognition or enforcement are impossible: (i) where they are contrary to public policy in the State in which they are sought ; (ii) where the document which instituted proceedings or an equivalent document was not served on the defendant in sufficient time and in such a way as to enable him to arrange for his defense; (iii) where the judgment is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought or (iv) with an earlier judgment given in another Member State or in a third State involving the same subject-matter and cause of action and between the same parties, where the earlier judgment fulfils the conditions necessary for its recognition in the Member State addressed.

Article 45 must be interpreted strictly insofar as the grounds for non-recognition or non-enforcement of judgments constitute many obstacles to the achievement of the free movement of judgments which must be ensured by a simple and rapid enforcement procedure . 

The fact that the foreign judgment is contrary to the public policy of the State in which enforcement is sought enables the latter to object to its recognition or performance. According to the Court of Justice, the public policy clause “ought to operate only in exceptional cases” . Recourse to the public policy clause must thus be excluded, having regard to its exceptional character, where the issue may be resolved on the basis of Article 45(1)(b), which governs compliance with the rights of the defense of the failing defendant . However, supervision by the court in which enforcement is sought of compliance with the rights of the defense in the State of origin may fall within paragraph 1 in exceptional cases where the guarantees laid down in the legislation of the State of origin and in Regulation No 1215/2012 have been insufficient to protect the defendant from a manifest breach of his right to defend himself before the court of origin, as recognized by the ECHR . 

To be excluded, recognition or enforcement of the decision delivered in another Member State must be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought. The infringement is to constitute manifest breach of a rule of law regarded as essential in the legal order of the State in which enforcement is sought or of a right recognized as being fundamental within that legal order . In effect the concept of public policy within the meaning of the regulation seeks to protect legal interests which are expressed through a rule of law, and not purely economic interests . Even though the Member States are free to determine, according to their own conceptions, what public policy requires, the Court of Justice controls the limits in which the court of a Member State may resort to that concept to refuse to recognize the decision of another Member State. The public policy of the State in which enforcement is sought cannot be asserted against the recognition or enforcement a decision given in another Member State on the ground that the court of origin has not complied with the rules of Regulation No 1215/2012 on jurisdiction  or that it has wrongly applied the national law or the law of the European Union . The public policy clause concerns both the rules as to substance and the procedural rules. Exceptionally, the court of the State in which enforcement is sought may legitimately consider that the refusal by the foreign judge to hear the defense of the accused who failed to enter an appearance constitutes a clear violation of a fundamental right of its procedural public policy, justifying the non-recognition of the foreign judgment. It may also take into account the fact that the court of the State of origin ruled on the plaintiff's claims without hearing the defendant, who regularly entered an appearance before it but was excluded from the proceedings by order on the ground that he had not complied with certain obligations, if, following a comprehensive assessment of the proceedings and in the light of all the circumstances, it appears to it that that exclusion measure constituted a manifest and disproportionate infringement of the defendant's right to be heard . Likewise, the court of the Member State in which enforcement is sought may refuse, under the public policy clause, to enforce a judgment given in default of appearance which disposes of the substance of the dispute but which does not contain an assessment of the subject-matter or the basis of the action and which lacks any argument of its merits, only if it appears to the court, after an overall assessment of the proceedings and in the light of all the relevant circumstances, that that judgment is a manifest and disproportionate breach of the defendant's right to a fair trial referred to in the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union, on account of the impossibility of bringing an appropriate and effective appeal against it . The recognition and enforcement of an order issued by a court of a Member State, without a prior hearing of a third person whose rights may be affected by that order, cannot be regarded as manifestly contrary to public policy in the Member State in which enforcement is sought or manifestly contrary to the right to a fair trial insofar as that third person is entitled to assert his rights before that court .

2) Protection of the defaulting defendant.

Recognition is excluded when “the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defense, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so” (Article 45(1)(b)). The Brussels Convention required the document which instituted the proceedings to be duly served on the defendant in default of appearance “in sufficient time to enable him to arrange his defense”.

The regulation no longer requires the document to be duly served  and introduces an exception to the refusal to recognize and enforce the decision, where the defendant in default of appearance has not brought any action against the decision in the State of origin while it was possible for him to do so . Before, the Court of Justice decided, in accordance with the Brussels Convention, that the recognition in a Member State of a decision given in another State without the defendant appearing, had to be refused where the document instituting proceedings had not been duly served in sufficient time on the defendant, even if he had not used the available remedies . Now, as  Article 45 sets outs an express requirement for service on a defendant in default of appearance only with respect to the document which instituted the proceedings and not as regards the default judgment, the Court considers that “to justify the conclusion that it was possible for a defendant to commence proceedings to challenge a default judgment against him”, he must have been aware of the contents of that judgment by being served the documents in sufficient time to enable him to arrange for his defense before the court of the State of origin . Therefore, the court in which enforcement is sought may refuse to recognize or enforce the decision of the court of origin for reasons of non-compliance with the rights of defense of the defendant in default of appearance (a) where the fact that the document which initiated the proceedings was not served on the defendant in sufficient time or was served in sufficient time but not in such as way as to enable him to arrange for his defense, is at the origin of the non-appearance or (b) where the fact that the default judgment was not served, in the same conditions, has resulted in the defendant in default of appearance not being aware of the contents of the judgment in sufficient time as to enable him to arrange for his defense and not being able to “commence proceedings”.

Thus, the application of Article 45(1)(b), which sets forth no requirement as to domicile , is subject to the existence of a document instituting proceedings, served  in sufficient time. 

The term “document which instituted the proceedings or equivalent document” means the document or documents which must be served with sufficient time on the defendant in order to enable him to assert his rights before an enforcement judgment is given in the State of origin . Article 45(1)(b) does not require evidence that the defendant has actually been aware of the document instituting proceedings but only that there has been sufficient time . The court in which enforcement is sought must take account only of the time available to the defendant for the purposes of preventing the issue of a judgment in default which is enforceable. The court in which enforcement is sought must therefore make sure that there are no exceptional circumstances which warrant the conclusion that service was inadequate for the purposes of enabling the defendant to take steps to arrange for his defense  or exceptional facts or circumstances which occurred after service was effected and which may have the effect that service did not enable the interested party to arrange for his defense . When assessing, the court may take account of the means employed for effecting service, the relations between the plaintiff and the defendant or the nature of the steps which had to be taken to prevent judgment from being given in default . The fact that the foreign judgment is accompanied by the certificate (provided for by Article 53 of Regulation No 1215/2012) cannot limit the scope of the assessment to be made pursuant to the double control, by the court of the Member State in which enforcement is sought, once it examines the ground for challenge mentioned in Article 45(1)(b) of Regulation No 1215/2012 .

The implementation of Article 45(1)(b) also implies that the court of origin has issued a default judgment. This requirement concretely means that the defendant must not have appeared or be represented in the proceedings before the court in the State of origin. The ground for refusal to recognize referred to in Article 45(1)(b) cannot be relied upon where the defendant appeared, at least if he was notified of the elements of the claim and had the opportunity to arrange for his defense . Thus, a defendant who does not know that proceedings are initiated against him - and a lawyer appears before the court of origin on his behalf but without his authority - is powerless to defend himself and must therefore be regarded as a defendant in default of appearance . According to the Court of Justice, the fact that a defendant, through his counsel, answers at trial to the charges against him is to be taken as constituting, in principle, an appearance for the purposes of the proceedings taken as a whole, which precludes the non-recognition of the foreign judgment . On the other hand, the court of the State in which enforcement is sought may refuse to recognize a foreign judgment where the defendant has lodged an objection against the judgment given in default and a court of the State of origin has held the objection to be inadmissible on the ground that the time-period to bring proceedings had elapsed, since, in such a case, the dismissal of the objection as inadmissible means that the decision given in default remain “intact” . Lastly, EU law does not preclude the issue of judgment by default against a defendant on whom, given that it is impossible to locate him, the document instituting proceedings has been served by public notice under national law, provided that the court before which the matter is brought has first satisfied itself that all investigations required by the principles of diligence and good faith have been undertaken to trace the defendant .

In order to “minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States” (Regulation No 1215/2012, recital 21), Article 45 excludes recognition where the foreign judgment is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought (Article 45(1)(c)) or with an earlier judgment given in another Member State or in a third State involving the same cause of action and between the same parties, where the earlier judgment fulfills the conditions necessary for its recognition or enforcement in the Member State addressed (Article 45(1)(d)). 

The ground for refusing to recognize or enforce irreconcilable judgments is mandatory insofar as there can be no doubt that “the rule of law in a State would be disturbed if it were possible to take advantage of two conflicting judgments” and interpreting Article 45(1(c)) in such a way as to recognize that the court of the State in which enforcement is sought has a mere possibility of refusal would be contrary to the principle of legal certainty . It must however be strictly interpreted . Thus, since a settlement transaction does not constitute a judgment within the meaning of Article 45 of the regulation, the ground derived of the irreconcilable character of a foreign judgment and a settlement having taken place between the same parties before the court of the State in which enforcement is sought is inadmissible . 

Irreconcilability lies in the effects of judgments, but does not concern the requirements governing admissibility and procedure which determine whether judgment can be given . Irreconcilability assumes that the judgments in question entail legal consequences that are mutually exclusive . Thus, the decision on interim measures of the court of origin ordering an obligor not to carry out certain acts and that of the court of the State in which enforcement is sought, issued between the same parties, refusing to grant such an order  are irreconcilable.

Fraud is not expressly mentioned in Article 46 of the regulation.

Case C-414/92 Solo Kleinmotoren v Boch [1994] ECR I-2237, LawLex200900000757JBJ. 

Case C-619/10 Trade Agency Ltd v Seramico Investments Ltd, Judgment of 13 December 2012, LawLex201200002042JBJ.

Case C-559/14 Meroni, Judgment of 25 May 2016, LawLex201600000995JBJ.

Case C-283/05 ASML [2006] ECR I-12041, LawLex200900001407JBJ: Article 34(2) of the Brussels Regulation (I) does not require the document which instituted proceedings to be duly served, but does require that the rights of defense are effectively respected. 

The concept of the concept of 'proceedings to challenge a judgment' includes applications for relief when the period for bringing an ordinary challenge has expired, see Case C-70/50 Lebek v Domino, Judgment of 7 July 2016, LawLex201600001268JBJ.

Case C-78/95 Hendrikman and Feyen v Magenta Druck & Verlag [1996] ECR I-4943, LawLex200900001176JBJ: "The proper time for a defendant to have an opportunity to defend himself is the time at which proceedings are commenced. The possibility of having recourse, at a later stage, to a legal remedy against a judgment given in default of appearance, which has already become enforceable, cannot constitute an equally effective alternative to defending proceedings before judgment is given".

Case C-283/05 ASML [2006] ECR I-12041, LawLex200900001407JBJ.

Case 49/84 Debaecker v Bouwman [1985] ECR 1779, LawLex200900002198JBJ: Article 34(2), which is aimed at ensuring appropriate protection of the rights of defense of the defendant against whom judgment is given in default of appearance abroad by taking account of the diverse service mechanisms - particularly fictitious ones - existing within the European Union, must be able to benefit both to the defaulting defendant domiciled in a Member State and to the defendant whose domicile is situated in a non-Member State.

Within the European Union, service is governed by Regulation No 1393/2007 of 13 November 2007 which replaced Regulation No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters.

Case C-474/93 Hengst Import v Campese [1995] ECR I-2113, LawLex200900000970JBJ: the "decreto ingiuntivo", together with the application instituting the proceedings, which starts time running for the defendant to oppose the order without the plaintiff being able to obtain an enforceable order before the expiry of that time, must be regarded as the document which instituted proceedings; Case 166/80 Klomps v Michel [1981] ECR 1593, LawLex200900001584JBJ: the words 'the document which instituted proceedings' within the meaning of Article 34(2) of the regulation cover the order for payment (Zahlungsbefehl) in German law, service of which enables the plaintiff, under the law of the State of the court of origin, to obtain, in default of appropriate action taken by the defendant, a decision capable of being recognized and enforced under the provisions of the regulation, but excludes an enforcement order (Vollstreckungsbefehl), which is issued after service of the order for payment has been effected and which would be in itself enforceable.

To assess whether the defendant has had 'sufficient time' to arrange his defense, the court of the State in which enforcement is sought is not bound to comply with the periods set forth by its national law. 

Case 145/89 Hoffmann v Krieg [1988] ECR 645, LawLex200900001555JBJ. 

Case 166/80 Klomps v Michel [1981] ECR 1593, LawLex200900001584JBJ.

Case 49/84 Debaecker v Bouwman [1985] ECR 1779, LawLex200900002198JBJ: the fact that the plaintiff was apprised of the defendant's new address, after service was effected, and the fact that the defendant was responsible for the failure of the duly served document to reach him may be taken into account.

Case C-172/91 Sonntag v Waidmann [1993] ECR I-1963, LawLex200900000718JBJ.

Case C-78/95 Hendrikman and Feyen v Magenta Druck & Verlag [1996] ECR I-4943, LawLex200900001176JBJ. 

Case C-292/10 Cornelius de Visser, Judgment of 15 March 2012,  LawLex201200000644JBJ.

Case C-80/00 Italian Leather [2002] ECR I-4995, LawLex200900001179JBJ.

Case C-414/92 Solo Kleinmotoren v Boch [1994] ECR I-2237, LawLex200900000757JBJ.

Case C-80/00 Italian Leather [2002] ECR I-4995, LawLex200900001179JBJ: it does not matter whether the judgments at issue have been given in proceedings for interim measures or in proceedings on the substance, "decisions on interim measures [being] subject to the rules laid down […] concerning irreconcilability in the same way as the other 'judgments' covered by Article [32]", as well as " it is equally immaterial that national procedural rules as to interim measures are liable to vary from one [Member] State to another to a greater degree than rules governing proceedings on the substance", where "irreconcilability lies in the effects of judgments", and not in the conditions of admissibility and procedure, which may vary from one Member State to another.

Case 145/86 Hoffmann v Krieg [1988] ECR 645, LawLex200900001555JBJ.

Case C-80/00 Italian Leather [2002] ECR I-4995, LawLex200900001179JBJ. Similarly decisions given in two Member States between the same parties, the one based on the existence of a matrimonial relationship and the resulting conjugal obligation, the other pronouncing the divorce, Case 145/86 Hoffmann v Krieg [1988] ECR 645, LawLex200900001555JBJ, rendered under the Brussels Convention which included within its scope maintenance obligations - now governed by Regulation No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations.

Case C-7/98 Krombach [2000] ECR I-1935, LawLex200700001584JBJ.

Case C-7/98 Krombach [2000] ECR I-1935, LawLex200700001584JBJ; see also Case C-420/07 Apostolides [2009] ECR I-3571, LawLex200900001592JBJ.

Case C-302/13 flyLAL-Lithuanian Airlines, Judgment of 23 October 2014, LawLex201400001129JBJ.

Case C-38/98 Renault [2000] ECR I-2973, LawLex200700001591JBJ: the fact that there might be incompatibility between the principles of free movement of goods and free competition and the recognition by the court of origin of the existence of an intellectual property right on body parts for cars enabling the holder to prohibit traders in another Member State from manufacturing, selling and transporting such body parts, does not constitute a manifest breach of a rule of law regarded as essential in the legal order of the State in which enforcement is sought. 

As to the compatibility of the compliance with the rights of the defense intended by the application of Article 34(1) of the regulation with the 'unless order', 'debarment' and 'disclosure order', Case C-394/07 Gambazzi [2009] ECR I-2563, LawLex200900002347JBJ. 

European Business Law

372. Grounds for non-recognition or non-enforcement

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372. Grounds for non-recognition or non-enforcement

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