Public policy and the overall fairness of foreign procedure

Except for the case in which judgment is given in default of appearance, the public policy objection to recognition is the basis on which a court may satisfy itself that the defendant has had a fair trial; and the finding that the foreign court made proper provision for fairness or for correcting unfairness will make it distinctly difficult object to recognition on grounds of public policy. Put shortly, if the problem is one which could have been rectified in the Member or Lugano State in which the judgment was given, public policy does not require non-recognition. If, however, the foreign court has behaved in way which gives no confidence that it will deal fairly with an objection, it would be entirely proper to refuse recognition on grounds of public policy.^[1]

As the European Convention on Human Rights (ECHR) is not mentioned in (or carved out of) the Lugano Convention or Brussels I Regulation, a complaint that the defendant had been dealt with in a way which falls short of the guarantee put in place by Article 6 ECHR has to be accommodated under the public policy objection to recognition. This is therefore another reason why its removal from the recast Regulation would have been unwelcome.

The basic point is illustrated by Krombach v BamberskP and in Regie Nationale des Usines Renault SA v Maxicar SpA. These decisions confirm that, where the adjudicating court is shown to have acted contrary to the standards of the ECHR, the recognising court is free to conclude that recognition of the judgment would be contrary to its public policy. This is because the ECHR may be held to represent a fundamental and integral part of national laws. If the recognising court considers -as one would have supposed that it would - that adherence to the standards and guarantees of the ECHR is a fundamental principle which is essential in its legal order, a breach of those standards by the adjudicating court will mean that recognition of the foreign judgment must be manifestly contrary to public policy. Accordingly in Krombach, where the defendant had been debarred from presenting his defence by reason of his having earlier been found to be in contempt of court, it was held that the recognising court was permitted to rely on the public policy objection to recognition, by particular reference to the ECHR or to its Basic Law. The principle was correctly applied in England in Maronier v Larmer?⁵ in which the failure to notify a defendant that a long-dormant action against him before the Dutch courts had been revived meant that recognition would be contrary to English public policy, by reason of its being contrary to Article 6 ECHR.^[2]

By contrast, in Regie Nationale de Usines Renault SA v Maxicar SpA, where the adjudicating court was alleged to have made a substantive error in its application of rules of European laws on the free movement of goods and on competition, the shortcoming could not properly trigger the public policy objection, because recognition would not infringe a fundamental principle or amount to a manifest breach of a rule regarded as essential or fundamental within the legal order of the recognising State. There was no sense in which the original proceedings had been unfair. The analysis might have been different had there been no recourse against the alleged error in the courts of the adjudicating State, but because there was, and because of the possibility of a reference to the European Court under the law of the adjudicating State, there was no basis for such an objection to be advanced on the facts; the judgment resulted from a procedure which was fundamentally fair.

The case law may have reached the point at which recognition will not be contrary to public policy if the person against whom the judgment is given still has a right of appeal, recourse, or review, in the original court which appears to offer a sensible opportunity for him to have put right what he says has gone wrong. The English courts came to that conclusion long before. It is most doubtful whether the argument available at common law, that the judgment was procured by fraud, could ever have been accommodated under the public policy head. So far as is known or required to be assumed, all Lugano and Member States permit judgments given by their courts to be impeached on the ground that they were obtained by fraud, and that the availability of a perfectly sufficient local remedy will surely make it improper to rely upon a broad fraud rule, labelled as an issue of public policy, in order to withhold recognition from the judgment.

It has been held, but much more controversially, that a procedure is liable to be found to be unfair if it results in a judgment which does not give reasons or grounds and which, as a result, makes it difficult for the defendant to decide how to respond to the judgment; public policy may then be used to refuse recognition. In Trade Agency Ltd v Seramico Investments Ltd,^w the European Court held, in effect, that a Latvian court was entitled to refuse recognition of an English default judgment, which hadbeen entered without judicial scrutiny or analysis of the claim against the defendant. The absence of judicial reasons meant, so the Court said, that it was impossible for the defendant to determine whether to appeal and it was, all things considered, a manifestly disproportionate response to the defendant’s failure to appear.

This is challenging at every level of analysis. It appears to assume that the defendant will wish to appeal the merits, rather than seek to set aside the judgment, which would come as a surprise to an English lawyer. It sits oddly alongside the recent decision of the Court that there is no invariable human or procedural right to an appeal against a decision at first instance.^[3] It pays scant attention to the fact that if a defendant has calculated that it would be best for him to act in such a way that a judgment will issue without considered reasons, it is inappropriate to allow issue to be taken with the judgment on this very ground. And it looks oddest of all alongside a policy, put in place by the EEO Regulation 805/2004, of seeking to speed up, not retard, the enforcement of uncontested judgments. It is fair to say that although the basic principle is not wholly unnourished by sense, and although a defendant must be allowed to have and be shown to have had the chance of a fair hearing, if he chooses to say nothing it should not lie in his mouth to say he had been deprived of the hearing of, or adjudication of, a defence which, ex hypothesi, he had not troubled to advance. However, it also appears that the claimant who obtains a default judgment, entered without reasons going beyond the default, may face more difficulty than he should in obtaining recognition of the judgment under Title/Chapter III. For this reason a court may, if asked, treat the case as one in which is it appropriate to give summary (reasoned), rather than default judgment.

• [1] See Pravednaya v Russia [2004] ECHR 641; Merchant International Co Ltd v NAK Naftogaz [2012] EWCA Civ 196, [2012] 1 WLR 3036 (not Brussels/Lugano cases, but cited for illustration). 2 C-7/98, [2000] ECR 1-1935. The consequences of this unhappy story may have put the principle of mutual trust in the judicial systems of other Member States under a little strain. Believing that Dr Krombach had killed his daughter unlawfully and that, notwithstanding the judgment of a French court, which the German courts considered to offend their public policy, the German public authorities couldn’t care less, Bamberski engaged mercenaries from Kosovo and Georgia to kidnap Krombach from his home, and, in a freestyle form of extradition extraordinaire, to leave him, bound, gagged and chained to a fence, outside a French police station. The imperturbable French justice system duly tried and convicted Krombach, sentencing him to 15 years’ imprisonment and dismissing all appeals. 3 C-38/98, [2000] ECR 1-2973. 4 But for the contrary view, that a foreign judgment may still be recognised even though the adjudicating court has acted in this way, see Government of USA v Montgomery [2004] UKHL 37, [2004] 1 WLR 2241, criticised below, para. 34.33. 5 [2002] EWCA Civ 774, [2003] QB 620.
• [2] For an even more preposterous example of a judgment obtained by a manifestly unfair procedure, see Laserpoint Ltd v Prime Minister of Malta [2016] EWHC 1320 (QB). 2 C-681/13 Diageo Brands BVv Simiramida-04 EOOD EU:C:2015:471, [2016] Ch 147. 3 C-681/13 Diageo Brands BVv Simiramida-04 EOOD EU:C:2015:471, [2016] Ch 147. 4 As opposed to one which is more apparent than real. 5 C-559/14 Meroni v Recoletos Ltd EU:C:2016:349, [2017] QB 85. 6 See Chapter 34, below. 7 This view was adopted, and the English rule of common law held to be inapplicable in relation to a French judgment, by Phillips J in Interdesco SA v Nullifire Ltd[ 1992] 1 Lloyd’s Rep 180, and by the Court of Appeal in SISRO v Ampersand Software BE [1994] ILPr 55. 8 C-283/05 ASML Netherlands BV v Semiconductor Industry Services GmbH [2006] ECR 1-12041, [28]. But this was a case in which there were grounds, but which had not been communicated to the defendant, and it may not apply to a default case, notwithstanding Trade Agency r Seramico, [53]. 9 C-619/10, EU:C:2012:531. Contrast with C-302/13 flyLAL-Lithuanian Airlines as v Starptautiska lidosta Riga VAS EU:C:2014:2319, [2015] ILPr 28, where the argument that there was an absence of reasons for the sums assessed, which was true on its face, was answered by contending that it was possible to discern from the court file how the foreign court had conducted the assessment. That seems a weak response; more persuasive was the observation that there had actually been an inter partes hearing before the court of origin, and the basis for arguing that the trial had been unfair was not there.
• [3] Case C-413/12 Asociación de Consumadores Independientes de Castilla y León v Anuntis Segundamano España SL EU:C:2013:800. 2 Below, para. 33.31. 3 French courts have long seen this as a ground to refuse recognition: Soc Polypetrol v Soc Gen Routière [1993] ILPr 107: Soc Transports Internationaux Dehbashi v Gerling [1996] ILPr 104: Masson v Ottow. Union Discount Ltd v Casamata [2007] JDI/Clunet 543; Society of Lloyd’s v X (Cass 22 Oct 2008) [2009] ILPr 161: on this, see generally, Cuniberti (2008) 57 ICLQ 25. See also Camen:uli v Desira (Cass, 17 Nov 1999), [2000] Rev Crit DIP 786, and the decision of the Swiss Federal Tribunal in X Ltd v Y SA. 9 Feb. 2001, ATF/BGE 127 III 186. 4 Berliner Bank v Karageorgis [1996] 1 Lloyd's Rep 426; Bhatia Shipping and Agencies Pvt Ltd v Alcobex Metals Ltd [2004] EWHC 2323, [2005] 2 Lloyd’s Rep 336; Habib Bank Ltd v Central Bank of Sudan [2006] EWHC 1767 (Comm), [2007] 1 WLR 470; China Export & Credit Insurance Corp v Emerald Energy Resources Ltd[2018] EWHC 3470 (Comm); DEB Bank SE v Vega Marine Ltd [2020] EWHC 1494 (Comm). It may even set aside a default judgment which has already been entered and give summary judgment instead: Messer Griesheim GmbH v Goya! MG Gases Pvt Ltd [2006] EWHC 79 (Comm), [2006] 1 CLC 283. 5 C-619/10 Trade Agency Ltd v Seramico Investments Ltd EU:C:2012:531, [50]; C-559/14 Meroni v Recoletos Ltd EU:C:2016:349, [2017] QB 85. The possibility that a court in a Member State might have refused to give effect to an express agreement on choice of law - not so uncommon when some non-Member States are borne in mind - does not need to be considered as a possible exception to this statement of law.