Haier Europe Trading SRL v Mares Associates Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 23 February 2017
• Neutral Citation: [2017] IEHC 159
• Court: High Court
• Docket Number: [2015 No. 43 FJ]
• Date: 23 February 2017

IN THE MATTER OF THE JURISDICTION OF COURTS AND ENFORCEMENT OF JUDGMENTS ACT 2012

AND

IN THE MATTER OF AN APPLICATION PURSUANT TO ARTICLES 33, 38 AND 47 OF COUNCIL REGULATION NO. 44/2001/EC

AND

PURSUANT TO ORDER 42A OF THE RULES OF THE SUPERIOR COURTS 1986 (AS AMENDED)

AND

IN THE MATTER OF A JUDGMENT OF THE TRIBUNAL OF VARESE OF THE REPUBLIC OF ITALY ENTITLED CASE NO. 3367/2001

BETWEEN

HAIER EUROPE TRADING SRL

PLAINTIFF/RESPONDENT

AND

MARES ASSOCIATES LIMITED

DEFENDANT/APPELLANT

[2017] IEHC 159

[2015 No. 43 FJ]

THE HIGH COURT

Practice & Procedures – Courts and Enforcement of Judgments Act 2012 – O.42A of the Rules of the Superior Courts 1986 – Brussels Regulations – Time to file appeal – Enforcement of foreign judgment

Facts: The appellant sought a stay on the enforcement of a judgment of a foreign court awarding costs to the respondent against the appellant. The appellant contended that the result of the enforcement of that judgment would result in the winding up of the appellant and thus, it was desired that the stay should be granted pending an appeal that the appellant had filed in the foreign court. The respondent had raised a preliminary issue that the appeal was time barred as time began to run when the first notice of enforcement was served by the order of the Master of the High Court. The appellant contended that the order of the Master of the High Court had incorrectly mentioned figures, which were rectified by the subsequent order made by the High Court under ‘slip rule’ and thus, the time to lodge an appeal began to run from the date on which the order of the High Court was made to rectify the errors.

Ms. Justice Baker held that the appeal filed by the appellants was not out of time. The Court held that for the purpose of lodging of an appeal, the service of substance of the judgment was of an essence under the EU law. The Court held that since the foreign court had made a costs' order, the correct figures formed the material part of the judgment, which was modified and corrected by the order of the High Court. The Court, thus, observed that the time to file an appeal started to run from the date on which the High Court order was made. The Court granted a stay to the appellant as the Court had found that the effect of compliance with the costs' order would cause the winding up of the appellant company and thus, it would be prejudicial to the appellant. The Court held that the loss that would be caused by that winding up could not be compensated in damages.

JUDGMENT of Ms. Justice Baker delivered on the 23rd day of February, 2017.

1 On 26th January, 2015 the Tribunal of Varese of the Republic of Italy (“the Italian Court”) in an application to strike out proceedings gave judgment against Mares Associates Ltd. (“Mares”) in favour of Haier Europe Trading SRL (“HET”), and awarded HET costs in the amount of €50,000.00, plus general expenses, VAT and the social security contributions required by law. The total amount of the costs award was €72,956.00 including VAT.

2 Mares appealed the decision of the Italian Court on 4th June, 2015 but did not seek a stay on the award of costs. It is in respect of the judgment for costs that this application arises.

3 Mares is a company registered in Ireland and HET applied to the Master of the High Court for an order that the judgment of the Italian Court be recognised and enforced in accordance with Articles 33, 38 and 47 of Council Regulation 44/2001/EC, the Brussels Regulation. The Regulations of 2012 are not applicable. On 16th July, 2015 the Master made an order under the Brussels Regulation and pursuant to Order 42A of the Rules of the Superior Courts 1986, as amended, the relevant parts being as follows:

“1. There be an Order of recognition of the Judgment and Order of the Tribunal of Varese of the Republic of Italy of 26 January 2015 in accordance with Article 33 of Council Regulation 44/2001/EC

2. There be a Declaration that the said Judgment and Order is enforceable in this jurisdiction in all its terms pursuant to Article 38 of Council Regulation EC 44/2001

3. There be an Order restraining the Defendant from disposing of or otherwise dealing with its assets up to a maximum sum of €72,956.00 until further order of this Court

4. There be an Order directing the Defendant to disclose to the Plaintiff the identity and location of all financial institutions with which the Defendant holds accounts

5. There be an Order directing the Defendant to provide the Plaintiff with a list of all assets held by the Defendant

4 The Master also gave directions as to service, that a copy of his order, together with an enforcement notice be served on Mares by registered post, and that execution of the order would not issue until the time for an appeal had expired.

5 The three protective measures were enforceable immediately upon the making of the order of the Master. Mares has lodged an appeal to the substantive parts of the order.

6 This judgment is given in the application by Mares for a stay on the enforcement of the Italian costs award pending an appeal to the Italian court, listed for hearing, or at least by way of a first listing, in the spring of 2017. The application is made primarily because Mares frankly says that there are not sufficient funds in the company to discharge the order, and it fears that a petition to wind up the company would have the consequential effect that it was no longer able to pursue the appeal of the substantive matter in the Italian courts.

The proceedings in Italy

7 The Italian proceedings arise from a contractual relationship between Mares and various companies in the Haier Group, including HET, to provide agency services. Mares argues that in breach of contract substantial fees by way of commission were not paid by HET and the claim is made for a sum of €15 million.

8 The substantive proceedings had a complex history in the Italian courts, and the initial order of the Tribunal of Varese made on 20th March, 2008 dismissed the claim of Mares for want of jurisdiction. That decision was reversed on 24th May, 2011 by the Court of Appeal of Milan. The Supreme Court of Cassation rejected the appeal of HET on 6th May, 2013 and the proceedings were then remitted for hearing to the Tribunal of Varese.

9 On 26th January, 2015 the Tribunal of Varese dismissed the claim of Mares and awarded costs to HET. Mares have appealed the order of the Tribunal of Varese.

10 The application to the Master to recognise and enforce the Italian order was made on 16th July, 2015, after the lodgement on 4th June, 2015 of the appeal against the Italian judgment, but before its first hearing in Italy on 10th November, 2015.

The Brussels Regulation

11 The Brussels Regulation furthers the policy of judicial cooperation in civil matters and the free movement of judgments between Member States.

12 Article 33(1) provides for the recognition in Member States of judgments given in another Member State. The proposition is broadly stated:

“A judgment given in a Member State shall be recognised in the other Member States without any special procedure being required.”

13 Certain saver provisions are provided, in that a judgment shall not be recognised if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought. (Article 34)

14 Enforcement is under Article 38(1), and it too is stated as a broad proposition:

“A judgment given in a Member State and enforceable in that State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.”

15 Thus enforcement is not automatic, the judgment is not automatically recognised and self-executing in each Member State, and application to the enforcing State must be made.

16 Article 40 provides that the procedure for the making of an application for enforcement shall be governed by the law in the enforcing Member State.

17 The Court of Justice of the European Union (“CJEU”) in Draka NK Cables Ltd, AB Sandvik international, VO Sembodja BV and Parc Healthcare International Limited v Omnipol Ltd. Case C-167/08, [2009] ECR 1-03477, on a reference for a preliminary ruling concerning the interpretation of Article 43(1) of the Brussels Regulation held that the principle of legal certainty requires in all Member States “a uniform application of the legal concepts and legal classifications developed by the Court”. The Court described the principle objective of the Convention (the Brussels Convention 1968, or Brussels (I) the precursor of the Brussels Regulation) as an attempt to simplify the enforcement process which was as a result required to be “very summary, simple and rapid” (para. 26), while acknowledging that the person against whom an enforcement order was made had to be given an opportunity to bring an appeal.

18 The CJEU described the procedures envisaged by the Regulation as an “autonomous and complete system, independent of the legal systems of the Contracting States, including the matter of appeals”. The rules relating to enforcement and recognition are to be interpreted strictly.

Irish rules of recognition and enforcement

19 The Irish procedure for the making of an order of recognition and enforcement is provided by O.42A of the Rules of the Superior Courts, S.I. 307 of 2013. Application is to the Master of the High Court.

20 Order 42A, r.11 provides for the service of the notice of the making of an order of recognition and enforcement together with the relevant order.

21 The service of two documents is envisaged, and O.42A, r.12 provides that the notice of the making of the relevant order, the “notice of enforcement”, shall state:

“(a) full particulars of the judgment or decision declared to be enforceable and the relevant order;

(b) the name and address of the party...