OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 26 April 2012 (1)
Case C‑619/10
Trade Agency Ltd
v
Seramico Investments Ltd
(Reference for a preliminary ruling
from the Augstākās tiesas Senāts (Latvia))
(Regulation (EC) No 44/2001 – Recognition and enforcement of judgments – Grounds for withholding enforcement – Article 34 of Regulation No 44/2001 – Certificate provided for in Article 54 of Regulation No 44/2001 – Service of document instituting proceedings – Proceedings in which the defendant did not enter an appearance – Public policy – Decisions without examination of substance or a statement of reasons – Right to fair legal process)
I – Introduction
1. The reference for a preliminary ruling by the Supreme Court of the Republic of Latvia relates to the interpretation of Article 34(1) and (2) and Article 54 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. (2)
2. Article 34(2) permits the withholding of recognition or enforcement of a default judgment that has been pronounced against a defendant who was not served with the document which instituted the proceedings in sufficient time and in such a way as to enable him to arrange for his defence. Article 54 of the regulation provides for the issue by the State in which judgment was given (‘State of origin’) of a certificate showing the various underlying procedural data. This certificate has to be submitted together with the application for enforcement of a judgment. The information to be stated there also includes the date of service of the claim form. In light of this, the question in this case concerns the extent to which the court in the State where enforcement is sought should examine service of the claim form: Is it still entitled, despite the date of service being stated in the certificate, to examine whether the document instituting the proceedings was served or does the certificate have binding legal effect in this respect?
3. The ground for withholding recognition under Article 34(2) does not apply if the defendant failed to commence proceedings in the State of origin to challenge the default judgment when it was possible for him to do so. This case provides the Court with an opportunity of further clarifying its case-law on the question of when it is incumbent upon the defendant to lodge an appeal in the State of origin. It is necessary to make clear whether the defendant is obliged to do so even if the decision pronounced against it was served on it for the first time in exequatur proceedings.
4. Finally, the dispute in this case also relates to the public-policy clause in Article 34(1) of Regulation No 44/2001. The referring court would like to know in this connection whether it is compatible with the defendant’s right to fair legal process embodied in Article 47 of the Charter of Fundamental Rights of the European Union (3) for the court of the State of origin to neither examine the substance of a claim before pronouncing judgment in default nor to give further reasons for the default judgment.
II – Legal context
5. Article 34 of Regulation 44/2001 governs obstacles to recognition and provides:
‘A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;
2. where it was given in default of appearance, if 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 defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so; …’
6. Article 54 relates to the certificate to be issued by the court of the Member State of origin:
‘The court or competent authority of a Member State where a judgment was given shall issue, at the request of any interested party, a certificate using the standard form in Annex V to this Regulation.’
7. Annex V contains a specimen form of certificate to be issued under Article 54:
‘Certificate referred to in Articles 54 and 58 of the Regulation on judgments and court settlements …
4.4. Date of service of the document instituting the proceedings where judgment was given in default of appearance …’
III – Facts
8. Seramico Investments Limited (‘Seramico’) brought an action before the English High Court against the company Trade Agency Limited (‘Trade Agency’) and another defendant to obtain payment of GBP 289 122.10.
9. When no defence to the action was filed with the court by Trade Agency the High Court of Justice, Queen’s Bench Division, delivered a judgment in default of appearance on 8 October 2009 ordering Trade Agency to pay a total sum of GBP 293 582.98 based on the following grounds: ‘You have not replied to the claim form, which was served on you. It is therefore ordered that you must pay the claimant GBP 289 122.10 for debt [and interest to the date of the judgement] and GBP 130.00 for costs. You must pay to the claimant a total of GBP 293 582.98’.
10. According to the referring court the certificate issued by the English High Court under Article 54 of Regulation 44/2001 states: ‘the information relating to the claim was notified on 10 September 2009’.
11. On 28 October 2009 Seramico submitted to the Latvijas Republikas Rīgas pilsētas Ziemeļu rajona tiesa an application for recognition in Latvia of the High Court decision. The application was accompanied by a copy of the aforementioned decision and the certificate provided for by Article 54 of Regulation No 44/2001. The declaration of enforceability was issued on 5 November 2009 in accordance with the application. The appeal lodged by Trade Agency was dismissed by the Rīgas apgabaltiesas Civillietu tiesas kolēģija in a decision of 3 March 2010.
12. Trade Agency has now appealed to the Augstākās tiesas Senāts, the referring court, against the decision of the appellate court of 3 March 2010, contending that the procedure before the court in England infringed its right to fair legal process so that the declaration of enforceability of the High Court decision in the Republic of Latvia should be refused.
IV – Request for a preliminary ruling
13. The referring court stayed its proceedings and referred the following questions to the Court of Justice of the European Union for a preliminary ruling:
1. Where a decision of a foreign court is accompanied by the certificate provided for in Article 54 of Regulation No 44/2001, but the defendant nevertheless objects on the ground that he was not served with notice of the action brought in the Member State of origin, is a court in the Member State where enforcement is sought competent, when considering a ground for withholding recognition provided for in Article 34(2) of Regulation No 44/2001, to examine for itself the conformity with the evidence of the information contained in the certificate? Is such wide jurisdiction on the part of a court in the Member State in which enforcement is sought compatible with the principle of mutual trust in the administration of justice set out in recitals 16 and 17 to Regulation No 44/2001?
2. Is a decision given in default of appearance, which disposes of the substance of a dispute without examining either the subject-matter of the claim or the grounds on which it is based and sets out no reasoning as to the substantive basis of the claim, compatible with Article 47 of the Charter and does it not infringe the defendant’s right to a fair hearing, laid down by the provision?
14. The following have participated in the written procedure before the Court of Justice along with Seramico and Trade Agency: the Governments of Germany, France, Ireland, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal and the United Kingdom, together with the European Commission.
15. A hearing before the Court of Justice was held on 8 February 2012 at which Trade Agency, the Governments of Germany, France, Ireland, Latvia, Poland and the United Kingdom and the Commission were represented.
V – Assessment
A – The first question referred
16. Under Article 34(2), where it was given in default of appearance, a judgment is not to be recognised if the defendant was not served with the document which instituted the proceedings in sufficient time and in such a way as to enable him to arrange for his defence. With its first question the referring court would like to establish whether, where there is a certificate under Article 54 of the regulation in existence in which the date of service of the claim form is stated, the fact of service can no longer be called into question in the exequatur proceedings.
17. Article 34(2) also provides, however, that this ground for withholding recognition does not apply if the defendant failed to commence proceedings to challenge the judgment in the State of origin although it was possible for him to do so.
18. I shall, first, discuss below the extent to which the court of the State of enforcement is entitled to examine service of the claim form in the context of Article 34(2) (Part 1). I shall then go into the circumstances in which reliance upon that ground for withholding recognition is precluded for failure to commence proceedings to challenge the judgment in the State of origin (Part 2).
1. Scope of jurisdiction to review service
19. Before I go on to address the question of the scope of review where there is a certificate under Article 54 in existence I should like to briefly summarise the declaration of enforceability procedure under Regulation No 44/2001 since a purposive interpretation of Article 34(2), in particular, is possible only in light of the system created under the regulation.
a) System under the regulation
20. There are two stages to the procedure to declare a decision enforceable under Regulation No 44/2001. At the first stage the declaration that a judgment is enforceable should be issued virtually automatically after purely formal checks of the documents supplied. (4) It is essential for this purpose that a copy of probative value of the decision to be enforced be presented together with, in principle, the certificate under Article 54 (Article 55 of the regulation governs exceptions).
21. Examination of the grounds for withholding recognition is not permissible until the second stage of the procedure. The defendant may lodge an appeal against the declaration of enforceability under Article 43 of the regulation. The court hearing the appeal may then revoke the declaration of enforceability under Article 45(1) of Regulation No 44/2001 only on the grounds for withholding recognition in Articles 34 and 35 of the regulation.
22. It is not absolutely clear from the request for a preliminary ruling here whether in the main proceedings the claim form is supposed to have been served under a national or a cross-border procedure. However, this is irrelevant for the purposes of the application of Article 34(2) as it applies in both instances. (5)
b) Interpretation of Article 34(2) and Article 54 of Regulation No 44/2001
23. The first question referred to the Court essentially relates to the scope of jurisdiction to review afforded to the court in the State of enforcement. Can it examine service of the document and even find that service was not effected notwithstanding the date of service stated in a certificate under Article 54?
24. The wording of Article 34(2), according to which recognition may be withheld if the document instituting proceedings is not served in sufficient time and in such a way as to enable the defendant to arrange for his defence, initially militates in favour of a broad scope for review.
25. The Court had said with regard to the Brussels Convention that this ensured that the defendant’s rights were effectively protected when a default judgment was made against him. For that reason, jurisdiction to determine whether the document instituting the proceedings was properly served was conferred both on the court of the State in which the judgment was given and on the court of the State in which enforcement was sought. (6)
26. The Court has also reiterated the significance of a defendant’s rights of defence in relation to Article 34(2) of Regulation No 44/2001 in the ASML case. In the context of Article 34(2) the second court, which has to decide upon recognition and enforcement, could examine service once again. The Court therefore held that even under the regulation the observance of the rights of defence of a defendant in default of appearance is ensured by a double review. (7) It expressly ruled that this was the case even in light of the fact that under Article 26(2) of Regulation No 44/2001 in conjunction with Article 19(2) of Regulation No 1348/2000 (8) in the case of cross-border service the court giving judgment is already obliged to examine whether the claim form was served in sufficient time for the defendant to arrange for his defence.
27. The Irish Government is nevertheless doubtful as to whether the Court’s observations in ASML should apply in the present case since it is not apparent from the judgment in ASML that any certificate had been produced in the main proceedings there. Its view is that where there is a certificate the double review of service is precluded.
28. It is quite true that the ASML judgment does not explicitly mention a certificate. However, there is much to support the view that there was a certificate under Article 54 as this is normally so under Regulation No 44/2001. The judgment does not go into this, however. The Court’s observations on the double review of service do apply, however, also to cases where there is a certificate in existence. My explanation follows.
i) Grammatical and systematic interpretation of the regulation
29. Under Article 54 the court or competent authority of the State where a judgment was given issues, at the request of any interested party, a certificate using the standard form in Annex V to Regulation No 44/2001. According to point 4.4 of Annex V the certificate must show the date of service of the document instituting the proceedings where judgment was given in default of appearance. Under Article 53(2) this certificate has to be attached to the application for a declaration of enforceability. (9)
30. It is not apparent from the wording of the regulation that the information given in the certificate with regard to service of the document instituting the proceedings has binding legal effect in the context of an appeal against a declaration of enforceability.
31. Elsewhere in the regulation the court of the State of enforcement is expressly denied the right to re-examine certain matters. Article 35(2) provides, for example, that in its examination of the grounds of jurisdiction referred to in Article 35(1), it is bound by the findings of fact of the court of the State of origin. Under Article 36 of the regulation a foreign judgment may under no circumstances be reviewed as to its substance.
32. If the course taken by the regulation is to expressly deny the court of enforcement a right to review individual facts this militates in favour of the view that in other respects the regulation assumes that the court of the State of enforcement is competent to carry out its own examination of the premises underlying individual provisions. This is therefore also the case with Article 34(2).
33. On a systematic interpretation, mention should also be made of the difference between a certificate under Article 54 of Regulation No 44/2001 and a certificate under Article 42(1) of Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility. (10) Articles 41(2) and 42(2) of the latter regulation also provide for a certificate to accompany the decision that is to be enforced. The Court of Justice has found here that the court of the State of enforcement is not competent to review the information in the certificate. (11)
34. However, the two regulations and the provisions regarding each of the certificates are too disparate to enable parallels to be drawn in relation to the binding legal effect of a certificate. Regulation No 2201/2003 creates a system by which decisions on the right of access to and return of a child, a certificate for which has been issued in the Member State of origin under that regulation, are to be automatically recognised and enforced in all other Member States without the need for exequatur procedure and without any possibility of opposing recognition. (12) Consequently, it should also only be possible to review a certificate in the State in which judgment was given.
35. Unlike Regulation No 2201/2003, Regulation No 44/2001 does not dispense with the exequatur procedure. However, there are also vital differences in the procedure for the issue of a certificate. A certificate under Regulation No 2201/2003 has to be issued by a court, whilst a certificate under Article 54 of Regulation No 44/2001 simply summarises already existing information and does not have to be issued by a judge. Furthermore, only Regulation No 2201/2003 contains, in Article 43, an express provision regarding actions for rectification of the certificate. The possibility of a review of service under Article 34(2) of Regulation No 44/2001 ultimately exists only if there is no right of redress in the State in which judgment was given.
36. A comparison with Regulation 2201/2003 therefore militates against the conclusion that a certificate under Article 54 of Regulation No 44/2001 has binding legal effect.
ii) Purposive interpretation of the regulation
37. Nor does the spirit and purpose of a certificate under Article 54 of the regulation militate against the conclusion that the court of the State of enforcement has wide powers of examination with regard to the service of a claim form.
38. As can be seen from the regulation’s drafting history, the introduction of the certificate was supposed to facilitate procedural formalities for applicants. Instead of having to lodge various documents from which the necessary information had to be extracted – as under the preceding regulation – they now only have to provide the requisite information in a certificate package. (13)
39. The spirit and purpose of the certificate is therefore to make recognition and the declaration of enforceability simpler and more efficient at the first stage of the proceedings. The certificate also avoids the need for translations as the form and information in the respective paragraphs are uniform in all language versions.
40. The substance of the certificate therefore essentially reflects the scope of review afforded to the court of the State of enforcement at the first stage of the exequatur procedure. The information contained in it enables the conditions for a declaration of enforceability to be quickly examined. It is therefore easy to check from the certificate whether the parties to the main proceedings are identical to those under the exequatur procedure and whether, on the formal side, there is any decision that comes within the scope of application of the regulation. The certificate under Article 54 therefore serves in the first place the procedural simplification of the first stage of the exequatur procedure.
41. The date of service of the document instituting the proceedings is admittedly irrelevant at the first stage of the procedure as the reason for withholding recognition in Article 34(2) based on failure to serve the document instituting the proceedings in sufficient time cannot be examined until the second stage of the exequatur procedure. However, the clear arrangement of the certificate under Article 54 is also helpful in the context of such an examination at the second stage and hence serves to simplify the procedure. Whereas under the former rule in Article 46(2) of the Brussels Convention the relevant proof of service in the original proceedings had to be produced in the form of an original or a certified true copy and also had to be translated, the recording of the date of service in the certificate under Article 54 leads to simplification of the exequatur procedure as it makes it easy to discern the starting point when examining whether service was effected in time.
42. However, the sole spirit and purpose of the certificate is to simplify the procedure. No restriction on the scope of review in the exequatur procedure is to be inferred from the regulation.
43. It is not clear why service should now be deprived of any review under the regulation, which only makes provision for certification of the date of service and therefore only provides for a record of what is in the proof of service that does not have to be submitted. Indeed, the very susceptibility to error of a mere certificate showing the date of service taken from the files compared with the production of an original certificate of service militates in favour of the conclusion that it must still be possible for the court of enforcement to conduct a review of service. A certificate under Article 54 is no more likely to be soundly based than the original certificate of service that formerly had to be produced.
44. It should also be noted that only the date of service is stated in the certificate under Article 54. Under Article 34(2), however, in appeal proceedings it is necessary to examine whether the defendant was served with the document which instituted the proceedings in sufficient time and in such a way as to enable him to arrange for his defence. The certificate with the date shown on it provides the first pointer when examining whether service was effected in time to arrange for a defence. On the other hand, absolutely no details are to be derived from it for an examination of the manner and mode of service; hence, no binding legal effect can be attributed to it ab initio. It would be impossible to conclusively justify why just the date of service – and hence impliedly the question whether service was effected at all – should be deprived of a review whilst the manner and mode of service can always be reviewed, since these different aspects of service cannot properly be separated in the context of Article 34(2).
45. Nor does the interpretation portrayed conflict with the principle of mutual trust in the administration of justice in the Member States on which the regulation is based. (14)
46. The initiation of a double review of service, both by the court of the State in which judgment was given and by the court of appeal in the State of enforcement, is indeed at odds with the principle of mutual trust and the aim of quick recognition that is as uncomplicated as possible. It nevertheless follows from the 18th recital in the preamble to Regulation No 44/2001 that this also respects the rights of the defence. (15)
47. Article 34(2) illustrates an especially important instance of the application of the defendant’s right to a fair trial by preventing decisions under the regulation from being declared enforceable if the defendant has not had an opportunity to put his defence before the court of the State of origin. (16) It there weighs up the conflicting interests of the claimant in obtaining quick recognition and enforcement of the decision and respect for the rights of defence of a defendant against whom a judgment has been pronounced in default of appearance.
48. The principle of mutual trust is observed by Article 34(2) making primary reference to redress in the State of origin and not permitting recognition to be withheld unless no redress was to be had there. If one were to consider a certificate under Article 54 to be binding on the courts of the State of enforcement the defendant would be deprived of any opportunity to obtain a review in adversarial proceedings of service of the claim, which it alleges did not take place. Article 34(2) is only ever grounds for non-enforcement if, in addition to the failure to serve the document instituting proceedings, the defendant has not omitted to commence possible proceedings to challenge the judgment. It is then in the enforcement proceedings, however, that it first becomes possible for proper service of the claim to be challenged in adversarial proceedings. The issue of a certificate under Article 54 of the regulation is not designed to be an adversarial procedure and, as already stated, is not even a mandatory judicial process.
49. My interim conclusion must therefore be that the information on service of the document instituting proceedings in a certificate under Article 54 of Regulation No 44/2001 does not have binding legal effect.
2. Failure to exhaust channels of appeal
50. The combined effect of Article 34(2) and Article 45 is that a declaration of enforceability may not be withheld where the defendant was able to argue in appeal proceedings in the Member State of origin that he had not been served with the document which instituted the proceedings in sufficient time and in such a way as to enable him to arrange for his defence. (17) The referring court has not posed any question on this further condition in Article 34(2).
51. I am nevertheless of the opinion that a useful answer to the first question referred for a preliminary ruling should also look into this point.
52. According to the order for reference, Trade Agency is claiming in the main proceedings that the first it heard of the default judgment to be enforced was in the course of the exequatur procedure in Latvia.
53. If it should still be possible under the law of the United Kingdom to lodge an appeal against the default judgment at such a late date, the question would be whether Article 34(2) refers the defendant to the possibility of redress against the decision in the State of origin even where – as in this case – it only learns of the default judgment during the course of the exequatur procedure. Or can it in this case rely directly on the ground for non-enforcement in Article 34(2)?
54. No time limit on the obligation to file an appeal in the State of origin is to be inferred from the wording of Article 34(2). Article 46(1) of Regulation No 44/2001 expressly allows the court in the State of enforcement with which an appeal is lodged to stay the proceedings if an appeal has been lodged against the judgment in the Member State of origin. This shows that the regulation itself considers it possible for there to be parallelism and a crossover in the timing of proceedings in the State of origin and State of enforcement.
55. However, it is the spirit and purpose of the regulation that primarily militates against the conclusion that there is a time limit on the defendant’s obligation to file an appeal in the State of origin. Its intention is as far as possible to prevent a defendant evading enforcement under a valid foreign judicial instrument.
56. Where a defendant has objections to a default judgment it should raise these in the State of origin in an attempt to get the judgment set aside, or at least amended. The defendant should not, on the other hand, allow the default judgment to become final in the State of origin without challenging it in order to evade such valid foreign judicial instrument – in the State of enforcement alone – using Article 34(2).
57. Otherwise, in cases where a default judgment is pronounced against a defendant despite the document instituting proceedings not having been served at all or having been inadequately served, it would nevertheless be advantageous for a defendant with no assets in the State of origin to take no action against it in that State of origin. The filing of an appeal in the State of origin brings with it the risk of achieving success in relation to the question of service being effected in sufficient time and the lawfulness of the default judgment, whilst nevertheless losing on the merits of the case following a proper legal process. On the other hand, reliance upon Article 34(2) in the exequatur procedure instead of the filing of an appeal in the State of origin makes it finally impossible for action to be taken under the judicial instrument in the State of enforcement, when examination is confined to just the default issue.
58. In the context of Article 34(2) with regard to the question whether it had been possible for the defendant to lodge an appeal, however, the Court of Justice is not satisfied with the defendant’s mere knowledge of the existence of a default judgment but also requires service thereof to have been effected upon it. It was therefore possible for a defendant to bring proceedings to challenge a default judgment against him if he was in fact acquainted with its contents, because it was served on him in sufficient time to enable him to arrange for his defence before the courts of the State in which the judgment was given. (18)
59. In my opinion, service of the default judgment by the court of the State of enforcement can satisfy the requirements of the ASML judgment.
60. Finally, Article 42(2) of the regulation provides that ‘[t]he declaration of enforceability shall be served on the party against whom enforcement is sought, accompanied by the judgment, if not already served on that party’. The word ‘judgment’ in this provision can only mean the judgment that is to be enforced. (19)
61. The regulation itself therefore proceeds on the assumption that it is possible for a default judgment not to be served on the defendant until during the course of the declaration of enforceability procedure. It would therefore be logical for service by the court of enforcement together with the declaration of enforceability to also constitute sufficient service within the meaning of the Court’s observations in ASML. (20) In the main proceedings in the ASML case the default judgment had not even been served together with the declaration of enforceability. (21)
62. Service of a judgment by the court of enforcement in the course of exequatur procedure does therefore suffice, in principle, if the defendant has sufficient time in which to mount a valid defence against the judgment in the State of origin.
63. However, this case also has one other special feature, which is also the subject of the second question referred for a preliminary ruling. An English default judgment is distinguished by the fact that it is based only on the defendant’s default and contains no other statement regarding substantiation of the claim. The Court has stressed in its ASML judgment, with regard to the importance of service of the default judgment, that in order for a defendant to have the opportunity to bring defence proceedings he should be able to acquaint himself with the grounds of the default judgment in order to challenge them effectively. (22)
64. With regard to the withholding of recognition under Article 34(2), therefore, the absence or brief nature of reasoning in a default judgment has to be considered in connection with the requirements of and obstacles to the lodging of an appeal. The Government of the United Kingdom has said that the grounds of a default judgment have to be considered in the context of the claim form and the so-called ‘Particulars of Claim’, which set out the particular facts and legal reasoning of the claim. It is not clear from the order for reference whether the declaration of enforceability was served on the defendant with the default judgment alone or whether the claim form was served as well. If the latter were not the case it might be possible to assume that the default judgment could not have been challenged effectively. See in this respect the particular observations made in answer to the second question referred. This question will ultimately have to be clarified by the referring court.
3. Answer to the first question referred
65. The answer to the first question must be that the information as to the service of the document instituting proceedings in a certificate under Article 54 of Regulation No 44/2001 does not have binding legal effect and the court may examine this in the course of proceedings appealing against the declaration of enforceability. The fact that the default judgment was not served on the defendant until the court of enforcement did so together with the declaration of enforceability does not release him from his obligation under Article 34(2) to commence proceedings to challenge the default judgment in the State of origin provided that through the default judgment or other documents served upon him he has been able to acquaint himself with the grounds of the default judgment in order to challenge them effectively.
B – Second question referred for a preliminary ruling
66. With its second question the referring court would like to establish whether a default judgment that is pronounced without the conclusive nature of the claim being examined and which therefore sets out no reasoning as to the substantive basis of the claim is compatible with the right to a fair trial within the meaning of Article 47 of the Charter of Fundamental Rights.
67. It refers this question in the light of the public policy clause in Article 34(1) by which, when combined with Article 45, a declaration of enforceability may be withheld if recognition of the decision to be enforced is manifestly contrary to public policy in the Member State in which recognition is sought.
68. It should first be made clear that the public policy clause in Article 34(1) takes effect in connection with a default judgment only in so far as the point at issue is one other than the special case of breach of public policy for failure to serve the claim form which is already covered by Article 34(2). This is because the withholding of recognition and enforcement of a default judgment for failure to serve the document instituting proceedings is expressed in an independent and definitive rule in sub-paragraph 2 on which non-recognition under sub-paragraph 1 cannot be based.
1. The public policy clause in the Court’s case-law
69. The Court has stated in its judgment in Krombach in relation to the former provision in the Brussels Convention that it is not for the Court to define the content of the public policy of the Contracting States. The Court said that it is none the less required to review the limits within which the courts of a Member State may have recourse to its national public policy if it should wish to refuse recognition to a foreign judgment. (23)
70. According to the case-law of the Court on the Brussels Convention, recourse to the clause on public policy can be envisaged only where recognition or enforcement of the judgment delivered in another Contracting State would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought inasmuch as it infringes a fundamental principle. The infringement would have to constitute a 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 recognised as being fundamental within that legal order. (24)
71. This case-law must be applied to the interpretation of Article 34(1), particularly as the draftsman of the regulation incorporated the Court’s statements in the text of the regulation: he took express account of the need for a manifest breach of public policy in the wording of Article 34(1).
72. A national court does not therefore exceed the limits imposed upon it for a conclusion that public policy has been infringed in any event where requirements of national public policy are used as a basis for remedying a manifest infringement of the fundamental rights recognised in the ECHR or in the EU’s legal order. (25)
73. There is no need in the present case to discuss the question whether national public policy might also in an exceptional case include greater requirements or whether it always ultimately has to correspond in substance with public policy as it derives from fundamental rights under EU law. The referring court has expressly questioned only the requirements under Article 47 of the Charter of Fundamental Rights.
74. Under Article 47(2) everyone has the right to have their case heard in a fair trial.
75. Moreover, it follows from the requirement of homogeneity in Article 52(3) of the Charter that, in so far as the Charter contains rights which correspond to rights guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’), their meaning and scope are to be the same as those attributed to them in the ECHR. The right to a fair trial is enshrined in Article 6 of the ECHR. The same meaning and scope is therefore to be attached to Article 47 of the Charter as to Article 6 of the ECHR, having regard to its interpretation by the European Court of Human Rights. (26)
76. The exercise of the rights of the defence occupies a prominent position in the organisation and conduct of a fair trial. (27) The rights of the defence also include the defendant’s right to be heard. The fundamental right to a fair trial is therefore impinged if in civil proceedings it is not effectively possible for the defendant to raise objections to the claim before judgment is pronounced by the court and to therefore be heard.
77. The right to be heard is not so extensive, however, that court judgment may not be pronounced until the defendant has actually responded to the claim. The right to be heard is indeed respected as soon as it has been made effectively possible for the defendant to do so. If he should not seize that opportunity this will be on his own responsibility; he can also waive that right. (28)
78. Procedural rights are not guaranteed without limit. However, restrictions must in fact correspond to the objectives of public interest pursued by the measure in question and must not constitute, with regard to the aim pursued, a manifest or disproportionate breach of the rights thus guaranteed. (29)
79. The rights of the defence are at odds, in particular, with the opponent’s mirror-image procedural fundamental rights, such as its right of recourse to the courts that is guaranteed as a fundamental right and the associated right to expeditious proceedings. Procedural provisions on default form a balance in this respect and keep the right to a fair hearing within bounds. They serve to provide sound administration of justice and to enforce the claimant’s entitlement to timely legal protection. A defendant’s failure to respond to a claim should not bring the proceedings to a standstill.
80. Consequently, all legal systems in the Member States may acknowledge default judgments and even the rules of procedure of the Court of Justice make provision for the possibility of default judgments. (30)
81. The referring court’s doubts as to the compatibility of the decision to be enforced with public policy are not therefore based purely on its characteristic as a default judgment, which was pronounced without any prior comment from the defendant. As the Commission has observed, default judgments are also known to Latvian law. The referring court’s doubts are based rather on the fact that here, under the procedural law of the State of origin, in the case of a default judgment no examination is carried out by the court as to whether there is really a claim to be made on the basis of the claimant’s arguments and the judgment does not contain any substantive statement of reasons.
2. Absence of statement of reasons for the judgment
82. It is established case-law of the European Court of Human Rights that the right to a fair trial under Article 6 of the ECHR encompasses, in principle, the obligation on courts to give reasons for their judgments. (31)
83. The European Court of Human Rights has however also repeatedly held that excessive weight must not be attached to the obligation to give reasons for decisions and the extent to which it applies may vary according to the nature of the decision and in the light of the circumstances of each individual case. (32) It is also necessary in particular to take into account the type of decision and the differences existing in the legal systems of the Member States.
84. The obligation to give reasons for court decisions serves a dual purpose here. First, it is intended to ensure that the right to be heard is respected – that is to say, that the court sufficiently addresses the parties’ submissions. (33) That aspect would be irrelevant where a default judgment allowing a claim is pronounced against a defendant in default of appearance as the defendant here has not filed any submission that could be incorporated in a reasoned judgment.
85. Secondly, however, the obligation to give reasons is intended to put the losing party in a position enabling it to effectively take the redress action available. The loser should be able to see why judgment has been pronounced against him. Otherwise, the scope of the substantive force of the judgment could not be ascertained and a claimant might therefore still be able to obtain another judgment based on the same claim.
86. This second aspect is also of particular relevance to default judgments. However, the scope of the obligation to state reasons must correspond to the requirements to be satisfied in relation to a claim for legal redress. The stricter the requirements relating to the lodging of an appeal against a default judgment, the greater the requirements for reasoning in the default judgment. The losing party must be able to ascertain what facts and legal issues he has to plead in order to succeed in his appeal against the default judgment. Only then is his right to a fair trial ensured.
87. In the proceedings before the Court the Government of the United Kingdom emphasised, firstly, that a default judgment did not entirely dispense with a statement of reasons. However, the reasons were brief and the only grounds given for the judgment were the defendant’s default of appearance. It also stated that a default judgment could not be pronounced unless the defendant had been duly served not only with the claim form but also with the ‘Particulars of Claim’. These contained a detailed statement of the grounds of the claim and of the underlying facts.
88. It is not vital that these details come from the claimant itself and are to a certain extent just forwarded by the court. The requirement to give reasons is satisfied where the defendant has been informed of the reason for the claim and of the underlying facts in such a way that he is able to mount a challenge to the default judgment effectively.
89. The right to a fair trial does not absolutely require the court to set out the facts in its own words in the judgment itself if there is already a presentation of the facts elsewhere that has not been contradicted and to which the judgment makes clear reference. Where there are no major obstacles to mounting a challenge to the default judgment which would require knowledge of more detailed grounds of that judgment, there has thus been no breach of the rights of the defence. It will therefore be for the referring court, in an overall appraisal, to assess the requirements relating to the lodging of an appeal and the information available to the defendant for that purpose from the judgment, claim form and other documents served.
3. Failure to examine the legal sufficiency of the claim
90. It still remains to be considered below whether it constitutes a breach of the right to a fair trial for a court to pronounce a default judgment without prior examination of the legal sufficiency of the claim – that is to say, if it does not examine whether the legal provisions applicable support the claim asserted by the claimant based on the facts alleged by it.
91. The right to a fair trial requires, in principle, the inter partes examination of both facts and law (34) – that is to say, the arguments of both the claimant and the defendant have to be taken into account. The situation here is clearly one of default where only the claimant’s arguments were presented.
92. The Government of the United Kingdom, firstly, submitted the principle of procedural economy as justification for its form of procedure. There was no desire to compel the courts to examine cases where the defendant had not entered an appearance. Secondly, waiver of examination of the legal position derived from the form taken by English civil procedure, where the parties basically also have to put forward submissions in law and the ‘iura novit curia’ principle – the court is deemed to know the law – (and applies it of its own motion) – does not have unrestricted application. (35) This line of argument withstands an examination in light of the fundamental right to a fair trial.
93. If one party does not file a defence despite being aware of proceedings having been instituted against it, then it takes the chance of judgment being pronounced against it. It knows what is being claimed from it in the action and that there is a risk of judgment being pronounced. In my opinion, if it then nevertheless fails to oppose the claim, the right to a fair trial does not imperatively demand that the defendant party in default be afforded additional protection from a substantive and possibly unjustified judgment by way of an examination of the legal sufficiency of the claim. The risk of an incorrect substantive decision being made without examination of the legal sufficiency of the claim touches on the complex problem of substantive and procedural reality. However, the defendant’s fundamental procedural right is sufficiently safeguarded if he has an opportunity to effectively put forward his view of things and it is possible for him to file an appeal against the default judgment.
94. The circumstances in this case also differ from those in the Gambazzi case. The proceedings there related to default imposed on the defendant by the court as a sanction. Even though the defendant wished to take part in the proceedings he was excluded from further proceedings and therefore treated as a defendant in default because he had failed to fulfil his obligations under an order previously made in the same proceedings. The Court considered in this connection that it was a relevant aspect of an overall appraisal whether the well-foundedness of the claims against the defendant has been examined, at that stage or at an earlier stage, and whether he had had, at that stage or at an earlier stage, the possibility of expressing his opinion on that subject and a right of appeal. (36)
95. Nor does Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 March 2006 creating a European order for payment procedure(37) ultimately provide for any general examination of the sufficiency of a claim. Under Article 11(1)(b) an application will only be rejected for lack of a statement of reasons if the claim is clearly unfounded.
4. Answer to the second question referred
96. The answer to the second question is that, with regard to the public policy clause in Article 34(1) of Regulation (EC) No 44/2001, the court of the State in which enforcement is sought may take account of the fact that the court of the State of origin, without an examination of the legal sufficiency of the claim, has pronounced a default judgment that contains no statement regarding the merits of the claim apart from the fact that the defendant is in default, only if, after undertaking an overall appraisal of the information in the defendant’s possession and the requirements regarding the lodging of an appeal laid down by the law of the State of origin, it should come to the conclusion that the defendant was unable to effectively arrange for his defence due to the absence of a statement of reasons for the decision.
VI – Conclusion
97. In light of the above considerations, I propose that the Court answer the questions referred for a preliminary ruling as follows:
(1) The information as to the service of the document instituting proceedings in a certificate under Article 54 of Regulation No 44/2001 does not have binding legal effect; the court may examine this in the course of proceedings appealing against the declaration of enforceability. The fact that the default judgment was not served on the defendant until the court of enforcement did so together with the declaration of enforceability does not release him from his obligation under Article 34(2) to commence proceedings to challenge the default judgment in the State of origin provided that through the default judgment or other documents served upon him he has been able to acquaint himself with the grounds of the default judgment in order to challenge them effectively.
(2) With regard to the public policy clause in Article 34(1) of Regulation No 44/2001, the court of the State in which enforcement is sought may take account of the fact that the court of the State of origin, without an examination of the legal sufficiency of the claim, has pronounced a default judgment that contains no statement regarding the merits of the claim apart from the fact that the defendant is in default, only if, after undertaking an overall appraisal of the information in the defendant’s possession and the requirements regarding the lodging of an appeal laid down by the law of the State of origin, it should come to the conclusion that the defendant was unable to effectively arrange for his defence due to the absence of a statement of reasons for the decision.