Enforcement of EU judgments: Success for Boodle Hatfield
We successfully struck out a claim brought against our client, Mr Xavier Huertas (a French insolvency practitioner) by Dr Richard Smith who was seeking a declaration in the English Courts that a Judgment obtained by Mr Huertas against him in France should not be recognised or registered in England under the 2001 Brussels Regulation on the ground that it would be manifestly contrary to public policy. Mr Smith alleged that the proceedings as a whole, both criminal and civil, that had been brought against him in France were contrary to Article 6.1 and/or Article 6.3 of the ECHR and/or a breach of natural justice under English law. He also claimed that the French courts were guilty of actual or apparent bias.
Dr Smith’s UK company was bought by a listed French company called Valorum SA (“Valorum”.) Dr Smith became a director of Valorum in April 1998 and by December it had gone into liquidation. Mr Huertas was the court-appointed administrator. After a criminal investigation, criminal proceedings were subsequently brought against Dr Smith, alleging that Dr Smith had misappropriated company assets. Mr Huertas was also party to those proceedings as “partie civile” and was seeking compensation for the losses suffered by Valorum. At first instance, Dr Smith was convicted by the Grasse Court and was ordered to pay Mr Huertas the sum of €1,219,592 in respect of sums transferred to Valorum’s subsidiaries in the UK while the company was insolvent, together with the sum of €65,947.41 in respect of furniture that was transferred to the UK subsidiaries for no consideration. Dr Smith appealed to the Aix-en-Provence Court of Appeal. The Aix Court reduced the sum of €1,219,592 to €476,527 due to recoveries that had been made in the administration and ordered him to pay the sum of €98,117 in respect of unpaid interest on a loan but acquitted him of the charge relating to the furniture. The Court also ordered him to pay a fine of €50,000 and imposed a 6-month suspended prison sentence. Dr Smith appealed to the Court of Cassation in Paris and the ECHR on limited grounds yet was unsuccessful in both appeals.
In March 2014, Mr Smith brought proceedings in the English courts for a declaration as set out above.
Following a number of procedural skirmishes, we applied for summary judgment on behalf of Mr Huertas as it was clear that Dr Smith was effectively seeking to review the substance of the French Judgment which is not permitted under Article 36 of the 2001 Brussels Regulation. On 21 December, Mr Justice Cooke dismissed Dr Smith’s claim and made a declaration that the French Judgment be recognised and enforced in the English courts.
In summary, Cooke J found that:
– The complaints now raised by Dr Smith could and should have been raised before the French courts or the European Court of Human Rights;
– A number of the complaints sought to challenge the substance of the decision of the French courts which is prohibited under Article 36 of the 2001 Brussel Regulation; and
– None of the other grounds raised by Dr Smith even arguably raise matters where evidence at trial could differ from the evidence before him and concluded that he considered Dr Smith’s prospects of success as fanciful. He found that there was nothing which could emerge before or at a trial which would give rise to any compelling reason why there should be such a trial.
This was a particularly important case as it confirmed that it is very difficult to argue that registration of any judgment of a member state would be contrary to public policy in view of the concept of mutual trust in the legal systems of other member states, especially in cases where points could and should have been taken in the original jurisdiction. Further, it reinforces the position that under no circumstances will the English court review a foreign judgment as to its substance in accordance with Article 36 of the 2001 Brussels Regulation.
For further information please contact Simon Fitzpatrick of Boodle Hatfield’s Litigation team.