Problem 7.2 by xiaohuicaicai


									          Problem 7.2
Enforcement of Judgments under
    the Brussels Regulation
   Kerry Ann Fraas, Robin Belinsky,
            Sergii Zheka
                         Fact Pattern
•       Parties:
    –        Celsius Manufacturing, Inc.
         •     Delaware corporation
         •     Principal Place of Business, Pittsburgh, PA, USA
         •     Manufactures plastic products
         •     3,000 Euro in bank account in Munich
         •     Dublin, Ireland
               –   Manufacturing facility to serve European Market
               –   Substantial Assets
    –        Plastic Maker, GmbH
         •     Munich, Germany
         •     Purchasing agent
             Fact Pattern Continued:
•       Trade Fair, London, October 2007
    –        Purchase order
         •      1,000 IMDs at $400/ unite, “terms c.i.f. London”, shipped January
    –        President of Celsius respond w/ letter accepting all terms; no
             choice of law or forum clause
•       Shipment
    –        Paid entire $400,000 January 3, 2008
    –        IMDs shipped January 6, 2008 to Plastic Maker warehouse in
    –        To be redistributed in Germany, Netherlands, Spain
    –        IMDs did not conform to quality of product demonstrated at
             London trade fair
         •      So rejecting product
    –        All experts agree goods are in fact non-conforming, and
             unsuitable for the use intended by Plastic Maker
• There is now an option in enforcing the
  German Judgment
  – Plastic Maker- How and where to enforce
  – Celsius- How to avoid enforcement
                The Rule
• Brussels Regulation
  – Chapter III: Recognition and Enforcement
  – Articles 32-56
• Art. 32
  – …“any judgment given by a court or tribunal
    of a Member State, whatever the judgment
    may be called, including a decree, order,
    decision or writ of execution, as well as the
    determination of costs or expenses by an
    officer of the court.”
  – In this problem we know the judgment is
    against Celsius and we have presumed that
    the award is for the purchase price.
•   General Rule for Recognition
    – Article 33- A judgment
    – “a judgment given in a Member state shall
      be recognized in the other Member States
      without any special procedure being
    – Issues of non-recognition are raised during
      the enforcement phase
    – There are grounds for non-enforcement BUT
      they must be raised by the parties, not the
 Defenses to Recognition A. 34
• A judgment shall not be recognized:
   – If such recognition is manifestly contrary to public policy in the
     Member State in which recognition is sought;
   – 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 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;
   – If it is irreconcilable with a judgment given in a dispute between
     the same parties in the Member State in which recognition is
   – If it is irreconcilable 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, provided that the earlier
     judgment fulfils the conditions necessary for its recognition in the
     Member State addressed
                 Article 35
– 35(1)
  • Not recognized if conflicts with Sections 3, 4, and
    6, of Chapter II and Article 72
– 35(2)
  • Bound by findings of fact on which Court of origin
    based its jurisdiction
– 35(3)
  • Cannot examine substantive basis of jurisdiction
  Exorbitant Jurisdiction Issues
• Back to Art. 3 and 4
  – When a defendant is a domiciliary of a European
    Union Member State, it cannot be sued in any other
    Member States on the basis of exorbitant jurisdiction
     • So, to see if a state used exorbitant jurisdiction (Annex I) look
       at sections 2-6 of the BR
     • In this case, after looking at everything Germany had to have
       used exorbitant jurisdiction
     • However, if a defendant is not domiciled in a member state,
       exorbitant jurisdiction exceptions do not apply
  – So the question is whether or not Celsius could have
    been domiciled in the EU???
   So now we look at Domicile:
• Article 60
   – For companies and other legal persons:
      • Statutory Seat
      • Central Administration
      • Principal place of business
   – But wait, its not that simple: For Ireland, a statutory
     seat means registered office, or the place of
     incorporation, or where there is no such place
     anywhere, the place under the law of which the
     formation took place.
      • This is a point of contention for each party and the main
        issue that Celsius can appeal
• Art. 38
  – A judgment in one Member State, and
    enforceable in that State, shall be enforceable
    in another Member State when, on the
    application of any interested party, it has been
    declared enforceable there
     • So 3,000 in Munich is not an issue
• Art. 39-56
  – Procedural rules for application
       Hoffmann v. Krieg Case No.
          145/86, 1988 E.C.R. 645
Questions considered by the court:
• The judgment given in one state has the same weight in enforcing
  state as in the state of origin.
• The judgment rendered in one state and is enforceable there, is also
  enforceable in the same cases in another Member State. However,
  if a foreign judgment contradicts a domestic legal provision, that
  judgment cannot be applied to the extent of the contradiction.
• The party who has not appealed against the enforcement order is
  precluded, at the stage of execution, to rely on the valid argument
  which he could have raised in an appeal against an enforcement
  order. This party should have voiced the argument during
  enforcement proceedings in court. However, this rule should not
  prejudice a national judgment that cannot be recognized in the state
  of origin, but has an impact upon enforcement of the foreign
Gaetano Verdoliva b. J.M. Van Der
     Hoeven BV Case C-3/05,
       [2006] E.C.R. I-1579.
•   Regulation does not define “Service of Process” and
    “Manner in which it must be effected”
•   Aim of service of process: (i) to protect rights of party
    against whom the enforcement is sought; and (ii) to
    establish a clear moment from which to calculate the
    time for lodging an appeal
    MANNER. Mere fact that the person against whom the
    ruling is enforced learns about the enforcement is not
    enough. Proper procedure should be abided by.
• Plastic Maker
   – Check for conflicting judgment in Ireland regarding the same
     cause of action Art. 34(4)- claim that they are domiciled in the
     USA and therefore any judgment against them can be enforced
     despite exorbitant jurisdiction
   – Submit an application to the High Court of Ireland in accordance
     with Art. 39 and Annex II according to Art. 53 formalities
   – Make sure Celsius receive notice according to Irish law in
     accordance with Art. 42
   – Take protective measures in accordance with Irish law based on
     Art. 47
• Celsius
   – Upon receiving notice of enforceability, file appeal under Art. 43
     claiming non-recognition according to Art. 35-exorbitant base for
     jurisdiction in the court listed in Annex III w/in one month of
     service (based on assumption we are domiciled in Ireland)
• European Plaintiff
   – Check to see if there are agreements existing prior to Brussels
     Regulation Art. 72
   – Check to see if there is an earlier conflict between the two
     parties in the Member State (i.e. Ireland) arising out of the same
     cause of action in accordance w/ Art. 34
   – Check other Art. 34 defenses
   – Consider how jurisdiction was obtained to be prepared for any
     potential appeal raised by defendants
   – File application for Enforcement with the appropriate court from
     Annex II
       • File with Article 53 formalities
           – Copy of judgment
           – Certificate of Enforcement
   – After decision, research appropriate notice according to the
     domestic rules from the Member State in which judgment is
   – Immediately after decision take protective measures in
     accordance w/ law of member state
• American Defendant
  – Do you have substantial assets or facilities in Europe
    that a European decision can be enforced against?
  – If yes, do you have domicile in the Member State
    where enforcement is being sought?
     • Individuals look towards domicile rules of Member State
     • Firms and Legal Persons look at rules of Brussels Regulation
     • Trusts– apply rules of private international law in Member
         – If not domiciled proceed to Art. 34 defenses
  – If domiciled, did court of origin use exorbitant
     • To determine look at Sections 2-7 of the Brussels Regulation
     • If yes, then file an appeal under Art. 43
     • If no, proceed to Art. 34 defenses
  – If there are Art. 34 defenses, file appeal under Art. 43
• Filing Art. 43 Appeal
  - Ensure appeal is filed w/ in 1 month if you are
    domiciled in a Member State, or 2 months if
    you are not (43(5))
  – File appeal in court specified by Annex III
  – If judgment is against you, file another appeal
    under Art. 44, in court specified by Annex IV

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