The recent case of Olsen & Anor v Finansiel Stabilitet1 provides useful guidance as to the application of the 2001 Brussels Regulation2 in relation to the recognition and enforcement of judgments in civil and commercial matters.
The principal question for the High Court in this case was whether a Danish judgment was enforceable in England and Wales despite the fact that the limitation period for enforcement in its originating country, Denmark, had expired.
Procedure for enforcement of EU member state judgments arising from claims issued prior to 10 January 2015
Whilst largely superseded by the Recast Brussels Regulation3, the 2001 Brussels Regulation still applies to the enforcement in the UK of civil and commercial judgments from EU member states which have been given in proceedings instituted between 1 March 2002 and 10 January 2015 (subject to some exceptions).
Enforcement of such judgments in the UK is a two-stage procedure, the first stage of which involves the judgment creditor or "any interested party" applying without notice to a Queen's Bench Master for the registration of the judgment, with that application being supported by (i) an authenticated copy of the judgment; (ii) a translation of the judgment; (iii) a certificate from the court of origin in the form set out at Annex V to the 2001 Regulation giving details of the judgment and stating that the judgment is enforceable in the state of origin; and (iv) evidence as to the amount or rate of interest, where interest is recoverable on the judgment. Assuming the relevant formalities have been complied with, the court will declare the judgment enforceable and the judgment creditor must serve the registration order on the judgment debtor. The second stage of the procedure involves either the judgment creditor appealing against a refusal of registration, or the judgment debtor appealing against the grant of registration.
Factual background
This case concerned an appeal by the Olsens, who were guarantors of various loans which had been transferred to Finansiel Stabilitet, the respondent bank, of a decision to register a Danish judgment of €5.8 million and 1.25 million Danish Kroner in favour of the respondent bank, for enforcement in England and Wales. Of particular significance was the fact that the registration order was made on the same day that the limitation period pursuant to the Danish Limitation Act 2015 (namely ten years from the date of the judgment) expired.
The parties were in agreement that the 2001 Brussels Regulation applied given that the Danish proceedings had been instituted prior to 10 January 2015. However, the parties disagreed as to the effect of the registration order.
Parties' submissions
The appellants contended that even though the registration order had been made shortly prior to the expiry of the Danish limitation period, the judgment became unenforceable after the expiry of that period on the following day. The appellant based this contention on Article 38(1) of the 2001 Brussels Regulation which states that "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." In the appellant's view, this meant that, regardless of the fact that the registration order had been made at a time when the judgment was enforceable under Danish law, it could not be enforced in the UK when the Danish limitation period had expired.
However, the respondent argued that the judgment remained enforceable notwithstanding the expiry of the Danish limitation period. The respondent submitted that the question of enforceability after expiry of a foreign limitation period was a matter for English domestic law. In particular, the respondent contended that (i) the fact that paragraph 2(2) of Schedule 1 of the Civil Jurisdiction and Judgments Order 2001 (the "2001 Order") provided that a judgment registered under the 2001 Brussels Regulation would have the same force and effect as if the judgment had been originally given by the registering court meant that the registration order should be treated as a new High Court judgment given on the same date the order had been made; and (ii) a new 6 year limitation period (being the period provided for pursuant to s.24 of the Limitation Act 1980 (the "Limitation Act")) started to run from the date of the order.
The Court's decision
The Court held that, while eligibility for recognition of a foreign member state judgment in a receiving member state is governed by European law, in particular the 2001 Brussels Regulation, execution of such judgments is governed by the domestic law of the receiving member state. However, the Court also held that the 2001 Order should be construed in harmony with the 2001 Brussels Regulation. The Court considered that the use of the word "originally" in paragraph 2(2) of Schedule 1 of the 2001 Order suggested that the registering court is deemed to have given the judgment on the date of the original judgment given in the originating state (in this case 16 August 2013), rather than on the date of the relevant registration order.
The Court also rejected the respondent's submission that section 24 of the Limitation Act created a new six year limitation period which starts to run from the date of registration, on the basis that (i) that provision applies to actions brought in England or Wales; and (ii) even if it did apply to foreign member state judgments, it would create anomalous results and enable a party to benefit from a more favourable limitation regime than that available to it under the law of the originating state. The limitation period in this case was governed by Danish law, because the action had been brought in Denmark.
As such, whilst the registration order had been validly made, the judgment could not be enforced after the expiry of the Danish limitation period.
Practical takeaways
This decision underscores the need for lawyers and their clients to be acutely aware of the interplay between EU regulations and domestic laws when seeking to enforce certain foreign judgments. This case highlights that while the 2001 Brussels Regulation provides a framework for the recognition of certain foreign judgments, the enforcement of such judgments is ultimately subject to the domestic laws of the receiving state. Careful consideration must be given to the limitation periods applicable in both the originating and receiving jurisdictions, and enforcement actions should be promptly initiated within the relevant timeframes to avoid the risk of judgments becoming unenforceable.
2 Council Regulation (EC) 44/2001
3 Regulation (EU) No 1215/2012
