Case law Developments in PIL

H Limited – The Austrian Sequel

This post was written by Paul Lorenz Eichmüller, Vienna.

After the Austrian Supreme Court had filed a reference for a preliminary ruling to the CJEU (see here) in a matter concerning the definition of “judgments” in the Brussels I bis Regulation’s provisions on recognition and enforcement, the CJEU rendered its decision in its much discussed case of H Limited. Now that the Court of Justice has spoken, the matter was back in the Austrian Supreme Court – which has just rendered its final decision.

A Quick Recap of the CJEU Decision in H Limited

After Jordanian courts had ordered the borrower J (= Jabra Sharbain) to reimburse a loan to H (= HSBC Bank Middle East) Limited, the latter presented the Jordanian judgment to the English High Court, which issued a so-called merger decision. This type of judgment is not just a mere recognition but a new decision on the merits, albeit based on the foreign judgment’s payment order. It therefore contains a separate order against the defendant to pay the owed amount of money.

HSBC then tried to enforce the English decision in Austria under the Brussels I bis Regulation. Sharbain argued that a judgment that is based on a foreign decision should not be enforced according to the rules of Chapter III of the Regulation in another EU member state in order not to circumvent the Member States’ rules on recognition and enforcement of third-country judgments. However, the courts of first and second instance allowed for enforcement, arguing that the English merger decision was issued on the basis of adversarial proceedings where both parties could supposedly defend their side and should therefore qualify as a judgment in the sense of Article 36 et seq Brussels I bis Regulation. When the matter reached the Austrian Supreme Court, it sent a reference for a preliminary ruling to Luxembourg.

In its judgment, the CJEU shared the opinion of the Austrian courts: whether the basis for the judgment is a decision of third country is irrelevant for the purposes of the recognition and enforcement under the Brussels Regime. While the other member states in principle have to recognize such a merger decision, the CJEU specifically pointed to the fact that the ordre public could be used to resist enforcement (CJEU, C-568/20, H Limited para 41–46). It was left up to the deciding national court to reach a final decision on this matter.

The Austrian Supreme Court’s Decision

After the CJEU explicitly left the question of the ordre public open, the Austrian Supreme Court was tasked with determining whether the English merger decision was contrary to Austrian public policy. Sharbain argued that the recognition and enforcement of merger decisions in general would infringe public policy, as there is no possibility for a review on the merits of the third-country decision. This lack of defence opportunities would trigger the public policy exception in Art 45(1)(a) Brussels Ibis Regulation. However, the Austrian Supreme Court dismissed this argument and stated that general considerations could not be regarded when assessing the ordre public. Only the proceedings in question could give rise to a public policy infringement – and in the case at hand, the court of first instance had found that the English High Court had actually given Sharbain the opportunity to oppose the claims from the Jordanian judgment. Thus, public policy could not be invoked and the English merger decision can be enforced in Austria.


Although the CJEU has left the back door of the ordre public open for the member states, it is good to see that, at least in Austria, it will only be used cautiously – not because double exequatur or the way around it with merger decisions is something to aspire to, but rather due to reasons of legal certainty and uniformity. If Member States were to invoke their public policy too loosely, the decision of the CJEU would mean a step backwards rather than forwards in the uniform recognition and enforcement of judgments in the EU. Ordre public is not and should not be a reason for generally denying the recognition and enforcement of certain types of judgments instead of looking at the specific circumstances and the final outcomes of the individual case.

While the Austrian Supreme Court was bound by the findings of the court of first instance regarding the extent to which the specific defendant had an adequate possibility to make his case and thus could not raise this question again, it is doubtful whether this was actually the case: the English High court explicitly stated that “A foreign judgment for a definite sum, which is final and conclusive on the merits, is enforceable by claim, and is unimpeachable (as to the matters adjudicated on) for error of law or fact” (JSC VTB Bank v Skurikhin & Ors [2014] EWHC 271 (Comm) at para 18, referred to in Arab Jordan Investment Bank Plc & Anor v Sharbain [2019] EWHC 860 (Comm) at para 14). There are only four exceptions to this rule, namely: 1) fraud, 2) public policy, 3) natural justice and 4) penalties. Whether that is indeed enough for a proper defence is not quite as clear. Thus, one must still wait for further cases to determine as to what extent a party must be given the opportunity to oppose the third-country judgment.

%d bloggers like this: