Case law Developments in PIL

First Contacts with the Application for Refusal of Enforcement in Greece

Following the abolition of exequatur by the Brussels I bis Regulation (Article 39), a new model (application for refusal of enforcement, Articles 46-51) has been introduced. So far, case law has been scarce in the vast majority of Member States. Greece was no exception to the rule.

A dispute between a Cypriot and a Greek company led to a series of judgments, which demonstrate the problems of mixing EU with domestic procedures. The facts of the case are complicated, at least for Greek practice standards, departing from the average scheme of creditor v debtor.

Facts

Stage 1: Cyprus

The case began in Cyprus. A Cypriot aviation company (creditor = C) started litigation against another Cypriot company before the district court of Nicosia (debtor 1 = D1). C requested the return of a Cessna aircraft, of which it was the owner. The aircraft was leased to D1. The latter did not appear in the proceedings. The default judgment was served to D1. At some point, C was informed that the aircraft was not anymore in Cyprus. D1 had subleased the aircraft to a private aviation company situated in Thessaloniki (debtor 2 = D2).

Stage 2: Greece

In light of the above circumstances, C filed an action against D2 before Thessaloniki courts. However, ordinary proceedings do not offer chances of a speedy dispute resolution. Indeed, the hearing of the action is scheduled to take place end September 2022. C had not time to lose. It obviously was in a dire need to get hold of the aircraft as soon as possible. Therefore, five days after filing the action, C decided to follow a different path: It served both the judgment and the certificate of Article 53 of the Brussels I bis Regulation (issued by the Nicosia court) to D2, requesting the return of the aircraft, in accordance with the order of the Cypriot court.

Stage 3: The remedies of D2

Faced with the sword of Damocles, D2 opened three sets of proceedings: an application for refusal of enforcement; an action to oppose execution (five days after filing the above application); an application to suspend enforcement (filed same day with the action).

The grounds of defence were identical: Some of the grounds referred to the classic impediments featured under Article 45 of the Brussels I bis Regulation, namely public policy and violation of the right to be heard, aiming at the refusal of enforcement. The remaining grounds challenged the execution proceedings.

Judgements

The rulings of the Thessaloniki courts:

  1. The first decision (Thessaloniki Court of first Instance, 19 November 2021, unreported) concerned the action to oppose execution. The court did not enter into the merits of the case. It stated that, taking into account the melange of grounds against enforceability and enforcement, it must stay proceedings, until the court seised with the application for refusal of enforcement renders its ruling. The court underlined that it had no powers to examine the grounds against the execution proceedings, because D2 explicitly requested the court to examine the latter grounds (i.e., those against execution proceedings), only if it rejects the former. (i.e., those against enforceability)
  2. The second decision (Thessaloniki Court of first Instance, 16 February 2022, unreported) concerned the application for refusal of enforcement. Again, the court did not enter into the merits of the case. A number of issues were in need of clarification, so that the court could render judgment. Therefore, the court ordered the stay of proceedings, requesting evidence with respect to the following issues:

First, the court was not aware of the right of D2 to challenge the Cypriot judgment in the state of origin, pursuant to Cypriot law of civil procedure.

Second, the court was not aware of the Cypriot provisions on the service of process to legal entities.

Third, the court requested the original certificate of the service of process to D1.

Fourth, the court requested the production of a document, which will certify whether the Cypriot judgment is final and conclusive

  1. The third decision (Thessaloniki Court of first Instance – summary proceedings, 9 March 2022, unreported) concerned the application to suspend enforcement. It focused on the defence raised by D2 with respect to the certificate under Article 53. Upon scrutiny of the certificate, the court traced two defects: First, the certificate stated that the judgment was rendered in contradictory proceedings, although the judgment was given in default of appearance, as evidenced in the judgment issued by the Nicosia court. Second, the certificate did not include the date of service. The above were considered as vices of the enforceable foreign judgment, on the grounds of which the execution is founded. Therefore, the court ordered the temporary stay of execution, until the judgment on the action to oppose execution id rendered. NB: No reference was made to Article 44 Brussels I bis Regulation
Assessment

On a European level, judgments dealing with refusal of enforcement under the Brussels I bis Regulation are a sheer rarity. This may be evidenced by reading the reports published in the JUDGTRUST and EFFORTS projects.

Greece has not taken steps to clarify the landscape concerning Article 47 Brussels I Regulation. Greek legal scholarship supports unanimously the right of the judgment debtor to file a single remedy, challenging both enforceability and enforcement, i.e., an action to oppose execution. This has been accepted by the courts in the case at hand. However, D2 opted for the opposite solution: Applying prevailing lawyer tactics, it filed two separate documents, accumulating all possible grounds in each of them. It didn’t work the way it was expected. Luckily, D2 managed to suspend execution. Hence, the battle is still on ground zero. More judgments will follow, most probably reaching the Supreme Court.

Given that the courts did not enter into the merits (save the court ordering suspension of execution based on substantial evidence / the balance of probabilities), many intriguing issues are left unanswered: The right of C to initiate execution against a non-litigant in the country of origin; the obligation of D2 to challenge the Cypriot decision, without being a party to the proceedings; the significance of the errors found in the certificate under Article 53 on the level of enforceability. These are matters which will surely be scrutinized by the courts in the forthcoming proceedings. However, before concluding this post, it should be mentioned that the courts referred to three core rulings of the CJEU, offering guidance for the next set of litigation, namely the ruling of 2016 in the case of Rudolfs Meroni v Recoletos, the ruling of 2015 in the case of Diageo Brands BV, and the ruling of 2012 in Trade Agency.

P.S. A recent decision of the Thessaloniki Court of first instance, issued at the end of December 2021, examined the application for refusal of the Greek company against the enforcement of a judgment issued by the court of Reggio Emilia in 2021. More information about the case is available here.

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