CJEU Clarifies the Influence of Fundamental Rights on the Operation of the Public Policy Exception
This post was contributed by Fabien Marchadier, who is a professor of private international law at the University of Poitiers.
On 4 October 2024, the Court of Justice of the European Union delivered its judgment in Case C-633/22 Real Madrid Club de Fútbol v. Société éditrice Le Monde. The judgment explores the relationship between the public policy exception in the Brussels instrument and the freedom of the press as enshrined in Article 11 of the Charter of Fundamental Rights.
Background of the Case
Considering that an article published in the newspaper Le Monde and widely reported in Spain had damaged their reputation, Real Madrid and a member of its medical team sought compensation from Spanish courts. The Spanish courts upheld their claim and handed down a heavy sentence against Le Monde and the journalist who wrote the disputed article, claiming that the football clubs Real Madrid and Fútbol Club Barcelona had retained the services of the head of a doping ring in the cycling world. The principal amount of damages was 330,000 euros (300,000 for the club and 30,000 for its employee).
Despite Le Monde published a letter of denial it had received from Real Madrid (but without any comment on it), the claimants sought the enforcement of the Spanish decision in France. In accordance with the Brussels I Regulation (no 44/2001), in force at the relevant time, they obtained two declarations of enforceability from a first instance court in Paris. The defendant lodged an appeal. The Cour d’appel of Paris overturned those declarations on the ground that that judgment was manifestly contrary to French international public policy and could not be enforced in France. This issue was that the penalties had, in the circumstances of the case, a deterrent effect on the involvement of the defendants in the main proceedings in the public discussion of matters of public interest such as to curtail the media’s ability to perform its information and monitoring role.
Real Madrid and Mr AE seized the French Court of cassation which decided to stay proceedings and to refer to the Court of Justice for a preliminary ruling. In essence, the French Court of cassation asked to the CJEU “whether and, if so, in what circumstances, the enforcement of a judgment ordering a newspaper publishing house and one of its journalists to pay damages by way of compensation for non-material damage suffered by a sports club and one of the members of its medical team for harm to their reputation caused by the publication of information about them must be refused, on the combined basis of Article 34(1) and Article 45 of Regulation No 44/2001, on the ground that it is liable to give rise to a manifest breach of the freedom of the press as enshrined in Article 11 of the Charter and, therefore, a manifest breach of public policy in the Member State in which enforcement is sought” (pt 28).
Judgment
The Court of Justice points out that the system for the circulation of judgments in Europe is based on a subtle balance between mutual trust and respect for fundamental rights. The public policy clause (art. 45, § 1, a reg. n° 1215/2012 and 34, § 1 reg. n° 44/2001) is a fundamental part of this balance. Refusing or revoking a declaration of enforceability of a judgment requires to demonstrate that such recognition is manifestly contrary to public policy in the Member State in which recognition is sought. This outcome should remain exceptional because it runs counter the main goals of the regulation.
The Court of justice states that the decision is not recognized if it infringes a fundamental principle of the state. To ensure that the prohibition of any review of the substance of a judgment of another Member State is observed, the infringement would have to constitute a manifest breach of a rule of law regarded as essential in the legal order of the Member State in which enforcement is sought or of a right recognised as being fundamental within that legal order (pt 37), including a rule of law regarded as essential in the EU legal order or of a right recognised as being fundamental within that legal order (pt 39). These fundamental rights are those recognised in the Charter of Fundamental Rights of the European Union, since the application of Regulation No 44/2001 by a national court constitutes an implementation of EU law within the meaning of Article 51(1) of the Charter (pt 41).
In accordance with the Charter, the right to freedom of expression enshrined in Article 11 will have the same meaning and scope as Article 10 of the European Convention on Human Rights (for details, see paragraphs 45-65). In the context of the recognition and enforcement of judgments, it requires the court of the requested State to ascertain whether the damages awarded in those judgments are manifestly disproportionate to the reputational harm in question and thus risk having a deterrent effect on future media coverage of similar matters in the Member State in which enforcement is sought or, more generally, on the exercise of the freedom of the press. To this end, it could be taken into account “all of the circumstances of the case, including not only the resources of the persons against whom judgment is given but also the seriousness of their wrong and the extent of the harm as found in the judgments at issue in the main proceedings” (pt 68).
However, the judge of the State in which enforcement is sought does not have to call into question the assessment of the conduct of Le Monde and its journalist by the court which handed down the decision. Nor should it reassess the reality and extent of the damage. In this respect, any discrepancy between those amounts and the amount of damages awarded in those judgments is not in itself sufficient (pt 70).
To conclude, the Court pointed out that “should it find that there is a manifest breach of the freedom of the press, that court should limit the refusal to enforce those judgments to the manifestly disproportionate portion, in the Member State in which enforcement is sought, of the damages awarded” (pt 73).
Assessment
The Court of Justice of the European Union confirms the ever-increasing influence of European law on the definition and implementation of the public policy exception (on the origins of this influence, see ECJ, 28 March 2000, C-7/98, Dieter Krombach v André Bamberski and ECJ, 11 May 2000, C-38/98, Régie nationale des usines Renault SA v Maxicar SpA and Orazio Formento). Its limits are beyond the control of individual States. The combined influence of European Union law and European human rights law, which the Court of Justice is relaying through the Charter of Fundamental Rights of the European Union (pts 45 et seq.), excludes certain principles that are nonetheless deemed essential by States (see, for example, ECHR, 3 May 2011, no. 56759/08 Négrépontis-Giannisis v Greece). Conversely, States have an obligation to incorporate the essential rights of the EU legal order and fundamental rights into their fundamental values. The freedom traditionally granted to States to determine, ‘in accordance with their national laws and practices, the requirements of their public policy’ (point 35) is therefore subject to review by the Court of Justice. The paragraph in point 35, constantly repeated since the Krombach case (cited above), has become a ‘clause de style’. Contrary to its assertions, the CJEU does not simply ‘review the limits’ within which public policy may impede the free movement of decisions in Europe. It defines, at least in part, the content of the concept. A ‘rule of law regarded as essential in the EU legal order’ or ‘a right recognised as being fundamental within that legal order’ is just as essential and just as fundamental in the legal order of the Member States, it points out (pt 39 – see also the conclusions of the AG at pt 189).
However, in the present case, the content of international public policy did not raise any particular difficulties. The right to freedom of expression is obviously capable of justifying a refusal to recognise a foreign decision (see ECHR, dec. no. 48198/99, 15 Jan 2004, Lindberg v Sweden). The Spanish decisions unquestionably interfered with the exercise of this right. However, was this interference proportionate? Above all, how is proportionality to be assessed in the context of judicial cooperation in civil matters which is based on the principle of mutual trust ? Each Member State is presumed to respect fundamental rights (in accordance with Opinion 2/13 – CJEU, Ass. pl., 18 Dec. 2014, Accession of the Union to the ECHR – recalled in paragraph 42). If the allegation of a breach of fundamental rights has not been raised before the court of origin, it cannot normally be examined by the court of the State addressed (rappr. CJEU, 16 Jul 2015, Diageo Brands BV, C-681/13, pt 64). If it has been examined, the prohibition on substantive review prevents it from being re-examined by the court of the requested State.
The Court of Justice provides a vade mecum designed to avert this risk, reiterating its precedents, which are nevertheless far from fully convincing. The manifest nature of the breach would reconcile all the opposites (pt 37). Yet there is little difference between review of the merits and of the existence of a manifest breach. The review may vary in intensity, but it does not change in nature. Manifest breach breaks the trust that supports the whole cathedral. It justifies, exceptionally and by way of derogation, the restoration of a control normally neutralised by mutual trust. It plays the role, in EU litigation, of the ‘manifest deficiency’ criterion used by the European Court of Human Rights to determine whether an EU Member State was obliged, under Article 6 of the ECHR, to review the decision of another Member State and deny it any legal effect (see ECHR, Grand Chamber, 20 May 2016, no. 17502/07, Avotins v Latvia, § 116).
A mere violation of fundamental rights does not therefore justify refusal of recognition. It must be manifest. If the court of origin gave its decision without having weighed up the interests of each of the parties (right to reputation protected by Article 8, on the one hand, and right to freedom of expression protected by Article 10, on the other), a finding of manifest infringement is conceivable (if only for having ignored the fundamental rights of one of the parties), without carrying out a review of the merits, since the review carried out by the court addressed has not, in this case, been undertaken by the court of origin. On the other hand, if this review has already taken place, the very idea of a manifest breach is more difficult to accept (see CJEU, 16 July 2015, Diageo Brands, C-681/13, pt 64), especially if it took place in compliance with the criteria established by the case law of the European Court of Human Rights for arbitrating between two competing private interests (on these criteria, see ECHR, gde ch, 7 Feb. 2012, no. 40660/08, Von Hannover (no. 2), § 107), which appears to be the case in this case (see the Opinion of Advocate General Szpunar delivered on 8 Feb. 2024, pp. 68 and 120). It should then be considered, as the Advocate General did (pt. 131), that the interests in the balance before the court addressed are different. While the defendant’s interest remains the same, that of freedom of expression, the plaintiff’s interest is no longer limited to respect for his reputation. The right to enforcement of the decision complements it (more than it replaces it, however, so that the review by the court addressed would essentially be the same as that by the court of origin…).
In this case, a violation of freedom of expression is more than likely. Given the case law of the European Court of Human Rights, which is quoted at length to clarify the meaning and scope of Article 11 of the Charter of Fundamental Rights (pts 45 et seq.), freedom of the press is still highly valued today, even though the Strasbourg Court is increasingly reminding journalists of their duties and responsibilities. The article in question contributed to a debate of general interest (the issue of doping in sport) and Real Madrid had the opportunity to publish a denial. In this context, any sanction, however small, creates a chilling effect that the Strasbourg Court will not tolerate. But did the Spanish judgments clearly infringe freedom of expression? The answer to this question remains uncertain. However, it is crucial because it determines the very principle of applying the public policy exception. If it is not manifest, the infringement does not constitute grounds for non-recognition. The decision will be recognised. The requested State would not incur any liability before the European Court of Human Rights (see Avotins judgment, supra). Only the State of origin is exposed. If, following the finding of a violation, the proceedings are not reopened, enforcement of the decision in the requested State will never be called into question. Compensation for the damage suffered by the victim of the infringement of Article 10 (in this case the journalist and Le Monde) could then be limited to just satisfaction, which may be awarded by the Strasbourg Court (which will not happen in this case, as the European Court of Human Rights has declared the application against Spain inadmissible).
The final conclusion of the Court of Justice will undoubtedly remain the most controversial point of the judgment. Traditionally, when a foreign decision appears to be internationally irregular (because a ground for non recognition is constituted), it produces no effect in the forum. The outcome of the review by the court addressed is binary. Either the decision is recognised or it is not. In the latter case, the beneficiary of the judgment has no option but to bring an action on the merits (if it is still admissible …) before the courts of the State addressed. The partial effectiveness of the foreign decision is only conceivable if the operative part comprises several heads that are sufficiently independent from each other to be treated differently (for example, in this case, the conviction of the journalist on the one hand and that of the newspaper publishing company on the other). On the other hand, the court addressed does not have the power to modify the operative part of the foreign decision submitted to it for review. If the court adds to it, deletes from it or modifies it, the court is interfering in the foreign judicial process and would be carrying out a prohibited review. This prohibition is all the more important in relations between the Member States of the European Union, which are dominated by the principle of mutual trust. If the court addressed finds a clear breach of the right to freedom of expression and, consequently, a clear conflict between the foreign decision and public policy, it should refuse to give effect to it. Curiously, the Court of Justice invites that court to ‘limit the refusal to enforce those judgments to the manifestly disproportionate portion, in the Member State in which enforcement is sought, of the damages awarded’ (pt. 73). Achieving the objective of free movement of judgments is not definitively compromised. Other avenues are conceivable. It would therefore be sufficient for the court addressed to erase the excesses of the foreign decision for it to be recognised. In other words, even if certain findings by the court of origin are required (for example, the seriousness of the fault, the reality and extent of the damage), the Court of Justice authorises the court of the State addressed to reassess the operative part of the foreign decision and, if necessary, rewrite it. This is not a completely new idea. It was suggested by G.A.L. Droz (Variations Pordea. De l’accès au juge entravé par les frais de justice. À propos de l’arrêt de la Cour de cassation,1er Chambre civile, du 16 mars 1999, RCDIP 2000. 181). The departure from the prohibition on revision is pragmatic. It makes it possible to reconcile objectives that, in this case, conflict with each other. It is better to modify the amount of the fine imposed abroad and make the foreign judgment acceptable than to simply deny it any effect in France at all. The practical implementation of this directive is no less difficult to conceive with regard to financial penalties. It is obviously possible to assess whether they are proportionate or disproportionate by reference to various factors (in particular, the resources of the persons sentenced, the seriousness of their fault, the extent of the damage – point 68). Measuring disproportionality is a much more difficult exercise, especially if the court addressed considers that the disproportionality arises from the very principle of the sentence without departing from the findings of the court of origin. In this case, should the foreign decision not be deprived of all effect? Is it conceivable that the court addressed could order another form of remedy that would be more appropriate, for example, publication of a right of reply or of the judgment?
The European influence is therefore not only leading to an enrichment (at least quantitative) of public policy. It alters foreign judgments law by undermining, to a certain extent, the principle of mutual trust and the prohibition of review on the merits.