A3/2007/0919 – A3/2007/0175
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION-COMMERCIAL
MR JUSTICE DAVID STEEL
2006 Folio No. 2006 1097
Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE TUCKEY
LORD JUSTICE JACOB
| BANCO NACIONAL De COMERCIO EXTERIOR S.N.C.
|- and -
|EMPRESA De TELECOMMUNICACIONES De CUBA S.A.
BRITISH TELECOMMUNICATIONS P.L.C.
WordWave International Ltd
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Jeffery Onions Q.C. (instructed by Messrs Freshfields Bruckhaus for the Respondent
Mr Graham Read Q.C. and Miss Diya Sen Gupta (instructed by Legal Business Services BT) for the Intervener
Hearing dates: 12 & 13 June 2007
Crown Copyright ©
Lord Justice Tuckey:
This is the judgment of the court.
Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.
(1) When a judgment must be recognised in accordance with this Regulation nothing shall prevent the applicant from availing himself of provisional, including protective, measures in accordance with the law of the Member State requested without a declaration of enforceability under Article 41 being required.
(2) The declaration of enforceability shall carry with it the power to proceed to any protective measures.
(3) During the time specified for an appeal pursuant to Article 43 (5) against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought.
29. Accordingly, Article 47 provides an unrestricted and discrete code for the granting of provisional or protective measures in the context of enforcement. I detect no basis for restricting the measures to the freezing of domestic assets and/or for limiting the disclosure to domestic assets.
30. The limitations on such measures in Article 31, exemplified by the Van Uden case afford no analogy with the situation post judgment as the recitals to the Regulation demonstrate. This is all the more so where, as here, the court exercising substantive jurisdiction had no power to grant anything other than a domestic freezing order.
It is not clear which of the recitals the judge is referring to. He was right however to say that neither the Turin court or indeed any of the other courts in which enforcement proceedings have been taken had the power to grant worldwide relief.
may refuse to grant that relief if, in the opinion of the court, the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings in question makes it inexpedient for the court to grant it.
For provisional and protective measures, the regulation stipulates that a foreign decision which has not yet been declared enforceable in the state addressed, nevertheless does establish the existence of a credit claim warranting provisional and protective measures (according to the legislation of the state addressed). Such a measure will protect the interests of the creditor pending the enforcement decision.
We think this statement entirely supports our construction of Article 47 (1). A similar statement appears in 184.108.40.206 of this document. Nothing in the document or any of the other material which we were shown supports Mr Cran's construction.
It is a strong thing to restrain a defendant who is not resident within the jurisdiction from disposing of assets outside the jurisdiction …
Where a defendant and his assets are located outside the jurisdiction of the court seised of the substantive proceedings it is in my opinion most appropriate that protective measures should be granted by those courts best able to make their orders effective. In relation to orders taking direct effect against the assets, this means the courts of the state where the assets are located; …
37. …it must be remembered that the expression "provisional, including protective, measures" within the meaning of Article 24 of the Convention is to be understood as referring to measures which, in matters within the scope of the Convention, are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is otherwise sought from the court having jurisdiction as to the substance of the case..
38. The granting of this type of measure requires particular care on the part of the court in question and detailed knowledge of the actual circumstances in which the measures sought are to take effect…
39…the court held at para. 16 of Denilauler [ ECR 1553] that the courts of the place – or, in any event, of the contracting state where the assets subject to the measures sought are located are those best able to assess the circumstances which may lead to the grant or refusal of the measures sought or to the laying down of procedures and conditions which the plaintiff must observe in order to guarantee the provisional and protective character of the measures authorised.
40. It follows that the granting of provisional or protective measures on the basis of article 24 [article 31 of the Regulation] is conditional on, inter alia, the existence of a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the contracting state of the court before which those measures are sought.
41…a). it is part of the standard form;
b). it is limited to loss caused by the freezing order which the court decides should lead to compensation;
c). the very same matter was raised before Langley J. on 27 October; it was refused and no appeal was pursued.
The judge went on to reject a proposed alternative wording for the undertaking which excluded liability for loss caused by termination or non-performance of contractual arrangements by ETC.
20. …as in the case of enforcement properly so called, the Convention confines itself with respect to the protective measures referred to in Article 39, to laying down the principle that the party who has applied for enforcement may, during the period indicated in that Article, proceed with such measures. By contrast, the Convention leaves the matter of resolving any question not covered by specific provisions of the Treaty to the procedural law of the court hearing the proceedings.
21. It must nevertheless be made clear that the application of the requirements of the national procedural law of the court hearing the proceedings must not in any circumstances lead to frustration of the principles laid down in that regard whether expressly or by implication by the Convention itself and by Article 39 thereof in particular. Accordingly the question whether any given provision of the national procedural law of the court hearing the proceedings is applicable to protective measures taken pursuant to Article 39 depends upon the scope of each provision of national law and upon the extent to which it is compatible with the principles laid down by Article 39.
The court then examined the particular aspects of Italian procedural law in question to see whether they were compatible with Article 39 and concluded that the requirements for prior authorisation and subsequent confirmation of the protective measures in question were not compatible because under Article 39 the decision authorising enforcement carried with it the right to protective measures. Nor was the Italian rule which required protective sequestration to be carried out within a fixed period because the Convention allowed for such measures to be taken during the time in which the appeal was pending.
11. Article 39 of the Convention governs the rights of the party who obtained the decision authorising enforcement which is contested by the appeal. Until judgment is given on that appeal that party may according to that provision take only "protective measures … against the property of the party against whom enforcement is sought". It follows that no enforcement measures may be taken until the court with which the appeal has been lodged gives judgment thereon.
12. That is the context in which the second paragraph of Article 38 of the Convention under which the court with which the appeal has been lodged may make enforcement conditional on the provision of such security as it shall determine, must be set. The whole significance of that provision lies in the fact that as soon as the court gives judgment on the appeal the restrictions provided for by Article 39 cease to be applicable . Enforcement measures may therefore be taken …
13 It follows that the second paragraph of Article 38 of the Convention must be interpreted as meaning that a court with which an appeal has been lodged against a decision authorising enforcement, given pursuant to the Convention, may make enforcement conditional on the provision of security only when it gives judgment on the appeal.
Where the effect of service of the injunction on the third party substantially interferes with the third parties business, the rights of the third party must in my view always prevail over the desire of the plaintiff to secure the ultimate recovery of debts or damages from the defendant with which the third party is in no way concerned.