On Friday, the case of Drika BVBA (and others) v Clare Giles, confirmed that certain foreign judgments cannot be enforced via the petition procedure set out in Rule 62.28 of the Court of Session Rules.
When assessing the relevancy and impact of the above decision, the starting point is to identify whether the relevant foreign judgment is one to which the Brussels I Regulations (Regulation (EC) 44/2001) (“Brussels I”) applies. That regulation requires that a judgment be registered for enforcement in the manner specified by the law of the relevant Member State: Article 38(2) and 40(1).
What cases will be affected?
Any case which started before 10 January 2015 will be governed by Brussels I and any judgment granted in respect of such a case will continue to be enforced in terms of that Regulation.
The Drika petition involved a judgment granted by a Belgian Court in 2013. The petitioners sought warrant to register the judgment for execution in terms of Brussels I. The petition proceeded under Rule 62.28 of the Rules of the Court of Session. Part V of Chapter 62 of the Rules of the Court of Session was amended by the Act of Sederunt (Rules of the Court of Session Amendment) (Regulation (EU) SI No 1215/2012 2015. The amended Rule provides that Chapter 62 is no longer to apply to cases brought under the “Council Regulation” – that is Brussels I. That Act of Sederunt came into force on 7 February 2015.
A gap in the rules?
It follows that the Rule of Court upon which the petitioners relied was no longer in existence. The decision has shown that not all foreign judgments can enforced in the manner that some may have expected.
Counsel for both sides generally accepted that there appeared to be a lacunae in the law. Neither party attempted to suggest that there was any intention to prevent decrees from other member states of the European Union being registered in Scotland. The method of how such judgments should be enforced was debated.
Counsel for the petitioner argued that the lacunae had arisen as a result of error. He argued there were two means in which the obvious intention of Brussels I could be implemented. The first was that the Regulation was plainly of direct effect and therefore conferred a jurisdiction on this court to entertain applications for registration of judgments from other member states. The second submission was that in any event the court had an inherent power to do what was necessary to “discharge its responsibilities”.
The headline argument for the respondent was one of competency – the petition having been brought under a non-existent Rule, the court had no jurisdiction to entertain the application. It did not follow from the repeal of the relevant Rule of Court that a lacunae had been created in the law in relation to registration of judgments of other member states.
The impact of this decision will be felt by those wishing to enforce a foreign judgment to which Brussels I continues to apply. We may be dealing with such judgments for some years yet.
Although Lord Brailsford could think of no plausible reason why the Rules of Court could have been amended in a way which seemed to impede the ability to register certain foreign judgments, he suggested that “whilst the position is apparently unsatisfactory I do not feel able to conclude that there has been an error“. He continued “In the circumstances in this case it is plain that the Rules of Court are merely a procedural mechanism for implementing the overall purpose of recognition of foreign decrees. Direct effect for these procedural mechanisms would appear to be precluded by the aforesaid decisions of the ECJ. I accordingly conclude that there is no argument on direct effect available to the petitioners.”
Turning to the second argument advanced by the petitioners, Lord Brailsford identified that “the court must use its powers in this area with caution. The court should not seek to devise rules in relation to the practice of the court lightly. Whilst the court has some inherent power to regulate matters of practice the scope to interfere or innovate in relation to procedure controlled by Rules of Court is far more limited. That is exactly the position which applies in the present case.”
The Court of Session found that the petition was incompetent and determined that, for those cases involving a Judgment to which Brussels I applies, they cannot be brought under Rule 62.28 of the Court of Session. Lord Brailsford accepted that “by rejecting the arguments advanced by the petitioners they may be left with no option but to seek decree conform.”
The result is therefore likely to leave such petitioners with a more costly and protracted process than they may have initially thought. It highlights the fact that when seeking to enforce foreign judgments in Scotland, expert advice should always be sought.