C-178/83

J U D G M E N T OF T H E C O U R T (SECOND CHAMBER) 12 JULY 1984 '

Firma P. v Firma K. (reference for a preliminary ruling from the Oberlandesgericht Frankfurt am Main)

(Brussels Convention of 27 September 1968 Issue of an order for enforcement)

Case 178/83

Convention on Jurisdiction and the Enforcement ofJudgments — Enforcement — Appeal against dismissal of an application for enforcement — Obligation to hear the party against whom enforcement is sought — Scope (Convention of 27 September 1968, Article 40, second paragraph)

The Court hearing an appeal by the Commercial Matters, even though (a) party seeking enforcement is required to the application for an enforcement order hear the party against whom en- was dismissed simply because documents forcement is sought, pursuant to the first were not produced at the appropriate sentence of the second paragraph of time and (b) the enforcement order is Article 40 of the Convention of 27 applied for in a State which is not the September 1968 on Jurisdiction and the State of residence of the party against Enforcement of Judgments in Civil and whom enforcement is sought.

on the interpretation of Article 40 of the Convention of 27 September 1968,

T H E C O U R T (Second Chamber)

composed of: K. Bahlmann, President of chamber, P. Pescatore and O. Due, Judges,

Advocate General: M. Darmon Registrar: H. A. Rühi, Principal Administrator

gives the following

JUDGMENT

produced. The Landgericht observed and thus be in a position to dispose of that, under the abovementioned pro- that asset before execution is levied?" visions, it is necessary, in the case of a judgment given in default, to produce In the grounds of its decision, the documents proving that the writ was national court states that, so far as served and that the judgment is service is concerned, it must suffice that enforceable according to Netherlands service was effected according to the law and has been served on the party in rules of the State in which judgment was

As for the support of which it produced additional second paragraph of Article 40, which documents which, in its view, established provides that the party against whom that the writ and judgment in default enforcement is sought must be sum- had been served in the proper manner. moned to appear before the appellate court, it lays down a rule which appears acceptable when enforcement is to take place in the State in which the judgment Considering that the outcome of the debtor is resident, since he is then unable proceedings depended upon the inter- to identify the asset against which pretation to be given to Article 40 of the enforcement will take place and will as a Brussels Convention of 27 September rule be unable to act in good time to 1968, the Oberlandesgericht stayed the remove all his assets and prevent proceedings and referred the following execution.

That approach seems dismissed simply because documents to the Oberlandesgericht to be legally were not produced at the appropriate justifiable as a result of the combined time and (b) the enforcement order is provisions of Articles 34 and 40 of the applied for in a State which is not the Brussels Convention. Thus the en- State of residence of the party against forcement order would be granted but whom enforcement is sought, so that the the defendant would retain the right to latter person will normally be able to object to enforcement within a specified establish against which asset (in the period in subsequent proceedings before present case: a claim against a bank) the same court. enforcement is to take place in that State

The applicant in the main proceedings In accordance with Article 5 (1) of the states that it wholly endorses the view Protocol of 3 June 1971 and Article 20 taken by the Oberlandesgericht and of the Protocol on the Statute of the therefore submits that the Court should Court of Justice of the EEC, written give a ruling to the same effect. observations were submitted on 3 Oc- tober 1983 by the applicant in the main Contrary to the view taken by the Ober- proceedings, represented by Messrs Metz landesgericht, the Government of the and Bandisch, Rechtsanwälte, Bremen, Federal Republic of Germany considers on 24 October 1983 by the Commission that the particular circumstances of the of the European Communities, main proceedings do not make it represented by E. Zimmermann, its Legal unnecessary to summon the judgment Adviser, acting as Agent, assisted by debtor to appear, under the first sentence W. D. Krause-Ablass, Rechtsanwalt, of the second paragraph of Article 40 of Düsseldorf, and on 9 November 1983 by the Brussels Convention, as follows from the Government of the Federal Republic the clear and unequivocal wording of of Germany, represented by C. Böhmer, that provision. acting as Agent. Indeed, Articles 31 et seq., especially the first paragraph of Article 34, of the Brussels Convention, which permit a Upon hearing the report of the Judge- creditor to obtain an order for the Rapporteur and the views of the enforcement of a judgment given in his Advocate General, the Court decided to favour in another Member State without open the oral procedure without any the judgment debtor's being entitled to preparatory inquiry and to assign the make any submisisons, constitute an case to the Second Chamber. However, exception to the general principle in the it asked the applicant in the main international sphere that a court must proceedings to reply in writing by not give judgment without having heard 1 March 1984 to the following the opposite party. Such an exception is questions : justified by the fact that the judgment debtor has benefited sufficiently from the 1. Did the Landgericht specify (under adversarial nature of the previous Article 48 of the Convention) a time proceedings and ought at the end of for the production by the applicant of those proceedings, to expect the en- the documents referred to in Articles forcement procedure to ensue. The only 46 (2) and 47 (1) of the Convention? condition imposed is that the documents specified in Article 47 of the Convention must be produced. 2. Has the applicant at this stage of the On the other hand, where those proceedings produced equivalent documents are not annexed to the documents? application by the party applying the enforcement, doubts can arise as to the 3. What are the additional documents regularity of the procedure leading to which were produced by the applicant the judgment. Under those circums- in support of its appeal and which, in tances, the hearing of the party against its view, show that the writ and whom enforcement is sought no longer judgment in default were served in the constitutes an unnecessary formality but proper manner? serves to remove the uncertainty. Thus

the interpretation of the first sentence of dispute complies with the rules of the second paragraph of Article 40 of the procedure of the Court of Justice. Brussels Convention cannot, on grounds Indeed, in its view, it follows from of legal certainty, depend upon the Article 20 of the Protocol on the Statute degree of doubt as to the regularity of of the Court of Justice that the pre- the procedure leading to the judgment in liminary question is to be notified by the this case.

However, the fact that the could have been sent to him, so that the court may authorize the party applying provisions of Article 20 of the Statute for enforcement to produce the missing have been complied with in that respect. documents at a later date makes it possible to avoid inequitable conse- As regards the question whether the quences of that nature. Moreover, it is defendant in the main proceedings must also open to the party applying for also take part in the proceedings from enforcement to obtain a protective now on, the Commission considers that, attachment order pursuant to paragraphs since that is the very question covered by 916 et seq. of the Zivilprozeßordnung the order for reference, the latter may be [Code of Civil Procedure]. regarded as admissible in its present

apply. According to the second "The appellate court is required to hear paragraph of Article 20, the court in the party against whom enforcement is which the action is brought "shall stay sought under the first sentence of the the proceedings so long as it is not second paragraph of Article 40 of the shown that the defendant has been able Convention, even if the application for to receive the document instituting the an enforcement order was dismissed proceedings in sufficient time to enable simply because documents were not him to arrange for his defence, or that produced at the appropriate time. The all necessary steps have been taken to answer is the same where the en- this end." The position is similar where, forcement order is applied for in a State in accordance with the third paragraph which is not the State of residence of the of Article 20, the foregoing provisions party against whom enforcement is are to be replaced by those of Article 15 sought." of the Hague Convention of 15 November 1965 on the service abroad of The Commission asks first whether a judicial and extra-judicial documents in preliminary question not containing the civil or commercial matters. name or address of the parties to the

The Commission concludes that it is restriction of the participation of the clear from those provisions that there is party against whom enforcement is to be no restriction on the defendant's sought in the procedure on appeal. participation in the appeal procedure. In its view, the appeal must therefore not be considered until it has been established Finally, according to the Commission, that the defendant's right to be heard has such restrictions on the defendant's right been protected. to a fair hearing, in order to ensure the element of surprise, also seem un- necessary on the following practical Pointing out that, at first instance, in grounds : order to preserve the element of surprise, proceedings for an enforcement order take place without the participation of First, in the event of failure to produce the party against whom enforcement is the necessary documents, the court can sought, the Commission submits that by specify a time-limit in order to avoid the contrast the participation of that party is problems referred to in the order for of special importance in the appeal reference; if the application were procedure provided for in Article 40. nevertheless to be dismissed on the The Jenard Report states that "upon ground that the necessary documents appeal the proceedings are contentious, had not been produced, the applicant since the party against whom could in general preserve the element of enforcement is sought is summoned to surprise by obtaining provisional or

fact. There can be no restriction on the defendant's right to be heard. "In proceedings on an appeal under Article 40 of the Convention on Jurisdiction and The Commission also submits that it is the Enforcement of Judgments in Civil and clear from the Jenard Report that the Commercial Matters, the provisions of the dismissal of the application at first second paragraph of Article 40 on the instance on the ground that the summoning of the party against whom necessary documents were not produced enforcement is sought must be applied even was considered in the discussions where the application for an enforcement concerning the drafting of Article 40; order was dismissed simply because however, the Contracting States did not documents were not produced at the think it necessary, in order to ensure the appropriate time and the enforcement element of surprise, to provide for any order is applied for in a State which

Firma P. also sent to the Landgericht a At the sitting on 22 March 1984, Mr letter from Mr Osse, a lawyer in the Krause-Ablass, for the Commission, Netherlands, certifying that, together presented oral argument and replied to with the judgment and the statement of questions put by the Court and the claim, those were the only items in the Advocate General. case file of the Arrondissementsrecht- The Advocate General delivered his bank, Rotterdam. opinion on 30 May 1984.

Decision

1 By an order of 12 August 1983, which was received at the C o u r t Registry on 18 August 1983, the Oberlandesgericht [ H i g h e r Regional C o u r t ] Frankfurt am M a i n referred t o the C o u r t of Justice for a preliminary ruling u n d e r Articles 2 (2) and 3 (2) of the P r o t o c o l of 3 J u n e 1971 on the interpretation

JUDGMENT OF 12. 7. 1984 — CASE 178/83

by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (hereinafter referred to as "the Convention") a question on the interpretation of the first sentence of the second paragraph of Article 40 of the Convention.

2 That question was raised in the course of litigation between Firma P. (here- inafter referred to as "the plaintiff") and Firma K. (hereinafter referred to as "the defendant"); it concerns the necessity or otherwise of summoning the defendant to appear before the Oberlandesgericht in proceedings for the enforcement of a default judgment given on 20 January 1982 by the Arrondissementsrechtbank, Rotterdam.

5 The plaintiff appealed against that order to the Oberlandesgericht; in support of its appeal it produced supplementary documents which, in its view, showed that the statement of claim and the default judgment had been properly served.

6 Considering that the result of the proceedings before it depended on.the interpretation of Article 40 of the Convention, the Oberlandesgericht stayed the proceedings and referred the following question to the Court of Justice:

"Is the appellate court required to hear the party against whom enforcement is sought under the first sentence of the second paragraph of Article 40 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters if (a) the application for an enforcement order was dismissed simply because documents were not produced at the appropriate time and (b) the enforcement order is applied for in a State which is not the State of residence of the party against whom enforcement is sought, so that the latter person will normally be able to establish against which asset (in the present case: a claim against a bank) enforcement is to take place in that State and thus be in a position to dispose of that asset before execution is levied?"

7 Article 40 of the Convention provides that:

"The party against whom enforcement is sought shall be summoned to appear before the appellate court. If he fails to appear, the provisions of the second and third paragraphs of Article 20 shall apply even where he is not domiciled in any of the Contracting States."

s It should be noted that the wording of that article does not provide for any exception.

n It is nonetheless true that the Convention formally requires that both parties should be given a hearing at the appellate level, without regard to the scope of the decision in the lower court. That provision is in accordance with the spirit of the Convention, which seeks to reconcile the necessary surprise effect in proceedings of this nature with respect for the defendant's right to a fair hearing (see the judgment of the Court of 21. 5. 1980, Case 125/79, Denilaulerv Couchet Frères, [1980] ECR 1553). That is why the defendant is not entitled to be heard in the lower court, whereas on appeal he must be given a hearing. There can be no exception to that rule in a situation where, for reasons which may be ascribed to the plaintiff, the lower court has dismissed an application for enforcement on purely formal grounds. There is no ground for approaching this matter differently according to whether the defendant's habitual residence or registered office is in the State where enforcement is sought or in another State.

i2 As a result, the reply to the question referred by the national court should be that the court hearing an appeal by a party seeking enforcement is required to hear the party against whom enforcement is sought, pursuant to the first sentence of the second paragraph of Article 40 of the Convention, even though the application for an enforcement order was dismissed simply because documents were not produced at the appropriate time and the enforcement order is applied for in a State which is not the State of residence of the party against whom enforcement is sought.

Bahlmann Pescatore Due

Delivered in open court in Luxembourg on 12 July 1984.

For the Registrar H. A. Rühi K. Bahlmann Principal Administrator President of the Second Chamber

O P I N I O N OF MR ADVOCATE GENERAL D A R M O N DELIVERED O N 30 MAY 1984 »

Mr President, Let us recall the facts and the course of Members of the Court, the procedure. 1. The preliminary question which has On 20 January 1982 the Netherlands been referred to you concerns the in- firm P. obtained a default judgment from terpretation of the first sentence of the the Arrondissementsrechtbank, Rotter- second paragraph of Article 40 of the dam, ordering the firm K., whose re- Brussels Convention of 27 September gistered office is in Jeddah, Saudi 1968, hereinafter referred to as "the Arabia, to pay it the sum of 678 095 Convention". Saudi riyals or the equivalent of that sum 1 — Translated from the French.