C-183/90

VAN DALFSEN AND OTHERS

OPINION OF MR ADVOCATE GENERAL VAN GERVEN delivered o n 11 July 1 9 9 1 *

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OPINION OF MR VAN GER VEN — CASE C-183/90

enforcement may be refused only for one of proceedings. However, under the last the reasons specified in Articles 27 and 28 paragraph of that article, the court may also of the Convention and that the foreign make enforcement conditional on the judgment may under no circumstances be provision of such security as it may reviewed as to its substance (Article 34). determine on behalf of the party against whom enforcement is sought.

4. If the order for enforcement is refused, the applicant may, under Article 40 of the Under the second paragraph of Article 37 of Brussels Convention, appeal to the court the Brussels Convention, the 'judgment mentioned in that article, whose judgment given on the appeal' may be contested only may, in turn, be contested in cassation or by by an appeal in cassation or by a similar a similar form of appeal. form of appeal.

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VAN DALFSEN AND OTHERS

accordance with Article 31 of the Brussels Convention as the court with which the Convention, for an order for enforcement in appeal is lodged. Van Dalfsen's view is that the Netherlands of the judgment which in it was open to the Arrondissements- Belgium had been declared provisionally rechtbank, in its decisions on the stay of enforceable. By judgment of 23 January proceedings on the appeal and making 1987 the presiding judge of the Arrondisse- enforcement conditional on the provision of mentsrechtbank authorized enforcement. security, to take account of circumstances Pursuant to Article 36 of the Convention, which the foreign court could already have Van Dalfsen appealed to the Arrondisse- taken into account in its judgment and to mentsrechtbank against the order for base such decisions, inter alia, on its enforcement. They also requested the court estimate of the chance of success of the to stay the proceedings on the appeal in ordinary appeal lodged, or which might still view of the fact that an appeal had be lodged, in the State in which the meanwhile been lodged in Belgium against judgment was given. 3 the Vredegerecht's judgment and the fact that the claim for compensation for capital expenditure, which the Vredegerecht had accepted in principle, had in the meantime been assessed in a provisional expert report 9. The court of reference raises the at BFR 477 954. following questions:

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OPINION OF MR VAN GERVEN — CASE C-183/90

(3) May "the court with which the appeal proceedings and required the provision of under the first paragraph of Article 37 security. is lodged" make use of the powers conferred on it by the first paragraph of Article 38 of the Brussels Convention: Article 37(2) provides for the possibility of lodging an appeal in cassation (or a similar form of appeal) against 'the judgment given (a) where the party lodging the appeal on the appeal'. In its judgment in Case states no grounds for its application 258/83 Brennero v Wendel· the Court for the proceedings to be stayed or stated that these words must be strictly for enforcement to be made con- interpreted and ruled that a preliminary or ditional on the provision of security interlocutory decision requiring the creditor other than grounds that the foreign (wrongly in the Court's opinion 5 ) to court could have taken into provide security did not constitute 'a account in its decision; judgment given on the appeal' and could not therefore be challenged by an appeal in cassation (in that case by a 'Rechtsbe- schwerde'). In that connection the Court (b) only where the application in stated : question is based partly or exclus- ively on submissions not put forward in the proceedings before the foreign court; or 'Under the general scheme of the Convention, and in the light of one of its principal objectives which is to simplify (c) only where the application is based procedures in the State in which partly or exclusively on submissions enforcement is sought, that provision cannot which could not have been put be extended so as to enable an appeal in forward in the proceedings before cassation to be lodged against a judgment the foreign court because the party other than that given on the appeal, for lodging the appeal was at that time instance against a preliminary or interlocu- unaware of the facts on which tory order requiring preliminary inquiries to those submissions are based?' be made' (paragraph 15).

position is different in the case of a In the Jenard Report, 6 too, the need for a judgment refusing to stay the proceedings strict interpretation of the second paragraph or requiring the provision of security, since of Article 37 is emphasized and it is pointed such decisions pre-suppose a judgment on out that: the appeal and are thus (as in this case) normally laid down in the final judgment declaring the appeal unfounded and ordering enforcement. 'An excessive number of avenues of appeal might be used by the losing party purely as delaying tactics, and this would constitute an obstacle to the free movement of judgments which is the object of the The question therefore is whether, in the Convention.' light of Brennero v Wendel, the conclusion must be drawn that these judgments, which are not interlocutory decisions but are a formal part of the final decision, may be regarded as judgments 'given on the appeal'. 13. In its observations to the Court, the In other words, does it follow from Commission puts forward another point of Brennero v Wendel that an appeal in view. It thinks that a decision by the court cassation may be brought against any final with which the appeal is lodged to stay the decision of the court with which the appeal proceedings is clearly not a judgment given is lodged (formal criterion) or can an appeal on the appeal. On the other hand, a in cassation be brought against the final decision refusing to stay the proceedings decision only in so far as it concerns the and a decision to make enforcement con- actual judgment on the appeal, that is, in so ditional on the provision of security are far as it concerns the justification for, in this indeed judgments given on the appeal case, the dismissal of the appeal, which because they imply the possibility of pre-supposes a judgment on one of the proceeding to enforcement. reasons specified in Articles 27 and 28 (material criterion)?

Anicie 38 of staying the proceedings or the formal nature of the decision. The requiring the provision of security is answer to the second preliminary question intended, on the other hand, to preserve a should therefore be that, even when a balance between the interests of creditor decision based on Article 38 is contained in and debtor: by staying the proceedings the the same (final) decision as the actual court with which the appeal is lodged judgment on the appeal, an appeal in prevents the creditor from taking other than cassation against such a (final) decision will protective measures. Making enforcement lie only in so far as it concerns the substance conditional on the provision of security of the appeal. means that the interests of the debtor in the event of enforcement are protected in view of the possibility of a modification of the foreign court's judgment on appeal. In other words, decisions taken in this respect by the court with which the appeal is lodged lay An additional advantage of this solution is down the details of the enforcement. Conse- that in the appeal procedure it treats the quently, if it refuses a postponement or parties to the dispute equally. If the possi- requires provision of security it is taking a bility of an appeal in cassation were to be decision regarding the details of rejected when a decision taken under Article enforcement. Of course, such a judgment 38 was given in an interlocutory judgment implies that a decision is taken at the same (which is bound to be the case with a time as to the substance of the appeal, but decision to stay the proceedings) but to be should be distinguished from it. accepted when such a decision is included in a final decision (which is normally the case with a decision refusing to stay the proceedings and ordering enforcement, where appropriate with the provision of security) then the appellant is in a position 14. In view of the need to keep the to lodge an appeal in cassation against the procedure in the State in which enforcement said final decision, but the respondent is not is sought as simple as possible and of the entitled to appeal in cassation against the different object of the procedures referred aforementioned interlocutory judgment. 7 to in Articles 36 and 38, I therefore think I can say, in answer to the first preliminary question, that the expression 'judgment given on the appeal' refers to judgments directly concerning the substance of the appeal. These seem to me, moreover, to be the only judgments which lend themselves First paragraph of Article 38 of the Brussels wholly to an appeal in cassation since they Convention concerns questions of law in the strict sense, whilst judgments in the context of the procedures referred to in Article 38 are intended basically to balance interests.

in support of their application, put forward In their observations to the Court the no arguments other than those which the Netherlands and German Governments foreign court could already have taken into associate themselves on this point with Van account in its judgment and that to consider Dalfsen's interpretation, whilst the such arguments would mean that the appeal Commission takes the opposite point of court would essentially be reviewing the view. I agree with the Commission, for the substance of the foreign judgment. The following reasons. Arrondissementsrechtbank made the order for enforcement conditional on the provision of security, taking into consideration a new fact which had arisen 17. The possibility, envisaged in the first since the foreign judgment, namely the paragraph of Article 38, of staying production in the meantime of the legal proceedings on the appeal, with the conse- expert's report in which Van Dalfsen's quence that, under Article 39, only counterclaim was evaluated. 8 protective measures may still be taken by the creditor (just like the possibility, envisaged in the last paragraph of Article 38, of making the order for enforcement conditional on the provision of security) has As I have already said, Van Dalfsen raise as its object to: the point with the court of reference that in this way the Arrondissementsrechtbank proceeded on the basis of an erroneous interpretation of the scope of the powers 'protect the judgment debtor against any conferred on it by Article 38 of the Brussels loss which could result from the Convention. According to Van Dalfsen, it is enforcement of a judgment which has not open to the court with which the appeal is yet become res judicata and may be lodged to take into account in its decisions amended'. 9 under Article 38 circumstances which the foreign court could already have taken into account in its judgment and the court with which the appeal is lodged must in In its judgment in Case 43/77 Industrial particular base those decisions on its Diamond Supplies v Luigi Rival0 the Court estimate of the chances of success of the stated, in clarification of Article 38 of the ordinary appeal which has been or may still Brussels Convention, that the State in which be lodged against the judgment. enforcement is sought 'is not under a duty to stay the proceedings but merely has the power to do so' (paragraph 32) and that the court may 'stay the proceedings whenever reasonable doubt arises with regard to the fate of an appeal which may lead to the 16. In the third preliminary question the annulment or amendment of the judgment court of reference asks the Court to give its in question' (paragraph 33). views on this point, whilst restricting the question to a decision taken in connection with an application to stay the proceedings, as referred to in the first paragraph of Article In assessing the damage which a party may 38. suffer as a result of the enforcement of the S — The relevant extracts from the Arrondissementsrechtbank'* judgment are to be found in point 3 of the Opinion 9 — Jenard Report, OJ 1979 C 59, p. 52. referred to in the previous footnote. 10 — [1977] ECR 2175, paragraphs 32 and 33.

judgment, the court with which the appeal is conferred for this purpose must be applied lodged must naturally take into account the sparingly or with reservations. ' ' This is chance which, in the abstract, always exists, itself an indication that only facts and that the judgment under appeal may be arguments which the foreign court did not wholly or partially revised on further appeal. and could not know may be taken into It must draw up a balance between this account. chance and the extent and possibly irre- versible nature of the damage which enforcement may inflict on the debtor. So, in drawing up this balance, may the competent court also take account of facts and arguments which the foreign court has 19. That this is indeed so follows above all, or might have already considered in its however, (as was also observed by the judgment so that it can assess specifically Arrondissementsrechtbank), from the rule the chance of revision on appeal, or can it laid down in the third paragraph of Article take into account only arguments and facts 34 according to which the foreign judgment which were not and could not be known to may 'under no circumstances... be the foreign court? reviewed as to its substance' by the courts of the State in which enforcement is sought. If the court with which the appeal is lodged, in its decision regarding a stay of proceedings (or a requirement to provide security), could take into account arguments and facts already known to the foreign 18. For an answer to this question it must court, there would be a real risk of its be stressed in the first place that the first proceeding to review the substance of the paragraph of Article 31 is based on the foreign judgment and in particular of the principle that judgments which are declaration of the provisional enforceability enforceable in the State in which the of that judgment, a declaration made inter judgment was given, even though they have alia on the strength of the conviction not the force of res judicata, are also arrived at by the foreign court regarding the enforceable in the State in which substance of the case. enforcement is sought. This means, as the Commission stated at the hearing, that the rules applicable between Contracting States must be as similar as possible to the rules applying within their national territory with regard to a judicial decision which has been I think that to avoid that risk the court with declared enforceable. which the appeal is lodged, weighing up the chances of success of the appeal brought against the foreign judgment on the one hand against the damage to the debtor in the event of complete enforcement (perhaps not protected by security) on the other, can only be guided by considerations which the A stay of proceedings on the appeal and the foreign court could not take into account. resulting prohibition of measures other than protective measures (like a requirement to 1 1 — See points 14 and 15 of the Opinion of the provide security, though to a lesser extent) Procureur-Generaal at the Hoge Raad der Nederlanden, represent in some degree a derogation from referred to in footnote 3, and G. Müller in A. Bulow and K.-H. Böckstiegel, Internationaler Rechtsverkehr in Zivil- this principle. It follows that the powers und Handelssachen, N o 606 256.

20. A special problem arises with regard to the facts and arguments of which the From this it appears that the omission by a foreign court was unaware at the time of its party to lodge an appeal, whatever the cause judgment but which were known to the may be, deprives that party of the oppor- appellant, who did not, however, bring tunity to avail himself subsequently of a them before the foreign court. My view is further ground which would have supported that the court with which the appeal is that appeal. By analogy it should in my view lodged cannot take these facts and be stated in this case that a party who has arguments into account either. As the neglected to put facts and arguments before the foreign court can no longer put them 12 — In view of the fa« that that would amount to a review of before the court deciding as to a stay of the substance of a foreign judgment. proceedings on the appeal (or as to the 13 — Cf. Kaye, P. Civil Jurisdiction and Enforcement of Foreign Judgments (1987), p. 1643; O'Mallcy, S. and Layton, A. provision of security). European Civil Practice (1989), p. 770 f., and Huet, A. note on the judgment in Case 43/77, Journal de Droit International, 1978, p. 403. 14 — [1988] ECR 645, paragraph 4 of the operative part.

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21. Having regard to the foregoing considerations, I propose that the questions submitted should be answered as follows:

' 1 . A judgment given under Article 38 of the Brussels Convention by the court with which the appeal is lodged cannot be regarded as a "judgment given on the appeal" within the meaning of the second paragraph of Article 37 of that Convention and accordingly cannot be the subject of an appeal in cassation.