C-414/92

SOLO KLEINMOTOREN v BOCH

OPINION OF ADVOCATE GENERAL GULMANN delivered on 22 March 1994 *

Mr President, the contract between the parties. The other Members of the Court, action, brought before the Tribunale Civile, Bologna, against both Solo Kleinmotoren and SOLO Italiana, concerned misuse of the trade name and unfair competition.

1. The Bundesgerichtshof has submitted questions to the Court of Justice for a pre­ liminary ruling on the interpretation of the Convention of 27 September 1968 on juris­ diction and the enforcement of judgments in civil and commercial matters ('the Brussels Convention'). The questions arose in a case 3. The action in Milan ended in 1975, when before it between a German company, Solo the Corte d'Appello, Milan, ordered Solo Kleinmotoren, and an Italian businessman, Kleinmotoren to pay Emilio Boch approxi­ Emilio Boch. The issue in dispute is whether mately LIT 48 million, with interest. That a court settlement reached in Germany is a judgment was, in accordance with the Brus­ bar to Mr Boch's having a judgment deliv­ sels Convention, declared enforceable in ered in Italy enforced in Germany. Germany. Solo Kleinmotoren, however, appealed against the enforcement decision to the Oberlandesgericht Stuttgart. Before that court and at its suggestion, the parties reached a court settlement on 24 Febru­ 2. The facts of the case are as follows: Mr ary 1978 which provided inter alia as fol­ Boch ran a business in Milan under the name lows: 'SOLO' , dealing in agricultural machinery which was supplied by Solo Kleinmotoren. In 1966 a company was formed in Bologna with the name SOLO Italiana SpA which subsequendy took over the sales in Italy of the machinery manufactured by Solo Klein­ motoren; accordingly Solo Kleinmotoren '1 . The judgment debtor [Solo Kleinmoto­ discontinued its supplies to Mr Boch. ren] shall pay the judgment creditor [Emilio Boch] ... DM 160 000

5. In 1981 Emilio Boch brought proceedings before the Tribunale Civile, Bologna, to obtain payment of damages for infringement of his trade name and unfair competition. 4. The action brought in Bologna resulted in In 1986 the Tribunale Civile, Bologna, a judgment delivered in 1979 in which the ordered Solo Kleinmotoren and SOLO Ital­ Corte d'Appello, Bologna, held Solo Klein­ iana to pay damages of approximately motoren and SOLO Italiana jointly liable for LIT 180 million. That judgment was upheld misuse of the trade name 'SOLO' and unfair by the Corte d'Appello, Bologna. Before competition. The Corte d'Appello stated that both courts, Solo Kleinmotoren contended the decision on the quantum of damages that the court settlement reached before the should be dealt with in later proceedings. In Oberlandesgericht Stuttgart in 1978 put an its reasoning the Corte d'Appello considered end to the parties' differences. Each court a submission that Emilio Boch's claims rejected that submission, stating that the should be regarded as having been satisfied judgment delivered in 1979 by the Corte in their entirety in Stuttgart on 24 February d'Appello, Bologna, had dealt with that 1978. The court did not uphold that submis­ question and it was therefore res judicata. sion, stating inter alia that the court settle­ ment had never been declared enforceable in Italy and, in any case, was unrelated to the dispute being heard by the court. The judg­ ment states inter alia:

7. Before the Bundesgerichtshof Solo Klein­ sought. The Bundesgerichtshof therefore motoren contended that Point 3 of the court referred the following questions to the Court settlement reached in the Oberlandesgericht of Justice for a preliminary ruling: Stuttgart was aimed at precluding all claims that Emilio Boch might have against the company, including the claims on which he subsequently obtained judgment before the courts in Bologna; on that basis the company claimed that the court settlement was a bar 'Can a judgment within the meaning of Art­ to the recognition and enforcement of the icle 27(3) of the Brussels Convention, with judgment for damages delivered in Bologna. which the judgment whose recognition is In that submission the company relied on sought is irreconcilable, also be an enforce­ Article 27(3) of the Brussels Convention, able settlement which is reached by the same which provides: parties before a court of the State in which recognition is sought in order to settle legal proceedings which are in progress?

'A judgment shall not be recognized:

If so, does that answer apply to all the terms of that settlement or only to those which are independently enforceable pursuant to Art­ icle 51 of the Brussels Convention and poss­ (3) if the judgment is irreconcilable with a ibly only if the conditions for enforcement judgment given in a dispute between the are met?' same parties in the State in which recogni­ tion is sought.'

9. The parties to the main proceedings, the German Government, the Italian Govern­ The company takes the view that a court set­ ment and the Commission have submitted tlement is covered by Article 27(3). observations to the Court.

claim that he had raised before the court and will mean that a decision on the meaning of that it had upheld. The correctness of such a the third paragraph of Article 34 is rendered judgment which has the force of res judicata unnecessary. cannot be disputed in connection with an application for an order for enforcement under the Brussels Convention, since the third paragraph of Article 34 of the Conven­ tion provides that under no circumstances may the foreign judgment be reviewed as to its substance. 14. The Bundesgerichtshof posed the ques­ tion concerning the interpretation of Art­ icle 27(3) because Solo Kleinmotoren relied on that provision as a bar to enforcement of 11. Mr Boch's view is based on a particular the judgment for damages delivered in Italy. interpretation of the Convention, namely that the third paragraph of Article 34 excludes application of Article 27(3) when, in the judgment in respect of which enforce­ ment is sought, a position has been taken on whether it is irreconcilable with a 'judgment between the same parties' given in the State 15. Under Article 31 of the Convention 'a of enforcement. judgment given in a Contracting State and enforceable in that State shall be enforced in another Contracting State when, on the application of any interested party, the order for its enforcement has been issued there' 12. The Bundesgerichtshof did not refer and under the second paragraph of Article 34 questions to the Court of Justice concerning 'the application may be refused only for one the meaning of the third paragraph of Article of the reasons specified in Articles 27 34. It chose to pose the questions quoted and 28'. above concerning the interpretation of Ar­­ icle 27(3). The Bundesgerichtshof found it appropriate to seek a ruling on those ques­ tions because if they are answered in the negative application of Article 27(3) is in any case precluded.

18. Special rules on the enforcement of court settlements are laid down in Title IV on authentic instruments and court settlements. Article 51 provides: 'A settlement which has been approved by a court in the course of proceedings and is enforceable in the State in which it was concluded shall be enforceable in the State in which enforcement is sought under the same conditions as authentic 21. The Bundesgericht's assumption is, in instruments.' Article 50, which concerns my view, not sustainable. The definition in authentic instruments, provides that such a Article 25 applies, on its terms, generally to document 'which has been formally drawn the term 'judgment' when it is used in the up or registered as an authentic instrument convention — 'For the purposes of this and is enforceable in one Contracting State Convention'. Neither in the travaux prépa- shall, in another Contracting State, have an ratoires nor elsewhere in the Convention is order for its enforcement issued there, on there any suggestion that the definition application made in accordance with the pro­ should not apply to judgments which bar cedures provided for in Article 31 et seq.' recognition. and that 'the application may be refused only if enforcement of the instrument is contrary to public policy in the State in which enforcement is sought'.

22. The very formulation of Article 27(3) militates against a judgment which is a bar to recognition including a court settlement. The 19. Whilst there is no doubt but that, in English version of the provision thus also respect of judgments whose recognition is uses the term 'judgment' in respect of a bar sought, Article 27(3) operates on the basis of to recognition. All the language versions the definition given in Article 25, doubt has speak of a 'judgment' 'given' in the State in been raised in the present case whether the which recognition is sought. Article 51 of the definition in Article 25 also applies to the Convention speaks of a court settlement 'judgment' which is relied upon as a bar to being 'approved' by the court in the course recognition of the foreign judgment. of proceedings.

29. Solo Kleinmotoren contended that only by acceptance of a court settlement as a bar to recognition can the necessary equal treat­ ment of the various means by which pro­ 26. Accordingly there would have to be par­ ceedings may be concluded in the Contract­ ticularly strong and cogent grounds for ing States be achieved. interpreting Article 27(3) to the effect that a court settlement can also constitute a bar to recognition. 1 — Jenard Report, OJ 1979 C 59, p. 45.

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31. It does not therefore appear to me pos­ sible to interpret Article 27(3) to the effect that that provision, despite its wording, 30. That argument does not, in my view, includes a court settlement as a bar to recog­ carry enough persuasive weight for the inter­ nition. If there should appear in practice to pretation suggested by the company. be a need for it to do so, the provision can be According to the information available there amended so as to achieve such a result. is no support for the contention that the two alternative ways of concluding disputes differ from each other merely on minor details. On the evidence there are currently no Contract­ ing States whose legal systems accord the status of res judicata to court settlements, whereas 'consent judgments' can acquire that status. The Convention does not lay down any requirement that a judgment should 32. As is also mentioned in the order for ref­ have become res judicata before it can be erence, it should not be overlooked in this recognized, subject to the first paragraph of connection that Article 27(1) contains a rule which can be applied in order to refuse to recognize and enforce foreign judgments, that is to say when recognition 'is contrary 2 — So-called 'jugements convenus', 'jugements d'expédient', 'jugements de donner acte'. to public policy' in the State in which

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enforcement is sought, and if necessary that 33. As a consequence of the suggested inter­ provision could be applied in a case where pretation of Article 27(3), there is no reason the circumstances are quite out of the ordi­ to reply to the second question referred to nary. the Court.