C-80/00

ITALIAN LEATHER v WECO POLSTERMÖBEL

OPINION OF ADVOCATE GENERAL LÉGER delivered on 21 February 2002 1

1. By the present reference for a prelimi- protective measures in interim relief pro- nary ruling, the Court is asked to interpret ceedings in each of those States render the Article 27(3) of the Convention of 27 Sep- decisions ruling on applications for the tember 1968 on Jurisdiction and the adoption of such measures irreconcilable. Enforcement of Judgments in Civil and Commercial Matters. 2 This article pro- vides that a judgment is not to be recog- nised in another Contracting State if it is irreconcilable with a judgment given in a dispute between the same parties in that 3. Before examining the main question State. which has been referred to the Court, it is necessary to recall the facts giving rise to the dispute, the proceedings which ensued and the relevant legal background.

2. The particular feature of the national I — The facts and the main proceedings decisions at issue in the main proceedings is that they were made at the end of proceed- ings for interim relief governed by different rules in each of the two Contracting States. This feature of the dispute before it led the 4. Italian Leather SpA 3is a legal person referring court to wonder whether the established in Italy. It markets leather- differences in the procedural requirements upholstered furniture under the name imposed for the adoption of provisional or 'LongLife'.

10. By judgment of 17 November 1998 the Landgericht Koblenz, which had been seised in accordance with Article 24 of the Convention, dismissed the application because there was no 'ground justifying the (4) No dealer may use the LongLife brand grant of interim relief'. 6 name for its own advertising without written authorisation from the sup- plier.' 5

11. The Landgericht Koblenz took the view that to grant Italian Leather's application would be tantamount to ordering WECO to perform the contract. Italian Leather had 7. The parties to the contract conferred not proved that there was a risk of irrepar- jurisdiction on the courts of Bari (Italy). able damage or of a definitive loss of rights, requirements which had to be met under German law before the relief sought could be granted. WECO had, moreover, already taken concrete steps to advertise and mar- ket its products with leather from other 8. In 1998 WECO alleged defective per- formance of the contract by Italian Leather. It informed Italian Leather that, as a 6 — Article 24 of the Convention permits the courts of a Contracting State to order the provisional, including protective, measures available under the law of that State, even if, under the Convention, the courts of another Contracting State have jurisdiction as to the substance of 5 — Page 4 of the order for reference. the matter.

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ITALIAN LEATHER v WECO POLSTERMÖBEL

suppliers. Accordingly, it equally would 15. Italian Leather appealed against the have suffered considerable damage if the decision of the Oberlandesgericht to the restraining order sought had been granted. Bundesgerichtshof (Federal Court of Jus- tice).

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OPINION OF MR LÉGER — CASE C-80/00

19. The exceptions to the recognition of III — The questions referred for a prelimi- judgments in the State where recognition is nary ruling sought include that provided for in Article 27(3), under which 'a judgment shall not be recognised ... if the judgment is irreconcilable with a judgment given in a dispute between the same parties in the 22. The Bundesgerichtshof has doubts as to State in which recognition is sought'. how Article 27(3) of the Convention should be interpreted where, as in the present case, two decisions have been made, at the end of proceedings for interim relief, on the basis of different procedural requirements. Should it uphold the decision authorising enforcement made by the Landgericht Koblenz on 18 January 1999, it is uncer- tain whether it may or must maintain the German legislation administrative financial penalty which that court attached to the Italian decision in case the latter was not enforced.

20. According to the Bundesgerichtshof, 'under Paragraph 935 of the Zivilprozes- sordnung, 8 an interim measure may be 23. Consequently, the Bundesgerichtshof granted if it is feared that a change in the decided to stay the proceedings and to refer current situation could prevent or substan- the following questions to the Court for a tially impede the assertion by a party of his preliminary ruling: rights. Accordingly, the court seised is called on essentially to maintain the status quo'. 9

'(1) Can judgments be irreconcilable within the meaning of Article 27(3) of the Brussels Convention when the only difference between them lies in the 21. The Bundesgerichtshof further states specific requirements for the adoption that 'under that provision, the court may of a particular type of autonomous also make an interim order regulating a provisional measure (within the mean- legal relationship, in so far as that appears ing of Article 24 of the Convention)? to be necessary in order to prevent substan- tial prejudice or imminent use of force or for other reasons'. 10

IV — Irreconcilability, for the purposes of 27. First, while the question from the Article 27(3) of the Convention, of con- referring court lays emphasis on the dif- flicting judgments given under procedures ferences between the German and Italian for interim relief governed by different procedural requirements (first question referred for a preliminary ruling) 11 — It is evident from the order for reference, and it is not contested, that the judgment in proceedings for interim relief whereby the Landgericht Koblenz dismissed Italian Leather's application to prohibit WECO from using the brand name 'LongLife' is a 'judgment' within the meaning of Article 25 of me Convention. The same is true of the order in interim relief proceedings whereby the Tribunale di B a r igranted the same application for a restraining order, the recognition of which in Germany is at issue in 24. The first question from the referring the main proceedings. Article 25 states that any judgment court relates to irreconcilability under given by a court or tribunal of a Contracting State, whatever the name by which it may be called, constitutes a Article 27(3) of the Convention of two judgment for the purposes of the Convention.

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OPINION OF MR LÉGER — CASE C-80/00

28. However, in the absence of more pre- cise information on the reasons why the referring court is concerned in its question with the procedural requirements for grant- ing the measure sought, it must be accepted that the grounds for interim relief laid down by national law are not identical in 31. Article 27 constitutes an obstacle to the the two Contracting States. attainment of one of the fundamental objectives of the Convention which seeks to facilitate, to the greatest extent possible, the free movement of judgments by provid- ing for a simple and rapid enforcement procedure. This exception to the principle that judgments should be recognised must therefore be interpreted strictly. 13 Fur- thermore, it must be applied only to judg- 29. Secondly, the assumption that the only ments whose legal effects, if they were difference between the two decisions on produced simultaneously in the same Con- interim relief stems from this difference in tracting State, would disturb the rule of law the requirements which the national pro- in the State of enforcement. 14 cedures set for grant of a restraining order disregards the fact that the decisions also 13 — See, as a recent example of established case-law, Case C-38/98 Renault [2000] ECR I-2973, paragraph 26. 12 — Ibid., p. 9. The requirement mentioned by the referring 14 — See P. Jenard, 'Report on the Convention of 27 September court is, in essence, the need to avert substantial harm or 1968 on Jurisdiction and the Enforcement of Judgments in an imminent danger threatening the interests of the Civil and Commercial Matters', p. 45 (OJ 1979 C 59, p. 1; applicant for interim relief. 'the Jenard Report').

32. It should be recalled that in Hoffmann the judgments that is attributable to the the Court ruled that, in order to ascertain effects which they produce, as referred to in whether two judgments are irreconcilable the judgment in Hoffmann, that the Bun- within the meaning of Article 27(3) of the desgerichtshof is uncertain whether the Convention, it should be examined whether judgments remain irreconcilable even if they entail legal consequences that are the irreconcilability arises from differences mutually exclusive. 15 It is therefore dif- in the procedural requirements pursuant to ficult to claim, for example, that judgments which they were given. which diverge as to their reasoning but not as to their legal effects are irreconcilable in that they would be liable to disturb the rule of law in the State in which enforcement is sought. 16 Despite being different, the grounds on which judicial decisions are based can coexist, provided that the rules 35. The hesitation as to the interpretation of law deriving from them are not incom- of Article 27(3) of the Convention also patible. stems from the fact that, while different, the judgments do not decide the case as to the merits, that is to say in accordance with substantive law. The chances of a party's succeeding in its application depend mainly on the degree of accessibility, as laid down by national law by means of the grounds 33. It can be accepted all the less that, if the for the grant of interim relief, of the grounds for interim relief laid down in measures which the court in interim relief national legislation diverge but the judg- proceedings has the power to grant. ments given pursuant to those procedural requirements do not produce mutually incompatible effects, the foreign judgment should be considered irreconcilable with the judgment given in the State in which enforcement is sought. The procedural differences in themselves create risks that decisions will be irreconcil- able, so that it is not certain that, in the present case, an Italian judgment on the merits, given pursuant to the substantive 34. Consequently, the fact that the require- law applicable to the dispute, would be ments laid down by the national procedures irreconcilable with a German judgment are not identical cannot be separated from given under the same conditions. the finding that the two judgments at issue gave diametrically opposing responses to applications for a restraining order. It is precisely because of this irreconcilability of

order on the merits. 17 It merely considered 39. The Italian court granted Italian that the condition for obtaining the meas- Leather's application for a restraining order ure sought was not met. 18 According to the after the German court had dismissed an Landgericht Koblenz, Italian Leather's identical application by the same applicant. application was seeking to settle the legal relationship between the contracting parties and was not confined to maintain- ing the existing situation, so that the need to prevent substantial prejudice, one of the preconditions for making a decision grant- ing interim relief, was not met. 19 Applying its national procedural provisions, the 40. The fact that a court of a Contracting Tribunale di Bari reached a different State grants an application identical to the decision. application dismissed by the court of another Contracting State is not invariably the element in enforcement procedures that is liable to give rise to doubts as to the reconcilability of two judgments. 37. The referring court's question should therefore be read as seeking to establish whether Article 27(3) of the Convention is to be interpreted as meaning that a foreign judgment granting a restraining order is irreconcilable, within the meaning of that article, with a judgment refusing to grant such an order, given in a dispute between In Hoffmann, for example, a foreign judg- the same parties in the State in which ment ordering a person to make mainten- recognition is sought, where the conflicting ance payments to his spouse by virtue of his effects of the two judgments are attribu- conjugal obligations to support her was table to the differences in the procedural held to be irreconcilable with a national requirements laid down by national law for judgment pronouncing the divorce of the the grant of a restraining order in the State spouses. Although not relating to the same of origin and in the State in which recog- subject-matter, the two judgments given in nition is sought. disputes between the same parties were nonetheless considered to fall within Article 27(3) of the Convention.

47. Also, there is a risk of irreconcilability within the meaning of Article 27(3) of the Convention whatever the nature of the judgment in question, provided that the 44. It is necessary to examine whether judgment meets the definition in Article 25 judgments may still be categorised as of the Convention. irreconcilable within the meaning of the judgment in Hoffmann if their mutual irreconcilability stems from differences in the procedural requirements laid down by national law in order for restraining meas- ures to be granted. 48. In interpreting the latter provision, the Court has stated that in order to be a 'judgment' for the purposes of the Con- 20 — The United Kingdom Government appears to endorse this vention the decision must emanate from a view when it states that 'it is hard to see from the order ... judicial body of a Contracting State decid- how it can be said that the decisions are irreconcilable at all' (paragraph 9 of its observations) or (at the hearing) ing on its own authority on the issues how the legal effects of the German judgment can he irreconcilable with the positive effects of the Italian between the parties. 21 Article 25 draws no judgment. It adds that a refusal to grant a provisional or distinction between national judicial protective measure constitutes a judgment that is not to be recognised or enforced in other Contracting States, so that decisions on the basis of the characteristics it is debatable whether its irreconcilability with a judgment from one of the other Contracting States should justify a of the procedures under which they have refusal t o recognise that other j u d g m e n t (ibid., paragraph 22). According to the United Kingdom Govern- been made. ment, it is inimical to the Convention's purpose for recognition of a foreign judgment to be refused on the basis of its irreconcilability with a |jdgment of the State in which enforcement is sought that can itself thus not be 21 — C a s e C-414/92 Sah Kleinmotoren [1994] ECR I-2237, recognised (ibid., paragraph 24). paragraph 17.

53. According to the Jenard Report, 'there can be no doubt that the rule of law ... 51. This point is confirmed by the case-law would be disturbed if it were possible to of the Court according to which Article 24 take advantage of two conflicting judg- of the Convention does not preclude pro- ments'. 26 The test of whether the rule of visional or protective measures from being law is disturbed, which as we know the subject of recognition and an auth- underlies the rule laid down by orisation for enforcement on the conditions Article 27(3) of the Convention, must serve laid down in Articles 25 to 49 of the as a guide for interpreting this provision. Convention. 23 It cannot be concluded that the Convention is applicable to proceedings leading to measures of this kind without at 24 — These measures have been defined as being those 'which, in the same time envisaging the possibility matters within the scope of the Convention, are intended to preserve a factual or legal situation so as to safeguard that the judgments involved will be incom- rights the recognition of which is otherwise sought from patible. the court having jurisdiction as to the substance of the case' (Case C-391/95 Van Uden [1998] ECR I-7091, paragraph 37). 25 — See also Van Uden, cited above, paragraph 34, which states that 'where ... the subject-matter of an application 22 — Ibid., paragraph 20. for provisional measures relates to a question falling 23 — Case 125/79 Denilauler [1980] ECR 1553, paragraph 17. within the scope ratione materiae of the Convention, the See, also, Case 120/79 De Cavel [1980] ECR 731, Convention is applicable ...'. paragraphs 9 and 10. 26 — Page 45.

54. The judgment in Hoffmann illustrates right of each individual to have recourse to perfectly the requirement for a strict read- the judicial system that has been set up, in ing of Article 27(3) of the Convention, order to have the legal rules in force because it makes the irreconcilability of actually applied. This entire edifice would two judgments dependent on the legal rule be jeopardised if the judgments emanating pronounced by the court of the State of from it could be called into question by the origin being incompatible with that pro- recognition or enforcement of conflicting nounced in the State in which recognition is judgments. sought. This approach to the incompatibil- ity of judgments based on the effects which they produce, rather than their 'substantive content', 27 appears to me both more prag- matic and more faithful to the requirement for a strict interpretation of the provision. 57. The requirements in accordance with which the judgments have been delivered are of little importance. The risk of disturb- ing the rule of law is no less great where judgments with irreconcilable effects are given pursuant to different procedural 55. In that judgment, the Court implicitly requirements. held that a judgment of a Contracting State the enforcement of which in another Con- tracting State produces legal consequences that are mutually exclusive disturbs the rule of law. This assessment covers first and foremost judgments which produce oppo- site effects, as in the present case. 58. If it is accepted that a judicial act, even if it has been adopted in accordance with specific requirements laid down by national law, constitutes a judgment within the meaning of Article 25 of the Convention, it is intended to apply like any other 56. If proof be needed, it is sufficient to judgment in the territory of the Contracting imagine the consequences for a State of a States. The risk lies in the conflict of situation in which it were called upon, in opposing legal rules, the binding force of accordance with its national law, to pro- which is not diminished by the fact that the vide the assistance of the law-enforcement judgments have been given at the end of agencies for the enforcement of two judg- interim relief proceedings organised in dif- ments, one of which grants an application ferent ways. that the other dismisses. The legal order in the Contracting States is safeguarded by the existence of the State governed by the rule of law. The continued existence of the State governed by the rule of law depends on the It is not claimed in the main proceedings 27 — The term is that of Advocate General Darmon i n his that a decision made under the Italian Opinion in Hoffmann, at point 10. interim relief procedure or the German

61. I am therefore of the view that the nature of the reasons resulting in mutually incompatible judgments, whether those 65. The simultaneous enforcement of two reasons are purely legal or stem from the judgments whose legal effects are mutually applicable procedure, is not to be taken exclusive constitutes nothing more nor less into account in the reasoning of the court seised that intends to rule on their irrecon- cilability. 28 — Page 10 of the order for reference, point 3.

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ITALIAN LEATHER v WECO POLSTERMÖBEL

than the negation of the effectiveness of the 69. It follows from the foregoing that a law, which is paralysed by the pronounce- foreign judgment granting a restraining ment of two contradictory legal rules. A order is irreconcilable with a judgment society founded on the rule of law loses refusing to grant such an order, given in a some of its essence if the rules of social dispute between the same parties in the organisation on which it rests are deprived State in which recognition is sought, even of force, so that this contradiction between where the conflicting effects of the two two legal rules — or, if you prefer, their judgments are attributable to the differ- mutual cancellation —· is in itself contrary ences in the procedural requirements laid to the rule of law. down by national law for the grant of a restraining order in the State of origin and in the State in which recognition is sought.

66. It follows that it is not for a court to assess the extent to which a foreign judg- ment is capable of disturbing the rule of law, once it has been established that it is irreconcilable, within the meaning of the 70. The court to which application is made judgment in Hoffmann, with the judgment for recognition or enforcement of the given in the State in which recognition is foreign judgment does not have the power sought. Disturbance of the rule of law is to grant the application on the basis that inherent in this incompatibility between the that judgment does not sufficiently disturb legal effects produced by the two judg- the rule of law where the judgment given in ments. the State of origin is irreconcilable, within the meaning of Article 27(3) of the Con- vention, with the judgment given in the State in which recognition is sought.

The court to which application is made for recognition or enforcement of the foreign judgment does not have the power to grant the application on the basis that that judgment does not sufficiently disturb the rule of law where the judgment given in the State of origin is irreconcilable, within the meaning of Article 27(3) of the Convention, with the judgment given in the State in which recognition is sought.

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