C-80/00

WECO Polstermöbel GmbH & Co.,

on the interpretation of Title III, headed 'Recognition and enforcement', of the abovementioned Convention of 27 September 1968 (OJ 1978 L 304, p. 36), as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1 and — amended text — p. 77), by the Convention

* Language or the case: German.

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of 25 October 1982 on the Accession of the Hellenic Republic (OJ 1982 L 388, p. 1) and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic (OJ 1989 L 285, p. 1),

— WECO Polstermöbel GmbH & Co., by J. Schütze, Rechtsanwalt,

— the German Government, by R. Wagner, acting as Agent,

— the Greek Government, by S. Khala and K. Grigoriou, acting as Agents, — the Italian Government, by U. Leanza, acting as Agent, and O. Fiumara, avvocato dello Stato, I - 5012

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— the United Kingdom Government, by G. Amodeo, acting as Agent, and A. Layton QC,

— the Commission of the European Communities, by J.L. Iglesias Buhigues, acting as Agent, and B. Wägenbaur, Rechtsanwalt,

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the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters three questions on the interpretation of Title III, headed 'Recognition and enforcement', of that Convention (OJ 1978 L 304, p. 36), as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1 and — amended text — p. 77), by the Convention of 25 October 1982 on the Accession of the Hellenic Republic (OJ 1982 L 388, p. 1) and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic (OJ 1989 L 285, p. 1) (hereinafter 'the Brussels Convention').

2 Those questions were raised in proceedings between Italian Leather SpA (hereinafter 'Italian Leather'), a company governed by Italian law established in Bironto (Italy), and WECO Polstermöbel GmbH & Co. (hereinafter 'WECO'), a limited partnership governed by German law established in Leimbach (Germany), concerning the conditions of use of a brand name under a contract for the exclusive distribution of leather-upholstered furniture.

Legal context

The Brussels Convention

3 As stated in the first paragraph of Article 1, the Brussels Convention applies in civil and commercial matters whatever the nature of the court or tribunal. I - 5014

7 The first paragraph of Article 26 of the Brussels Convention states:

'A judgment given in a Contracting State shall be recognised in the other Contracting States without any special procedure being required.' I - 5015

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8 Article 27 of the Brussels Convention is worded as follows:

'A judgment shall not be recognised:

3. if the judgment is irreconcilable with a judgment given in a dispute between the same parties in the State in which recognition is sought;

German legislation

1 1 According to the Bundesgerichtshof, under Paragraph 935 of the Zivilpro- zessordnung (German Code of Civil Procedure, hereinafter 'the ZPO') an interim measure may be granted if it is feared that a change in the current situation could prevent or substantially impede the assertion by a party of his rights. Accordingly, the court seised is called on essentially to maintain the status quo.

1 2 The Bundesgerichtshof further points out that, under Paragraph 940 of the ZPO, the court seised may also make an interim order regulating a legal relationship, in so far as that appears to be necessary in order to prevent substantial prejudice or imminent use of force or for other reasons.

1 3 Under Paragraph 890(1) of the ZPO, decisions of German courts which impose restraining orders may also give rise to an administrative penalty payment or, where such payment cannot be recovered, to imprisonment. I-5017

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The main proceedings and the questions referred for a preliminary ruling

17 In 1998 WECO complained of defective performance of the contract by Italian Leather. It informed Italian Leather that, as a consequence, it would not be a party to any joint sales message at forthcoming exhibitions and that it would present its own WECO mark.

18 Italian Leather brought proceedings for interim relief against WECO before the Landgericht Koblenz (Regional Court, Koblenz, Germany), the court within whose jurisdiction WECO's registered office is situated, to restrain it from marketing products presented as being in easy-care leather under the brand name 'naturia longlife by Maurizio Danieli'.

19 By judgment of 17 November 1998 the Landgericht Koblenz, which had been seised in accordance with Article 24 of the Brussels Convention, dismissed the application because there was no 'ground justifying the grant of interim relief'.

20 The Landgericht Koblenz took the view that to grant Italian Leather's application would be tantamount to ordering WECO to perform the contract. However, Italian Leather had not proved that there was a risk of irreparable damage or of a definitive loss of rights, conditions which had to be met under German law before the relief sought could be granted. Furthermore, WECO had already taken concrete steps to advertise and market its products with leather from other suppliers. Accordingly, it too would suffer considerable damage if the prohibition sought were granted.

21 A few days before the Landgericht Koblenz delivered its judgment of 17 November 1998, Italian Leather had applied to the Tribunale di Bari (Bari District Court) for interim measures. In its order of 28 December 1998, the Tribunale di Bari took a different view on the condition of urgency. It held in this regard that 'the pericitlum in mora (urgency) lies in the plaintiff's economic loss and the possible "extinction" of its rights resulting therefrom, for which there would be no compensation'.

26 The Bundesgerichtshof is unsure as to the correct interpretation of Article 27(3) of the Brussels Convention.

27 According to the Bundesgerichtshof, the Court of Justice's case-law on whether the legal consequences of different judgments are mutually exclusive has, until now, only concerned situations in which there were divergences in substantive law. However, the case before the Bundesgerichtshof has the particular feature I - 5020

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that the conflict between the two decisions on interim measures at issue is attributable only to divergences as to procedural requirements.

28 The Bundesgerichtshof states that, if those decisions are irreconcilable, the court of the State in which enforcement is sought should nevertheless have the power to disapply Article 27(3) of the Brussels Convention if it considers that, from the point of view of that State, the divergence is not sufficiently significant. The sole purpose of Article 27(3) is to prevent the rule of law in a Contracting State from being disrupted by advantage being taken of two conflicting judgments. The risk of such disruption in a given case is to be assessed solely from the point of view of the State in which enforcement is sought.

29 The Bundesgerichtshof is also uncertain whether, if it were to uphold the order for enforcement, it may, or must, maintain the financial penalty which the Landgericht Koblenz, on the basis of German law, attached to the order of the Tribunale di Bari in case the latter order was not enforced.

(2) May and must the court of the State of enforcement which has declared a foreign judgment requiring the party against whom enforcement is sought to desist from certain activities to be enforceable in accordance with the first paragraph of Article 34 and the first paragraph of Article 31 of the Convention at the same time order the measures necessary, under the law of the State of enforcement, for enforcement of a restraining order?

(3) If the answer to Question 2 is in the affirmative, must the measures necessary, under the law of the State of enforcement, for enforcement of the restraining order be ordered even if the judgment to be recognised does not itself include comparable measures in accordance with the law of the State of origin, and that law makes no provision at all for the immediate enforceability of such restraining orders?'

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Question 1

36 The United Kingdom Government observes with regard to the first distinction that Article 27(3) of the Brussels Convention concerns solely the legal effects of a judgment and not the procedural requirements for its adoption. Examination of those requirements may, however, be necessary in order to determine the legal effects of the judgment concerned and to assess, by way of consequence, to what

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extent it is irreconcilable with another judgment. That is particularly the case where the measure sought has been refused. It may then be necessary to refer to the requirements for the adoption of the measure in order to understand the content of the judgment refusing to grant it.

37 As regards the second distinction referred to in paragraph 35 of the present judgment, the court may, in order to appraise the content and effect of each of the competing judgments, examine whether the requirements for the adoption of the measures in question are substantive or procedural. That will be particularly true where the court of the State in which recognition is sought is faced with a judgment refusing to order a particular measure because, in that case, there will be no 'measure' as such to examine.

38 At the hearing, the United Kingdom Government inferred therefrom that, in the main proceedings, it was difficult to regard the negative effects of the judgment of 17 November 1998 of the Landgericht Koblenz as being irreconcilable with the positive effects of the order of the Tribunale di Bari of 28 December 1998. Only if the respective criteria applied by those two courts and the evidence adduced before them were identical could the effects of the decisions made by them be regarded as irreconcilable.

42 Third, it is equally immaterial t h a t national procedural rules as t o interim measures a r e liable t o vary from o n e Contracting State t o a n o t h e r t o a greater degree t h a n rules governing proceedings o n t h e substance.

43 T h e object of the Brussels Convention is n o t t o unify the procedural rules of the Contracting States, b u t t o determine which court h a s jurisdiction in disputes concerning civil a n d commercial matters in i n t r a - C o m m u n i t y relations a n d t o facilitate t h e enforcement of judgments (see Case C-365/88 Hagen [1990] E C R I-1845, paragraph 17, and Case C-68/93 Shevill and Others [1995] ECR 1-415, paragraph 35).

44 Moreover, as follows from paragraph 22 of the judgment in Hoffmann, cited above, irreconcilability lies in the effects of judgments. It does not concern the requirements governing admissibility and procedure which determine whether judgment can be given and which may vary from one Contracting State to another.

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45 In the light of the foregoing, it is clear that decisions on interim measures such as the decisions here at issue in the main proceedings are irreconcilable.

50 Article 27(3) of the Brussels Convention therefore sets o u t a g r o u n d for refusing to recognise judgments w h i c h is m a n d a t o r y , in contrast t o t h e second p a r a g r a p h

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of Article 28 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, done at Lugano on 16 September 1988 (OJ 1988 L 319, p. 9), under which recognition of a judgment may be refused in any case provided for in Articles 54B(3) or 57(4) of that Convention.

51 Finally, it would be contrary to the principle of legal certainty, which the Court has repeatedly held to be one of the objectives of the Brussels Convention (see Case 38/81 Effer [1982] ECR 825, paragraph 6, Case C-440/97 GIE Groupe Concorde and Others [1999] ECR I-6307, paragraph 2 3 , and Case C-256/00 Besix [2002] ECR I-1699, paragraph 24), to interpret Article 27(3) as conferring on the court of the State in which recognition is sought the power to authorise recognition of a foreign judgment when it is irreconcilable with a judgment given in that Contracting State.

52 In view of the foregoing, the answer to the second part of the first question must be that, where a court of the State in which recognition is sought finds that a judgment of a court of another Contracting State is irreconcilable with a judgment given by a court of the former State in a dispute between the same parties, it is required to refuse to recognise the foreign judgment.

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Bundesgerichtshof by order of 10 February 2000, hereby rules:

1. On a proper construction of Article 27(3) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, by the Convention of 25 October

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