Contents
In Case 258/83REFERENCE to the Court under the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters by the Bundesgerichtshof [Federal Court of Justice] for a preliminary ruling in the proceedings pending before that court betweenCalzaturificio Brennero sas, Pastrengo, Verona (Italy),andWendel GmbH Schuhproduktion International, Detmold (Federal Republic of Germany)THE COURT (Fourth Chamber)composed of: G. Bosco, President of Chamber, P. Pescatore, A. O'Keeffe, T. Koopmans and K. Bahlmann, Judges,Advocate general: Sir Gordon SlynnRegistrar: H. A. Rühi, Principal Administratorgives the following
Judgment
Facts and Issues
The order making the reference, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I —Facts and procedure
II —Summary of written observations submitted to the Court
First question
Brennero, the appellant in the main action, contends that neither the wording of the second paragraph of Article 37 nor the system established by the Convention permit the issue of an interim order concerning the provision of security under the second paragraph of Article 38, before judgment is given on the appeal in accordance with the first paragraph of Article 36 and Article 37 of the Convention. The second paragraph of Article 37 does not apply to interim orders or interlocutory judgments. If a court were permitted to issue an interim order under Article 38 before giving judgment on the appeal, Article 39 would be rendered devoid of purpose. That provision lays down precisely that the decision authorizing enforcement permits the creditor to take protective measures during the period specified for lodging an appeal against the decision authorizing enforcement and until judgment has been given on the appeal. As long as the court of first instance's decision authorizing enforcement is not enforceable itself, that is to say whilst the appeal proceedings are in progress, it is inappropriate to issue an interim order under Article 38. It is only once the appeal proceedings are over that it may prove necessary to make the decision authorizing enforcement — if it has been upheld — conditional on the provision of security pursuant to Article 38 of the Convention. The measures referred to in that provision may therefore be adopted only in conjunction with the judgment dismissing the appeal whereby the decision of the court of first instance authorizing enforcement itself becomes enforceable.Brennero also draws attention to a factor which was not expressly raised in the questions submitted. It considers that Article 38 of the Convention is inapplicable in proceedings for the enforcement of an interim order, such as the protective seizure order issued by the Tribunale, Verona, in the present case. Seizure is by definition a measure which has only temporary effects before final judgment is given on the substance of the case. A provisional suspension of the effects of an interim order of that kind or an order requiring a creditor effecting seizure to provide security for the same amount would be tantamount to cancelling out the effects of the original interim order by a protective measure having the opposite effect. In that respect, such a measure would amount to a review of the substance of the original judgment, something that is expressly prohibited by the last paragraph of Article 34 of the Convention. An interim protecitvc measure creates, in so far as it prejudges the final decision, a risk which the court of the State in which the original judgment was given must assess at the time when it authorizes the seizure.Brennero points out that suspension of enforcement and the provision of security are typical measures relating to the enforcement of judgments on the substance of a case and they do not apply to measures intended to provide interim legal protection.The legal traditions of the Member States, which were followed in bilateral international agreements, always demanded as a precondition for enforcement that the judgment should have become final (res judicata). Although the Convention departs from that tradition by providing that judgments which are open to appeal are also enforceable, it takes account in Article 38 of the possible consequences of enforcing a judgment which is subsequently reviewed. The decisive reason for limiting the scope of the measures provided for by Article 38 exclusively to judgments on the substance of a case is that enforcement proper produces irrevocable effects on the debtor's assets, with the result that precautionary measures are needed pursuant to Article 38 in cases where the judgment in question may still be amended. However, that does not apply where the measures are intended merely to provide interim legal protection.The Italian Government and the Commission also consider that the court hearing an appeal against a decision authorizing enforcement may require the provision of security under Article 38 of the Convention only when it gives judgment on the appeal.In the Italian Government's opinion, the second paragraph of Article 38, which permits the court to “make enforcement conditional” on the provision of security, refers to the time at which the court upholds the enforcement order issued at first instance. Furthermore, the purpose of Article 38 is to protect the interests of the party against whom enforcement is sought solely in view of the provisional nature of the foreign judgment. The provisions of Article 39 provide adequate guarantees for the duration of any appeal proceedings.The Commission weighs the conflicting interests of the creditor and of the debtor. Under Article 34 of the Convention, the court of first instance hearing the creditor's application for an enforcement order is obliged to give its decision without delay and without hearing the debtor. Although the protective measures which the creditor may take in accordance with Article 39 in the event of an appeal by the debtor are not themselves sufficient to satisfy the creditor's claim, they may none the less on their own already create substantial economic difficulties for the debtor, for example by freezing his bank accounts. In view of the debtor's right of recourse against the creditor if the decision authorizing enforcement is subsequently reversed, the debtor has an interest in obtaining an order that the creditor must provide security. Conversely, where no such obligation is imposed by the original foreign judgment, it constitutes an additional burden for the creditor.That appraisal of the parties' respective interests must however take account of the fundamental purpose of the Convention which is to ensure, as far as possible, the “free movement” of judgments and consequently to leave only limited powers to the courts of the State of enforcement. It follows from that principle that a restrictive interpretation must be given to Article 38 so as to limit the powers of the courts of the State of enforcement to those which are expressly provided for. Article 38 allows the court hearing the appeal:— either to stay the proceedings where an ordinary appeal has been lodged in the State in which the judgment was given or where the period for lodging such an appeal has not yet expired;— or to give judgment forthwith on the appeal lodged with it and, if it upholds the enforcement order, to authorize enforcement with or without provision of security.However, a restrictive interpretation of that kind does not deny a debtor the possibility of defending his legitimate interests. If the debtor, after lodging an appeal in the State in which the judgment was given, considers that the powers conferred by Article 38 are inadequate for the purpose of protecting his interests, he may apply to the competent courts of the State in which the judgment was given in order to obtain either an order suspending enforcement altogether or the provision of security. Those are the courts empowered to consider whether and to what extent a judgment that has not yet become final may be enforced.Furthermore, to recognize that the court hearing the appeal in the State of enforcement is empowered to issue an interim order concerning the provision of security before giving judgment is incompatible with Article 39 of the Convention. The creditor is entitled under that provision to take protective measures during the time specified for lodging an appeal and until the appeal has been determined. To issue an interim order concerning the provision of security may thus jeopardize the objective of the Convention which is to permit the creditor to take whatever measures are appropriate with all possible speed.The German Government considers that the court hearing an appeal against a decision authorizing enforcement may, under the second paragraph of Article 38 of the Convention, make an interim order for the provision of security during the appeal proceedings. It contends that Article 38 provides for the possibility of staying the proceedings or making enforcement conditional on the provision of security. A stay of proceedings is by its very nature an interim measure. Since a measure of that kind may cause substantial harm to the creditor, for example where the debtor becomes bankrupt whilst the proceedings arc suspended, the second paragraph of Article 38 provides as an alternative the possibility of proceeding with enforcement in return for the provision of security. In the light of the purpose of Article 38 which is to diminish as far as possible the risks to which creditors and debtors arc exposed, an order for the provision of security is also an interim measure which comes to an end with the final judgment in the main proceedings pending in the State in which the original judgment was given. Once the uncertainty concerning the outcome of the main proceedings has been dispelled, the court hearing the appeal in the State of enforcement can finally decide whether the enforcement order was issued on valid grounds or whether it is necessary to quash it at the debtor's request.
Second question
Brennero considers that it must be possible to contest any judgment by a national court hearing an appeal against a decision authorizing enforcement given pursuant to the Convention, including an interim order, by a Rechtsbeschwerde (appeal on a point of law) pursuant to the second paragraph of Article 37. Brennero contends that this means of redress is not provided for by German national law but was introduced and is governed by the Convention and performs a specific function thereunder. In connection with such an appeal, therefore, the Bundesgerichtshof is not exercising its general function under German procedural law but is performing the specific function conferred upon it by the Convention, which is to review any judgment given by a court on an appeal. If it were impossible to lodge a Rechtsbeschwerde against a judgment given by such a court, the uniform interpretation of the Convention would be jeopardized since under the Protocol of 3 June 1971 on the interpretation of the Convention only the Bundesgerichtshof is obliged to submit a question to the Court of Justice for a preliminary ruling.According to the Commission, the second paragraph of Article 37 allows a Rechtsbeschwerde to be lodged only against the final judgment on the appeal. To allow a Rechtsbeschwerde to be lodged against an interim order concerning the provision of security would, in the Commission's opinion, be incompatible with the objective that the proceedings in the State of enforcement should be conducted swiftly.The Italian Government considers that while the Convention does not provide for the possibility of lodging an appeal in cassation against an interim order issued during the appeal proceedings, it does not rule out that possibility in so far as an appeal in cassation is provided for by each national system.In the German Government's opinion, there is no need for the second paragraph of Article 37 to be applied by analogy to interim orders. In certain national legal systems there is sometimes no right of appeal against interim orders. Increasing the number of means of redress merely enhances the risk of delays in proceedings and thus constitutes an obstacle to the “free movement” of judgments which is the objective of the Convention.
III —Oral procedure
At the sitting on 29 May 1984 oral argument was presented by the following: Alberto Miele, advocate at the Italian Court of Cassation, for Brennero, the appellant in the main action; F. Rössler, of the Detmold Bar, for Wendel, the respondent in the main action; Oscar Fiumara, Avvocato dello Stato, for the government of the Italian Republic; and W.-D. Krause-Ablass, of the Düsseldorf Bar, for the Commission of the European Communities.At the sitting, the representative of the Italian Government pointed out — whilst acknowledging that there was no reference to this problem in the questions submitted — that the seizure order issued by the Tribunale, Verona, is an interim protective measure and cannot therefore be contested by an appeal under Italian law. Since that interim measure is definitive as such, Article 38 of the Convention is inapplicable.Wendel, which did not submit any written observations, contended at the sitting that the need to afford the debtor sufficient protection in the manner provided for by Article 38 even before final judgment is given on the appeal stems from the scheme of Articles 38 and 39 of the Convention. Those two articles apply to two quite distinct situations. Article 38 applies to cases where an appeal has been lodged against a decision authorizing enforcement of a foreign judgment which can still be contested by an appeal in the State in which that judgment was given; Article 39, for its part, applies only to cases where the foreign judgment is final and it is necessary simply to ascertain whether that judgment can be recognized and declared enforceable.Therefore, since the reference to Article 39 is not relevant in this case, the possibility of issuing an order concerning the provision of security under the second paragraph of Article 38 must be available even during the appeal proceedings against the decision authorizing enforcement.Furthermore, a right to lodge a Rechtsbescbwerde against an interim measure of that kind which does not exist under German national law cannot be founded on the Convention.The Advocate General delivered his opinion at the sitting on 4 July 1984.
Decision
First question (Article 38)
Second question (Article 37)
Costs
Operative part
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.