Outline of the decision in Olsen v Finansiel Stabilitet [2025] EWHC 42 (KB)

In Half 1 of this two-part weblog collection on recognition and enforcement of international judgments, Alex Cornelius outlines the latest choice of Kerr J in Olsen v Finansiel Stabilitet A/S [2025] EWHC 42 (KB). Half 2 will present a useful sensible information to the primary avenues for imposing international judgments in England and Wales.

Olsen v Finansiel Stabilitet A/S [2025] EWHC 42 (KB), Kerr J, 16 January 2025

One side of this case that won’t be mentioned is the tried reliance on a case that didn’t exist. On this level, the reader is referred to paragraph 102 of the judgment onwards. Quite a lot of circumstances involving comparable errors have been publicised just lately. It’s not clear how the appellants got here throughout this fictional case, however it was seemingly AI-generated. Though Kerr J declined to trigger a summons for contempt of courtroom to be issued, he did point out that litigants in particular person can’t count on to be handled any in a different way to represented events in relation to checking the authenticity of authorities they search to depend upon.

Background

The appellants had arrange a renewable power firm in Denmark in 2003 and borrowed cash from a financial institution. The loans have been subsequently transferred to the respondent financial institution and the appellants have been guarantors of these loans. The enterprise later failed and went into obligatory liquidation. The respondent commenced proceedings in Denmark in November 2011 searching for to implement the assure.

Though the appellants had already moved to London in Could 2011, they participated within the Danish proceedings and gave proof. On 16 August 2013, the courtroom discovered them liable below the ensures and entered judgment towards them. Importantly, they gave their full London deal with, and this was recorded within the judgment.

The appellants tried to enchantment however by no means paid the charge such that their enchantment didn’t proceed. Nevertheless, plainly the enchantment was not truly dismissed till Could 2015. After its dismissal, the respondent tried to implement the judgment however apparently its enquiry brokers couldn’t find the appellants’ everlasting residential deal with in England. Due to this fact, they determined to attend till the appellants had returned to Denmark, however it was seemingly solely when the limitation interval for the debt was quick approaching that they realised was this not going to occur and sought to implement the judgment in England.

Two days earlier than the Danish limitation interval expired an ex parte utility was made within the King’s Bench Division. Grasp Prepare dinner granted the registration order on 16 August 2023, giving the appellants two months from service of the order to enchantment and offering that the judgment couldn’t be enforced in that interval. The order was finally served on the appellants at their flat in Guildford on 25 March 2024. They duly appealed throughout the two-month interval.

Sadly, some confusion was created by the respondent overlooking the truth that the appellants didn’t want permission to enchantment, resulting in an pointless permission to enchantment listening to. Pursuant to CPR 74.8(2) they may enchantment as of proper as a result of they’d no proper to make representations to the courtroom under and the enchantment towards the registration order was the one approach to problem it.

The relevant EU Legislation

The Danish proceedings had been commenced earlier than 10 January 2015 which means that the 2001 Brussels Regulation EC 44/2001 (“the Judgments Regulation”) utilized. As a reminder to the reader, the Judgments Regulation was designed to help the free motion of judgments by offering a fast and environment friendly approach to recognise and implement judgments in different Member States. The rationale behind the regime was that the precept of mutual belief justifies a just about computerized recognition course of the place the courtroom requested to recognise a judgment merely checks that the paperwork are so as and is forbidden from reviewing the substance of the judgment (Recital 17 and Article 36).

Accordingly, Article 38 of the Judgments Regulation gives that:

“(1) A judgment given in a Member State and enforceable in that State shall be enforced in one other Member State when, on the appliance of any get together, it has been declared enforceable there.”

Article 40 units out the process for making use of for a declaration of enforceability and specifies the paperwork which should be included with the appliance. The required paperwork are an genuine copy of the judgment and a certificates of enforceability from the courtroom that gave the judgment containing some primary details about the case (Articles 53 to 55 and Annex V). If required, these should be accompanied by a licensed translation.

Articles 34 & 35 comprise the one defences to recognition, and it’s for a defendant to lift them on an enchantment towards enforceability. The grounds for non-recognition below Article 34 are (1) public coverage, (2) default judgments the place service of the originating course of was not validly effected, (3) an irreconcilable judgment given within the Member State the place recognition is sought or (4) an earlier irreconcilable judgment given in some other state involving the identical reason for motion between the identical events which itself meets the standards for recognition. Article 35 prevents recognition or enforcement of judgment which don’t in any other case adjust to the jurisdiction provisions of the Judgments Regulation.

The grounds of enchantment

The primary grounds of enchantment have been (1) alleged non-compliance with the formal necessities and (2) public coverage arguments. The appellant’s problem to the formalities of registration was unsuccessful because the required paperwork had been produced earlier than Grasp Prepare dinner. Failures similar to the usage of the incorrect emblem and lack of notarisation and ‘apostille’ didn’t invalidate the registration as a result of the identical didn’t breach the necessities laid down by the Judgments Regulation or CPR Half 74. Moreover, the appellants’ public coverage arguments failed as there was nothing unfair concerning the proceedings by which the judgment was given. The general public coverage defence is interpreted strictly and requires infringement of a basic precept that quantities to a manifest breach of a rule of legislation considered important within the authorized order of the receiving state. Readers are referred to the case of Krombach v Bamberski C-7/98 (2000) for an illustration of the defence and the way it’s to be utilized. In that case, the French Courtroom had refused to permit Mr Krombach to be defended by a lawyer as a result of he didn’t seem in particular person on the listening to. The Courtroom of Justice said that the fitting to a good trial was a basic proper, and the German courtroom (the place recognition was sought) was entitled to take this infringement into consideration when making use of the general public coverage defence.

Limitation below Danish legislation

These determinations left solely the argument on whether or not the Danish limitation interval had expired and what impact this had. Article 38 stipulates {that a} judgment will solely be enforced in one other Member State when it’s enforceable within the Member State the place it was given. It was frequent floor that the Danish Limitation Act 2015 supplied for a 10-year limitation interval for the enforcement of a debt established by a judgment. The Danish judgment was given on 16 August 2013. The day on which judgment is given counts as a part of that interval however there was a dispute as as to if the 10-year-period expired at midnight on 15 August 2023 or whether or not enforcement was permissible on 16 August 2023 (the day on which Grasp Prepare dinner granted the registration order). After cautious consideration of the textual content of the Danish Limitation Act, Kerr J held that 16 August 2023 was included throughout the limitation interval. That is akin to the place below the CPR the place, for instance, the 4-month interval for serving a declare type issued on 1 January would expire on 1 Could, quite than 30 April. This meant that the respondent had till midnight on 16 August 2023 to hunt a registration order. Due to this fact, the registration order had been correctly made by Grasp Prepare dinner as a result of the Danish judgment was enforceable on the time it was made. Nevertheless, the Danish judgment had ceased to be enforceable in Denmark from 17 August 2023.

The respondent argued that this was irrelevant as a result of they needed to implement the registered English judgment which was enforceable like some other English judgment and now topic to the English guidelines of limitation below Part 24 of the Limitation Act 1980. Reference was made to the case of Coursier v Fortis Financial institution SA C-267/97 (1999) the place the Courtroom of Justice determined {that a} judgment given in France may probably be enforced in Luxembourg regardless that French insolvency legislation prevented execution of the judgment in France. There was no suggestion in that case that the debt had been extinguished by limitation. Enforceability in formal phrases was to be distinguished from execution which was left to the home legislation of the Member State addressed.

If the respondent’s argument was appropriate, then they might have acquired an additional six years to implement the judgment and would have escaped the results of leaving issues to the final minute.

Notice that there seemed to be some confusion concerning limitation and the enforcement of judgments. Maybe this stemmed from contemplating the distinction between imposing a international judgment below the frequent legislation guidelines which requires a contemporary motion on the judgment and enforcement below the EU guidelines which doesn’t (a degree returned to under).

Part 24 of the Limitation Act 1980 gives:

“Time restrict for actions to implement judgments.

(1) An motion shall not be introduced upon any judgment after the expiration of six years from the date on which the judgment turned enforceable.

(2) No arrears of curiosity in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the curiosity turned due.”

Regardless of the title of the part, the textual content makes it clear that it refers solely to an motion on a judgment, which isn’t the identical as enforcement of a judgment. Because the Home of Lords made clear in Lowsley v Forbes [1998] UKHL 34, s.24 prevents the restoration of curiosity on a judgment debt after six years, however it doesn’t forestall execution of a judgment which isn’t topic to a limitation interval. As a substitute, judgment debtors are protected, at the very least for some strategies of enforcement, by CPR 83 which gives that no writ of execution may be issued with out permission of the courtroom after six years from the date of judgment. Permission will solely be granted in distinctive circumstances (see Patel v Singh [2002] EWCA Civ 1938.)

This solely made the respondent’s arguments extra unpalatable as a result of it might have meant that getting registration of the Danish judgment would have stopped the limitation clock and given the respondent probably limitless time to implement it, relying on the belongings of the appellants and the corresponding technique of enforcement pursued. That is of significance to a judgment creditor as a result of the requirement for permission doesn’t apply to purposes for charging orders or third-party debt orders. As a substitute, the lapse of time is merely an element for the courtroom to contemplate when exercising its discretion to make a ultimate order (see Westacre Investments Inc v Yugoimport SDPR [2009] 1 All ER (Comm) 780).

Consequence of the enchantment

In the end, the respondent’s arguments on this level have been rejected by the choose. Article 38 means what it says, “A judgment given in a Member State and enforceable in that State shall be enforced in one other Member State when, on the appliance of any get together, it has been declared enforceable there” (emphasis added).

Kerr J held that it was “clear” that enforceability of a judgment within the originating state was “a pre-condition” of recognition within the receiving state. Though a barely totally different process was supplied for the UK below Article 38(2) requiring registration of the judgment quite than the exequatur procedures of the civil legislation Member States, this didn’t change the substantive legislation. In accordance with paragraph 2 of Schedule 1 of the Judgments Regulation, as soon as a judgment is registered, the registering courtroom is deemed as having given it on the date of the unique judgment, on this case 16 August 2013. Due to this fact, on 17 August 2023, the judgment ceased to be enforceable in each Denmark and England.  

The International Limitation Intervals Act 1984 was irrelevant as a result of it applies solely to proceedings ‘introduced’ in England and Wales. In search of to register a international judgment below the Judgments Regulation doesn’t quantity to ‘bringing proceedings’.

This ultimate conclusion, the one challenge determined in favour of the appellants, meant that the respondents had succeeded in establishing that the registration order was validly made however gained no profit from it as a result of, virtually as quickly because it had been registered, the judgment had ceased to be enforceable. As Kerr J identified, it’s troublesome to really feel any sympathy for the respondents who had had a few years to attempt to implement the judgment in England. The lesson to be realized from the quite a few choices on service of declare type applies equally right here: don’t depart issues to the final minute.

Additional classes and sensible steering might be given within the forthcoming Half 2 of this collection on recognition and enforcement of international judgments – coming quickly.