JUDGMENT OF 22. 11. 1977 — CASE 43/77 INDUSTRIAL DIAMOND SUPPLIES v RIVA

In Case 43/77 Reference 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 Rechtbank van Eerste Aanleg (Court of First Instance) of the judicial district of Antwerp for a preliminary ruling in the action pending before that court between:

THE COURT composed of: H. Kutscher, President, M. Sørensen and G. Bosco, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges, Advocate-General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and issues

I — Facts and written procedure

II — Written observations submitted to the Court

III — Oral procedure

Decision

The nature of the expression ordinary appeal as a reference to national law or as an independent concept

The meaning of the expression ordinary appeal within the framework of the Convention

Costs

I —. Facts and written procedure

1. What appeals are regarded as ordinary appeals in Articles 30 and 38 of the Convention of 27 September 1968 or, in other words, to what judgments are Articles 30 and 38 of the Convention applicable? or

2. Is the nature of the appeal lodged against the judgment in the State in which that judgment was given to be determined solely in accordance with the law of that State?

II —. Written observations submitted to the Court

(a). The report on the amendments to be made to the Convention having regard to the accession of the new Member States notes the total absence of a clear rule on the distinction between ordinary appeals and extraordinary appeals.

(b). The objective of the Convention is to facilitate the enforcement of judgments, in particular by enabling judgments which are provisionally enforceable in the State in which they were given to be enforced in another State. The judgment debtor must however be protected against the risk of irreparable damage caused by the enforcement of a judgment which is not yet absolute and which has been given in another State. The concept of ordinary appeal contained in Article 38 of the Convention must therefore be given a broad interpretation. The court must be in a position to decide in each individual case whether it is necessary to take measures for the protection of the judgment debtor.

(c). It is impossible to make a direct decision on the question whether an appeal provided for by the law of another State must be considered as ordinary on the basis of the law of the State in which enforcement is sought. At most, reference may be made to the law of that State in order to ascertain whether an appeal provided for by the law of the State in which the judgment was given must be equated with an ordinary appeal under the law of the State in which enforcement is sought.

(d). It would be possible to appraise the nature of an appeal exclusively according to the law governing the lodging of that appeal and the procedure relating thereto in the State in which the judgment was given. The fact that it is in any case necessary to classify an appeal as ordinary or extraordinary by reference to the characteristics which it bears in the State in which the judgment was given (admissibility, periods within which appeals must be lodged, scope of the examination by the court before which the appeal is brought) confirms this argument. When the law of the State in which the judgment was given does not classify the appeal, the decisive factor might be the fact that the appeal does or does not prevent the judgment against which it is lodged from formally acquiring the force of res judicata.

(e). The effect to interpreting the concept of an ordinary appeal directly on the basis of the actual wording of the Convention would be to make the protection given to the judgment debtor within the Community to a large extent uniform. It would be in complete accordance with the basic idea upon which Article 38 of the Convention is based. At the same time, the necessary freedom in the actual application of that provision would be guaranteed by the discretionary power given to the court. Such an interpretation would take into account the law of the State in which the judgment was given in the classification of appeals but would not however grant it exclusive authority for this purpose.

(f). The direct interpretation of the concept of an ordinary appeal should not be based solely on the concept of res judicata, as understood by the law of the State in which the judgment was given. It is necessary rather to have recourse to the idea, expressed in the second half of the first paragraph of Article 38, that only appeals which must be lodged within a relatively short period of time after the judgment has been given may be considered as ordinary appeals against judgments. It is possible to give a final decision as to their admissibility very rapidly. These appeals are in particular Berufung and Einspruch lodged against a default judgment which are generally considered to be ordinary appeals. The period to be selected should be the longest period prescribed in the Member States for the lodging of an appeal in cassation (three months from the date on which the judgment was notified).

(g). An interpretation of the concept of ordinary appeal by reference to the State in which the judgment was given, in the same way as a direct interpretation of the Convention, result in the conclusion that a Kassationsbeschwerde under Italian law must be considered as an ordinary appeal. A direct interpretation of the Convention however results in actual and not only formal uniformity of the legal situation in all the Member States. It is more in accordance with the meaning of the Convention as an important step towards the harmonization of international procedural law within the EEC. It seems to be a necessary extension of the case-law of the Court of Justice on the Convention.

(h). It is necessary to give the following reply to the questions submitted by the Antwerp court:

(a). Under Articles 30 and 38 of the Convention it falls to the court in one Member State to determine the nature of an appeal in another. The issue will arise in a procedural context and require to be decided speedily. The tests to be applied to determine the issue should, therefore, be as simple and clear as possible.

(b). In Luxembourg, France and Belgium, the distinction between ordinary and extraordinary appeals appears in the Codes of Civil Procedure, so that the appropriate appeals can be readily identified by reference to known classifications. In the three other States which are parties to the 1968 Convention no such distinction appears in legislative texts, but the differentiation is well known in legal literature which classifies certain types of appeal as ordinary appeals usually on account of the fact that they prevent a judgment from becoming res judicata, while the rest are considered to be extraordinary.

(c). With regard to the three other Member States of the Community which are obliged under Article 63 of the Convention to accede thereto, the position in Denmark is believed to be similar to that in the other States where no distinction is found in legislative texts. No distinction between different types of appeals is drawn in the legal systems of the United Kingdom and Ireland, nor has any such division so far been the subject of discussion in the legal text books.

(d). In relation to the present States which are parties to the 1968 Convention and to Denmark it is a relatively easy matter to ascertain the ordinary or extraordinary nature of the appeal from the law of the Member States concerned, and in relation to the United Kingdom and Ireland the Convention itself can readily provide the necessary guidance.

(e). On the other hand, it would prove difficult, and perhaps even impracticable, to find a Community criterion of simple application. It would first be necessary to ascertain the objectives which the distinction between ordinary and extraordinary appeals seeks to achieve in Articles 30 and 38 and then to formulate a test which could be trusted to achieve these objectives. To state that the purpose of Article 30 is to avoid an obligation to accord recognition to a judgment which has not yet become res judicata and, if the appeal is successful, may never do so and that the object of Article 38 is to protect the judgment debtor against a loss which he could suffer as a result of the enforcement of a judgment which has not yet become res judicata and might yet be upset may be an over-simplification, since extraordinary appeals would also sometimes satisfy these tests and yet they are outside Articles 30 and 38.

(f). A Community criterion which distinguished ordinary and extraordinary appeals on the ground that pending the outcome of an ordinary appeal the conclusive effects of the judgment are suspended would not work satisfactorily. Article 30, which is only concerned with appeals actually lodged, will practically always apply to a judgment which is not yet considered to be conclusive in the State from which it originated. That criterion would be inoperative in relation to Article 38 and would clearly encompass some appeals of a very exceptional nature and at present categorized as extraordinary.

(g). The existing distinctions drawn in the national laws between ordinary and extraordinary appeals achieve roughly the right result because as a general rule ordinary appeals either have suspensory effect or have them unless enforcement is provisionally authorized, while extraordinary appeals do not have suspensory effect unless suspension is ordered.

(h). The only satisfactory answer to the questions posed by the Antwerp court is that the nature of the appeal for the purposes of Articles 30 and 38 of the Convention must be determined solely in accordance with the classification of that appeal in the law of the State where the appeal has been or may be lodged.

(a). The main advantage would be that, as regards the Convention and the recognition and enforcement of judgments, the consequences of lodging an appeal which is classified as ordinary within the meaning of the definition given by the Convention itself would always be the same. If the definition of that concept depended upon the national law of the Contracting States, the fate of a decision against which an appeal in cassation had been lodged would vary according to the States, since an appeal in cassation is considered as an ordinary appeal in Italy and in the Netherlands and as an extraordinary appeal in France, Belgium and Luxembourg.

(b). However, it is difficult to find in the wording of Article 38, or, likewise, in that of Article 30 of the Convention, support upon which it might be possible to base an independent interpretation of those provisions. Nor does the aim of the Convention supply any arguments in favour of such an interpretation.

(c). With regard to the application of the Convention, from the point of view both of uniformity and of legal certainty, it must be considered an advantage to be able to rely upon terminology which has a precise meaning in the various Member States rather than to have to use criteria which cannot be based clearly on the wording of the Convention and which, moreover, may be applied differently by the courts.

(d). It is therefore necessary to reply as follows to the question submitted by the Rechtbank van Eerste Aanleg, Antwerp:

III —. Oral procedure

1. By judgment of 7 April 1977, which was received at the Court on 18 April 1977, the Rechtbank van Eerste Aanleg (Court of First Instance), Antwerp, referred to the Court of Justice under Articles 2 (3) and 3 (2) of the Protocol of 3 June 1971 two questions on the interpretation of the expression ordinary appeal used in Articles 30 and 38 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (hereinafter referred to as the Convention).

2. The file shows that Industrial Diamond Supplies, the plaintiff in the main action, having its registered office in Antwerp, was ordered by the Tribunale Civile e Penale (Civil and Criminal Court), Turin, to pay to Luigi Riva, the defendant in the main action, a commercial representative residing in Turin, the sum of Lit 53052980, as commission owed by the plaintiff to the defendant in the context of a contractual relationship between the parties, together with interest and legal costs.

3. The judgment, which was given on 23 September 1976 by the Turin court on appeal from a decision of the Pretore of the same city, is at present enforceable.

4. On 25 November 1976 Mr Riva obtained from the Antwerp court a judgment authorizing the enforcement in Belgium of the judgment of the Turin court, in accordance with the provisions of Article 31 et seq. of the Convention.

5. On 15 December 1976, Industrial Diamond Supplies lodged an appeal against the order for enforcement before the Antwerp court under Articles 36 and 37 of the Convention.

6. On 27 December 1976 Industrial Diamond Supplies lodged an appeal in cassation before the Italian Corte Suprema di Cassazione (supreme court of appeal) against the judgment given on appeal by the Turin court.

7. It is not in dispute that that appeal does not have the effect of suspending the enforceability of the judgment given by the Turin court.

8. It is also established that Industrial Diamond Supplies has not sought a stay of execution in Italy.

9. Industrial Diamond Supplies requested the Antwerp court principally to suspend the proceedings relating to the enforcement of the judgment given by the Turin court until final judgment has been delivered between the parties in Italy.

10. So as to be able to reach a decision on that request, the Antwerp court submitted to the Court of Justice the following two questions on the interpretation of Articles 30 and 38 of the Convention:

11. These questions ask in substance whether the expression ordinary appeal used in Articles 30 and 38 of the Convention must be understood as a reference to national law or as an independent concept, the interpretation of which must be sought within the Convention itself.

12. In the second case, the questions submitted by the court ask what the meaning of that expression is within the context of the Convention.

13. During the procedure the view was expressed that Article 30 of the Convention, which relates to the recognition and not the enforcement of judgments, is not relevant to the proceedings and that the interpretation requested concerns only the meaning of the expression ordinary appeal within the context of Article 38, which relates to enforcement.

14. There is no need to examine this question, especially since the connexity of the provisions of Title III of the Convention make it necessary to interpret the expression in question in the two abovementioned articles in the same way.

15. Under Article 30 of the Convention, A court of a Contracting State in which recognition is sought of a judgment given in another Contracting State may stay the proceedings if an ordinary appeal against the judgment has been lodged.

16. Under the first paragraph of Article 38, The court with which the appeal under the first paragraph of Article 37 is lodged may, on the application of the appellant, stay the proceedings if an ordinary appeal has been lodged against the judgment in the State in which that judgment was given or if the time for such an appeal has not yet expired; in the latter case, the Court may specify the time within which such an appeal is to be lodged.

17. According to Industrial Diamond Supplies, it is necessary to classify any appeal considered to be an ordinary appeal in the Contracting State in which the judgment the recognition or enforcement of which is sought was given as an ordinary appeal within the meaning of the abovementioned provisions.

18. Under the law of the Italian Republic, the State in which the judgment in question was given, there is no doubt that an appeal in cassation (ricorso per cassazione) must in fact be considered as an ordinary appeal.

19. This view has been supported by the Government of the United Kingdom and by the Commission, which both agree that the nature of an appeal for the purposes of Articles 30 and 38 must be determined by reference to the national law of the Contracting State in which the original judgment was given.

20. Mr Riva, without contesting the fact that in Italy an appeal in cassation is considered to be an ordinary appeal, takes the view that in any case a judgment which is enforceable in Italy must also be considered as enforceable in Belgium so long as the enforceability of that judgment has not been suspended in the State in which the judgment was given.

21. Finally, it is necessary to note that the Government of the Federal Republic of Germany expressed the opinion that the expression ordinary appeal used in Articles 30 and 38 must be interpreted within the context of the Convention itself, regardless of the classification of appeals by the national law of the State in which the judgment was given.

22. It follows from a comparison of the legal concepts of the various Member States of the Community that although in some States the distinction between ordinary and extraordinary appeals is based on the law itself, in other legal systems the classification is made primarily or even purely in the works of learned authors while in a third group of States this distinction is completely unknown.

23. It is established moreover that in the legal systems in which the distinction between ordinary and extraordinary appeals is acknowledged by legislation or by learned authors, the classification of the various appeals for the purposes of that distinction gives rise to varying classifications.

24. It seems therefore that if the concept of ordinary appeal were interpreted by reference to a national legal system, whether the legal system of the State in which the judgment was given or that of the State in which enforcement or recognition is sought, it would in certain cases be impossible to classify a specific appeal with the required degree of certainty for the purposes of Articles 30 and 38 of the Convention.

25. Moreover, reference to a particular national legal system might perhaps oblige the court required to make a decision under Articles 30 and 38 of the Convention to classify appeals of the same type inconsistently according to whether they belonged to the legal system of one or other of the Contracting States.

26. The effect of the application of that criterion of interpretation would therefore be to create even greater legal uncertainty since Article 38 requires the Court before which an order for enforcement of the judgment is sought to take into consideration not only appeals which have been lodged at present but in addition appeals which may be lodged within specific periods.

27. It follows from these considerations that the interpretation of the concept of ordinary appeal may only be usefully sought within the framework of the Convention itself.

28. It is therefore necessary to reply to the national court that the expression ordinary appeal within the meaning of Articles 30 and 38 of the Convention must be determined solely within the framework of the system of the Convention itself and not according to the law either of the State in which the judgment was given or of the State in which the recognition or enforcement of that judgment is sought.

29. The meaning of the expression ordinary appeal may be deduced from the actual structure of Articles 30 and 38 and from their function in the system of the Convention.

30. Although, as a whole, the Convention is intended to ensure the rapid enforcement of judgments with a minimum of formalities when those judgments are enforceable in the State in which they were given, the specific purpose of Articles 30 and 38 is to prevent the compulsory recognition or enforcement of judgments in other Contracting States when the possibility that they might be annulled or amended in the State in which they were given still exists.

31. For this purpose Articles 30 and 38 reserve to the court before which a request for recognition or an appeal against a decision authorizing enforcement has been brought in particular the possibility of staying the proceedings where, in the State in which the judgment was given, the judgment is being contested or may be contested within specific periods.

32. According to the Convention, the Court before which recognition or enforcement is sought is not under a duty to stay the proceedings but merely has the power to do so.

33. This fact presupposes a sufficiently broad interpretation of the concept of ordinary appeal to enable that court to stay the proceedings whenever reasonable doubt arises with regard to the fate of the decision in the State in which it was given.

34. It is possible by applying this criterion alone to decide the outcome of a request for recognition or enforcement based on a judgment which, in the State in which the judgment was given, is at present the subject of an appeal which may lead to the annulment or amendment of the judgment in question.

35. A court may be required to make a more difficult appraisal whenever a request for a stay of the proceedings is lodged before it under Article 38 of the Convention when the periods for lodging appeals have not yet expired in the State in which the judgment was given.

36. In that case, it is also necessary to bear in mind, in addition to the criterion based on the possible effect of an appeal, all the relevant considerations arising from the nature and conditions for the application of the judicial remedies in question.

37. Considered from this point of view, the expression ordinary appeal must be understood as meaning any appeal which forms part of the normal course of an action and which, as such, constitutes a procedural development which any party must reasonable expect.

38. It is necessary to consider that any appeal bound by the law to a specific period of time which starts to run by virtue of the actual decision whose enforcement is sought constitutes such a development.

39. Consequently it is impossible to consider as ordinary appeals within the meaning of Articles 30 and 38 of the Convention in particular appeals which are dependent either upon events which were unforeseeable at the date of the original judgment or upon the action taken by persons who are extraneous to the case, and who are not bound by the period for entering an appeal which starts to run from the date of the original judgment.

40. It is for a court before which a request is submitted under Article 36 at a date on which the period for entering an appeal in the State in which the judgment was given has not yet expired to exercise its discretion in this respect.

41. This freedom of discretion is implicit in the actual system of Article 38 which gives the court before which an order for enforcement is sought the power to specify with regard to a party which is opposed to enforcement, although it has not yet taken advantage of the possibility of lodging an appeal in the State in which the judgment was given, a time within which its appeal is to be lodged.

42. It is therefore necessary to reply that, within the meaning of Articles 30 and 38 of the Convention, any appeal which is such that it may result in the annulment or the amendment of the judgment which is the subject-matter of the procedure for recognition or enforcement according to the Convention and the lodging of which is bound, in the State in which the judgment was given, to a period which is laid down by the law and starts to run by virtue of that same judgment constitutes an ordinary appeal which has been lodged or may be lodged against a foreign judgment.

43. The costs incurred by the Government of the Federal Republic of Germany, the Government of the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

44. Since the proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT, in answer to the questions referred to it by the Rechtbank van Eerste Aanleg of the judicial district of Antwerp by judgment of 7 April 1977, hereby rules:

1 The expression ordinary appeal within the meaning of Articles 30 and 38 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters must be defined solely within the framework of the system of the Convention itself and not according to the law either of the State in which the judgment was given or of the State in which recognition of enforcement of that judgment is sought.

2 Within the meaning of Articles 30 and 38 of the Convention, any appeal which is such that it may result in the annulment or the amendment of the judgment which is the subject-matter of the procedure for recognition or enforcement under the Convention and the lodging of which is bound, in the State in which the judgment was given, to a period which is laid down by the law and starts to run by virtue of that same judgment constitutes an ordinary appeal which has been lodged or may be lodged against a foreign judgment.