Opinion of the Advocate General — ECLI:EU:C:2014:2414
Date: 2014-12-04
Language of the case: Lithuanian
Subject matter: Area of freedom, security and justice;Judicial cooperation in civil matters
Procedure: Reference for a preliminary ruling
Origin: Lithuania

summary of the impact analysis is available in French: SEC(2010) 1548 final. 54 – Ibid. (p. 35). 55 – Ibid. (pp. 36 and 37). 56 – Ibid. (pp. 37 and 38). 57 – Ibid. (pp. 36 and 37). 58 – Ibid. (p. 37). 59 – Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast) (COM(2010) 748 final). 60 – Article 29(4) of the proposal for a recast regulation provided that ‘[w]here the agreed or designated seat of an arbitration is in a Member State, the courts of another Member State whose jurisdiction is contested on the basis of an arbitration agreement shall stay proceedings once the courts of the Member State where the seat of the arbitration is located or the arbitral tribunal have been seised of proceedings to determine, as their main object or as an incidental question, the existence, validity or effects of that arbitration agreement. … Where the existence, validity or effects of the arbitration agreement are established, the court seised shall decline jurisdiction’. Article 33(3) of that proposal provided that ‘… an arbitral tribunal is deemed to be seised when a party has nominated an arbitrator or when a party has requested the support of an institution, authority or a court for the tribunal’s constitution’. 61 – European Parliament Resolution of 7 September 2010 on the implementation and review of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (P7_TA(2010)0304, paragraphs 9 and 10). Emphasis added. 62 – Documents 10609/12 JUSTCIV 209 CODEC 1495 and 10609/12 JUSTCIV 209 CODEC 1495 ADD 1. 63 – See Articles 1(2)(d) and 29(4). 64 – See Article 84(2). 65 – European Parliament legislative resolution of 20 November 2012 on the proposal for a regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (P7_TA(2012)0412). 66 – Article 73(2). 67 – See point 117 of this Opinion. 68 – Emphasis added. 69 – That is confirmed by the third paragraph, which states that ‘where a court of a Member State … has determined that an arbitration agreement is null and void, inoperative or incapable of being performed, this should not preclude that court’s judgment on the substance of the matter from being recognised or, as the case may be, enforced in accordance with this Regulation’. It may be inferred a contrario that the decision on jurisdiction (and the arbitration agreement) is not subject to the rules on recognition and enforcement in the regulation. 70 – See point 81 of this Opinion. 71 – Emphasis added. 72 – See, to that effect, Nuyts, A., ‘La refonte du règlement Bruxelles I’, 2013, vol. 102, Revue critique du droit international privé, p. 1, 15: (‘… it can be inferred [from the second paragraph of recital 12] that a plea founded on an arbitration clause alleging a lack of jurisdiction falls in itself outside the scope of the regulation. It is therefore necessary, in my view, to abandon the interpretation adopted in the West Tankers judgment … The reversal of the West Tankers case-law in this respect must be welcomed …’). 73 – See European Parliament resolution of 7 September 2010 on the implementation and review of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (P7_TA(2010)0304, recital M), which states that ‘the various national procedural devices developed to protect arbitral jurisdiction (anti-suit injunctions so long as they are in conformity with free movement of persons and fundamental rights, declaration of validity of an arbitration clause, grant of damages for breach of an arbitration clause, the negative effect of the “Kompetenz-Kompetenz principle”, etc.) must continue to be available and the effect of such procedures and the ensuing court decisions in the other Member States must be left to the law of those Member States as was the position prior to the judgment in Allianz and Generali Assicurazioni Generali’. 74 – Emphasis added. In that sense, the solution provided by recital 12 is different from that applied in the judgment in Gothaer Allgemeine Versicherung and Others (C‑456/11, EU:C:2012:719, paragraph 41), where the Court held that ‘a judgment by which a court of a Member State has declined jurisdiction on the basis of a jurisdiction clause, on the ground that that clause is valid, binds the courts of the other Member States both as regards that court’s decision to decline jurisdiction, contained in the operative part of the judgment, and as regards the finding on the validity of that clause, contained in the ratio decidendi which provides the necessary underpinning for that operative part’. In that case it was not an arbitration agreement that was at issue but a clause conferring jurisdiction, which, unlike an arbitration agreement, falls within the scope of the Brussels I Regulation (see Article 23) and of the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, signed on 30 October 2007 and approved on behalf of the Union by Council Decision 2009/430/EC of 27 November 2008 (OJ 2009 L 147, p. 1), which was applicable to that case (Article 23). Conversely, according to the second paragraph of recital 12 in the preamble to the Brussels I Regulation (recast), if a decision given by a court of a Member State declaring an arbitration agreement null and void, inoperative or incapable of being performed arrives for recognition and enforcement before the courts of another Member State, it cannot be either recognised or enforced on the basis of the Brussels I Regulation. See, to that effect, Cour d’appel de Paris, 15 June 2006, Legal Department du Ministère de la Justice de la République d’Irak v Sociétés Fincantieri Cantieri Navali Italiani, available on Legifrance’s website at the following address: http://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000006951261&fastReqId= 65424442&fastPos= 9. 75 – That means that where the judgment of a court of a Member State declaring an arbitration agreement null and void, inoperative or incapable of being performed and then making a determination on the substance of the dispute arrives for recognition and enforcement before the courts of another Member State, it must be recognised and enforced in accordance with the Brussels I Regulation. However, since, as a general rule, arbitration proceedings are quicker than proceedings before the national courts, it is likely that the court addressed will have already recognised and enforced an arbitral award on the substance of the same dispute. In such a case, the court addressed would not be required to recognise and enforce the judgment of the national court, since the arbitral award would already have acquired the authority of res judicata (see Article 45(1)(c) of the Brussels I Regulation (recast), according to which ‘… the recognition of a judgment shall be refused … (c) if the judgment is irreconcilable with a judgment given between the same parties in the Member State addressed …’). 76 – Emphasis added. 77 – Emphasis added. 78 – Judgment in Allianz and Generali Assicurazioni Generali (EU:C:2009:69, paragraph 29). 79 – Judgment in Allianz and Generali Assicurazioni Generali (EU:C:2009:69, paragraph 31). 80 – In that judgment, the Court, relying on the ‘trust which the Contracting States accord to each other’s legal systems and judicial institutions’, on which the Brussels Convention was based, and on ‘legal certainty’ (paragraph 72), denied that the ‘excessively long’ duration (paragraph 73) of judicial proceedings in the State of the court first seised can have any impact on the application of that convention and rejected the argument based on ‘delaying tactics by parties who, with the intention of delaying settlement of the substantive dispute, commence proceedings before a court which they know to lack jurisdiction by reason of the existence of a jurisdiction clause’ (paragraph 53). For a critique of that judgment and the risk of forum shopping before courts lacking jurisdiction by parties acting in bad faith, see Franzosi, M., ‘Worldwide patent litigation and the Italian torpedo’, European Intellectual Property Review, 1997, vol. 7, pp. 382, 385; Véron, P., ‘ECJ Restores Torpedo Power’, International Review of Intellectual Property and Competition Law, 2004, vol. 35, pp. 638, 638 and 639; and Muir Watt, H., ‘Erich Gasser GmbH c. MISAT Srl’, Revue critique de droit international privé, 2004, vol. 93, pp. 444, 463. 81 – For a critique of that judgment which emphasises the possibilities afforded by the Brussels Convention (or the Brussels I Regulation, which succeeded it) to parties acting in bad faith of impeding the rapid and equitable settlement of disputes, see Lord Mance, ‘Exclusive Jurisdiction Agreements and European Ideals’, Law Quarterly Review, 2004, vol. 120, p. 357; Fentiman, R., ‘Access to Justice and Parallel Proceedings in Europe’, Cambridge Law Journal, 2004, vol. 63, p. 312; and Romano, G.P., ‘Le principe de sécurité juridique à l’épreuve des arrêts Gasser et Owusu’, Cahiers de droit européen, 2008, pp. 175, 209 and 210. 82 – ‘However, in order to enhance the effectiveness of exclusive choice-of-court agreements and to avoid abusive litigation tactics, it is necessary to provide for an exception to the general lis pendens rule in order to deal satisfactorily with a particular situation in which concurrent proceedings may arise. This is the situation where a court not designated in an exclusive choice-of-court agreement has been seised of proceedings and the designated court is seised subsequently of proceedings involving the same cause of action and between the same parties. In such a case, the court first seised should be required to stay its proceedings as soon as the designated court has been seised and until such time as the latter court declares that it has no jurisdiction under the exclusive choice-of-court agreement. This is to ensure that, in such a situation, the designated court has priority to decide on the validity of the agreement and on the extent to which the agreement applies to the dispute pending before it. The designated court should be able to proceed irrespective of whether the non-designated court has already decided on the stay of proceedings.’ Emphasis added. 83 – I would refer, in that regard, to the law applicable in France, one of the pioneer countries of arbitration, under which, where a dispute covered by an arbitration agreement is brought before a French court, that court is to declare that it has no jurisdiction unless the arbitral tribunal has not yet been seised and the arbitration agreement is manifestly null and void or manifestly incapable of being performed (Articles 1448 and 1506-A of the Code of Civil Procedure). See, to that effect, Gaillard, E., and de Lapasse, P., ‘Le nouveau droit français de l’arbitrage interne et international’, Recueil Dalloz, 2011, vol. 3, pp. 175 to 192. 84 – See Article V(1)(a) and (c) of the New York Convention. 85 – UNCITRAL (United Nations Commission on International Trade Law) Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958): extract, guide on Article II, paragraph 61 (UNGA A/CN.9/814/Add.2), available on the Internet at the following address: http://www.newyorkconvention1958.org/pdf/II-English-140211.pdf. UNCITRAL, which is the principal United Nations legal body in the field of international trade law, draws up modern, equitable and harmonised rules on commercial operations, including the 1958 New York Convention. 86 – Nor, moreover, are judgments of the courts of the Member States ordering enforcement of an arbitral award, because they are not judgments within the meaning of Article 32 of the Brussels I Regulation. Admittedly, the Court held in the judgment in Gothaer Allgemeine Versicherung and Others (EU:C:2012:719, paragraphs 23 and 24) that ‘the concept of “judgment” covers “any” judgment given by a court of a Member State, without any distinction being drawn according to the content of the judgment in question’. However, as the German, French and United Kingdom Governments stated at the hearing, there can be no enforcement of enforcement. Since review of a judgment by the enforcing court under the Brussels I Regulation is more restricted than under the New York Convention, to allow judgments enforcing an arbitral award to be recognised and enforced in accordance with the provisions of that regulation would in reality deprive the courts of the Member States of the right conferred on them by that convention to review themselves the arbitral award on the basis of the criteria set out in Article V of that convention. 87 – I consider that it would be compatible with the Brussels I Regulation if an arbitral tribunal or a national court could, at the request of the injured party and in so far as the law applicable to the arbitration agreement allowed it to do so, order the party which initiated proceedings before national courts in breach of that agreement to pay damages in the amounts which those courts might have ordered the injured party to pay. That is the position, for example, in English law: Mantovani v Carapelli SpA [1980] 1 Lloyd’s Rep 375 (CA). Mutatis mutandis for breach of a clause conferring jurisdiction: Union Discount Co v Zwoller [2001] EWCA Civ 1755, [2002] 1 WLR 1517; Donohue v Armco Inc [2001] UKHL 64, [2002] 1 Lloyd’s Rep 425. See, to that effect, European Parliament resolution of 7 September 2010 on the implementation and review of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (P7_TA(2010)0304, recital M). 88 – Arbitral award, paragraph 266. 89 – See judgments in PreussenElektra (C‑379/98, EU:C:2001:160, paragraph 39); Owusu (EU:C:2005:120, paragraph 50); Régie Networks (C‑333/07, EU:C:2008:764, paragraph 46); Melki and Abdeli (C‑188/10 and C‑189/10, EU:C:2010:363, paragraph 27); Unió de Pagesos de Catalunya (C‑197/10, EU:C:2011:590, paragraph 17); and Radu (C‑396/11, EU:C:2013:39, paragraph 22). 90 – See point 57 of this Opinion. 91 – ‘Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: … (b) The recognition or enforcement of the award would be contrary to the public policy of that country.’ 92 – See points 41 to 43 of this Opinion. 93 – ‘Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: (a) The subject-matter of the difference is not capable of settlement by arbitration under the law of that country; …’ See points 59 to 61 of this Opinion. 94 – UNCITRAL Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958): extract, guide on Article V(2)(b), paragraph 4, available on the website of the guide at the following address: http://www.newyorkconvention1958.org/index.php?lvl=cmspage&pageid= 11&provision= 304. 95 – Judgment in Parsons & Whittemore Overseas v Société Générale de l’Industrie du Papier (RAKTA) 508 F.2d 969, 974 (1974). This definition of public policy has been adopted by the courts of a number of Contracting States: see BCB Holdings Limited and The Belize Bank Limited v The Attorney General of Belize [2013] CCJ 5 (AJ) (Caribbean Court of Justice, Appellate Jurisdiction); Traxys Europe SA v Balaji Coke Industry Pvt Ltd [2012] FCA 276 (Federal Court, Australia); Hebei Import & Export Corp v Polytek Engineering Co Ltd [1999] 2 HKC 205 (Court of Final Appeal, Hong Kong); Renusagar Power Co Ltd v General Electric Company & anor 1994 AIR 860 (Supreme Court of India); and Brostrom Tankers AB v Factorias Vulcano SA, (2005) XXX Ybk Com Arb 591 (High Court of Dublin, Ireland). 96 – Cour d’appel de Paris, 16 October 1997, Agence pour la sécurité de la navigation aérienne en Afrique et à Madagascar v M. N’DOYE Issakha. 97 – UNCITRAL Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958): extract, guide on Article V(2)(b), paragraph 9, available on the Internet at the following address: (http://www.newyorkconvention1958.org/index.php?lvl=cmspage&pageid= 11&provision= 304), citing the judgments of the Oberlandesgericht München, 34 Sch 019/05, 28 November 2005; the Oberlandesgericht Düsseldorf, VI Sch (Kart) 1/02, 21 July 2004; the Hanseatisches Oberlandesgericht Bremen, (2) Sch 04/99, 30 September 1999; and the Bundesgerichtshof, III ZR 269/88, 18 January 1990. 98 – Judgment in Deutsche Schachtbau- und Tiefbohrgesellschaft mbHvShell International Petroleum Co Ltd [1990] 1 AC 295 (Court of Appeal). 99 – ‘A judgment shall not be recognised: … if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought.’ 100 – Judgment in Krombach (C‑7/98, EU:C:2000:164, paragraph 21). See also, to that effect, judgment in Solo Kleinmotoren (C‑414/92, EU:C:1994:221, paragraph 20). 101 – Judgment in Krombach (EU:C:2000:164, paragraph 21). See also, to that effect, judgments in Hoffmann (EU:C:1988:61, paragraph 21) and Hendrikman and Feyen (C‑78/95, EU:C:1996:380, paragraph 23). 102 – Judgment in Krombach (EU:C:2000:164, paragraph 37). See also, to that effect, judgments in Renault (C‑38/98, EU:C:2000:225, paragraph 30); Apostolides (C‑420/07, EU:C:2009:271, paragraph 59); and Trade Agency (C‑619/10, EU:C:2012:531, paragraph 51). 103 – Judgment in Krombach (EU:C:2000:164, paragraph 37). See also, to that effect, judgments in Renault (EU:C:2000:225, paragraph 30); Apostolides (EU:C:2009:271, paragraph 59); and Trade Agency (EU:C:2012:531, paragraph 51). 104 – See judgments in Eco Swiss (C‑126/97, EU:C:1999:269) and Mostaza Claro (EU:C:2006:675). 105 – In that regard, I would observe that the judgment in Eco Swiss (EU:C:1999:269) does not strike me as being easily reconcilable with the judgment in Renault (EU:C:2000:225). I would point out that what had led the court of the State in which recognition and enforcement were sought in Renault (EU:C:2000:225) to ask whether the foreign judgment was contrary to the public policy of its State was a possible error on the part of the court of the State of origin in the application of certain rules of EU law, in particular the principle of free movement of goods and free competition. In spite of the similarity between the problem in that case and that in Eco Swiss (EU:C:1999:269), the Court ruled that ‘[t]he court of the State in which enforcement is sought cannot, without undermining the aim of the [Brussels I Regulation], refuse recognition of a decision emanating from another Contracting State solely on the ground that it considers that national or Community law was misapplied in that decision’ (judgment in Renault, EU:C:2000:225, paragraph 34; see also judgment in Apostolides, EU:C:2009:271, paragraph 60). I do not see the logic in the fact that the court of a Member State is required to annul an arbitral award where it is incompatible with Article 101 TFEU but is required to recognise and enforce a decision emanating from a court of another Member State which is also incompatible with EU competition law. 106 – OJ 1993 L 95, p. 29. 107 – Judgment in Eco Swiss (EU:C:1999:269, paragraph 36). See also, to that effect, judgment in Mostaza Claro (EU:C:2006:675, paragraph 37). 108 – See judgments in Krombach (EU:C:2000:164, paragraphs 25, 26, 38 and 39) and Trade Agency (EU:C:2012:531, paragraph 52). 109 – Opinion of Advocate General Kokott in flyLAL-Lithuanian Airlines (C‑302/13, EU:C:2014:2046, point 84). 110 – Ibid. (point 85). See, to that effect, judgment in flyLAL-Lithuanian Airlines (C‑302/13, EU:C:2319, paragraph 56). 111 – Judgment in Kadi and Al Barakaat International Foundation v Council and Commission (C‑415/05 P, EU:C:2008:461, paragraph 304). 112 – It will be recalled that that judgment did not concern arbitration. 113 – Article 22 sets out the rules on jurisdiction in respect of: rights in rem in immovable property or tenancies of immovable property (paragraph 1); the validity, nullity or dissolution of companies or legal persons having their seat in a Member State, or the validity of the decisions of their organs (paragraph 2); the validity of entries in public registers (paragraph 3); the registration or validity of patents, trade marks, designs or other similar rights required to be deposited or registered (paragraph 4); and the enforcement of decisions (paragraph 5). 114 – See the UNCITRAL Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958): extract, Guide to Article V2)(b), paragraphs 17 and 18, available on the website of the guide at the following address: (http://www.newyorkconvention1958.org/index.php?lvl=cmspage&pageid= 11&provision= 304). See also, to that effect, Hanotiau, B., and Caprasse, O., ‘Public Policy in International Commercial Arbitration’ in Gaillard, E., and Di Pietro, D., (eds), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice, Cameron May, London, 2008, pp. 787, 791 to 794. 115 – The requests made by the Ministry of Energy (in particular the request that Lietuvos dujos should be required to enter into negotiations with Gazprom in order to fix a fair and correct price for the purchase of gas) do not relate to the validity, nullity or dissolution of Lietuvos dujos or the validity of the decisions of their organs.