Latvijas Republikas Augstākā tiesa; 2018-06-29; C30499317
Decision by national courts in the field of European Union law — ECLI:LV:AT:2018:0629.C30499317.6.L
Date: 2018-06-29
Subject matter: Judicial cooperation in civil matters
Origin: Latvia

82018LV0629(51)_ENG_SUMJURE
JURE summary
JURE summary
This case regards a question of recognition and enforcement of foreign decisions given within arbitration, addressed to the Latvijas Republikas Augstākā tiesa (hereinafter ‘the Supreme Court’).
An association of legal entities providing legal services (hereinafter ‘the plaintiff’) requested the Rīgas Pilsētas Vidzemes Priekšpilsētas Tiesa (hereinafter ‘the Court of First Instance’) to recognise and enforce a decision of the Swiss court, according to which a company domiciled in Latvia (hereinafter ‘the defendant’) was ordered to pay a financial sum to the plaintiff.
The Court of First Instance cited Articles 32 to 36 of the new Lugano Convention (1), found no obstacles to the recognition and enforcement of the foreign judgment in Latvia and granted the application.
Following the defendant’s appeal, the Rīgas apgabaltiesas Civillietu tiesas kolēģija (hereinafter ‘the Court of Appeal’) upheld the first instance decision.
The defendant appealed to the Supreme Court, alleging mainly that the Court of Appeal erroneously applied the new Lugano Convention since the Swiss decision was given in direct connection with the arbitration proceedings between the parties, but Article 1(2)(d) of the new Lugano Convention expressly provides that ‘the Convention shall not apply to arbitration’.
The Supreme Court confirmed that the Swiss decision was undisputedly given in close relation to arbitration between the parties. The new Lugano Convention applied by the Court of Appeal by its Article 1(2)(d) excludes the application of the Convention to arbitration. The wording of the new Lugano Convention is almost identical to the Brussels I Regulation (2) and the Brussels I Regulation (recast) (3). Therefore, interpreting these regulations can help interpret the new Lugano Convention too. The legal doctrine and the case-law of the Court of Justice of the European Union make it clear, however, that the Brussels/Lugano system of recognition should not apply to any action or ancillary proceedings to arbitration (see Recital 12 to the Brussels I Regulation (recast)).
Furthermore, according to the Supreme Court, the Swiss decision in question could not be recognised under national law either. Article 636 of the Civilprocesa likums (4) requires that the foreign decision to be recognised be a decision on the merits of the dispute. The Swiss decision was only an ancillary decision issued within the arbitration.
The Supreme Court upheld the appeal, and the decision of the Court of Appeal was annulled. The Supreme Court, in its analysis, found no grounds for recognition and enforcement of the given Swiss decision in Latvia. Therefore, the case was not referred back to the lower courts; the Supreme Court decided directly on the merits of the plaintiff’s original request for recognition and enforcement and dismissed it as unfounded.
(1) Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
(2) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
(3) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).
(4) Civilprocesa likums (Civil Procedure Law).