Case C-3/05

Gaetano Verdoliva

v

J.M. Van der Hoeven BV and Others

(Reference for a preliminary ruling from the Corte d’appello di Cagliari)

(Brussels Convention – Judgment authorising the enforcement of a judgment given in another Contracting State – Failure of, or defective, service – Notice – Time for appealing)

Summary of the Judgment

Convention on Jurisdiction and the Enforcement of Judgments – Enforcement – Judgment authorising enforcement – Service

(Brussels Convention of 27 September 1968, Art. 36)

Article 36 of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, as amended by the Accession Conventions of 1978, 1982 and 1989, is to be interpreted as requiring due service of the decision authorising enforcement in accordance with the procedural rules of the Contracting State in which enforcement is sought, and therefore, in cases of failure of, or defective, service of the decision authorising enforcement, the mere fact that the party against whom enforcement is sought has notice of that decision is not sufficient to cause time to run for the purposes of the time-limit fixed in that article.

First, the requirement that the decision authorising enforcement be served has a dual function: on the one hand, it serves to protect the rights of the party against whom enforcement is sought and, on the other, it allows, in terms of evidence, the strict and mandatory time-limit for appealing provided for that provision to be calculated precisely. That double function, combined with the aim of simplification of the formalities to which enforcement of judicial decisions delivered in other Contracting States is subject, explains why the Convention makes transmission of the decision authorising enforcement to the party against whom enforcement is sought subject to procedural requirements that are more stringent than those applicable to transmission of that same decision to the applicant. Secondly, if the sole issue were whether the document authorising enforcement came to the attention of the party against whom enforcement was sought, that could render the requirement of due service meaningless and, moreover, would make the exact calculation of the time-limit provided for in that provision more difficult thus thwarting the uniform application of the provisions of the Convention.

(see paras 34-38, operative part)

JUDGMENT OF THE COURT (Second Chamber)

16 February 2006 ( )

(Brussels Convention – Judgment authorising the enforcement of a judgment given in another Contracting State – Failure of, or defective, service – Notice – Time for appealing)

In Case C-3/05,

REFERENCE for a preliminary ruling, pursuant to 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 Corte d’appello di Cagliari (Italy), made by decision of 12 November 2004, received at the Court on 6 January 2005, in the proceedings

Gaetano Verdoliva

v

J.M. Van der Hoeven BV,

Banco di Sardegna,

San Paolo IMI SpA,

with

Pubblico Ministero, intervening,

THE COURT (Second Chamber),

composed of C.W.A. Timmermans, President of the Chamber, R. Schintgen, R. Silva de Lapuerta, G. Arestis and J. Klučka (Rapporteur), Judges,

Advocate General: J. Kokott,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– Mr Verdoliva, by M. Comella and U. Ugas, avvocati,

– the Italian Government, by I.M. Braguglia, acting as Agent, and A. Cingolo, avvocato dello Stato,

– the Commission of the European Communities, by E. de March and A.-M. Rouchaud-Joët, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 24 November 2005,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 36 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1978 L 304, p. 36), as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1, and – amended version – p. 77), by the Convention of 25 October 1982 on the Accession of the Hellenic Republic (OJ 1982 L 388, p. 1) and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic (OJ 1989 L 285, p. 1) (‘the Brussels Convention’).

2 The reference was made in the course of proceedings between Mr Verdoliva and J.M. Van der Hoeven BV (‘Van der Hoeven’), Banco di Sardegna and San Paolo IMI SpA, formerly Instituto San Paolo di Torino, concerning the enforcement, in Italy, of a judgment given by the Arrondissementsrechtsbank ’s‑Gravenhage (Netherlands), ordering Mr Verdoliva to pay NLG 365 000 to Van der Hoeven.

Legal context

The Brussels Convention

3 Under the first paragraph of Article 26 of the Brussels Convention, a judgment given in a Contracting State is to be recognised in the other Contracting States without any special procedure being required.

4 Article 27(2) of the Convention provides that a judgment is not to be recognised where it was given in default of appearance, if the defendant was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable him to arrange for his defence.

5 According to the first paragraph of Article 31 of the Convention, a judgment given in a Contracting State and enforceable in that State is to be enforced in another Contracting State when, on the application of any interested party, it has been declared enforceable there.

6 Under Article 34 of the Brussels Convention:

‘The court applied to shall give its decision without delay; the party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.

The application may be refused only for one of the reasons specified in Articles 27 and 28.

...’

7 Article 35 of the Convention requires the appropriate officer of the court to bring the decision given on the application to the notice of the applicant without delay, in accordance with the procedure laid down by the law of the State in which enforcement is sought.

8 Article 36 of the Convention provides:

‘If enforcement is authorised, the party against whom enforcement is sought may appeal against the decision within one month of service thereof.

If that party is domiciled in a Contracting State other than that in which the decision authorising enforcement was given, the time for appealing shall be two months and shall run from the date of service, either on him in person or at his residence. No extension of time may be granted on account of distance.’

9 Article 40(1) of the Brussels Convention provides that the applicant may appeal if the application for enforcement is refused.

Italian procedural law

10 Article 143 of the Italian Code of Civil Procedure (Codice di Procedura Civile, the ‘CPC’) provides that, if a person’s place of residence or domicile are unknown, the bailiff is to effect service by lodging a copy of the document in the town hall of the last place of residence and attaching another copy to the notice board of the bailiff’s office.

11 Article 650 of the CPC provides that the addressee of an order for payment can also appeal against enforcement of the order, even after expiry of the period set by the order, provided that he proves that he had no notice of the order in sufficient time, owing inter alia to defective service. However, such an appeal ceases to be admissible 10 days from the date of the first notice of enforcement.

The main proceedings and the questions referred for a preliminary ruling

12 By judgment of 14 September 1993, the Arrondissementsrechtsbank ’s‑Gravenhage ordered Mr Verdoliva to pay Van der Hoeven the sum of NLG 365 000, together with interest and incidental expenses.

13 On 24 May 1994, the Corte d’appelo di Cagliari made an order authorising enforcement of that judgment in the Italian Republic and attachment of the amount owed by Mr Verdoliva in the sum of ILT 220 million.

14 An initial attempt to serve the enforcement order at Mr Verdoliva’s residence in Capoterra (Italy) was unsuccessful. According to the certificate of service dated 14 July 1994, Mr Verdoliva, while still registered in that area, had moved elsewhere more than a year previously.

15 Service of the order was therefore effected a second time in accordance with Article 143 of the CPC. According to the certificate of service dated 27 July 1994, the bailiff lodged a copy of the order at the town hall in Capoterra and posted a second copy on his office notice board.

16 Since Mr Verdoliva did not appeal against that order within 30 days of such service, Van der Hoeven proceeded to enforce the judgment against Mr Verdoliva by intervening in the enforcement procedure already initiated against him by Banco di Sardegna and San Paolo IMI SpA.

17 By an application lodged on 4 December 1996 before the Tribunale civile di Cagliari (Italy), Mr Verdoliva appealed against enforcement on the grounds, first, that the enforcement order had not been served on him, and, secondly, that it had not been lodged at the Capoterra town hall and that, consequently, the certificate of service of 27 July 1994 was false.

18 That appeal was dismissed by judgment of the Tribunale civile di Cagliari of 7 June 2002, on the ground, in particular, that it was time-barred. According to that court, it would be permissible, by analogy with Article 650 of the CPC, to appeal out of time where, on account of defective service, no notice of the enforcement order had been obtained in sufficient time. However, the period for lodging such an appeal could not, in any event, exceed 30 days from the date of the first enforcement document which brought that order to Mr Verdoliva’s notice.

19 Mr Verdoliva appealed against that judgment to the Corte d’appello di Cagliari, advancing the same arguments as at first instance and adding that service of the enforcement order was also invalid by reason of infringement of Article 143 of the CPC, as interpreted by the Corte suprema di cassazione (Italy). The bailiffs had neither carried out the necessary enquiries to determine whether the addressee was in fact untraceable nor given an account of such enquiries in the certificate of service of 27 July 1994.

20 Taking the view that resolution of the dispute depended on the interpretation of Article 36 of the Brussels Convention, the Corte d’appello di Cagliari decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:

‘(1) Does the Brussels Convention provide an independent definition of “notice of procedural documents” or is that term left to be defined by national rules?

(2) Can it be inferred from the rules of the Brussels Convention, and in particular from Article 36 thereof, that service of the enforcement order provided for in [that article] may be effected in a manner deemed equivalent to service?

(3) Does notice of the enforcement order, in cases of failure of, or defective, service, none the less cause time to run for the purposes of the time-limit laid down in that article? If not, is the Brussels Convention to be interpreted as limiting the ways in which notice of the enforcement order will be deemed to have been acquired?’

Concerning the questions referred

21 By its questions, which it is appropriate to examine together, the national court asks essentially whether, in cases of failure, or defective, service of the decision authorising enforcement, the mere fact that the party against whom enforcement is sought had notice of that decision is sufficient to cause time to run for the purposes of Article 36 of the Brussels Convention.

22 In that regard, it must be observed at the outset that the wording of Article 36 of the Brussels Convention does not by itself enable an answer to be given to the questions raised.

23 While that provision provides that the time-limit for appealing against the decision authorising enforcement begins to run from the day on which that decision is served, it does not define service and does not specify the manner in which it must be effected in order to be effective, except where the party against whom enforcement is sought is domiciled in a Contracting State other than that in which the decision authorising enforcement was given. Service in such a case is required to be effected either on him in person or at his residence before the time for appealing begins to run.

24 Further, Article 36 of the Brussels Convention does not, in contrast to Article 27(2) of that Convention, include any express condition for validity of service.

25 Accordingly, Article 36 of the Brussels Convention must be interpreted in the light of the scheme and aims of that Convention.

26 In relation to the aims of the Brussels Convention, it is clear from its preamble that it is intended to secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals. It is settled case-law that it is not, however, permissible to achieve that aim by undermining in any way the right to a fair hearing (see, in particular, Case 49/84 Debaecker and Plouvier [1985] ECR 1779, paragraph 10, and Case C-522/03 Scania Finance France [2005] ECR I-0000, paragraph 15).

27 More particularly, as far as enforcement is concerned, the principal aim of the Convention is to facilitate, to the greatest possible extent, the free movement of judgments by providing for a simple and rapid enforcement procedure whilst giving the party against whom enforcement is sought an opportunity to lodge an appeal (see, in particular, Case 148/84 Deutsche Genossenschaftsbank [1985] ECR 1981, paragraph 16, and Case C-7/98 Krombach [2000] ECR I-1935, paragraph 19).

28 In relation to the scheme established by the Brussels Convention for recognition and enforcement, it is appropriate to point out that, in addition to Article 36, other provisions of that Convention provide for the service on the defendant of documents or decisions.

29 Accordingly, by virtue of Articles 27(2) and the second sentence of Article 34 of that Convention, a judgment given in default of appearance is not to be recognised or enforced in another Contracting State if the defendant was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable him to arrange for his defence. In that context, the Court has held that a judgment given in default of appearance in a Contracting State must not be recognised in another Contracting State where the document which instituted the proceedings was not duly served on the defendant, even if the defendant subsequently had notice of the judgment and did not have recourse to the available legal remedies (Case C-305/88 Lancray [1990] ECR I-2725, paragraph 23, and Case C-123/91 Minalmet [1992] ECR I-5661, paragraph 21).

30 Moreover, it must be observed that, under the scheme established by the Brussels Convention with regard to enforcement, the interests of the applicant and of the person against whom enforcement is sought are protected differently.

31 Article 36 of the Convention provides, in relation to the party against whom enforcement is sought, for the use of a formal mechanism of ‘service’ of the decision authorising enforcement. Conversely, it follows from Article 35 of the Convention that the decision given on the application is required only to be ‘brought to the notice’ of the applicant.

32 Further, according to Article 36 of the Brussels Convention, the party against whom enforcement is sought may appeal against the decision, according to whether or not he is domiciled in the Contracting State in which the decision authorising enforcement was given, within a time-limit of one or two months from the date of service of the decision. That time-limit is of a strict and mandatory nature (Case 145/86 Hoffmann [1988] ECR 645, paragraphs 30 and 31). Conversely, it follows from both the wording of Article 40(1) of that Convention and the Jenard Report on the Convention (OJ 1979 C 59, p. 1, 53), that an applicant’s right of appeal against a decision refusing the application for enforcement is not subject to any time-limit.

33 In light of those considerations it must be established whether, in cases of failure of, or defective, service of the decision authorising enforcement, the mere fact that the person against whom enforcement is sought has notice of that decision suffices for the time-limit fixed in Article 36 of the Brussels Convention to begin to run.

34 In that regard, it is common ground, first, as stated by the Advocate General at point 56 of her Opinion, that the requirement that the decision authorising enforcement be served has a dual function: on the one hand, it serves to protect the rights of the party against whom enforcement is sought and, on the other, it allows, in terms of evidence, the strict and mandatory time-limit for appealing provided for in Article 36 of the Brussels Convention to be calculated precisely.

35 That double function, combined with the aim of simplification of the formalities to which enforcement of judicial decisions delivered in other Contracting States is subject, explains why the Brussels Convention, as is clear from paragraph 32 of this judgment, makes transmission of the decision authorising enforcement to the party against whom enforcement is sought subject to procedural requirements that are more stringent than those applicable to transmission of that same decision to the applicant.

36 Secondly, it should be borne in mind that, if the sole issue were whether the document authorising enforcement came to the attention of the party against whom enforcement was sought, that could render the requirement of due service meaningless. Claimants would then be tempted to ignore the prescribed forms for due service (see, to that effect, in the context of Article 27(2) of the Brussels Convention, Lancray, paragraph 20).

37 Moreover, that would make the exact calculation of the time-limit provided for in Article 36 of the Convention more difficult, thus thwarting the uniform application of the provisions of the Convention (see, to that effect, Lancray, paragraph 20).

38 Therefore the reply to the questions put to the Court must be that Article 36 of the Brussels Convention is to be interpreted as requiring due service of the decision authorising enforcement, in accordance with the procedural rules of the Contracting State in which enforcement is sought, and therefore, in cases of failure of, or defective, service of the decision authorising enforcement, the mere fact that the party against whom enforcement is sought has notice of that decision is not sufficient to cause time to run for the purposes of the time-limit fixed in that article.

Costs

39 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

Article 36 of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, as amended by the Convention of 9 October 1978 on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, the Convention of 25 October 1982 on the accession of the Republic of Greece and the Convention of 26 May 1989 on the accession of the Kingdom of Spain and the Portuguese Republic, is to be interpreted as requiring due service of the decision authorising enforcement in accordance with the procedural rules of the Contracting State in which enforcement is sought, and therefore, in cases of failure of, or defective, service of the decision authorising enforcement, the mere fact that the party against whom enforcement is sought has notice of that decision is not sufficient to cause time to run for the purposes of the time-limit fixed in that article.

[Signatures]