Mr Justice Tomlinson:
•1.                   There is before the court an application in two related
actions. The application is that in each action this court should give formal
recognition to a judgment rendered by a court of another European
Community State, here Greece, pursuant to Article 33 of Council
Regulation (EC) No. 44/2001 on jurisdiction and the recognition and
enforcement of judgments in civil and commercial matters, to which
I shall refer hereafter as the "Judgments Regulation." The judgment
of the Greek court grants negative declaratory relief. It is said that
recognition of the Greek judgment in these actions would give rise to a
defence of res judicata or issue estoppel which is why it is raised by the
Defendants in the actions as the principal issue in the disputes between
the parties. I have not been invited to decide whether recognition of the
judgment would have the effect for which the Defendants contend. In
certain circumstances it might not be possible or appropriate to consider
an application of this sort without addressing that question. However
I proceed upon the basis, as did the parties, that it is arguable that
recognition of the Greek judgment might entitle the Defendants to have
the English actions against them dismissed. In view of the conclusion
which I have reached as to the disposal of this application I believe that it
is unnecessary to decide what would be the effect of the Greek judgment
were it to be recognised in these English actions.
•2.                   The background to the actions brought both here and
in Greece is unusual. The actions have their roots in a casualty suffered
in August 1991 by a tanker called "Atlas Pride" and in her subsequent
salvage. The Claimant Mr Tavoulareas is effectively the beneficial owner
of the Atlas Pride. The salvage was carried out by the well known Tsavliris
interests. The Defendants are companies and persons associated with
the Tsavliris interests. I do not know when precisely the salvage was
completed but in July 1993 the Lloyd's Open Form Salvage Award was
published, making an award in favour of Tsavliris of a substantial sum in
excess of US$7 million.
•3.                   The origins of the dispute were described by David Steel
J in a judgment which he gave in the first of the actions on 8 December
2004, [2004] EWCA 3400 (QB). The first action is brought by Peter
Tavoulareas as Claimant against Messrs George and Andrew Tsavliris and
also against two corporate Defendants, A.G Tsavliris and Sons Maritime
Company and Tsavliris Salvage International Limited. Neither of the
corporate Defendants has been served with the proceedings but the
two personal Defendants were served therewith at the end of 2001.
Although the proceedings were issued in November 2001 it is a feature
of the action that so far the court has not been invited to adjudicate upon
the merits of the dispute. It should not be thought however that that is
indicative of inactivity. David Steel J began his judgment in this way: -
"The background to this dispute is very unusual. The claimant is in the
ship owning business, and through a one-ship company called Atlas
Marine Maritime Limited, he is effectively the beneficial owner of a tanker
called Atlas Pride. The defendants are companies and/or personnel
associated with a well-known salvage group, which I will call for short
"Tsavliris".
In August 1991, that is to say some 13 years ago, the Atlas Pride suffered
a casualty off the coast of South Africa. I am told that her bow fell
off. At the end of the month, a Lloyd's Open Form Salvage Agreement
was concluded between Tsavliris (for the moment I will not distinguish
between the various companies within the group) and the shipowners.
Shortly thereafter, what I shall euphemistically call "arrangements" were
entered into between the Tsavliris' interests and the shipowners. The
documentation relating to those arrangements are threefold. Firstly, a
letter dated 3 September 1991 on Tsavliris' notepaper addressed to Mr
Alexatos, who I understand to be one of the principals in the shipowning
company, headed "Atlas Pride - Heavy Weather Damage", the document
reads: "We confirm that upon receipt of the salvage award or amicable
settlement proceeds, we shall pay to you or your nominees the amount of
38% of the amount so received in the same currency, after first deducting
relevant legal fees and other expenses and the cost of subcontracting
equipment or services, provided the cost will not exceed 25% of the gross
amount". There is then a further provision allowing for the position where
the expenses are greater. That is signed on behalf of Tsavliris by a Mr
Constantinides, a Managing Director.
At face value this is a remarkable agreement because it seems to involve
the salvors agreeing simply to share the salvage award, and a very
substantial proportion of it, with the shipowners.
Associated with this document is another more obscure document. Again
it refers to the Atlas Pride, it is on Tsavliris' notepaper, it is signed by Mr
Constantinides, and it reads: "We confirm the amount of the freight for
the Alsama Alabama..." (I understand a vessel into which some of the
cargo was transhipped): "...as well as the funds for the repairs, for which
there will be the same facility. It shall be paid back to you normally as
soon as the money is collected from the award."
Again, this is an unusual agreement (if it reflects one) in which somehow
the freight for the lightening vessel, which perhaps was going to be
paid by the shipowners, would be reimbursed out of the salvage award,
but also that repair costs would receive the same treatment, repairs
presumably to the vessel. Notably, the original document has a notation
on it, which I do not believe we have focused on during the course of
argument, referring to "Algamin Bank Netherlands NV" and a bank
account at that bank held by Tango Investment Holding Corporation,
another company in the Tsavliris group.
The third document which emerged in or around this time, is dated 30
September 1991, again on Tsavliris' notepaper and again apparently
signed by Mr Constantinides. It is addressed to the board of directors of
McHugh Investments Limited, care of Atlas Maritime, and reads: "We, A
G Tsavliris hereby acknowledge we owe you the sum of $748,000 with
which you have facilitated us upon our request to meet expenses relating
to salvage and transhipment of the Atlas Pride and we confirm we shall
repay the money to you, as well as any additional money you may loan us
for the same reason immediately and unconditionally out of the salvage
award relating to the Atlas Pride.
It appears that in June 1993, some considerable time after the completion
of the salvage services, an assignment was entered into by the claimant
in favour of Banque Indosuez in Paris. Notice of that assignment
purporting to be under an unidentified loan agreement but certainly
relating to advances made in respect of costs incurred in regard to the
salvage of the Atlas Pride was given to Tsavliris....
A month later the salvage award was published. It made an award in
favour of Tsavliris of a very substantial sum in excess of US$7 million.
Given the nature of the casualty, I would regard it as likely that the vast
bulk of the award was against the cargo interests."
•4.                   I will call the action begun on 7 November 2001 "the
first action." In it Mr Tavoulareas claims US$794,232.24 as the balance
outstanding under the loan agreement.
•5.                   On 8 November 2001 Messrs George and Andrew
Tsavliris, their brother Nicholas Tsavliris and four Tsavliris companies,
Alexander G. Tsavliris and Sons Shipping Company, Tsavliris Russ
(Worldwide) Salvage and Towage Limited, Tsavliris Salvage International
Limited and Tango Investment Holding Corporation issued proceedings in
the Piraeus Multi-member Court of First Instance against two corporate
defendants and Mr Tavoulareas personally. I shall call that action "the
Greek action." In the document initiating the Greek action the Tsavliris
interests referred to the instruments of 3 and 30 September 1991 and
referred to a loan from the Tavoulareas interests to the Tsavliris interests
which, it was said, had been fully repaid with interest. The Tsavliris
interests claimed a declaration that they had no debt or responsibility
to the Tavoulareas interests arising out of the various arrangements in
connection with the salvage of the Atlas Pride. That document also stated
that Mr Tavoulareas was resident in London giving an address in Regent's
Park. Mr Tavoulareas had not in fact lived at this address since 1992.
•6.                   The Greek proceedings were served upon the Public
Prosecutor on 19 November 2001, whose function it was so far as
concerned Mr Tavoulareas to forward the process for service pursuant to
the Hague Convention. An attempt to serve the relevant documents at
the Regent's Park address was indeed made although unsurprisingly this
was unsuccessful. However it was contended by the Tsavliris interests
that this was irrelevant to the status of the Greek proceedings against
Mr Tavoulareas of which the Greek court was, they said, seised on 19
November 2001 by virtue of service on the Public Prosecutor.
•7.                   Mr Andrew Tsavliris was served with the first English
action on 23 November 2001, and on 21 December 2001 he issued an
application challenging the jurisdiction of the English court. Mr George
Tsavliris was served with the first English action on 24 December 2001.
He failed to acknowledge service and on 17 January 2002 a judgment in
default of acknowledgment of service was entered against him. On 15
April 2002 he applied for that judgment to be set aside and also, like his
brother, challenged the jurisdiction of the English court.
•8.                   There was therefore a dispute under what was then
Article 21 of the Brussels Convention as to which was the court first
seised. Mr Tavoulareas denied that he had been served with the Greek
proceedings.
•9.                   The date fixed for resolution of that dispute by this
court was 17 January 2003. By chance that was also the date which, in
December 2001, the Greek court had fixed as the first hearing date in
that action.
•10.               At a hearing in this court on 25 November 2002 Gross J
directed that the parties take the necessary steps to have the hearing
in Greece adjourned. The Tsavliris interests said that this could only be
done by consent and not by them alone. The parties agreed to make a
joint approach to the Greek court seeking such an adjournment. In order
for the Greek court to entertain such an application it was necessary
for Mr Tavoulareas to present a brief in the Greek proceedings. In his
brief placed before the Greek court Mr Tavoulareas said that he had been
resident in the United States for over ten years. I think that what is said
under the heading, in translation, Plea of Incompetence is probably a
protest as to the jurisdiction of the Greek court. He also said in his brief
that for this dispute the English courts had already been chosen and he
described this action and the steps taken pursuant thereto. He said that
the Greek action was brought subsequently and had never been served
on him. Of the claim brought against him he said "we deny [it] from word
to word in legal terms and substance and consider it to be groundless,
inadmissible, vague, unproven and not of court appreciation and which
must be rejected by Your Court likewise all the proposals, objections and
allegations." Counsel for Mr Tavoulareas made it clear before Gross J
that Mr Tavoulareas would not for the purposes of this exercise submit
to the jurisdiction of the Greek court but would be prepared to take the
appropriate steps limited to obtaining an adjournment by consent.
•11.               A brief hearing took place before the Greek court on 17
January 2003 at which the court was informed of the applications of
George and Andrew Tsavliris pending in this court. The Greek proceedings
were adjourned to September 2004.
•12.               The applications in this court on 17 January 2003 came
before me. In a judgment delivered on 21 March 2003 ([2003] EWHC 550
(COMM)) I concluded that the Greek court was the court first seised and
stayed the English action.
•13.               On 5 February 2004 the Court of Appeal reversed my
decision - see [2004] EWCA Civ 48, [2004] 1 Lloyd's Rep. 445. The Court
of Appeal held that this court was the court first seised and restored the
proceedings, which included reinstatement of the judgment in default
against George Tsavliris, without prejudice to his right to apply to set
aside that judgment on grounds other than jurisdiction. The Court
of Appeal held that the Greek Court was not definitively seised until
either service was effected in accordance with Council Regulation (EC)
No.1348/2000, to which I shall refer hereafter as "the Service Regulation"
or, possibly, and at the very least, Mr Tavoulareas obtained notice of the
Greek proceedings in such time as to enable him to defend them. The
Court of Appeal held that there had never been any service of the Greek
proceedings in accordance with the Service Regulation. Mr Tavoulareas
did however come to know of the Greek proceedings on 31 December
2001 although not before. Since service of this English action had been
effected on Mr Andrew Tsavliris and Mr George Tsavliris on, respectively,
23 November and 24 December 2001, the English court was the court
first seised. See in particular the judgment of Mance LJ at paragraphs 31
to 38.
•14.               The Court of Appeal also considered the matter quite
apart from the Service Regulation. It concluded that even in terms of
Greek domestic law, should that be relevant, the proceedings had not
been duly addressed to or served on Mr Tavoulareas. Whether the Greek
court had become definitively seised of the proceedings was of course a
different question but the Court of Appeal recorded its conclusion that the
Greek proceedings had not been properly served on Mr Tavoulareas in
accordance with the relevant Greek domestic law requirements - see the
judgment of Mance LJ at paragraphs 39 and 40. Evans-Lombe J agreed
with Mance LJ. Thorpe LJ considered the Service Regulation alone relevant
to the question whether the Greek court had in the circumstances of this
case become definitively seised.
•15.               It is convenient to explain here the circumstances in
which Mr Tavoulareas became aware of the proceedings in Greece. On
Friday 21 December 2001 Messrs Constant and Constant, then solicitors
simply for Mr Andrew Tsavliris, wrote to Messrs Stephenson Harwood,
the solicitors for Mr Tavoulareas, enclosing by way of service Notice of
Application issued by Mr Andrew Tsavliris contesting the jurisdiction of
the English court, together with the evidence in support thereof. Exhibit
no. 1 to the Witness Statement of Mr Dickinson of Messrs Constant
and Constant was an official translation of a document headed "Action"
which I take to be the initiating process in the Greek proceedings. In
view of the Christmas holiday that letter was not seen by Mr Keates of
Messrs Stephenson Harwood until 28 December. Mr Keates prepared a fax
message to his client Mr Tavoulareas under cover of which he intended
to send the material received from Messrs Constant and Constant.
Because of the holiday this message was not typed and sent, together
with the enclosures, until 31 December 2001. Mr Tavoulareas, in Florida,
saw the fax and enclosures on the day that they were sent. This was
the first occasion upon which Mr Tavoulareas became aware of the
Greek proceedings. With the exception of service upon the Greek public
prosecutor with directions to effect service at the out of date address in
London the Tsavliris interests have taken no steps to effect service of
the Greek proceedings upon Mr Tavoulareas. With the exception of his
participation in what was a joint application to adjourn those proceedings
on 17 January 2003 which I have described above Mr Tavoulareas has
taken no part in the Greek proceedings.
•16.               When handing down judgment the Court of Appeal refused
to grant to the Tsavliris interests leave to appeal to the House of Lords.
On that occasion Mr Tavoulareas asked the Court of Appeal to grant an
injunction against the Tsavliris brothers restraining pursuit by them of
the Greek proceedings. The Tsavliris brothers for their part by Counsel
indicated that they had it in mind to petition the House of Lords for leave
to appeal. The Court of Appeal declined to grant an anti-suit injunction,
indicating that any application therefor should be made to the Commercial
Court. In the event, no petition for leave to appeal was presented and,
the day after the expiry of the time for so doing, the European Court of
Justice delivered its judgment in Turner v. Grovit [2005] 1 AC 101 to the
effect that anti-suit injunctive relief in respect of proceedings in other
member states should not be granted by a court of a member state.
•17.               On 16 August 2004 Mr Tavoulareas issued fresh
proceedings in this court against Alexander G Tsavliris and Sons Maritime
Company. I shall refer to this action as "the second action" and to the
Defendant therein as "AGT Co." I have not been shown the Claim Form or
Statements of Case in that action. Andrew Smith J summarised the claim
in this way at paragraph 10 of his judgment of 12 October 2005: -
"The claim is that Mr [George] Tsavliris made an agreement on behalf of
himself, Mr Andrew Tsavliris and AGT Co that he and Mr Andrew Tsavliris
would repay on demand the funds advanced in respect of the salvage
together with interest after the collection of funds under any Lloyd's
Open Form Salvage Agreement, and that US$3,454,490 is due to him
thereunder."
This action was served on AGT Co on 18 August 2004 and an initial
challenge to the validity of the service has not been pursued.
•18.               On 15 September 2004 Mr George Tsavliris issued an
application notice seeking an order that the judgment in default entered
against him on 17 January 2002 be set aside. The application was
supported by a Witness Statement setting out the nature of his defence to
the claim.
•19.               On 28 September 2004 the Greek court sat to try the
Greek proceedings. Mr Tavoulareas had not instructed anyone to appear
on his behalf and nor had the two corporate defendants. I am told on
behalf of Mr Tavoulareas that the two corporate defendants had ceased to
exist by the time the Greek proceedings were issued and so are or were
incapable of being served. A Greek lawyer or at any rate a person who
worked for a Greek law firm was present at the trial in order to observe
proceedings on behalf of Mr Tavoulareas. I do not know whether that
person announced his presence - I infer that probably he did not and that
he was simply there as an unidentified member of the public. In his report
upon his attendance he said this: -
"As expected, when the Court announced the disputed case heading and
started announcing the names of the Claimants, Mr Albouras approached
the bench and noted that he acted on behalf of each of the Claimants.
In turn the Court President announced the names of the Defendants and
noted orally and in writing their absence (either in person or through an
attorney at law). The Claimants' attorney at law informed the Court that
in view of the Defendants not filing an appearance before that Court, The
Claimants would not invite any Claimants' witnesses in support of their
claims and that their written pleadings, already submitted to the Court,
constitute the Claimants' case. The Court noted the comments and oral
declarations put forward by the Claimants' attorney at law and stated for
the sake of order and for the completeness of record that the case "is
being discussed."
When the Court revisited the case, the Court President stated that all
three Defendants failed to file an appearance before the Court and
declared that the case "was discussed."
As a result of the hearing a default judgment against all and each of the
three Defendants is bound to be entered into in favour of all and each
of the Claimants of the Greek proceedings. Depending on the workload
of the Court, we anticipate that the latter is going to issue its judgment
within 3-4 months of the hearing."
•20.               Andrew Smith J was evidently referred to more evidence
about this hearing than I have been. In his judgment of 12 October 2005
he deals with the matter as follows: -
"The claim in the Greek proceedings was heard on 28 September
2004. The court was informed that the first action in this court had
been "filed" (as it is put in the translation in evidence before me) on
7 November 2001, and that the second action had been filed "Just a
short while ago". In a further pleading dated 28 September 2004 it was
asserted that the "objection of "lis pendens" which is put forward by [Mr
Tavoulareas] is unfounded and should be rejected, since the requirements
provided for by the law are not met for establishing the existence of "lis
pendens"". However, the Greek court was not informed of the decision of
the Court of Appeal, nor that Mr Andrew Tsavliris had served a defence in
the English proceedings and that Mr [George] Tsavliris had applied to set
aside the default judgment with a view to defending them.
The Greek claimants were represented at the hearing by Mr G Albouras,
who is a Greek Attorney at Law. Mr Tavoulareas did not appear and was
not represented. It appears from an account of the hearing in evidence
before me that Mr Albouras informed the Court that, since the defendants
to the Greek proceedings had not filed appearances before the Court,
the Claimants did not propose to call oral evidence and relied upon their
written pleading. The President of the Court declared that the case "was
discussed".
•21.               On 4 October 2004 AGT Co issued an application notice in
the second action seeking a declaration that this court has no jurisdiction
over AGT Co and for an order that the Claim Form and its service be set
aside. Andrew Smith J described the basis of this challenge at paragraph
47 of his judgment of 12 October 2005: -
"AGT Co are a Greek company with a registered office in the Piraeus, and
are not domiciled in England. Mr Tavoulareas brings a claim in England
in the basis of article 5(1)(a) of the Brussels Regulation. AGT Co dispute
the jurisdiction of the English court on two grounds. First, they dispute
the English court has jurisdiction under article 5, denying that place of
the performance of the obligation to pay is England and submit that it is
Greece. Secondly, they say that the Greek proceedings were issued before
these proceedings and this court should stay the second action."
The second argument involved reliance upon Article 27 of the Judgments
Regulation.
•22.               The decision of the Greek court was published on 22
October 2004. The final paragraph of the judgment reads: -
"Tried and determined in Piraeus on 15/10/2004 and pronounced in this
court at an extraordinary public sitting on 22/10/2004, in the absence of
the parties and their appointed attorneys."
It is not entirely easy to reconcile this with the statement in the second
paragraph of the same judgment which reads: -
"Sat in public in its court room on 28/9/2004 to try the matter
between ......."
However, putting that matter on one side, Andrew Smith J said of the
publication of the decision, at paragraph 18 of his judgment: -
"The Court's decision was published on 22 October 2004, and it was in
favour of the Tsavliris claimants. Remarkably, however, according to the
evidence of Mr Albouras, they did not come to know of the decision until
after the hearing before David Steel J on 8 December 2004. (It is the
more remarkable because Mr Peter Irvin, who represents Mr Tsavliris,
told David Steel J on 8 December 2004, "They have had the substantive
hearing and they are waiting for the judgment. I have taken instructions
very recently that that is the position.")
•23.               The judgment of the Greek court recited that the
Defendants were not represented in court by an appointed attorney and
were absent. After dealing with service on the corporate defendants the
court proceeded in its judgment as follows: -
"....With regard to the third Defendant, who is resident in London, a
certified copy of the instant action has been served lawfully and in
the prescribed time on the prosecuting attorney to this Court and has
been forwarded abroad to be served on the Defendant pursuant to the
provisions of Articles 15 and 16 of the Hague Convention of 15/11/1965,
in view of the fact that England is one of the countries that have ratified
the said convention. Given, therefore, that service has been effected by
one of the methods stipulated in the said convention and that since the
dispatch of the serviceable document (18/2/2002) till today (18/2/2002)
(sic, at any rate in the translation) a period in time greater than six
(6) months has elapsed, this Court may enter judgment, despite the
fact that it has not been possible to obtain confirmation of service of
the document (see document no. 155316/7-10-2002 of the Ministry of
Justice) in accordance with the provisions of paragraph 2 Article 15 of the
aforementioned convention in conjunction with the relevant declaration
by Greece under the said Article which took place with the verbal note
of 23/11/1989 of the Greek Embassy in the Hague...... In consequence
thereof and given that the Defendants have not appeared during the
calling forth of the case in its order from the cause list, they must be tried
in absentia, also in view of the fact that postponement from the cause list
is deemed to be a summons to all the parties. Nevertheless, the Court will
proceed to hear the case as though all parties were present....."
•24.               The judgment also records that "during the hearing of
the case the Plaintiffs' appointed attorneys asked the Court to admit the
arguments set forth in the minutes and in their written submissions."
•25.               I have already set out the evidence before me to the effect
that the Claimants in the Greek proceedings indicated their intention
not to call any oral evidence and the conclusion of Andrew Smith J to
like effect on the basis of the evidence before him. In the light of that
evidence it is puzzling to find that the Greek court introduced its findings
of fact with the following: -
"In the instant case, on the basis of the statement made by the Plaintiffs'
witness, Xenophon Constantinidis, who was examined in this courtroom
and whose statement is contained in the tape-recorded minutes bearing
the same number as this judgment, as well as of all the documents
lawfully produced and invoked by the parties, the Court finds the following
facts......"
The court then continued: -
"The first plaintiff is an enterprise whose activities are the provision of
towing, rescue and salvage services on a global scale whilst the first
defendant is the owner of the Panamanian-registered tanker vessel
"ATLAS PRIDE" which on 30/8/1991came close to sinking from a rupture
in its quick-works while making way off the south-eastern coast of South
Africa laden with 240,000 tonnes of crude oil bound for Brazil. That same
day the first plaintiff undertook the salvage of the endangered ship,
signing in Greece the relevant contract on the basis of the conditions
of the Lloyd's standard agreement "LOF 1990 Salvage Agreement No
Cure No Pay", which provided that remuneration would be determined in
arbitration in London provided that a beneficial outcome was achieved.
Following the assignment of the salvage of the vessel to the first plaintiff,
the first defendant compelled it to promise, under a written declaration
dated 3/9/1991 which it signed, that it would refund it 38% of the
amount of the fee awarded to it in arbitration in London after deduction
of costs and that in any event, irrespective of the total amount of costs,
it would refund it a proportion not less than 25% of the gross amount
that would be awarded to it. During inspection of the endangered
ship, it was ascertained that her salvage required a combination of a
number of operations (bringing under control towing, repairs to the ship,
transhipment of the cargo, completion of the carriage, etc) which involved
expenses that the first plaintiff could not afford. The first defendant then
proposed to the first plaintiff that it be financed by one of the companies
in the Group to which it itself belonged, specifically the second defendant
of which the principal shareholder and legal representative was the
third defendant who controlled the whole Group of these companies.
For the granting of the loan and for the defendants to secure the refund
of the agreed sum from the salvage award that would be decided, they
required the first plaintiff to sign a declaration saying that it owed to the
second defendant the sum of US$748,000. And so, for the first plaintiff
to undertake the salvage of the vessel, it signed the relevant declaration
dated 30/9/1991, even though it has never received the aforementioned
sum. Up to the end of the salvage, the first plaintiff received from the
second defendant, as a loan, in instalments and at various stages of the
salvage, the total sum of US$2,216,000, which was paid to it through the
fourth plaintiff, with an agreed rate of interest of 7%. This loan has been
repaid by the first plaintiff since 1996. However, although none of the
plaintiffs has the slightest debt or legal obligation towards the defendants,
the latter present themselves from time to time as having various claims
against the plaintiffs and demand from them various sums as being due
from the above cause. The plaintiffs therefore have a legal interest in
obtaining a court judgment recognising the non-existence of any debt
on their part vis-à-vis the defendants, deriving from the aforesaid cause,
that is the salvage of the vessel ATLAS PRIDE, as detailed in this ruling.
In view of the foregoing, the present action must be admitted as also
founded on substantive grounds. Further, the legal security must be fixed
for failure to appear in court in the event that a substantiated objection
to the failure to appear is exercised against this judgment by the absent
defendants (articles 501 and 505 C.Civ.P.). Finally, the plaintiffs' legal
costs must be borne by the defendants as they have lost this action
(art.176 C.Civ.P.).
ON THESE GROUNDS
The Court gives judgment in the absence of the defendants.
Fixes the security for failure to appear in court at one hundred and twenty
(€120).
Allows the action.
Recognises that there's no debt or liability on the part of the plaintiffs
towards the defendants arising from and connected with the salvage of
the vessel ATLAS PRIDE and specifically from the first plaintiff's written
declarations of 3/9/1991 and 20/9/1991.
Orders the defendants to pay the plaintiffs' legal costs which are fixed at
two hundred euros (€200)."
•26.               On 8 and 9 December 2004 there came before David Steel
J in this court the two outstanding applications in the two actions, one to
set aside the default judgment, the other challenging the jurisdiction of
the court. It will be recalled that it was at this stage unknown that the
Greek court had already given judgment. I can again do no better than to
reproduce Andrew Smith J's description of what occurred: -
"The hearings before David Steel J
21. These applications came before David Steel J on 8 December
2004. Starting with the application in the first action, he first heard
argument about whether the application should be refused regardless
of the implications of the decision of the Court of Appeal and the Greek
proceedings. He decided in a judgment given on 8 December 2004
that the points raised by Mr. Tsavliris afforded sufficient defence for the
judgment to be set aside.
22. Upon the question whether the judgment should be set aside on
the condition that security for the claim be provided, David Steel J said
this: "Leaving aside the question of the impact of the Court of Appeal
judgment, I have not forgotten that it would be appropriate to give
consideration to the additional term which the claimant's solicitors
thought it was appropriate to seek to impose as a condition for setting
aside the default judgment, namely the posting of security for the claim
by a payment into court. I am not persuaded that delay is the sort of
justification for requiring a payment into court. Either the delay is so
damaging as to justify refusal of relief, or, if it is not, it does not seem to
me to be a justification for imposing a term for payment in if the position
is that, so far as the first defendant is concerned, there is and remains a
real prospect of successfully defending the claim. Accordingly, I would not
impose that condition. Accordingly, and again entirely without prejudice
to a review of the outcome in the light of further argument relating to the
significance of the Court of Appeal decision and the continuing existence
of proceedings as between the same parties in Greece, I would give the
first defendant the relief he seeks, namely that this judgment, which was
obtained by default, be set aside."
23. David Steel J then went on to hear argument about the significance
of the Court of Appeal decision and the Greek proceedings. Mr Philip
Shepherd QC, who represents Mr Tavoulareas, argued that this Court
should ensure that the decision of the Court of Appeal that the English
Courts were first seised of the proceedings is not undermined, and
should therefore either decline to exercise its discretion to set aside the
judgment or decline to do so in the absence of an appropriate undertaking
with regard to discontinuing the Greek proceedings.
24. In response to this argument, Mr Irvin on behalf of Mr George Tsavliris
made the following submission, as it is summarised in a judgment of
David Steel J given on 9 December 2004, [2004] EWHC 3390: first, that
Mr Tavoulareas had applied for an anti-suit injunction to the Court of
Appeal when the Court handed down their judgment, but, Mr Tsavliris
expressing a wish to petition the House of Lords for leave to appeal, the
Court declined to consider the application. However, Mr Tavoulareas did
not apply for an injunction when no petition was presented. Secondly
it was said that Mr Tavoulareas had in fact participated in the Greek
proceedings, and it was open to him to deploy the Court of Appeal's
judgment in the Greek proceedings to prevent injustice.
25. These two arguments advanced by Mr Irvin did not, it appears,
greatly impress David Steel J, who saw "great force" in the claimant's
submissions on these points. He said that it was understandable that
an application for an injunction was not immediately pursued, given
Mr Tsavliris' expressed intention to petition for leave to appeal: in the
absence of a successful appeal, it might reasonably have been inferred,
the Greek proceedings would be abandoned. As for Mr Tavoulareas
participating in the Greek proceedings, David Steel J said that the
material before him did not enable him to determine whether he had done
so in any significant way, and such material as was before him suggested
that "at least he was involved for the purpose of ensuring that the hearing
in January 2003 in Greece was adjourned pending the outcome of the
jurisdiction application in England". However, the principal argument
that Mr George Tsavliris deployed was based upon the decision of the
European Court in Turner v Grovit, [2004] 2 Lloyd's Reports 169, and I
shall refer to this argument later in my judgment.
26. David Steel J was, however, concerned that the Greek court had
been in ignorance of the English proceedings, and in particular had
not been made aware of the orders of either Tomlinson J or the Court
of Appeal, and concluded his judgment in the following terms: "It is
clearly consistent with the principle of mutual trust that the Greek court
should be informed of the Court of Appeal judgment as soon as possible.
Whilst I am minded ... to set aside the judgment on its merits and to
do so without the requirement that money be posted in court, what I
am proposing at this stage is to make an order that before the default
judgment be set aside that there be a stay of that order for two months.
In the meantime, the defendant must immediately notify the court by
letter in English and Greek of the judgment and of its outcome, the
letter to be drafted by counsel and copied to the court. That must be
despatched within seven days. Secondly, the first defendant must take
steps to obtain a translation of the judgment of the Court of Appeal and
its order, again, as I provisionally conclude, for despatch to the Greek
court, within 28 days. This matter should be restored before me on 14
January 2005 for further review of the terms of this order in which will be
included, if appropriate, considerations as to whether there should be a
payment into court as a term of the order setting aside judgment."
27. No order was drawn up and signed by David Steel J following the
hearing and judgment on 9 December 2004."
•27.               In the course of the argument before David Steel J Mr
Peter Irvin, for the Tsavliris interests, speculated, without instructions,
that the purpose of his clients in pursuing the Greek proceedings was
to obtain a judgment inconsistent with whatever judgment might
be rendered in the English proceedings so as to make more difficult
enforcement of the latter in Greece.
•28.               I return to the narrative as set out by Andrew Smith J in
his judgment of 12 October 2005: -
"30. After the hearing on 9 December 2004 there was a little delay before
agreement was reached upon the draft of the letter to be sent to the
Greek court, and the time for sending it was extended to 20 December
2004. Before it was sent, Mr [George] Tsavliris, or his advisers, learned
of the judgment of the Greek Court. On 20 December 2004 the letter and
a copy of the Court of Appeal decision in English were left at the Greek
court with a porter shortly before 4.00pm, the court office being closed.
They were sent to the court by fax on 23 December 2004. Mr [George]
Tsavliris declined to obtain a translation of the Court of Appeal judgment
despite the order of David Steel J. The reason given for this decision
was that since the Greek court would not review its judgment of its own
motion, the costs of doing so would be disproportionate.
31. The matter came back before David Steel J on 14 January 2005.
It was accepted on behalf of Mr [George] Tsavliris that he had not
complied with the orders of December 2004 about supplying the Greek
court with a translated copy of the judgment of the Court of Appeal,
and that the judgment in default had not been set aside by the rulings
already made. David Steel J ordered that Mr [ George] Tsavliris use
every best endeavour to ensure that the letter of 17 December 2004 and
other documents including a translation of the Court of Appeal decision
be brought to the attention of the Greek judges, and adjourned the
application to set aside the default judgment. The application in the
second action was also adjourned."
•29.               It seems likely that some confusion was caused by the
fact that the letter sent to the Greek court was written on the basis that
the Greek court had not yet given judgment. On 15 March 2005 Messrs
Constant and Constant addressed a letter to the President of the Greek
court in these terms: -
"We understand that the Court is concerned to know where it is being
asked by the Commercial Court in London to say whether or not its
decision would have been any different had it been aware of the English
Court of Appeal judgment in Tavoulareas v. Tsavliris.
We respectfully refer you to the letter dated 25 January 2005 approved by
Steel J, the Commercial Court Judge, and which he ordered to be brought
to your attention. A copy of the letter and the order in respect of it is
attached. You will see that the substance of the English Court of Appeal's
judgment is set out at points 1-7 in the letter. We invite you to take
particular note of the final paragraph of the letter (again we emphasise
that it was approved by the judge in accordance with his order):
"On behalf of the Claimant it has been argued that the judgment
should not be set aside until George Tsavliris agreed to discontinue the
proceedings in Greece. On 9 December 2004, the Honourable Mr Justice
David Steel ordered that in the interests of mutual respect between
the courts of different member states of the European Union the Greek
Court ought to be aware of the Court of Appeal decision before delivering
judgment. A copy of his order is enclosed. In compliance with that order
we are now sending this letter."
The order was made and the letter was sent before the parties and Steel J
were aware that you had already given judgment against Mr Tavoulareas.
Notwithstanding this, Steel J made a further order (attached) so that he
could be absolutely sure, before proceeding with the case in London, that
you were aware of the English Court of Appeal decision, in order to give
you an opportunity of reconsidering your decision should you think fit.
We trust that this will now enable you to consider whether or not you
do wish to reconsider your decision in the light of the judgment as
summarised at points 1-7 of the letter of 25 January 2005.
Should you not be satisfied as to the intention of Steel J, as set out
above, the parties will be obliged to return to him to ask him to confirm
what is set out above, possibly in a letter specifically addressed to
yourselves, but this step will obviously involve the parties in further
expense and delay and we hope it will not prove to be necessary.
We look forward to hearing from you at your earliest convenience with
your decision, so that it may be passed on to the English Court."
•30.               Andrew Smith J takes up the story at paragraph 32 of his
judgment: -
"A translation of the judgment of the Court of Appeal was in due course
presented to the Greek Court. By a response dated 4 April 2005 the
Greek Court stated, in a communication addressed to Messrs Constant
& Constant, that the question whether the Court was aware of the
Court of Appeal judgment was "legally unacceptable (since the Greek
Civil Procedure provides for the way and the consequence of producing
documents in the trial) and even more unacceptable is your application
for the granting of a confirmation as to whether the Greek Court
Judgment would be different if the Court had been aware of the English
Court Judgment".
•31.               The resumed hearing of the two outstanding applications
in these actions then came before Andrew Smith J on 18 May 2005. The
hearing was adjourned part heard and completed on 25 July 2005. It was
accepted that the default judgment against Mr George Tsavliris should
be set aside but it was argued that his conduct in relation to the Greek
proceedings, including what was alleged to be the deliberate furnishing
of an incorrect address for service on Mr Tavoulareas, was such that the
judgment should only be set aside on condition that Mr George Tsavliris
provide security for the claim together with interest and costs. In his
judgment delivered on 12 October 2005 Andrew Smith J rejected this
contention. Andrew Smith J found it unnecessary to decide whether the
wrong address for service had been deliberately given, pointing out that
Mr Tavoulareas learned of the proceedings in good time to participate in
them to the extent that he saw fit. Andrew Smith J, like me, saw great
force in the point that Mr Tavoulareas could himself have drawn to the
attention of the Greek court before it gave judgment the decision of the
English Court of Appeal. He was not convinced that there was any good
reason why Mr Tavoulareas did not do so but concluded that the evidence
on the point was insufficient for him to base his decision upon the failure
of Mr Tavoulareas in this respect. This is a point to which I shall have
to return in the light of the evidence before me. Andrew Smith J then
continued: -
"41. Mr Shepherd's argument really, it seems to me, turns on his third
point. Mr Tsavliris is asking the court to exercise its discretion to set aside
the judgment on the grounds that, in order to do justice between the
parties, the dispute should be adjudicated on the merits. I have already
said that Mr Irvin's statement to David Steel J is not itself evidence of
the purpose of the Greek proceedings, but I would be prepared to accept
in the absence of evidence to the contrary that their purpose was to
provide an answer to the claim in these proceedings, by way of either
a defence to them or an obstacle to enforcing any judgment obtained
in them. Mr Irvin submits that (unless and until there is a successful
appeal by Mr Tavoulareas) the Greek judgment is a conclusive answer
to the claim in both the first and the second action, and that under EC
Regulation 44/2001 articles 33 and 34 this court must recognise it. Mr
Shepherd argues that the circumstances in which the Greek judgment
was obtained means that articles 34(1) and 34(2) both provide an answer
to this submission. It is not for me to decide on this application whether
they do so.
42. I do not regard Mr Tsavliris' purpose in prosecuting the Greek
proceedings as the crucial question. The fact is by his conduct Mr Tsavliris
has brought it about that it is the less likely that there will be an effective
and enforceable judgment on the merits, and the fundamental question,
as I see it, is whether in these circumstances it is appropriate for the
English court to impose conditions upon setting aside the judgment so as
to ensure that, if Mr Tavoulareas nevertheless pursues the litigation and
succeeds in obtaining a judgment, the judgment will be met.
43. Mr Irvin argues that Mr. Tsavliris is not to be criticised, and other
Tsavliris interests are not to be criticised, for prosecuting the Greek
proceedings or for the manner in which they were prosecuted and in
any event such criticisms would not be a proper reason for the court to
impose conditions upon setting aside judgment. That power, he says, is to
be exercised when justified by the merits of the underlying dispute, and
not as a vehicle whereby the court expresses its disapproval of a party's
behaviour, or at least (as I understand he would argue) not of behaviour
other than the conduct of the proceedings themselves. Moreover, even if,
which Mr Tsavliris disputes, criticism were justified, it is submitted that it
is not for the English court to assess the conduct of the Greek proceedings
and whether it is appropriate: to do so would be contrary to the judgment
of the European court in Turner v Grovit.
44. Mr Irvin was right, I think, to emphasise the importance of the
decision in Turner v Grovit. The decision in that case was that the Brussels
Convention precluded the grant of an injunction prohibiting a party to
proceedings before it from commencing or continuing legal proceedings
before the courts of another contracting state, even where the party is
acting in bad faith with a view to frustrating existing proceedings. In so
far as criticism of the conduct of the party involves an assessment that
his conduct is abusive and "implies an assessment of the appropriateness
of bringing the proceedings before the court of another Member State",
such an assessment would run contrary to the principle of mutual trust
that underpins the Convention and should not be made: see para 28 of
the Judgment. I therefore accept, despite the fact that the Greek court
apparently reached its own decision without knowing about the decision
and judgments of the Court of Appeal, that this court should not accede
to Mr Tavoulareas argument in so far as it rests upon this court taking
the view that the pursuit of the Greek proceedings was inappropriate or
an abuse. In light of Turner v Grovit, that course could not be justified,
even if the reason that it was taken was in order to defend the integrity of
these proceedings.
45. This argument, it seems to me, has to be taken a step further
because Mr Shepherd's complaint is directed not only to the fact that
the Greek proceedings were pursued, but also to the intention to deploy
the Greek judgment in answer to these proceedings. I consider that
it would run contrary to the reasoning of the European court to take
the view that it would be inappropriate for Mr Tsavliris to deploy the
judgment of the Greek court under article 26 of the Convention or article
33 of the Regulation, and that this criticism of Mr Tsavliris' apparent
intention justifies the imposition of the condition for which Mr Tavoulareas
contends. That too, it seems to me, would be inconsistent with the
"mutual trust which has enabled a compulsory system of jurisdiction to be
established", a system that itself provides for the circumstances in which
there should not be recognition. Indeed, to criticise the deployment of
the judgment in the Greek proceedings in the manner contemplated by
the Regulation does, I think, in reality, amount to an assessment that the
proceedings themselves were inappropriate.
46. It seems to me that if I were to make my order setting aside the
judgment of 17 January 2002 conditional upon the payment into court,
I would, given the conclusions reached by David Steel J, implicitly be
assessing the appropriateness of the Greek proceedings. In view of the
judgment of the European court in Turner v Grovit, I do not consider
it right for me to do so. However, quite apart from what was said by
the European court, I would not regard the conduct of Mr Tsavliris as
providing a proper basis for imposing a condition upon an order allowing
Mr Tavoulareas' claim being considered on its merits. I would accept
Mr Irvin's submission that the imposition of a condition such as that for
which Mr Tavoulareas contends would not be justified by disapproval of Mr
Tsavliris' behaviour in the respects in which it is criticised."
•32.               Andrew Smith J then turned to the application of AGT Co.
In reliance on Article 19 of the Service Regulation and passages from
the judgment of Mance LJ to which I have already referred above he
concluded that even if definitive pendency of the Greek proceedings
was postponed beyond the date on which Mr Tavoulareas had notice of
the Greek proceedings, 31 December 2001, there was no basis for an
argument that Article 19 had the effect of postponing it until August 2004.
He therefore concluded that the Greek court was definitively seised of the
Greek proceedings before this court was seised of the second action.
•33.               That meant that the application of AGT Co turned on the
question whether Article 27 of the Judgments Regulation applies where
the proceedings in the court first seised have proceeded to judgment.
Andrew Smith J had not heard argument directed to this point. As to this
he said: -
"69. Of course, if the provisions of article 27 do not apply after judgment
in the proceedings in the court first seised, the question then will arise
whether article 33 provides an answer to the claim and therefore Mr
Tavoulareas should be prevented from pursuing it. However, Mr Shepherd
objects to AGT Co making an application on this basis because it is not
covered by their application notice. (At the time that they made their
application, apparently AGT Co did not know that the Greek court had
given notice.) It seems to me that there is force in Mr Shepherd's point
and for two reasons it is not an arid procedural technicality. First, Mr
Tavoulareas would rely upon article 34 to answer an argument based on
article 33 and he has not prepared in order to present his argument that
it does. Secondly, it appears likely that a similar question will arise in the
first action and if so it is sensible that the point should be considered in
the two actions together.
70. Accordingly, I shall invite the parties to make submissions as to
whether article 27 engages after and despite the judgment of the Greek
court and, if there is an issue between the parties about this, shall
determine AGT Co's application in light of my decision upon that issue."
•34.               Andrew Smith J heard further argument on 11 November
2005. On 24 November 2005 he gave a second judgment, [2005]
EWHC 2643 (COMM). He concluded that Article 27 applies only where
there are concurrent proceedings at the time when the court not first
seised makes its determination. It followed that as at the date of his
determination there were current proceedings only in this court. Andrew
Smith J then proceeded to give directions as to the manner in which it
should be decided in both actions whether the Greek judgment should be
recognised. On 28 November 2005 the Tsavliris interests as Defendants
in both actions issued their application pursuant to Article 33.2 of the
Judgments Regulation that the Greek judgment should be recognised
in the two actions. It is that application which came before me on 21
February 2006.
•35.               With that lengthy introduction I come to the points which
I have to decide. The introduction has unfortunately been necessary in
order to provide the context in which the parties' respective contentions
must be seen.
•36.               Chapter III of the Judgments Regulation is headed
"RECOGNITION AND ENFORCEMENT." Section 1, under the rubric
"Recognition," provides as follows: -
"Article 33
1. A judgment given in a Member State shall be recognised in the other
Member States without any special procedure being required.
2. Any interested party who raises the recognition of a judgment as
the principal issue in a dispute may, in accordance with the procedures
provided for in Sections 2 and 3 of this Chapter, apply for a decision that
the judgment be recognised.
3. If the outcome of proceedings in a court of a Member State depends on
the determination of an incidental question of recognition that court shall
have jurisdiction over the question.
Article 34
A judgment shall not be recognised:
1. if such judgment is manifestly contrary to public policy in the Member
State in which recognition is sought;
2. where it was given in default of appearance, if the defendant was not
served with the document which instituted the proceedings or with an
equivalent document in sufficient time and in such a way as to enable
him to arrange for his defence, unless the defendant failed to commence
proceedings to challenge the judgment when it was possible for him to do
so;
3. if it is irreconcilable with a judgment given in a dispute between the
same parties in the Member State in which recognition is sought;
4. if it is irreconcilable with an earlier judgment given in another Member
State or in a third State involving the same cause of action and between
the same parties, provided that the earlier judgment fulfils the conditions
necessary for its recognition in the Member State addressed.
Article 35
1. Moreover, a judgment shall not be recognised if it conflicts with
Sections 3,4 or 6 of Chapter II, or in a case provided for in Article 72.
2. In its examination of the grounds of jurisdiction referred to in the
foregoing paragraph, the court or authority applied to shall be bound
by the findings of fact on which the court of the Member State of origin
based its jurisdiction.
3. Subject to paragraph 1, the jurisdiction of the court of the Member
State of origin may not be reviewed. The test of public policy referred
to in point 1 of Article 34 may not be applied to the rules relating to
jurisdiction.
Article 36
Under no circumstances may a foreign judgment be reviewed as to its
substance.
Article 37
1. A court of a Member State in which recognition is sought of a judgment
given in another Member State may stay the proceedings if an ordinary
appeal against the judgment has been lodged.
2. A court of a Member State in which recognition is sought of a judgment
given in Ireland or the United Kingdom may stay the proceedings if
enforcement is suspended in the State of origin, by reason of an appeal."
•37.               It is convenient to note at the outset that, should it be
relevant, whereas in the first action the English court is the court first
seised, in the second action it is the Greek court which is the court
first seised. I mention this point because in Hendrikman v. Magenta
Druck [1996] ECR I/4943 both the Advocate General and the Court
pointed out that the European Court had twice said that Article 27(2)
of the Brussels Convention, which is the precursor of Article 34.2 of the
Judgments Regulation, is intended to ensure that a judgment is not
recognised or enforced under the Convention if the defendant has not had
an opportunity of defending himself before the court first seised.
•38.               Mr David Goldstone, for Mr Tavoulareas, submits that
the conditions for non-recognition as set out in Article 34.1, 34.2 and
34.3 are all satisfied although as he rightly points out it is sufficient for
the purposes of non-recognition that just one sub-article is applicable. I
propose first to address Article 34.2.
Article 34.2
•39.               Article 34.2 has three elements. Mr Irvin contended that
the party against whom the relevant judgment has been obtained must
establish each of them in order to avoid recognition. First there must
be a judgment in default of appearance. Secondly the defendant must
show that he was not served with any sort of document instituting the
proceedings in sufficient time and in such a way as to enable him to
arrange for his defence. Thirdly, the defendant must not have failed to
commence proceedings to challenge the judgement when it was possible
for him to do so. Mr Goldstone accepted for the purposes of argument
before me that it is only relevant to consider whether the defendant has
failed to commence proceedings to challenge the judgment if the first
two conditions are met. Although at the time when the Tsavliris interests
applied for recognition of the Greek judgment Mr Tavoulareas had not
commenced proceedings to challenge the same, he has now done so. It
is common ground that because the judgment in the Greek proceedings
has not been served on Mr Tavoulareas he is entitled as of right to file
an appeal within three years of publication or issue of the judgment,
22 October 2004. Mr Tavoulareas filed an appeal on 16 February 2006.
The document constituting the appeal asks for "the default judgment"
to be set aside on various grounds including lack of service, lack of
jurisdiction and on the merits. It is accepted that these are "proceedings
to challenge the judgment" such as are referred to in Article 34.2. Mr Irvin
contended that since the appeal was filed subsequent to the application
for recognition of the judgment it would not be sufficient to prevent
recognition even if the Claimant establishes the first two elements of
Article 34.2. He suggests that the position should be examined as it
obtains at the date of application for recognition. I reject that argument,
which reflects a similar argument advanced unsuccessfully by Mr Irvin
before Andrew Smith J in relation to Article 27 of the Regulation. It is to
my mind obvious that the position must be examined as at the date when
the court is called upon to decide whether to recognise the judgment.
Since an appeal has now been commenced the Claimant will not be
defeated by the proviso if he satisfies the court that the other elements of
Article 34.2 are applicable.
•40.               The first of those elements is that the judgment was given
in default of appearance. Mr Irvin points out that Mr Tavoulareas has
adduced no evidence bearing on the question whether the judgment
would as a matter of Greek law and procedure be considered a judgment
given in default of appearance. He also submitted that a conscious failure
to appear at the actual hearing in circumstances where the defendant
knows all about it and has appeared once before in the proceedings is not
"default of appearance" in any sense other than that the defendant did
not turn up on the day.
•41.               I do not regard as relevant to this discussion the agreed
procedure pursuant to which on 17 January 2003 the parties secured the
agreement of the Greek court to an adjournment, save to the extent that
it demonstrates, as is in any event obvious, that Mr Tavoulareas could
have appeared at the trial had he so wished. Mr Tavoulareas participated
in the procedure at the direction of the English court and only to the
extent necessary to bring about the success of the parties' agreed joint
approach to the Greek court. In any event the Greek court recorded in
its judgment that the Defendant parties were not represented in court
by an appointed attorney and were absent, had not appeared during
the calling forth of the case and must be tried in absentia. Evidently
the Greek court did not consider that the earlier participation of Mr
Tavoulareas in its proceedings derogated from those conclusions. In
Maersk Olie Gas A/S v. Firma M de Haan and W de Boer [2005] 1 Lloyd's
Rep. 210 the European Court at paragraph 57 of its judgment drew a
distinction between challenging the jurisdiction of the court and appearing
to defend on the merits, a distinction well recognised in English law
and procedure. Whilst not directly analogous, this fortifies me in my
conclusion that it would be inappropriate in this European context to
regard the participation of Mr Tavoulareas in the January 2003 application
as precluding his reliance upon his later non-appearance.
•42.               Mr Goldstone submitted that "default of appearance" has
an autonomous meaning under community law. There is support for
that proposition in paragraph 26 of the Opinion of the Advocate General
in the Hendrikman case. I find it difficult to extract from Hendrikman
any real guidance as to what that autonomous meaning is. Hendrikman
was an extremely odd case. Briggs and Rees describe it as a peculiar
decision - see Civil Jurisdiction and Judgments, 4th Edition at p.509. The
defendants in that case said that they were and were presumed to have
been unaware of the proceedings brought against them until served with
a judgment of the Landgericht reversing the decision of a lower local court
which had dismissed a claim against them. Other persons with an interest
in the dispute were served with the proceedings, which were addressed
to the defendants, and those other persons then instructed lawyers to
conduct the defence of the claim. The German courts which rendered
these judgments were under the impression that the defendants were
validly represented and so naturally the defendants were not declared
to be in default of appearance. The question arose whether a judgment
delivered in proceedings where, although the defendant was not declared
to be in default of appearance, he was not validly represented and had
no knowledge of the proceedings, is a judgment "given in default of
appearance" for the purpose of Article 27(2) of the Brussels Convention.
The only previous case in which the European Court had had occasion
to consider what is meant by default of appearance was also far from
straightforward. In Sonntag [1993] ECR I/1963 criminal proceedings were
brought in Italy against a German schoolteacher for causing the death by
negligence of a pupil who had suffered a fatal accident on a school trip to
Italy. As Advocate General Jacobs explained in Hendrikman at paragraphs
23-25: -
"23..... The deceased pupil's parents and brother joined the criminal
proceedings as civil parties seeking an order against Mr Sonntag for
compensation for the loss caused by the accident. The civil parties'
declaration of intention to make a civil claim against him was served on
Mr Sonntag. He was legally represented at the trial before the criminal
court at which he was found guilty on the criminal count and ordered to
pay compensation to the civil parties. The relevant German court granted
the civil parties' application to enforce the civil law part of the judgment.
Mr Sonntag appealed to the Oberlandesgericht, which dismissed the
appeal; he appealed against that dismissal to the Bundesgerichtshof,
which referred a number of questions to the Court including the following:
-
"Has a defendant appeared for the purposes of Article 27(2) of the
Convention where the case concerns a civil claim for damages in
connection with charges brought before a criminal court....and the person
against whom enforcement is sought, through counsel of his own choice,
answered to the criminal charges but did not express a view on the civil
claim, on which oral argument was also submitted in the presence of his
counsel?"
24. Advocate General Darmon favoured a restrictive interpretation of the
exception stating: "in order to be applicable, Article 27(2) necessarily
implies, in my view, that the defendant is in default of appearance, and
must have been found to be so by the court of the State where the
proceedings were first brought......" That statement should, however, be
seen in its context; it was not disputed in Sonntag that the defendant had
been aware of the proceedings as a whole and had been represented at
the hearing by counsel of his choice.
25. The Court did not follow the Advocate General's approach. The Court
stressed that Article 27(2) was intended to ensure that a judgment was
not recognised or enforced under the convention if the defendant had not
had opportunity of defending himself before the court first seised. Non-
recognition under Article 27(2) is accordingly possible only where the
defendant was in default of appearance at the original proceedings:
"Consequently that provision may not be relied upon where the defendant
appeared, at least if he was notified of the elements of the claim and had
the opportunity to arrange for his defence....
A defendant is deemed to have appeared for the purposes of Article 27(2)
of the Convention where, in connection with a claim for compensation
joined to criminal proceedings, he answered at the trial, through counsel
of his own choice, to the criminal charges, but did not express a view
on the civil claim, on which oral argument was also submitted in the
presence of his counsel."
The Advocate General concluded in Hendrikman, at paragraph 41: -
"I accordingly conclude that a judgment delivered in ostensibly inter
partes proceedings of which the defendant was unaware and in which he
was not validly represented is a judgment given in default of appearance
within the meaning of Article 27(2)."
That conclusion obviously does not of itself assist Mr Goldstone's
argument. Advocate General Jacobs did however cite with approval the
opinion of Advocate General Mayras in Denilauler [1980] ECR 1533 which
included the following passage: -
"It is however far from certain that the terms used in [Article 27(2)] can
apply only to default proceedings as understood stricto senso in certain
national systems.
I do not think it right to construe Article 27(2) as referring only to
specific proceedings known to certain national legal systems. In my view
such a construction would be too narrow and would fail to recognise
the independent nature of the Convention, which is an instrument of
international law, in relation to the multiplicity of proceedings under the
national legal systems of the Contracting States.
This is confirmed by the English text of Article 27(2) which, by using the
expression "judgment.....given in default of appearance", is careful to
avoid terminology calling to mind certain national proceedings and those
alone. There can be no doubt that according to the ordinary meaning of
the words any judgment given against a defendant without his having
been heard is a judgment "in default of his appearance." The English
term refers simply to the absence of the defendant from the course of the
proceedings for whatever reason."
That analysis was not adopted by the European Court which decided the
case on the basis that ex parte orders were outside the scheme of the
Convention as a whole."
•43.               The actual decision of the European Court in Hendrikman
on this point is to be found at paragraph 21 of its judgment to the
following effect: -
"The answer to the third question must therefore be that Article 27(2) of
the Convention applies to judgments given against a defendant who was
not duly served with, or notified of, the document instituting proceedings
in sufficient time and who was not validly represented during those
proceedings, albeit the judgments given were not given in default of
appearance because someone purporting to represent the defendant
appeared before the court first seised."
This is not altogether easy to understand. Article 27(2) can only apply
where the judgment is given in default of appearance. Presumably
therefore the phrase "albeit the judgments given were not given in default
of appearance" must mean "although the judgments given were not
declared to be given in default of appearance." Since the assumption
was that the Hendrikmans knew nothing of the proceedings, it was
unnecessary to consider what would have been the position had they
known of them and had they had an opportunity effectively to defend
themselves had they so wished. The conclusions of both the Advocate
General and the European Court at every point emphasise and reiterate
that there was present this cumulative consideration both of lack of
knowledge of the proceedings on the part of the defendants and of lack of
opportunity properly to defend themselves. That being so I cannot accept
Mr Goldstone's submission that the Hendrikman decision is authority
for the broad proposition that any judgment given against a defendant
without his having been heard is a judgment in default of his appearance.
On the other hand I consider that a judgment which is expressed by the
court rendering it to be given in default of appearance is likely in most
circumstances to be regarded as falling within the autonomous meaning
of those words as used in the Regulation. The Greek judgment with
which I am concerned is expressed to be given in default of appearance.
Since the first two requirements in Article 34.2 of the Regulation are
cumulative, I do not have to decide whether the judgment should be
regarded as having been given in default of appearance if the position is
that the defendant was served with the proceedings. I say simply "served
with the proceedings" without adding the qualifications as to sufficient
time and adequacy because it is clear in this case that, if "service"
was effected, it was sufficient to enable Mr Tavoulareas to arrange for
his defence before the Greek court. I am quite satisfied that, on the
assumption that the proceedings were not served on the Defendant, then
pursuant to any acceptable or autonomous definition of "given in default
of appearance" this judgment was, as the court rendering it expressly
said, given in default of appearance by the Defendants including Mr
Tavoulareas.
•44.               I turn therefore to the question whether Mr Tavoulareas
was served with the document which instituted the proceedings or with
an equivalent document. Here what is said by Mr Irvin is that service
was effected by means of the letter of Messrs Constant and Constant
of 21 December 2001 addressed to Messrs Stephenson Harwood who
acted for Mr Tavoulareas in the English action. That letter enclosed by
way of service in the English action a Notice of Application contesting
the jurisdiction of the English court and supporting evidence including
the exhibit which contained a copy of the document which instituted
the Greek proceedings. That was, submitted Mr Irvin, service in a very
formal manner. He also pointed to the fact that in the Hendrikman case
the Advocate General appears on more than one occasion to use the
expression "served on" and "notified to" interchangeably. The touchstone
of service for the purpose of Article 34.2 is, submitted Mr Irvin, to be
found in the requirement that what is done must be sufficient to enable
the defendant to arrange for his defence. Thus "service" is not used in
any technical sense. On any showing the Defendant here was sufficiently
notified of the proceedings to have been able, had he so wished, to
arrange to be defended at the September 2004 hearing before the Greek
court.
•45.               Mr Goldstone submitted that it is a misconception to think
that the meaning of "service" in Article 34.2 is somehow informed by
reference to the sufficiency of what is done. Even where "service" is
effected, there is required a separate examination of the question whether
it has been effected in sufficient time and in such a way as to enable the
defendant to arrange for his defence. Support for that proposition is to be
found in paragraph 21 of the Advocate General's Opinion in Hendrikman: -
"21. If that question [viz whether the judgment is given in default of
appearance] is answered in the affirmative, the national court will be
required to examine whether the two conditions set out in that provision
[viz Article 27(2)] were met before it enforces the judgment. Those
conditions are separate and cumulative: the first requirement, of due
service, is to be determined by reference to the procedural law of the
State in which the judgment was delivered together with any relevant
international conventions; the second requirement, of service in sufficient
time to enable a defence to be arranged, is a question of fact to be
assessed by the court before which enforcement is sought taking into
consideration the circumstances of the case before it."
I do not consider that too much significance can be read into the fact that
from time to time the Advocate General appears to use the concepts of
"service" and "notification" interchangeably in his Opinion. It would not
have been sufficient for the purposes of that highly unusual case to point
out that there had been no service, since Article 27(2) was only engaged
if there was default of appearance. On the other hand in considering
whether the "appearance" in that case should be regarded as real, it was
relevant to consider whether the Defendants had been notified of the
elements of the claim, a concept wider than mere service.
•46.               Mr Irvin pointed to the fact that whereas Article 27.2 of
the Brussels Convention used the concept of "due" service this element
is absent from Article 34.2 of the Judgments Regulation. He suggested
that this was consistent with the abandonment in the Regulation of the
concept of formal service being determinative of the order of seisin. He
submitted that for the purposes of the Regulation issue of proceedings
was a more relevant concept than service in any formal sense. For
the purposes of the Judgments Regulation no formalities were now he
suggested required for service other than that it be effected in such a way
as to enable the defendant to arrange for his defence. Mr Irvin submitted
that it would be anomalous if the Greek court were, so far as concerns
the second action, the court first seised and yet this court concluded that
the proceedings had not been served. Mr Irvin also submitted that if by
service in Article 34.2 was meant service under the Service Regulation
then it was unnecessary and superfluous to include the requirement that
service be in sufficient time and in such a way as to enable the defendant
to arrange for his defence.
•47.               I do not consider that there is any anomaly involved in
recognising that a court may be seised of proceedings notwithstanding
that service of them upon the defendant has not been effected. Seisin
and service are different concepts designed to achieve different aims and
objects. The distinction between them underpins the discussion in the
judgment of Mance LJ to which I have already referred. Furthermore it
does not follow that service in accordance with the Service Regulation will
afford to the defendant a sufficient opportunity to arrange for his defence
- the Service Regulation does not address such considerations. Moreover,
as Mr Goldstone pointed out the Service Regulation is not of universal
application. It is only applicable where a judicial document has to be
transmitted from one Member State to another for service there, and it
does not apply where the address of the person to be served with the
document is not known. The requirement as to service being "in sufficient
time" and "in such a way" as to enable the defendant to arrange his
defence is not therefore superfluous even if, in the context of service in
one Member State of proceedings issued in another, service means service
in accordance with the Service Regulation. I am a little unclear what
precisely is added by the expression "in such a way" to a requirement that
service be effected "in sufficient time....to enable him to arrange for his
defence." On the other hand, I not sure that the inclusion of the latter
expression carries the argument very far in either direction.
•48.               For present purposes all I need to decide is whether the
words "served with" involve an element of formality such as is habitually
dealt with in developed legal systems by a system of rules or whether it
is simply synonymous with notification however that may be achieved.
There is I think some force in Mr Goldstone's suggestion that the scheme
of Article 34.2 is broadly that if a defendant has been served with
proceedings it ought not to avail him not to appear. If on the other hand a
defendant who has not been served with proceedings chooses to appear,
it ought not to avail him that he was not served.
•49.               For my part I am unsure as to the significance of the
omission of the word "due" or "duly" as qualifying "service" or "served."
Accepting that the word "service" must no doubt in this context be given
an autonomous community meaning, it is nonetheless a well recognised
legal term of art expressing a well understood concept, even if different
legal systems may have different rules as to how it is to be effected.
Briggs and Rees, op cit at p.509 think it improbable that the omission
of the word "duly" has any real significance. For them, "a defendant
may say that he has not been served if the document was not delivered
in accordance with the law of the state in which the proceedings have
been commenced, even though it may have come to his attention in
some irregular way. The omission of the word "duly" seems to make
little real difference to the structure of the argument." On the other
hand the learned editors of Dicey and Morris, The Conflict of Laws,
Fourth Cumulative Supplement to the Thirteen Edition at paragraph
S14-213 consider that the omission of the word "duly" may have some
significance, probably as I read them in relation to cases where there may
have been some relatively trivial irregularity or defect in service. In my
judgment whatever the significance may be it is unlikely to be relevant
here, where there has been no service at all if service denotes something
more than notification or delivery. There is a helpful discussion of the
legislative history of Article 34.2 in O'Malley, European Civil Practice,
Second Edition, at pp.909 - 913, paragraphs 26 - 046 to 26 - 052. In the
light of that legislative history and the decisions of the European Court on
Article 27(2), Isabelle Lancray S.A v. Peters and Sickert KG [1990] ECR
I-2725 and Minalmet GmbH v. Brandreis GmbH [1992] ECR I-5661 it is
I think clear, as the learned editors of O'Malley suggest at paragraph 26
- 052, that "service" as used in Article 34.2 of the Judgments Regulation
is a legal concept which requires a framework of rules to give it meaning
and distinguish it from mere delivery. Mr Irvin came close to conceding,
if he did not actually do so, that Mr Tavoulareas had not been served with
the Greek proceedings if service meant something more than bringing
those proceedings to his attention. The only attempt made to serve Mr
Tavoulareas with the Greek proceedings was through the medium of
the Public Prosecutor which failed. Although Mr Irvin described delivery
to Messrs Stephenson Harwood of the letter of Messrs Constant and
Constant in December 2001 as service of a very formal character he
did not I think thereby mean to imply that it constituted service if that
word was being used as a legal term of art. Apart from anything else,
it was service in the English action rather than purported service of the
Greek action. Messrs Constant and Constant had no reason to believe
that Messrs Stephenson Harwood were authorised to accept service of
the Greek proceedings. Indeed at other stages of his submissions Mr Irvin
described the proposition that Mr Tavoulareas had never been served
with the Greek proceedings as probably correct. Moreover I am bound
and so are the parties by the decision of the Court of Appeal to the effect
that the Greek proceedings have not been served on Mr Tavoulareas. The
Court of Appeal has decided that point both on the basis that the point is
under Greek law informed by the Service Regulation and on the basis of
Greek domestic law unconstrained by that Regulation. In the view of the
Advocate General in Hendrikman the question of service for the purposes
of Article 27 is to be determined by reference to the procedural law of
the state in which the judgment was delivered together with any relevant
international conventions. The Court of Appeal has decided by reference
to the procedural law of Greece together with any relevant international
conventions that service of the Greek proceedings upon Mr Tavoulareas
has not been effected.
•50.               For all these reasons I conclude that by reason of the
satisfaction of the conditions in Article 34.2 of the Judgments Regulation
the judgment of the Greek court should not be recognised in the two
English actions. Much of the learning on Article 34.2 and its predecessor
Article 27(2) is suggestive that the rationale underlying Article 27(2) and
thus Article 34.2 is that ordinarily the judgment under consideration will
have been rendered by a court first seised. However that may be, my
conclusion so far as concerns Article 34.2 is obviously equally applicable
to both actions.
•51.               This conclusion renders it unnecessary to consider Article
34.1 and 34.3. Since the points were fully argued I will express my
conclusions quite shortly.
Article 34.1
•52.               Here as it seems to me different considerations may
obtain in the two actions. So far as concerns the first action, in which
the English court is first seised, what is said on behalf of Mr Tavoulareas
is that it was the Tsavliris interests which invoked the procedure in this
court to establish that the Greek court was first seised. However having
obtained from the Court of Appeal an answer which they did not like they
deliberately chose not to tell the Greek Court about it. That the decision
was deliberate is clear. Mr Dickinson for the Tsavliris interests puts it this
way at paragraph 12(c) of his Witness Statement of 1 February 2006: -
"The Tsavliris parties were entitled to take the view that the Court of
Appeal was wrong in its approach to the question of whether or not the
Greek proceedings were definitively pending before the initial English
proceedings were served."
What has occurred therefore is that the Greek court has been prevented
from considering whether, in the light of the decision of the English court
that it was first seised, it the Greek court should decline jurisdiction.
It would, submits Mr Goldstone, be entirely within the scheme of the
Convention and the Regulation or within their respective spirits to deny
recognition to a judgment so obtained. So to do will promote the purposes
of the Convention and of the Regulation by encouraging litigants to notify
courts second seised of judgments rendered by the court first seised.
•53.               Mr Irvin for his part rested his opposition to this approach
on the consideration that there was nothing in the Convention or in the
Regulation which prevented the Tsavliris interests from proceeding as they
did and that Andrew Smith J has already concluded that their having done
so ought not to be visited with sanctions. Mr Irvin also pointed out that
Mr Tavoulareas could had he so wished have drawn to the attention of the
Greek court the decision of the English Court of Appeal.
•54.               Underlying this debate is the question whether for this
court to deny recognition to the Greek judgment would "imply an
assessment of the appropriateness of bringing proceedings before a court
of another Member State," an assessment which this court ought not to
undertake in the light of the strictures of the European Court in Turner v.
Grovit, above, at p.113.
•55.               The exercise with which I am here concerned is not the
same as that which faced Andrew Smith J in deciding whether to impose
conditions upon the setting aside of the English default judgment. A
failure to afford recognition to the Greek judgment does not necessarily
imply any criticism of the conduct of the Tsavliris interests in either
invoking the Greek jurisdiction or pursuing their action to judgment. Non-
recognition pursuant to Article 34.1 could be said to reflect a view simply
that this court should ensure, as best it can without interference, direct
or indirect, in the jurisdiction of other Member States that the regime
of the Convention and the Regulation is observed. It could be said that
the regime has not been observed if the court second seised has not,
for whatever reason, had the opportunity to consider the implications, if
any, flowing from the order of seisin of courts in more than one Member
State of actions involving the same cause of action and between the
same parties. I am not persuaded, although I do not need to decide,
that for the English court to deny recognition to the Greek judgment
in the first action would "[run] counter to the principle of mutual trust
which..... underpins the Convention and prohibits a court, except in
special circumstances..... from reviewing the jurisdiction of the court
of another Member State." At paragraph 30 of its judgment, p.114,
the European Court explained why the grant of anti-suit injunctions did
not in its judgment contribute to the attainment of the objective of the
Convention, which is to minimise the risk of conflicting decisions and to
avoid the multiplicity of proceedings. The Court said this: -
"First, recourse to such measures renders ineffective the specific
mechanisms provided for by the Convention for cases of lis alibi pendens
and of related actions. Secondly, it is liable to give rise to situations
involving conflicts for which the Convention contains no rules."
As Mr Goldstone points out neither objection applies here. The specific
measure provided by the Convention, and now by the Regulation, namely
Articles 21 and 28 respectively, have failed because of the deliberate
omission by the Tsavliris interests to draw to the attention of the Greek
court the judgment of the English Court of Appeal. Nor, submits Mr
Goldstone, would a refusal to grant recognition give rise to any conflict
for which the Convention contains no rules. Although he did not spell it
out, the basis of that submission is, I imagine, that either ex hypothesi
there is such a rule contained within the Regulation, viz Article 34.1, or,
alternatively, it might be said that it is not non-recognition which gives
rise to a situation involving a conflict but rather the failure to afford to
the Greek court the opportunity itself to consider whether such a conflict
should be avoided.
•56.               However in that latter regard I am troubled by the
consideration that, as it seems to me and as it seemed to Andrew Smith
J, there is no good reason why Mr Tavoulareas should not himself have
drawn to the attention of the Greek court the existence of the English
judgment. The only evidence before me which bears upon the alleged
constraints upon Mr Tavoulareas in that regard is contained in paragraphs
41 and 42 of Mr Keates' ninth Witness Statement which read: -
"41. Once that step had been taken [viz participation in the joint
agreed application to the Greek court on 17 January 2003 to request an
adjournment] the Claimant did not take any further part in the Greek
proceedings because it became apparent from advice that he received,
and the expert evidence of Greek law in the London proceedings, that it
was not possible to challenge jurisdiction as a preliminary issue under
Greek procedure. The Claimant would have had to deal with the merits
of the case as well as the jurisdiction defence. In these circumstances
the Claimant has never been in a position to draw any matters to the
attention of the Greek court and had no reason to do so.
42. It was not correct, as Mr Justice Smith says at paragraph 40 of his
judgment of 12 October 2005, that the Claimant could have brought
the decision of the Court of Appeal to the Greek court's attention: if he
had done so he ran the risk that the Greek court would find that he had
submitted to its jurisdiction."
•57.               Just as Andrew Smith J regarded the evidence before him
on this topic as insufficient to be a satisfactory basis for a dispositive
conclusion, so I regard the evidence before me as insufficient to enable
me to conclude that in the unusual circumstances of this case it would be
manifestly contrary to public policy to afford recognition to the judgment
of the Greek court. The evidence is insufficient to enable me to conclude
that there was a real impediment to Mr Tavoulareas drawing to the
attention of the Greek court the existence of the English judgment.
Without such a finding, I have to conclude that both parties before the
court share responsibility for the situation which has arisen. That does
not detract from the fact that in the result the regime of the Convention
and the Regulation has not been observed, but it does to my mind make
it difficult to conclude that recognition of the Greek judgment would be
manifestly contrary to public policy. This renders it doubly unnecessary to
consider the position in the second action where the Greek court is first
seised.
Article 34.3
•58.               That leaves only the question whether the Greek judgment
is irreconcilable with the decision of the Court of Appeal. It is suggested
by Mr Goldstone that irreconcilability can be found in the assumption by
the Greek court of a Convention jurisdiction which the English court has
already decided the Greek court does not have. I do not consider that
this is a correct characterisation. The Greek Court did have jurisdiction to
entertain the action - the only question is whether, had the existence and
nature of the decision of the Court of Appeal been drawn to its attention
at the appropriate time, it might have felt obliged by the Convention or
the Regulation to decline that jurisdiction. I do not need to consider what
are the limits of irreconcilability under Article 34.3. It suffices that there
is in my judgment no irreconcilability between the English and Greek
judgments. The English decision is to the effect that the English court is
first seised. The Greek decision says nothing on that score and in my view
assumes nothing on that score.
However in the light of my earlier conclusions so far as concerns Article
34.2 the application of the Defendants in these two actions must be
dismissed.