Banco Nacional De Comercio Exterior SNC v Empresa De Telecomunicaciones De Cuba SA

Under the Judgments Regulation, recognition of a foreign judgment cannot be refused merely because an appeal is pending, or because a later event may affect the prospects of that appeal. The recognising court must not review the foreign judgment’s substance or assess the likely success of an appeal.

A stay is discretionary and should protect the defendant against prejudice if the foreign appeal succeeds. Where the court of origin has fully considered that question, the English court should ordinarily respect its decision. Public policy is an exceptional ground for refusing recognition. Issues arising from the effect of a later annulment should, so far as possible, be determined by the courts of the State of origin.

Bancomext obtained registration in England of a judgment of the First Civil Section of the Ordinary Court of Turin dated 18 November 2005, requiring ETECSA to pay more than US$160 million and interest. Registration was ordered ex parte by Irwin J under Article 33 of Council Regulation (EC) 44/2001.

ETECSA appealed under Article 43. It sought a stay under Article 46.1 because an appeal against the Turin judgment was pending in Italy. It also argued that recognition was manifestly contrary to public policy because a Paris arbitration award, whose findings were said to underpin the Turin judgment, had subsequently been annulled. The central issues were whether the English appeal should be stayed and whether recognition should be refused under Article 34.1.

1. Stay. The application to stay the English appeal was dismissed. Articles 37 and 46 establish the general enforceability of judgments before the exhaustion of ordinary appeals. The discretion to stay exists to protect the defendant against prejudice if the foreign appeal succeeds, but it is not exercised automatically.
2. The Turin Court of Appeals had fully considered whether enforcement before determination of the Italian appeal would prejudice ETECSA. Its decision was not based on an assessment of the substantive merits. It had also considered the effect of the subsequent annulment of the arbitration award. Tomlinson J therefore respected the Italian decision and considered that repayment, with interest, could be ordered if ETECSA succeeded. The reasoning in Petereit v Babcock International Holdings Limited [1990] 1 WLR 350 supported that approach, although the facts there were materially different.
3. Substance and public policy. Articles 36 and 45.2 prohibited review of the Turin judgment’s substance. Assessing whether annulment of the award made success in Italy more likely would amount to reviewing the foreign judgment and was impermissible. Recognition could not be refused merely because the Turin judgment might later be varied or set aside.
4. Public policy under Article 34.1 is exceptional. The asserted property-right issue under Protocol 1, Article 1 did not alter the analysis. It was not established that enforcement engaged a fundamental value of English law, and the Turin judgment might remain valid independently of the annulled award. Following Interdesco S.A. v Nullifire Limited [1992] 1 Lloyd’s Rep 180, the effect of the annulment should, so far as possible, be addressed by the Italian courts.
5. The appeal against registration failed. The Turin judgment remained enforceable in England.

High Court (Commercial Court): Tomlinson J dismissed ETECSA’s appeal from Irwin J’s order registering the Turin judgment and dismissed the application to stay the English appeal.