DHL GBS (UK) Ltd v Fallimento Finmatica SPA

In an appeal against registration of a Member State judgment under the Judgments Regulation, the court considered whether the appeal should be stayed pending an appeal in the state of origin. Assuming that a discretionary power to stay the English appeal existed, the court held that a stay was inappropriate. The English court should determine the recognition issue promptly, initially on the assumption that the foreign court was correct on matters of its own law. The court also indicated that the arbitration exception and restrictions on reviewing foreign jurisdiction and substance substantially limited the scope for reconsidering the foreign court’s conclusions.

Finmatica obtained an Italian judgment against DHL in proceedings before the Court of Brescia concerning sums allegedly due under a contract containing a London arbitration clause. The Italian court held that the Bankruptcy Receiver was not bound by that clause and gave judgment for approximately €1.3 million.

Master Fontaine registered the judgment in England under Council Regulation (EC) No 44/2001. DHL appealed and sought a stay of the English appeal pending its appeal to the Court of Appeal of Brescia, which might address the Italian court’s jurisdiction and the applicability of the arbitration clause. The central issue was whether the English appeal should await the Italian proceedings.

1. Stay application dismissed. Assuming, without deciding, that the court had a discretionary power to stay an appeal against registration, it would be inappropriate to exercise it. Finmatica had a legitimate interest in knowing promptly whether the English court would recognise the Italian judgment.
2. The English court should initially address the recognition issues on the assumption that the Italian court was correct in its conclusions of Italian law. That approach might make further examination unnecessary or preclude it. Only if required should the court consider whether it was permitted to examine the Italian court’s conclusions concerning its jurisdiction or the non-applicability of the arbitration clause.
3. The court observed that DHL would face difficulty showing that the Italian proceedings had arbitration as their subject matter within Article 1(2)(d) of the Judgments Regulation. The European Court of Justice’s decision in Allianz SPA v West Tankers Inc, Case C-185/07, had made that argument more difficult.
4. The court further noted that Article 35 restricted review of the jurisdiction of the court of origin, while Articles 36 and 45(2) prohibited review of the foreign judgment on its substance. Those provisions might materially affect any challenge based on the Italian court’s treatment of jurisdiction or the arbitration agreement.
5. The English appeal was to proceed, with directions to be considered for its expeditious disposal.

• High Court (Commercial Court): on appeal from Master Fontaine, the court refused to stay DHL’s appeal against registration and directed that arrangements be considered for its expeditious disposal.
• Court of Brescia: judgment dated 20 March 2008 registered in England; DHL had lodged an appeal in Italy, which remained pending.