Cyprus Popular Bank Public Co Ltd v Vgenopoulos & Ors

Registration of a foreign worldwide freezing order under the Judgments Regulation does not make it fully effective and enforceable while an appeal against registration remains pending. Pending appeal, the claimant may pursue protective measures available under the law of the enforcing Member State, but cannot use registration as a shortcut to obtain immediate freezing relief.

For a worldwide freezing order, service on or notification to third parties may itself constitute a measure of enforcement. Enforcement is not confined to steps involving further court process, because service gives the order practical effect against third parties.

The claimant obtained a final worldwide freezing order in Cyprus and registered it as a judgment of the Queen’s Bench Division under article 38 of Council Regulation (EC) No. 44/2001. The registration order allowed an appeal within two months and prohibited measures of enforcement, except protective measures, during that period.

The defendants appealed the registration order. The claimant nevertheless served the Cypriot Freezing Order and the Registration Order on a London bank, sought confirmation that the defendants’ accounts would remain frozen, and threatened contempt proceedings. The issues were whether the registered order was immediately fully enforceable and whether service or notification to third parties amounted to a measure of enforcement under article 47.3.

1. Enforceability. The Cypriot Freezing Order did not become fully effective and enforceable merely because the Registration Order had been made. Article 47.3 qualified the general language of articles 38 to 46. While an appeal against registration was pending, enforcement was prohibited except for protective measures. The order would become fully effective and enforceable on determination of the defendants’ appeal.
2. The procedural scheme required a balance between the claimant’s entitlement to protective relief and the defendant’s opportunity to appeal a declaration of enforceability made without notice. Under articles 31 and 47.2–47.3, any protective measure had to be sought under the law of the enforcing Member State. The claimant could not use article 38 as a shortcut to secure the immediate freezing of assets without satisfying the English court that a freezing order should be granted.
3. Measures of enforcement. In the context of a worldwide freezing order, service on or notification to a third-party bank constituted a measure of enforcement. Unlike a money judgment, service of a freezing order gives it practical effect against third parties. The claimant had enforced the order in practical terms by serving it on UBP, demanding compliance and threatening contempt proceedings.
4. The decision of the CJEU in Rudolfs Meroni v Recoletos Ltd did not alter the analysis. Its discussion of notification supported the conclusion that notification makes a freezing order effective against third parties, while its enforceability point had not been decided.
5. The court concluded that the Cypriot Freezing Order was not then fully enforceable and that the claimant’s service and notification constituted prohibited measures of enforcement under article 47.3 and paragraph 4 of the Registration Order. The parties were invited to agree the consequential order.

The judgment concerned an application arising from a Registration Order made by Master Leslie on 26 February 2015 under article 38 of the Judgments Regulation. The defendants had appealed that Registration Order, with the appeal due to be heard subsequently. The present court determined the effect of the Registration Order pending that appeal.