Lars Windhorst v Albert Levy

The Brussels I enforcement regime concerns the formal enforceability of a foreign judgment, not the circumstances in which it may be executed in the state of origin. A judgment remains formally enforceable where, under the law of origin, an insolvency arrangement does not remove enforceability unless a separate declaration is obtained. Recognition of that arrangement under the Insolvency Regulation gives it no greater effect than it has in the state of origin. Registration may therefore stand while proceedings there remain pending. The English court nevertheless retains power under CPR rule 83.7(4) to stay execution. Where refusing a stay could place the creditor in a better position in England, a conditional stay may be granted subject to security.

Albert Levy obtained a German judgment in 2003 requiring Lars Windhorst to repay $2 million. After German insolvency proceedings, an insolvency plan was approved under which creditors accepted a reduced quota. Windhorst later applied under section 767 ZPO for a declaration that the judgment was unenforceable, but those proceedings remained unresolved.

Levy registered the judgment in England under the Brussels I Regulation. Master Eastman made the Registration Order, and Mrs Justice Eady dismissed Windhorst’s appeal and application for a stay in [2021] EWHC 1169 (QB). The Court of Appeal considered whether the judgment remained enforceable for the purposes of Article 38(1), the effect of recognition under the Insolvency Regulation, and whether execution should be stayed pending the German proceedings.

1. Disposition. The appeal against the Registration Order was dismissed. The appeal against refusal of a stay was allowed. Execution was stayed subject to security of $3.44 million, with permission to apply.
2. The court applied Coursier v Fortis Bank SA [1999] ECR I-2543. The term enforceable in Article 38(1) concerns formal enforceability, rather than the circumstances in which execution may take place in the state of origin. Under German law, the Insolvency Plan did not make the 2003 Judgment formally unenforceable unless and until Windhorst obtained a declaration under section 767 ZPO. The judgment was therefore enforceable for Article 38(1) purposes.
3. Article 25(1) of the Insolvency Regulation required recognition of the German judgment approving the Insolvency Plan. It did not require the English courts to give the Plan greater effect than it had under German law. The second sentence of Article 25(1) did not need to be considered because Windhorst was not seeking to enforce the approving judgment.
4. The court rejected the argument that the Insolvency Regulation made a stay mandatory. Registration did not remove the English court’s power to stay execution under CPR rule 83.7(4).
5. Refusing a stay could have enabled Levy to enforce the judgment in England in full even though enforcement in Germany depended on the outcome of the section 767 ZPO proceedings. That disparity constituted special circumstances justifying a conditional stay. Security in the amount ordered by the Oberlandesgericht Hamm was appropriate, and the parties were given permission to apply if that court later concluded that the German courts lacked jurisdiction.
6. The court left undecided the wider scope of Article 45. It noted the possible significance of Article 54 and compared Apostolides v Orams [2009] ECR I-3571, but Ground 2 did not require determination.

1. Court of Appeal (Civil Division) — In [2021] EWCA Civ 1802, dismissed the appeal against registration but allowed the appeal concerning the stay and imposed a conditional stay.
2. High Court, Queen’s Bench Division — In [2021] EWHC 1169 (QB), Mrs Justice Eady dismissed Windhorst’s appeal against the Registration Order and refused a stay.
3. Master Eastman — Made the Registration Order on 17 August 2020 registering the German judgment for enforcement in England.