Aerotron Limited v Hermes Aviation Limited

The public-policy exception to recognition or enforcement under the Brussels I Recast Regulation is exceptional and strictly construed. It applies only where enforcement would be at variance with the legal order of the state addressed to an unacceptable degree, involving a manifest breach of an essential rule or fundamental right. A party relying on possible double liability must establish a real risk and identify the relevant difference between public policy in the state of origin and the state addressed. Concerns about corporate status, authority, insolvency and payment arrangements did not establish the necessary risk or breach. The application was dismissed.

Aerotron applied under rule 74.7A of the Civil Procedure Rules 1998 for refusal of recognition and enforcement of two Maltese judgments arising from an aircraft lease dispute. Aerotron accepted the underlying liability but argued that payment might not discharge the debt because of Hermes’s corporate status, uncertain authority, possible insolvency and proposed payment arrangements. Hermes disputed the existence of any real double-liability risk. The central issue was whether enforcement, rather than the merits of the Maltese judgments, would be manifestly contrary to public policy under Article 45(1)(a) of the Brussels I Recast Regulation.

Application dismissed.

1. The application was made under rule 74.7A of the Civil Procedure Rules 1998. Although the notice sought refusal of recognition and enforcement, Aerotron accepted the judgment debt and in practice challenged enforcement. Article 46 applies the same public-policy grounds to enforcement.
2. The court accepted that evidence of Maltese law was required to inform it of the effect of the relevant corporate status. The unchallenged foreign-law evidence could be relied upon, but unsupported opinion evidence was disregarded. The court did not need to determine any foreign-law issue unnecessary to the application. This approach was supported by Brownlie v FS Cairo (Nile Plaza) LLC ([2021] UKSC 45) at [148].
3. The public-policy exception is narrowly and strictly construed. Under Krombach v Bamberski ([2001] QB 709) and Charles Taylor Adjusting Ltd v Starlight Shipping Co ([2023] 4 WLR 68), refusal requires an unacceptable variance with the legal order of the state addressed, involving a manifest breach of an essential rule or fundamental right.
4. The court considered that the applicant must identify the relevant public-policy position in the state of origin as well as in the state addressed. Aerotron had not shown the necessary difference. The judge was also not convinced that a risk of double payment, without more, would itself satisfy the manifest-breach threshold. Société Eram Shipping Co Ltd v Cie Internationale de Navigation ([2004] 1 AC 260) concerned common-law relief rather than a public-policy defence under the Regulation.
5. In any event, the alleged risk was not real enough. A claim by the Maltese state was speculative, and a future liquidator’s claim was possible but unsupported by evidence of imminent liquidation. The evidence did not establish that Mr Di Grandi lacked authority to represent Hermes. Payment to solicitors’ client account with agreed full-and-final-settlement wording would likely prevent a later liquidator claim, subject to the necessary anti-money-laundering and know-your-client checks.
6. In the addendum, the court considered payment into the Maltese court a potentially sensible solution, but could not determine under Maltese law whether tender had occurred or whether payment would constitute a valid discharge. The application remained dismissed.