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knowledge 23 June 2017 |

Costs and Unfinished Foreign Enforcement Proceedings

The High Court recently considered1 whether it should finally decide costs issues in relation to applications for enforcement in Ireland of foreign judgments where the substantive proceedings are not completed before the foreign court concerned. It rightly concluded that it should. 

The Master of the High Court had made an order recognising an Italian judgment in favour of the claimant, Haier, and orders for enforcement of the Italian judgment in Ireland. However, on appeal to the High Court, the respondent, Mares, relied on the fact that it was appealing the Italian judgment. The High Court ordered enforcement in Ireland to be stayed pending decision of the Italian appeal. The stay was granted under Article 46(1)2 of Regulation 44/2001, by which the enforcing court may stay proceedings if an “ordinary appeal” has been lodged in the court of origin.

The dispute about costs centred on apparently conflicting English decisions on whether what should properly be stayed by the court of enforcement, pending the final decision of the court of origin, was the appeal against recognition and enforcement (a stay of which suspends enforcement),3 or simply the enforcement itself.4 The difference is that if the appeal to the court of enforcement is stayed, that court should logically reserve issues of costs until the final decision of the court of origin, whereas if enforcement itself is stayed, the court of enforcement should finally decide any question of costs.  

Baker J held that what was at issue here was undoubtedly an application for a stay on enforcement. Because Mares succeeded in obtaining a stay, Mares was entitled to costs. She declined to stay enforcement of those costs pending the final decision of the Italian appeal, but did allow a stay until the expiry of the time limit for an appeal from her decision to the Irish Court of Appeal. 

Baker J also noted a dispute between the parties about whether, and to what extent, an appeal lay from her decision to the Court of Appeal. Though it was not ultimately for the High Court to decide, she observed that undoubtedly an appeal lies on a point of law from any alleged incorrect application of the law, including granting or refusing an extension of time to appeal,5 but the CJEU case law strongly suggests that no appeal lies against the granting, refusal or lifting of a stay of enforcement.6  

A party to litigation where the court of origin has yet to decide finally who has won on the merits will understandably be aggrieved by being ordered to pay its opponent’s costs in a failed enforcement application in the court of enforcement. However, this approach is undoubtedly right. A stay on enforcement is usually a sign that the party concerned moved to enforce too quickly (bearing in mind that it can separately seek provisional or protective measures pending enforcement). It would be inefficient for the court of enforcement to defer issues of costs of ancillary action until the final decision of the court of origin. Those ancillary costs issues should be quickly and finally decided, exactly as Baker J did.

  1. In re Jurisdiction of Courts and Enforcement of Judgments Act 2012 and a Judgment of the Tribunal of Varese, Italy; Haier European Trading SRL v Mares Associates Ltd [2017] IEHC 356, 1 June 2017.
  2. This application would, in respect of an EU judgment given after 12 January 2015, be made under Article 51(1) of Regulation 1215/2012 (Brussels I Recast) which replaced Regulation 44/2001.
  3. Banco Nacional de Comercio Exterior S.N.C. v Empresa de Telecomunicaciones de Cuba S.A. [2007] EWHC 2322.
  4. British Seafood Ltd v Kruk and Kruk [2008] EWHC 1528.
  5. Christofi v National Bank of Greece (Cyprus) Ltd [2015] EWHC 986 (QB).
  6. Van Dalfsen v Van Loon Case C-183/90 [1991] ECR I-4743; SISRO v Ampersand Software BV Case C-432/93 [1995] ECR I-2269.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.