Incorrect application of the regime for recognition and enforcement of foreign judgement. Practical consequences according to the supreme court.

In its judgement delivered on 6 October 2016 regarding an alleged request for recognition and enforcement of a Swiss judgement, whereby the Court of First Instance had applied an incorrect regime, the Supreme Court understands that in view of the settlement that would have been reached by applying the correct regime, this would have been the same as the decision adopted, as the rights of the defence of the appellant were not infringed and, thus, this does not entail any consequence.  Furthermore it examines the notification system for foreign judgement as a ground for refusal of enforcement.

This case poses the legal recognition or exequatur of a judgement issued by the District Court of Zurich (Switzerland) and the corresponding request for enforcement against a citizen resident in Spain.

The Court of First Instance issued the order agreeing the enforcement of the foreign judgement, in accordance with the provisions of the Lugano Convention of 16 December 1988 regarding legal competence and the enforcement of legal decisions in civil and mercantile matters. The Court considered that the preconditions required under Articles 26 and 27 of the mentioned Convention had been met in compliance with the court judgement as, based on this, in the event of the defendant failing to appear, it was only required that delivery or notification of the writ instituting proceedings had been made to the defendant, in the usual way and with sufficient time to enable him/her to arrange for his/her defence.  In this case notification requirements had been met as the defendant even went as far as contesting the claim.

The defendant lodged an appeal, which was dismissed by the Provincial Court.

As regards the validity of the writ communicating judgement, the decisive right belongs to the Law of the canton of Zurich dated 13 June 1976 regarding civil procedure (ZPO).  Notification of legal summonses, judgements and decisions are regulated as per §30: Should a party be unable to be notified in the national territory, he/she shall be forced to appoint a representative in Switzerland to this effect.  In the event of non-compliance with the court injunction, notifications may be made via the publication of announcements or be omitted with the same effect.

The defendant was required to appoint a representative in Switzerland for notification purposes.  The defendant appointed a lawyer and submitted a reply to the claim.  After taking part in the hearing along with the lawyer, the defendant then broke the contact with the latter.  The defendant should have appointed a new representative for notification purposes, but did not, despite the fact that he/she was aware that the process was on-going.

In this procedural situation, §30 of the ZPO legitimates the Court to attach the partial judgement to court orders (so called “fictitious notification”).  The legal effectiveness of the fictitious notification is the same as that of notification and communication of judgement.  This type of procedure would only result in being unacceptable in the event that no legal requirement would have been made to the defendant to appoint a representative in Switzerland for notification purposes.

The appellant lodged an appeal in cassation based on the validity and application, in certain areas, of the Treaty between Spain and Switzerland dated 19 November 1896 regarding enforcement of civil and commercial matters and which, therefore, were not repealed by the 1988 Lugano Convention.

The Supreme Court understands that the appellant is correct regarding his/her interpretation of the applicable law but that this is not a determining factor due to the following:

The notification of judgement is a duty imposed by public order of the forum, for which compliance is necessary for the effectiveness of the judgement to be recognised, over the provisions of the law of the State of origin; in this exequatur procedure the accreditation of compliance with the performance of such duty is also decisive, consequently, the absence of this will result in the refusal of the declaration of enforceability.

However, such declaration is applicable in those situations of non-consensual default of the defendant.  Under no circumstances, however, can this be justifiable for not only those situations of consented default by the defendant, as presumed in the present case, but also when these have been articulated by his/her procedural bad faith in the course of the proceedings.

In the present case, this position of abuse of procedure by the defendant has been proven: not only was he/she aware of the mentioned procedure, but he/she was also legally represented in his/her statement of defence, and voluntary withdrew from this.  Beside this, his/her behaviour was obstructive, leading to the termination of his/her legal representative and, despite having been informed of the related consequences, no further legal representative was appointed for notification purposes. These circumstances clearly shaped this position of procedural abuse which, as a question of law and order, the Supreme Court should declare, regardless of the Convention or Treaty that is finally applicable, as none of them allows or authorises their exemption; particularly, when the procedures followed have not accounted for any effective infringement of the rights of defence of the defendant.

Secondly, if the formal basis of the application of the rule is taken into consideration, the solution regarding the recognition and enforcement of the foreign judgement would not have varied either.  Accordingly, given the Spanish-Swiss Treaty itself, the application for enforcement was accompanied by all the documentation required by the mentioned treaty (Article 2) and, at the same time, the Swiss judgement was issued against a duly summoned and legally represented party in the proceedings (Article 6.2 of the Treaty).  The latter being the condition that is ultimately consistent with the safeguarding rights of Article 27.2 of the Lugano Convention (current Article 34 of the Convention, 21 December 2007, regarding legal competence, recognition and enforcement of decisions) concerning the need for delivery or notification of the writ instituting proceedings or equivalent document, due to default of appearance by the defendant, in the usual way and with sufficient time to enable him/her to arrange for his/her defence.  Fully established circumstances in the present case.