In Case C-123/91,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesgerichtshof (Federal Court of Justice) for a preliminary ruling in the proceedings pending before that court between
Minalmet GmbH
and
Brandeis Ltd
on the interpretation of Article 27 (2) of the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, as amended by the 1978 Convention of Accession (OJ 1978 L 304, p. 1, hereinafter "the Brussels Convention"),
THE COURT (Fourth Chamber),
composed of: C.N. Kakouris, President of the Chamber, M. Diez de Velasco and P.J.G. Kapteyn, Judges,
Advocate General: F.G. Jacobs,
Registrar: H.A. Ruehl, Principal Administrator,
after considering the written observations submitted on behalf of:
Minalmet GmbH, by Ekkehart Schott, Rechtsanwalt Karlsruhe,
° Brandeis Limited, by Anna-Dorothea Polzer, Rechtsanwalt, Duesseldorf,
° the German Government, by C. Boehmer, Ministerialrat, Federal Ministry of Justice, acting as Agent,
° the United Kingdom, by S. Lucinda Hudson, of the Treasury Solicitor' s Department, acting as Agent,
° the Commission, by P. van Nuffel, of its Legal Service, acting as Agent, assisted by A. Boehlke, Rechtsanwalt, Frankfurt,
having regard to the Report for the Hearing,
after hearing the oral observations of Brandeis Ltd and the Commission at the hearing on 11 June 1992,
after hearing the Opinion of the Advocate General at the sitting on 8 July 1992,
gives the following
Judgment
1 By order of 4 April 1991, received at the Court Registry on 26 April 1991, the Bundesgerichtshof referred to the Court of Justice for a preliminary ruling under the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters a question on the interpretation of Article 27(2) of that convention, as amended by the 1978 Convention of Accession (OJ 1978 L 304, p. 1, hereinafter "the Brussels Convention").
2 That question was raised in proceedings between Minalmet GmbH, whose registered office is in Duesseldorf, Germany (hereinafter "Minalmet"), and Brandeis Ltd, whose registered office is in London (hereinafter "Brandeis").
3 It is apparent from the documents before the Court that Brandeis seeks the enforcement in Germany of a judgment delivered, in default of appearance, by the High Court of Justice, Queen' s Bench Division, ordering Minalmet to pay it a certain sum.
4 The document instituting the proceedings which led to the judgment at issue was forwarded by the competent authorities in the United Kingdom to the competent judicial authority in Germany in order to be served in accordance with Article 5(a) of the Hague Convention of 15 November 1965 on the service and notification abroad of judicial and extra-judicial documents in civil and commercial matters.
5 The Amtsgericht (Local Court) Duesseldorf, the competent authority in Germany, then effected service by post. The post-office employee, finding no-one at the Minalmet' s premises, lodged the documents to be served at the appropriate post office and issued a certificate to the effect that he had left at the debtor' s address a notice of such lodgment, in accordance with the procedure normally followed for the delivery of mail (substituted service under Paragraph 182 of the German Code of Civil Procedure). On the basis of that certificate, the Amtsgericht Duesseldorf issued a certificate recording due service and referring to the lodgment of the documents.
6 By order of 21 February, the Landgericht (Regional Court), Duesseldorf, ordered, at the request of Brandeis, that the judgment be certified as enforceable.
7 Minalmet brought an action for the annulment of that order before the Oberlandesgericht (Higher Regional Court), Duesseldorf, contending that the document instituting proceedings had not been served on it in accordance with the formal requirements of German law and solemnly affirmed that it had no knowledge either of the notice of lodgment by the post-office employee or of the said document. The Oberlandesgericht dismissed the application on 14 May 1990.
8 Minalmet then brought an appeal (Rechtsbeschwerde) against that decision before the Bundesgerichtshof. In its analysis of the case, that court found that the document instituting proceedings had not been validly served, the procedure being governed, by virtue of Article 5(a) of the Hague Convention, by the civil law of Germany, the State to which application had been made for service to be effected. It stated that substituted service could have been properly effected only at the private address of the statutory representative of the company, not at the debtor' s premises.
9 In those circumstances, the Bundesgerichtshof decided to stay the proceedings pending a preliminary ruling by the Court on the following question:
"Is recognition of a judgment given in default of appearance to be refused under Article 27(2) of the Brussels Convention where it cannot be proved that the defendant was served with the document which instituted the proceedings or he was not duly served with that document, if he was nevertheless aware of the judgment delivered in the proceedings but availed himself of none of the legal remedies against the judgment provided for in the procedure of the State in which the judgment was delivered?"
10 Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
11 By its question, the national court wishes essentially to ascertain whether Article 27(2) of the Brussels Convention must be interpreted as precluding recognition in one contracting State of a judgment given in default of appearance in another contracting State where the document instituting the proceedings was not served in due form on the defaulting defendant, even if the latter subsequently had notice of the judgment in question but did not avail himself of the legal remedies against that judgment provided for under the procedure of the State where it was delivered.
12 It must be borne in mind first of all that Article 27 of the Brussels Convention sets out the conditions for recognition in one contracting State of judgments given in another contracting State. According to Article 27(2), recognition must be refused "if the defendant was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable him to arrange for his defence".
13 It must next be noted that, in its judgment in Case C-305/88 Lancray [1990] ECR I-2725, paragraph 18, the Court held that due service and service in sufficient time constituted two separate and concurrent safeguards for a defendant who fails to appear. The absence of one of those safeguards is therefore a sufficient ground for refusing to recognize a foreign judgment.
14 It follows that a decision given in default of appearance in a contracting State must not be recognized in another contracting State if the document instituting proceedings was not duly served on the defaulting defendant.
15 That interpretation is not invalidated by the fact that the defendant had notice of the judgment given in default and did not avail himself of the remedies provided for under the procedure of the State where it was delivered.
16 Any other conclusion would be difficult to reconcile with the wording and purpose of Article 27(2) of the Brussels Convention.
17 It follows from the wording of the aforesaid provision that service on the defendant of the document instituting proceedings in due form and in sufficient time is required by that provision for recognition of that decision in a contracting State.
18 Furthermore, as the Court held in its judgment in Case 166/80 Klomps [1981] ECR 1593, paragraph 9, Article 27(2) of the Brussels Convention is intended to uphold the rights of the defence and ensure that a judgment is not recognized or enforced under the Convention if the defendant has not had an opportunity of defending himself before the Court first seised.
19 It must be emphasized in that regard that, as is apparent from the provision at issue, the proper time for the defendant to have an opportunity to defend himself is the time at which proceedings are commenced. The possibility of having recourse, at a later stage, to a legal remedy against a judgment given in default of appearance, which has already become enforceable, cannot constitute an equally effective alternative to defending the proceedings before judgment is delivered.
20 As correctly pointed out by the national court, once a judgment has been delivered and has become enforceable, the defendant can obtain suspension of its enforcement, if suspension is appropriate, only under more difficult circumstances and may also find himself confronted by procedural difficulties. The possibility for a defaulting defendant to defend himself is thus considerably diminished. Such a result would run counter to the purpose of the provision in question.
21 It follows from all the foregoing considerations that recognition in one contracting State of a judgment delivered in default of appearance in another contracting State must be refused where the document which instituted the proceedings was not duly served on the defendant, even if the defendant had notice of the judgment and did not have recourse to the available legal remedies.
22 It must therefore be stated in reply to the question submitted by the national court that Article 27 (2) of the Brussels Convention must be interpreted as precluding a judgment given in default of appearance in one Contracting State from being recognized in another Contracting State where the defendant was not duly served with the document which instituted the proceedings, even if he subsequently became aware of the judgment which was given and did not avail himself of the legal remedies available under the procedure of the State where the judgment was delivered.
Costs
23 The costs incurred by the German Government, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT (Fourth Chamber),
in answer to the question referred to it by the Bundesgerichtshof by order of 4 April 1991, hereby rules:
Article 27(2) of the Brussels Convention must be interpreted as precluding a judgment given in default of appearance in one Contracting State from being recognized in another Contracting State where the defendant was not duly served with the document which instituted the proceedings, even if he subsequently became aware of the judgment which was given and did not avail himself of the legal remedies provided for under the procedure of the State where the judgment was delivered.
