England and Wales Court of Appeal (Civil Division) Decisions

Cyprus Popular Bank Public Co Ltd v Andreas Vgenopoulos & Ors [2018] EWCA Civ 1 (12 January 2018)

Last Updated on September 22, 2021 by LawEuro

Neutral Citation Number: [2018] EWCA Civ 1
Case No: A2/2016/2810

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
MR JUSTICE PICKEN
[2016] EWHC 1442 (QB)

Royal Courts of Justice
Strand, London, WC2A 2LL
12/01/2018

B e f o r e :

LORD JUSTICE McCOMBE
LORD JUSTICE FLAUX
and
LORD JUSTICE HOLROYDE
____________________

Between:

CYPRUS POPULAR BANK PUBLIC CO LTD
Under resolution pursuant to the provisions of the
Resolution of Credit and Other Institutions Law 2013 N.17(I)/2013
(acting by its Special Administrator)
 Appellant
– and –
  
(1) ANDREAS VGENOPOULOS
(2) EFTHIMIOS BOULOUTAS
(3) KYRIACOS MAGEIRAS
(4) MARFIN INVESTMENT GROUP HOLDINGS S.A. and others
 Respondents

____________________
Mr Charles Samek QC and Mr James McWilliams (instructed by DLA Piper UK LLP) for the Appellant
Mr James Evans (instructed by Humphries Kerstetter LLP) for the Second to Fourth Respondents

Hearing date: Wednesday 13 December 2017
____________________
JUDGMENT APPROVED
____________________

Lord Justice Flaux:

Introduction

  1. The appellant appeals with the permission of Hamblen LJ against the Order of Picken J dated 22 June 2016. By that Order the judge made orders and declarations that: (i) the Judgment dated 23 May 2014 of the District Court of Nicosia, Cyprus (“the Judgment”) did not become immediately fully effective and enforceable by the appellant in England and Wales as a judgment of the High Court of Justice, Queen’s Bench Division on the making of the Order of Master Leslie dated 26 February 2015 and would only become fully effective and enforceable on the final determination of the appeal against the Order of Master Leslie issued by the respondents on 22 April 2016; (ii) the appellant was prohibited from taking any “measures of enforcement” pursuant to and in reliance on paragraphs 1 and/or 4 of the Order of Master Leslie until the final determination of the appeal; and (iii) “measures of enforcement” include service of the Judgment and/or the Order of Master Leslie on, or notification or provision of the Judgment and/or the Order of Master Leslie to third parties to the present proceedings in order to give effect to the Judgment as a judgment of the High Court of Justice, Queen’s Bench Division.
  2. As the judge said at the outset of his judgment, the case thus raises two interesting and apparently novel questions: (i) whether, in the case of a worldwide freezing order obtained in another member state, here Cyprus, the effect of obtaining an Order under Article 38 of Council Regulation (EC) 44/2001 (“the Judgments Regulation”) such as was obtained from Master Leslie permitting the registration of that worldwide freezing order as a judgment of the High Court of Justice, Queen’s Bench Division is that the worldwide freezing order becomes immediately effective and fully enforceable or whether it only becomes effective and fully enforceable if there is no appeal brought in respect of the registration order within two months of its being made or, if there is an appeal within that time, on determination of the appeal; and (ii) whether “measures of enforcement” as referred to in Article 47(3) of the Judgments Regulation includes service of the worldwide freezing order on and/or notification of the worldwide freezing order to third parties or whether “measures of enforcement” are confined to processes in which the Court is involved in securing enforcement.

Factual background

  1. The factual background is essentially not in dispute and can be stated as follows. The appellant is a registered Cypriot entity which until 2012 offered a full range of banking, insurance and financial services in Cyprus and abroad. Following the banking crisis in Cyprus, a Special Administrator was appointed and the appellant is now in a process called “resolution”. On 26 November 2012, the appellant issued a writ of summons in the District Court of Nicosia against the first three respondents and eight others, some of whom were its former officers, claiming breach of fiduciary duty, breach of trust, abuse of position, conflict of interest, conspiracy and negligence. On 29 April 2013, that writ was amended to add Marfin (the fourth respondent) as a defendant and the appellant made an ex parte application to the District Court seeking worldwide freezing orders and discovery orders against the then defendants. On 8 May 2013 a worldwide freezing order was made on an interim basis up to €3.79 billion in the case of the first and second respondents and €1.5 billion in the case of the third respondent. The order also prohibited Marfin from transferring assets to the first three respondents.
  2. Applications were made by the first three respondents to set aside the proceedings and the worldwide freezing order which ultimately proved unsuccessful and, following an inter partes hearing, the District Court issued a final judgment making a final worldwide freezing order (which like the judge I will refer to as “the Cypriot Freezing Order”) which will remain in force until the completion of the proceedings in Cyprus. The order deals with each of the respondents separately and provides in relation to each of the first three respondents:

“iv (1) Save as provided in paragraph (2) above, the conditions of this Order do not affect or concern anybody outside the jurisdiction of the Courts of the Republic of Cyprus.

(2) The conditions of this Order affect the following persons which are found in a country or state outside the jurisdiction of the Courts of the Republic of Cyprus:

…

b Any person, including any banking institution or other financial organization,

…

ii in relation to which this Order has been determined as being applicable and/or otherwise executable by the Courts of a country which has jurisdiction on the said person or on the assets of this person.”

  1. In [7] of his judgment, Picken J recorded that the first respondent (who is now deceased) and Marfin were claimants in an ICSID arbitration brought by them against the Republic of Cyprus and that in his witness statement Dr Karatzenis, Chief Legal Counsel of Marfin, went on to suggest that the claims in that arbitration cover the same ground as that covered by the claims made by the appellant against the respondents in the proceedings before the District Court. He went on to suggest that the Cypriot proceedings had been pursued by the appellant, which he described as being state-owned and state-controlled, as part of an attempt by the Republic of Cyprus to “hamper” the respondents’ pursuit of the ICSID arbitration claim, and that the obtaining of the Cypriot Freezing Order, as well as its registration in this jurisdiction, also forms part of that attempt. As the judge said, this was not accepted by the appellant in its evidence and, in any event, is not relevant to the present issues.
  2. On 12 February 2015, the appellant issued its application to the High Court of Justice, Queen’s Bench Division to register the Cypriot Freezing Order as a judgment of the English Court under Article 38 of the Judgments Regulation. The matter came before Master Leslie on paper and, although the application would normally have been dealt with without a hearing, he endorsed the Application Notice: “See me in Practice, if so advised. See Art 31 of EC Reg 44/2001”, as the judge said, a reference to the possibility of the appellant obtaining a domestic freezing order as a “protective measure” under Article 31 of the Judgments Regulation.
  3. At the subsequent hearing on 26 February 2015, Master Leslie raised this point with Mr Charles Samek QC, counsel for the appellant, and asked what the effect would be if the Cypriot Freezing Order were registered. Mr Samek QC’s response was: “it would be as if it were an English freezing order and that … the Applicant was considering going off to the High Court to seek specific interim relief as would be available here against third parties”. Master Leslie accepted that he had jurisdiction to make the registration order, as was also accepted by the respondents before Picken J. Under Article 32 of the Judgments Regulation the definition of “judgment” is wide enough to encompass a worldwide freezing order made after an inter partes hearing and there is authority from the European Court of Justice to that effect: Denilauler v SNC Couchet Frères [1980] ECR 1553.
  4. The Order of Master Leslie was in standard form and provided as follows:

“1. The Judgment dated 23 May 2014 of the District Court of Nicosia, Cyprus, with Action No. 8400/2012 between the Claimant/Applicant and the Defendants/Respondents 1, 2, 3 and 12 (which itself made final and absolute until trial or further order the interim orders dated 8 May 2013 of the District Court of Nicosia, Cyprus, with Action No. 8400/2012 between the Claimant/Applicant and the Defendants/Respondents 1, 2, 3 and 12) may be registered as a judgment of the Queen’s Bench Division of the High Court of Justice of England and Wales pursuant to Article 38 of the Judgments Regulation (Council Regulation (EC) No. 44/2001 of 22 December 2000), for enforcement in England and Wales.

  1. Respondents 1, 2, 3 and 12 pay the Applicant’s costs of this application to be assessed if not agreed, with a payment on account thereof to be made within 28 days of service of this order in the total sum of £10,000.00.
  2. The party entitled to the benefit of the judgment is Cyprus Popular Bank Public Co Ltd (also known as ‘Laiki’) under resolution pursuant to the provisions of the Resolution of Credit and Other Institutions Law 2013 N. 17(I)/2013 (acting by its Special Administrator, Andri Antoniadou, from Nicosia, Cyprus) and its address for service within the jurisdiction is the address of its instructed solicitors Eversheds LLP at One Wood Street, London EC2W 7WS (Ref: FLACKD/300174.000001).
  3. Respondents 1, 2, 3 and 12 have the right to appeal against this Order by making an appeal within 2 months after the date of service of this order on them. No measures of enforcement will be taken by the party entitled to the benefit of the judgment before the end of that period, other than measures ordered by the court to preserve the property of the judgment debtors.”
  4. Although the Registration Order was made in February 2015, the appellant did not seek to rely upon it for another twelve months until on 4 February 2016, the appellant’s solicitors, DLA Piper LLP wrote to Union Bancaire Privée (“UBP”). Having referred to the Cypriot Freezing Order and its terms, the letter then referred to the Registration Order. It continued, so far as presently relevant:

“7. We seek your written confirmation by 5 pm on 5 February 2016 that, in respect of any assets of the Defendants in your custody, possession or power, you will not permit the Defendants to remove these from England and Wales or to dispose or to deal with them or to diminish their value. In the absence of hearing from you, we may apply to the court without further notice to you.

…

  1. For the avoidance of doubt, you are now considered to be on notice of each of the May 2013 Order, the Cypriot Judgment and the English Order. Should you fail to comply with the terms of those orders and judgment you may be found in contempt of court.”
  2. The Head of Legal and the Head of Compliance at UBP responded the following day confirming that the bank had notice of and would comply with the Order of the High Court registering the judgment of the District Court “with immediate effect”. In a subsequent email on 25 February 2016, the Head of Legal said: “we are being told that the order is unenforceable in the UK as it has not been registered”, to which the partner at DLA Piper LLP responded the following day, saying, inter alia:

“While it is obviously not for us to advise you, our client’s position is as follows:

1 By Order of the English Court dated 26 February 2015, the Judgment of the District Court of Nicosia in Action no. 8400/2012 dated 23 May 2014 (the ‘Cypriot Judgment’) was registered as a judgment of the High Court of England and Wales.

2 The effect of …registration is that the Cypriot Judgment takes effect in England and Wales as though it were a judgment rendered by a Court in this jurisdiction. Accordingly, having received notice of it, UBP are bound by the English Order and must ensure that its terms are complied with.

3 Paragraph 4 of the English Order, which provides for certain of the Respondents to have a right of appeal, does not impact on the Order’s validity or enforceability as against the Respondents (or you). The purpose of that provision is to allow a period in which enforcement against an executory judgment may not take place, but this does not impact on the prohibition on disposition, which is [a] measure designed to prevent the Respondents from taking any steps that may prejudice a final judgment. That prohibition falls within the category of ‘measures ordered by the court to preserve the property of the judgment debtor’.

4 Accordingly, and as communicated to you in our letter of 4 February, our client’s position is that the English Order is a fully effective and enforceable order of the English Court that is binding on UBP.”

It is accepted by Mr Samek QC that the last sentence of paragraph 3 was incorrect.

  1. Following correspondence between the parties, the respondents’ application which was before the judge was issued on 9 May 2016 and was heard on 10 and 17 June 2016. The judge having circulated his draft judgment to the parties in the usual way prior to hand down and Mr Samek QC having appreciated that he had lost, before the judgment was handed down on 22 June 2016, Mr Samek QC made an application for a domestic freezing order against the respondents as a “protective measure” under article 47(3) of the Judgments Convention. The judge granted that application and made a domestic freezing order. His judgment in relation to that application ([2016] EWHC 1695 (QB); [2017] QB 453 at 481-494) is not under appeal. That freezing order remains in force because, for reasons not currently relevant, the respondents’ appeal against the Registration Order has yet to be heard.

The legal framework

  1. Before considering the judgment in more detail, it is necessary to consider the legal framework. The Judgments Regulation came into force on 1 March 2002 and had direct effect in the member states according to European Community law and had effect in English law by virtue of the European Communities Act 1972.
  2. Article 31 of the Judgments Regulation, in Chapter II “Jurisdiction”, is headed: “Provisional, including protective measures” and provides:

“Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.”

It thus reflects the earlier provision for “interim relief” to be available under section 25 of the Civil Jurisdiction and Judgments Act 1982.

  1. The “Enforcement” section of Chapter III “Recognition and Enforcement” begins with Article 38 which provides:

“1. A judgment given in a Member State and enforceable in that State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.

  1. However, in the United Kingdom, such a judgment shall be enforced in England and Wales, in Scotland, or in Northern Ireland when, on the application of any interested party, it has been registered for enforcement in that part of the United Kingdom.”
  2. Article 38.2 expressly recognises that unlike many other member states, the United Kingdom does not have the “exequatur” procedure, so that it is not necessary to apply for a declaration of enforceability under Article 38.1, hence only registration is required under Article 38.2.
  3. The relevant provisions in Articles 40 to 43 are:

“Article 40.1

The procedure for making the application shall be governed by the law of the Member State in which enforcement is sought.

Article 41

The judgment shall be declared enforceable immediately on completion of the formalities in Article 53 without any review under Articles 34 and 35. The party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.

Article 42.1

The decision on the application for a declaration of enforceability shall forthwith be brought to the notice of the applicant in accordance with the procedure laid down by the law of the Member State in which enforcement is sought.

Article 43.1

The decision on the application for a declaration of enforceability may be appealed against by either party.”

  1. Article 47 then provides:

“1. When a judgment must be recognised in accordance with this Regulation, nothing shall prevent the applicant from availing himself of provisional, including protective, measures in accordance with the law of the Member State requested without a declaration of enforceability under Article 41 being required.

  1. The declaration of enforceability shall carry with it the power to proceed to any protective measures.
  2. During the time specified for an appeal pursuant to Article 43(5) against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought.”
  3. It is noticeable that all these Articles refer only to the procedure for declarations of enforceability and do not refer to the procedure of registration applicable under Article 38.2 in the United Kingdom, but any question as to their applicability to the procedure of registration is answered by the relevant Order in Council, the Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929), to which the judge was not referred, which contains provisions as to the effect of registration and the right of appeal. Paragraph 2 of the Order provides:

“(1) In this Order—

“the Act” means the Civil Jurisdiction and Judgments Act 1982;

“the Regulation” means Council Regulation (EC) No. 44/2001 of 22nd December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters;”

  1. Paragraph 3 provides:

“Schedule 1 to this Order (which applies certain provisions of the Act with modifications for the purposes of the Regulation) shall have effect.”

  1. The critical provision of Schedule 1 which is headed “the Regulation” is paragraph 2, headed: “Enforcement of judgments other than maintenance orders (section 4) [i.e. section 4 of the Civil Jurisdiction and Judgments Act 1982]. Paragraphs 2(2) and (3) provide:

“(2) A judgment registered under the Regulation shall, for the purposes of its enforcement, be of the same force and effect, the registering court shall have in relation to its enforcement the same powers, and proceedings for or with respect to its enforcement may be taken, as if the judgment had been originally given by the registering court and had (where relevant) been entered.

(3) Sub-paragraph (2) is subject to Article 47 (restriction on enforcement where appeal pending or time for appeal unexpired), to paragraph 5 and to any provision made by rules of court as to the manner in which and conditions subject to which a judgment registered under the Regulation may be enforced.”

  1. The Rules of Court which were made as contemplated by paragraph 2(3) of Schedule 1 were contained in CPR Part 74, the relevant provisions of which were introduced by the Civil Procedure (Amendment) Rules 2002 SI 2002/2058. So far as registration of judgments under the Judgments Regulation is concerned, those Rules provided as follows:

“Registration Orders

74.6—(1) An order granting permission to register a judgment (“registration order”) must be drawn up by the judgment creditor and served on the judgment debtor…

(3) A registration order must state—

(a) full particulars of the judgment registered;

(b) the name of the judgment creditor and his address for service within the jurisdiction;

(c) the right of the judgment debtor—

…

(ii) in the case of registration following an application under the 1982 Act or under the Judgments Regulation, to appeal against the registration order;

(d) the period within which such an …appeal may be made; and

(e) that no measures of enforcement will be taken before the end of that period, other than measures ordered by the court to preserve the property of the judgment debtor.

Appeals

74.8—(1) An appeal against the granting or the refusal of registration under the 1982 Act or the Judgments Regulation must be made in accordance with Part 52, subject to the following provisions of this rule

(4) The appellant’s notice must be served—

(a) where the appeal is against the granting of registration, within—

…

(ii) where service is to be effected on a party not domiciled within the jurisdiction, two months, of service of the registration order;

Enforcement

74.9—(1) No steps may be taken to enforce a judgment—

(a) before the end of the period specified in accordance with rule 74.6(3)(d), or that period as extended by the court; or

(b) where there is an application under rule 74.7 or an appeal under rule 74.8, until the application or appeal has been determined.

(2) Any party wishing to enforce a judgment must file evidence of the service on the judgment debtor of—

(a) the registration order; and

(b) any other relevant order of the court.

(3) Nothing in this rule prevents the court from making orders to preserve the property of the judgment debtor pending final determination of any issue relating to the enforcement of the judgment.”

The judgment below

  1. The judge produced a careful and closely reasoned judgment on the two questions I identified at [2] above. In relation to the first question, as to the enforceability of the Cypriot Freezing Order as an English judgment, at [26] the judge said:

“Commonsense seems to me to dictate that if “measures of enforcement” cannot be taken, then, the “judgment” is not, in a real and practical sense, fully effective and enforceable. Put another way, it is difficult to see how a claimant could say, on the one hand, that it has a “judgment” which is enforceable whilst also saying, on the other hand, that it cannot take “measures of enforcement” in relation to that “judgment”. ”

  1. At [27] the judge went on to accept the submissions advanced by Mr Ali Malek QC, on behalf of the respondents, that the quid pro quo for the streamlined procedure set out in the Judgments Regulation was that a claimant cannot proceed to enforce a judgment until the defendant has had the opportunity to bring an appeal. He went on to hold at [28]:

“Furthermore, I struggle to see why a claimant which has obtained a declaration of enforceability should find itself in a better position pending an appeal, or in the two month period when an appeal can be brought if an appeal is, in the event, not brought, than a claimant would be in if an appeal were to be brought within the two month period and that appeal were to prove to be successful. Until it is known whether an appeal is to be brought and, if it is, whether it is going to succeed, it seems to me that it is appropriate that the position should, in effect, be neutral. The logical consequence of Mr Samek QC’s and Mr McWilliams’s submission being accepted is, however, that the claimant is in a better position simply by dint of having obtained a registration order on a without notice basis, and nothing more than that. I see no justification for adopting such an approach. This is all the more the case, given that Articles 47.2 and 47.3 both expressly permit a claimant, having obtained a registration order or, more accurately, using the language of Articles 47.2 and 47.3, a “declaration of enforceability”, to take “protective measures”, in the case of Article 47.3 specifically pending the resolution of any appeal. In view of this, pending an appeal a claimant has an appropriate level of protection and its position is safeguarded, provided obviously that it can persuade the Court in this jurisdiction to grant it relevant protective relief. In my view, there can be no justification for Article 38 effectively being used in such circumstances as, to use Mr Malek QC’s and Mr Evans’s label, a “short cut” to the obtaining of a freezing order in this jurisdiction. It cannot be right, and it would be wholly at odds with the scheme of the Judgments Regulation, were a claimant to be able to achieve the immediate freezing of bank accounts in this jurisdiction by obtaining an order pursuant to Article 38 without, pending an appeal, having to persuade the Court (in this jurisdiction) that it ought itself to grant a freezing order on conventional grounds.”

  1. He set out his conclusion at [30]:

“My conclusion, in the circumstances, is that the Cypriot Freezing Order is not currently fully effective and enforceable, and nor did it become fully effective and enforceable on the making of the Registration Order, but that it will only become fully effective and enforceable on determination of the Defendants’ appeal against the Registration Order. It follows from this that I reject the submission made by Mr Samek QC and Mr McWilliams that, by virtue of what was stated in the Cypriot Freezing Order about it applying to “Any person, including any banking institution or other financial organization, …in relation to which this Order has been determined as being applicable and/or otherwise executable by the Courts of a country which has jurisdiction on the said person or on the assets of this person”, the Cypriot Freezing Order is currently fully effective and enforceable as regards UBP in accordance with its terms. I do not consider, in the circumstances, that it can be right to suggest that it “has been determined” in this jurisdiction that the Cypriot Freezing Order is “applicable” or that it is “otherwise executable”. All that has so far happened is that the Claimant has obtained an order on a without notice basis and, in circumstances, where the Defendants are seeking to appeal against the Registration Order.”

  1. Although he had reached that conclusion without reference to authority, the judge went on to hold that his approach was supported by two authorities. The first was the decision of the European Court of Justice in Calzaturificio Brennero S.A.S. v Wendel GmbH Schuhproduktion International (Case 258/83) [1986] 2 CMLR 59, which considered the predecessor of Article 47(3) of the Judgments Regulation, Article 39 of the Brussels Convention. The judge relied particularly on certain passages from the Opinion of the Advocate General, Sir Gordon Slynn:

“By ‘protective measures’ Article 39 of the Convention envisages those forms of relief available under the law of the enforcing State to prevent the judgment debtor from removing the assets on which execution is to be levied. By ‘measures of enforcement’ which may not be taken, Article 39 means, in consequence, all other measures of enforcement, which usually take the form of the sequestration of the judgment debtor’s property.

… The object of Article 39 is ‘to ensure at the enforcement stage a balance between the rights and interests of the parties concerned, in order to avoid either of them suffering any loss as a result of the operation of the rules of procedure’. That balance may be safeguarded, not threatened, by the adoption of protective measures. Article 39, thus, does not exclude protective measures which have the same effect as an order for protective measures in the judgment sought to be enforced merely because they do give effect to that order. These are not the sort of measures which are prohibited by Article 39.”

  1. The judge relied upon these passages as emphasising the striking of a balance between the interests of the defendant and of the claimant, which he held involves in the case of the defendant, the right to appeal and in the case of the claimant, the ability to take protective measures.
  2. The other authority which the judge considered supported his approach is the decision of the Court of Appeal in Banco Nacional de Comercio Exterior SNC v Empresa De Telecommunicaciones De Cuba SA [2007] EWCA Civ 662; [2008] 1 WLR 1936, in particular those passages in the judgment of the Court given by Tuckey LJ at [25] and [44]-[45] discussing Article 47. The judge placed particular emphasis on the latter passages where Tuckey LJ underlined that “protective measures” will only be granted in accordance with the law of the member state in which the judgment was sought to be registered. At [34] the judge relied upon this as demonstrating that there was nothing remarkable about the appellant being under an obligation to make a separate freezing order application by way of protective measures under Article 47(3) even though the judgment registered was the Cypriot Freezing Order.
  3. In relation to the second question set out at [2] above, the judge accepted Mr Malek QC’s submission that “in any ordinary sense” the appellant had effectively enforced the terms of the Cypriot Freezing Order and the Registration Order by serving them on UBP and seeking compliance with them by UBP. As the judge put it at [35]:

“…in effect insisting on the immediate freezing of UBP’s bank accounts in the face of a threat of immediate contempt proceedings. In context, bearing in mind that the underlying “judgment” is a worldwide freezing order, I am confident that what the Claimant has done in the present case amounts to a “measure of enforcement”. As the Advocate-General observed in his opinion in the Brennero case at page 66:“Enforcement is the carrying out of the original judgment“. In my judgment, by sending the Cypriot Freezing Order to UBP, the Claimant has carried that order out and, as such, should be regarded as having taken a “measure of enforcement” in relation to it.”

  1. The judge referred to the various authorities Mr Samek QC had relied upon, in particular decisions of the European Court of Justice in Deutsche Genossenschaftsbank v Brasserie du Pêcheur SA (Case 148/84) [1986] 2 CMLR 496 and Hoffman v Krieg (Case C-145/86) [1988] ECR 645, which focused on the Court being involved in enforcement as opposed to it simply involving the claimant taking measures. At [37] the judge cited Capelloni v Pelkmans (Case 119/1984) [1985] ECR 3147 at [18] to [20] on which Mr Samek QC particularly relied:

“[18] As the first paragraph makes clear, during this period the party in question cannot proceed with measures of enforcement strictly so-called but must, if he considers it necessary, confine himself to taking protective measures against the property of the party against whom enforcement is sought. As the second paragraph states, the power to take such protective measures arises from the decision authorising enforcement.

[19] The manifest purpose of this provision is to enable the party who has obtained authorisation for enforcement, but who cannot yet proceed to take enforcement measures, to prevent the party against whom enforcement is sought from disposing of his property in the meantime so as to render future enforcement unsuccessful or even impossible.

[20] However, as in relation to enforcement proper, also with regard to the protective measures referred to in Article 39 the Convention confines itself to stating the principle that the party seeking enforcement may proceed with such measures during the period indicated in that Article. On the other hand the Convention leaves the task of settling any matter which is not the subject of specific provisions in the Convention to the procedural law of the court in question.”

  1. The judge also referred to various other English cases relied upon by Mr Samek QC on the meaning of “enforcement” although noting that none of them concerned the Judgments Regulation. He concluded at [39] that in none of the European or English cases to which he had been referred had the issue he had to consider arisen, so he had not found any of them especially helpful. In particular he sought to distinguish authorities concerning enforcement of money judgments from a case such as the present concerning enforcement of a worldwide freezing order, stating:

“Authorities which deal with how a money “judgment” is enforced, in other words through Court processes, provide no assistance in a case such as the present for the simple reason that, in the case of a money “judgment”, merely sending it to a party (whether the defendant or a third party), even if combined with a request (to the defendant but not presumably to the third party) that the relevant sum of money is paid, clearly does not entail any element of enforcement. Service of a money judgment, even on the judgment debtor, has no effect other than to serve as confirmation that the judgment creditor or claimant requires that payment is made. The same cannot be said about a worldwide freezing order because, in contrast to a money judgment, it is the service of a freezing order, or notification of its terms, which makes it effective as against third parties and which, in practical terms, carries the freezing order into effect and so represents, or entails, enforcement of it. This is sufficient without more to warrant the conclusion which I have reached, but that conclusion is all the more justified given that DLA Piper LLP not only served UBP with the Cypriot Freezing Order but went further, asking that UBP confirm that payments would not be made out of relevant accounts in the light of the Cypriot Freezing Order.”

  1. Finally the judge referred to the recent decision of the Court of Justice of the European Union in Meroni v Recoletos Ltd (Case C-559/14) [2017] QB 85, a case about enforcement in Latvia of a worldwide freezing order granted by the Commercial Court in London, which Mr Samek QC had cited just before the judge was originally due to hand down judgment. He did not agree that the case supported Mr Samek QC’s submissions. In particular at [46] the judge said:

“If anything, it seems to me that what is stated at [49] supports the Defendants’ position more than it does the Claimant’s position. The reference to it being “for the applicants seeking to enforce the order to ensure that the third persons concerned are duly notified of the order” confirms that it is notification (or service) of the worldwide freezing order which makes it effective as against third parties and that this is why an applicant “seeking to enforce” it must notify (or serve) the freezing order on third parties. In these circumstances, in my view, consistent with the reasoning which I have set out earlier in this judgment, notification or service itself amounts to the carrying into effect, and so the enforcement, of a worldwide freezing order. That seems to me to be all the more the case when (as happened in the present case) that notification or service is accompanied by threats of contempt for any failure to comply. I acknowledge that, if contempt proceedings are brought, that will entail enforcement also. This does not mean, however, that in the case of a worldwide freezing order the involvement of the Court through contempt proceedings is the only means by which that type of order can be carried into effect and enforced. I do not accept, in short, that in a case concerning a worldwide freezing order it is only when contempt proceedings are initiated, and not before, that a measure of enforcement can be regarded as having been taken.”

The grounds of appeal

  1. In summary, the two grounds of appeal are:
  • That the judge was wrong to conclude that the Cypriot Freezing Order did not become “fully effective and enforceable” on the making of the Registration Order and would only become “fully effective and enforceable” on determination of the respondents’ appeal against the Registration Order. The effect of the relevant provisions of the Judgments Regulation is that the Cypriot Freezing Order once registered was as effective and enforceable as any other judgment of the High Court, save that no “measures of enforcement” could be taken by the appellant in the appeal period.
  • That the judge was wrong to conclude that “measures of enforcement” as referred to in paragraph 4 of the Registration Order included service of the Cypriot Freezing Order and/or notification of its terms to third parties. The judge had been wrong not to follow European jurisprudence which demonstrated that at least in the context of a freezing order, “measures of enforcement” refers to Court process or Court ordered enforcement and service and notification of an order is a condition precedent to enforcement not enforcement per se. The judge had also been wrong not to recognise that as a matter of English law (which applied because European law is that it is for the law of the state where enforcement is sought to determine the procedures for enforcement) enforcement is a Court ordered process and service or notification of an order is not enforcement and thus not a “measure of enforcement”.

The parties’ submissions

  1. Mr Samek QC submitted in relation to the first ground of appeal that the judge’s conclusion that the Cypriot Freezing Order once registered was not “immediately fully effective and enforceable” pending the determination of the respondents’ appeal, was contrary to the scheme of the Judgments Regulation itself and also to paragraph 2 of Schedule 1 of the Civil Jurisdiction and Judgments Order 2001, to which this Court drew the parties’ attention.
  2. He submitted that the judge’s conclusion at [26] quoted at [22] above ignored the effect and purpose of registration. As the Jenard Report on the Brussels Convention stated in the Official Journal of the European Communities 1979 at C59/43:

“Recognition must have the result of conferring on judgments the authority and effectiveness accorded to them in the State in which they were given.”

  1. That passage was quoted with approval by the European Court of Justice in Hoffman v Krieg at [10] which went to say at [11]:

“It follows that the answer to be given to the national court’s first question is that a foreign judgment which has been recognized by virtue of Article 26 of the Convention [the predecessor of Article 33 of the Judgments Regulation] must in principle have the same effects in the State in which enforcement is sought as it does in the State in which judgment was given.”

  1. Mr Samek QC submitted that the judge’s conclusion at [27] which I referred to at [23] above about the balance between the right of appeal and the inability to take measures of enforcement pending appeal created an intermediate position not recognised in any of the European jurisprudence. The judge had confused recognition of a judgment and its enforcement.
  2. The principal focus of Mr Samek QC’s criticism of the judgment was, however, on the judge’s conclusion on the second question, as to what constitutes a “measure of enforcement”. He submitted that the judge had not given effect to the European jurisprudence that the issue of enforcement is governed by the domestic law of the Courts where enforcement is sought which determine what “measures of enforcement” are available. He also submitted that “measures of enforcement” had an autonomous meaning under European law and were limited to Court-ordered measures.
  3. He submitted that the judge had been wrong to reject the various English authorities which assisted as to the meaning of “enforcement” in circumstances where the European Court has said that it is for the domestic law of the State where enforcement is sought to determine what constitutes a “measure of enforcement”. Notification or service of a money judgment would not amount to a “measure of enforcement” and the judge had been wrong to conclude at [39] that the position was different in relation to notification or service of a freezing order. Mr Samek QC submitted that a number of authorities supported his submission that service of the Cypriot Freezing Order and Registration Order on UBP did not amount to enforcement, but at most a step towards subsequent enforcement. Accordingly, such service was not prohibited under Article 47.3 of the Judgments Regulation. To the extent that the authorities on which Mr Samek QC relied assist the determination of the issue, I consider them in more detail later in this judgment.
  4. In their written submissions in the respondents’ Skeleton Argument for the appeal, in relation to the first question, Mr Malek QC, Mr James Evans and Mr Richard Brent sought to uphold the judge’s analysis at [27] about the balance between the interests of the parties at the stage when an appeal against the registration order is pending. They relied upon the fact that the Judgments Regulation distinguishes three different matters: (i) the recognition of judgments; (ii) the ex parte declaration of enforceability or, in this jurisdiction, registration and its consequences (on the one hand the power to take local protective measures and on the other the limited right of appeal on jurisdictional and other grounds under Articles 34 and 35) and (iii) actual enforcement after an unsuccessful appeal or the expiry of the two month time limit for an appeal. They relied upon this analysis as demonstrating that the judge was right to recognise what was in effect a half-way house between full enforceability and non-enforceability, which is what the declaration he made does. It is fair to say that those submissions were made without any consideration having been given to the terms of paragraph 2 of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001.
  5. In his oral submissions Mr Evans submitted that what had gone wrong here was that by serving the Cypriot Freezing Order and the Registration Order on UBP, the applicant had sought to short-cut the two stages (ii) and (iii). The applicant had wrongly understood that it had an immediately fully enforceable worldwide freezing order which was to be treated as an Order of the English Court, as stated in paragraphs 1 and 2 of the email from DLA Piper LLP to UBP of 26 February 2016 which I quoted at [10] above. However, as McCombe LJ pointed out during the course of argument, that is exactly what paragraph 2 of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001 says that the applicant has, subject only to paragraph 2(3).
  6. The reality is that it is difficult to see how, in the light of that provision, the judge’s analysis on the first question can stand. Perhaps recognising this difficulty, Mr Evans’ oral submissions really focused on the second question and sought to uphold the judge’s decision that notification of the Cypriot Freezing Order and the Registration Order to UBP in the terms of the DLA Piper LLP correspondence did constitute a “measure of enforcement”.
  7. Mr Evans submitted that because the Registration Order of Master Leslie in paragraph 1 referred to registration of the judgment for enforcement, service of the Cypriot Freezing Order and the Registration Order on a third party such as UBP was part of the enforcement process. He noted that it was accepted on behalf of the applicant that it would not be entitled to go to Court to seek enforcement of the Orders against UBP, for example by way of an application for committal for contempt. He submitted that in those circumstances, on the applicant’s case, what was left during the interim period before the respondents’ appeal was determined was an extremely odd creature, an “effective” worldwide freezing order which cannot be enforced by way of court process.
  8. He submitted that this result contravened the fundamental principle applicable in cases of freezing orders served on a third party that the third party must know precisely what it is enjoined not to do and what is the consequence of non-compliance. For example, although the letter of 4 February 2016 serving the Orders on UBP said that if it failed to comply with their terms, it might be found to be in contempt of court, it was accepted by Mr Samek QC that the appellant could not in fact commence contempt proceedings if the bank did not comply because that would be a “measure of enforcement” until the appeal process was concluded. This would lead to confusion and delay. He submitted that, in contrast, the judge’s analysis provided a clear and workable system that avoided any risk of confusion for third parties such as UBP or the parties themselves.
  9. Mr Evans accepted Mr Samek QC’s proposition that “measures of enforcement” has an autonomous EU meaning, but did not accept that it was limited to Court-ordered measures. He sought to define a measure of enforcement as “the carrying out of the judgment”, relying upon a statement to that effect by the Advocate-General, Sir Gordon Slynn in the Brennero case at 66, an analysis which the judge adopted at [35] of his judgment.
  10. Mr Evans submitted that where the domestic law of the State where enforcement is sought recognises self-help remedies by way of enforcement, they are as much a measure of enforcement as a Court-ordered process. He relied upon what the Advocate- General, Sir Gordon Slynn, said in his Opinion in Capelloni v Pelkmans (Case 119/84) [1986] I CMLR 388 at 394:

“A plaintiff who has obtained an order for enforcement may, under the Convention, proceed to those measures by whatever route national law provides. If national rules enable him, e.g., to seize property without further order, he may do so. If national rules require a further order of the court, such an order must be obtained either from the court authorising enforcement or from some other competent court.”

  1. He submitted that the judge was correct to conclude at [39] of his judgment that in England, a freezing order can be used by a judgment creditor to effect the freezing of assets without further Court involvement, by service on a bank, as in the present case. This was carrying the order into effect and thus a “measure of enforcement”, particularly when accompanied by the threat of contempt, and therefore impermissible within the meaning of Article 47.3 of the Judgments Regulation.
  2. Mr Evans submitted that the appellant’s argument that if notification of a money judgment did not constitute enforcement then neither should notification of a freezing order fallaciously equated a money judgment with a freezing order and confused voluntary compliance by the third party with an order and compliance under the threat of a penalty in the event of breach. He submitted that the judge had been right to draw the distinction he did between money judgments and freezing orders at [39] of his judgment.
  3. There was nothing in the argument on behalf of the appellant that because Article 42.2 of the judgments Regulation required a declaration of enforceability to be served on the judgment debtor and that was not a measure of enforcement, service of the Cypriot Freezing Order and Registration Order on the third party bank could not be a measure of enforcement either. Mr Evans submitted that there was no parity of status between a third party and the judgment debtor.

Analysis and conclusions

  1. In my judgment, the first question on this appeal can be addressed relatively shortly. Once it is appreciated that paragraph 2 of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001 is applicable, the question allows of only one answer. In the terms of that paragraph a judgment once registered in the High Court of Justice “shall, for the purposes of its enforcement be of the same force and effect…as if the judgment had originally been given by [the High Court]” subject only, pursuant to paragraph 2(3), to Article 47 and rules of court i.e. the prohibition on taking measures of enforcement other than protective measures pending any appeal against registration. I have no doubt that had the judge’s attention been drawn, as it should have been, to the Civil Jurisdiction and Judgments Order 2001 and, in particular to paragraph 2 of Schedule 1, he would have reached a different conclusion to the one he reached at [27], [28] and [30] of his judgment. The gloss he placed upon the enforceability and effectiveness of the Cypriot Freezing Order once it was registered, in the declaration he made in paragraph 1 of his Order and in the analysis in those paragraphs of his judgment is contrary to the terms of paragraph 2(2) and (3) of schedule 1 to the Civil Jurisdiction and Judgments Order 2001.
  2. The conclusion that the Cypriot Freezing Order once registered was as fully effective and enforceable as an English judgment would be, subject only to the appellant not being entitled to take measures of enforcement other than protective measures pending determination of the respondents’ appeal is not only mandated by the terms of the Civil Jurisdiction and Judgments Order 2001 but also by the Rules of Court applying to registration of judgments under the Judgments Regulation, specifically CPR 74.6(3)(e) and 74.9(1)(b) and (3) which I set out above.
  3. I also agree with Mr Samek QC that this conclusion is consistent with the effect and purpose of registration (or in other Member States a declaration of enforceability) under the Judgments Regulation which is to clothe the foreign judgment in principle with the same effects in the State in which enforcement is sought as it has in the State where it was given, as borne out by the passages from the Jenard Report and the decision of the European Court of Justice in Hoffman v Krieg which I quoted at [34] and [35] above.
  4. Turning to the second question on the appeal, the starting point is that European law recognises that the question of what constitutes a “measure of enforcement” is a matter for the domestic law of the State where enforcement is sought, here English law. As the European Court of Justice put it in Capelloni v Pelkmans (Case 119/84) [1986] 1 CMLR 388 at [16]:

“However, the Convention confines itself to governing the procedure for obtaining authorization for enforcement, and does not contain any provisions concerning enforcement properly so called, which, as stated in the judgment of 2 July 1985 (Case 148/84 Deutsche Genossenschaftsbank (1985) ECR 1987), is subject to the national law of the court hearing the proceedings.”

  1. The same principle is reflected in the Opinion of the Advocate-General, Sir Gordon Slynn, in the Brennero case [1986] 2 CMLR 59 at 65:

“By ‘protective measures’ Article 39 of the Convention envisages those forms of relief available under the law of the enforcing State to prevent the judgment debtor from removing the assets on which execution is to be levied. By ‘measures of enforcement’ which may not be taken, Article 39 means, in consequence, all other measures of enforcement, which usually take the form of the sequestration of the judgment debtor’s property.”

It is clear from that passage that the other measures of enforcement he is referring to in the second sentence are those available under the law of the enforcing state.

  1. It follows that the question of what constitutes a measure of enforcement in this jurisdiction for the purposes of Article 47.3 of the Judgments Regulation (and for the purposes of CPR 74.6 and 74.9) is a matter of English law. Whilst the judge is correct that there is no English case directly in point as to what constitutes a “measure of enforcement”, it seems to me that some guidance and assistance can be derived both from the jurisprudence of the European Court of Justice (now the Court of Justice of the European Union) and from the English cases relied upon by Mr Samek QC as to what is meant by a “measure of enforcement” or “enforcement” in this context. The judge fell into error in discounting the various authorities cited to him merely because they did not deal directly with the issue in the present case.
  2. Mr Samek QC sought to argue that the European jurisprudence limited “measures of enforcement” to Court-ordered measures. I am not convinced that he is correct. When the national court where enforcement is sought recognises self-help remedies by way of enforcement, they will surely be as much measures of enforcement as Court-ordered measures, as is clear from the Opinion of the Advocate- General, Sir Gordon Slynn, in Capelloni v Pelkmans which I quoted at [45] above.
  3. As I have said, both the judge at [35] of the judgment and the respondents in their submissions also sought to define a measure of enforcement as “the carrying out of the judgment”, relying upon a statement to that effect by the Advocate-General, Sir Gordon Slynn in the Brennero case at 66. I am not sure that that statement really assists in the present case. The critical question is rather whether English law, as the national law of the State where the Cypriot Freezing Order is sought to be enforced, recognises measures of enforcement other than court-ordered measures.
  4. In that context, it seems to me that the provisions of the CPR are of some significance. CPR 74 appears to contemplate that “enforcement” of a foreign judgment under the Judgments Regulation involves a Court process. The requirement in 74.9(2) that: “Any party wishing to enforce a judgment must file evidence of the service on the judgment debtor of (a) the registration order” is clearly referring to evidence which has to be produced to the English Court before it will permit steps to be taken to enforce the judgment. Furthermore, in the context of enforcement of judgments and orders of the English Courts, the Practice Direction to CPR 70 which contains General Rules as to Enforcement of Judgments and Court Orders sets out at paragraph 1.1 and 1.2 the methods of enforcement of money judgments and orders that may be made against a judgment debtor respectively, all of which involve the invocation of the process of the Court.
  5. This all suggests very strongly that “enforcement” of a judgment as a matter of English law entails the invocation of the process of the English Court. Nevertheless, it is not necessary to determine definitively whether other measures such as measures of self-help are thus excluded from “measures of enforcement” under English law because, in my judgment, the steps taken by the appellant in the present case were not on any view “measures of enforcement”.
  6. Service of a registration order on the party against whom enforcement is sought as required by Article 42.2 of the Judgments Regulation and CPR 74.6(1) by definition cannot be a “measure of enforcement” given that it is required and not prohibited. In those circumstances, it is difficult to see how the service of a registration order or the foreign judgment on a third party or notification to the third party of the terms of such an order or foreign judgment could conceivably amount to a “measure of enforcement”. The contrary argument run by Mr Evans based upon the distinction in status between the third party and the judgment debtor is misconceived. The issue is as to the status of the service or notification, not of the person to whom it is addressed.
  7. Indeed, Mr Evans accepted on behalf of the respondents that, if what was in issue here was a money judgment of the Cypriot Court, the notification of the judgment or registration order to UBP with a demand to pay over money pursuant to it would not have amounted to a measure of enforcement. However, he submitted that where the judgment as here was a worldwide freezing order, the position was different. The crucial distinction was that in the present circumstances, the appellant was seeking to give effect to the Cypriot Freezing Order as an immediate effective order of the English Court. As I have said, this argument found favour with the judge at [39] of his judgment.
  8. In my judgment, this distinction between money judgments and judgments granting worldwide freezing orders cannot be justified. No such distinction is made anywhere in the Judgments Regulation, the Civil Jurisdiction and Judgments Order 2001 or the Rules of Court. Under both the Civil Jurisdiction and Judgments Order 2001 and CPR 74, the effect of registration of any judgment, whether for a sum of money or a freezing order, is that it has the same force and effect as if it were a judgment of the English Court, subject only to it not being possible to take any measures of enforcement other than protective measures. What the distinction which the judge accepted at [39] cannot explain is how what is notification and not a measure of enforcement in one case (a money judgment) becomes transmuted into a measure of enforcement in the other case (a worldwide freezing order), not because of the terms of the notification, but because of the type of foreign judgment.
  9. The correct analysis is that notification of the terms of a judgment or order is just that and no more. It may be a step which is necessary for subsequent enforcement, but it is not enforcement per se. This conclusion is supported by a number of the English authorities to which Mr Samek QC referred the Court. Thus, where a third party bank is notified of the terms of a freezing order (which as Lord Bingham of Cornhill said in Customs and Excise Commissioners v Barclays Bank plc [2006] UKHL 28; [2007] 1 AC 181 at [13] is “literally, an everyday event”) the party which obtained the order no doubt expects that the bank will respect the order. However, if it does not, then the party relies on the court enforcing its order for example by proceedings for contempt: see per Lord Rodger of Earlsferry in Customs and Excise Commissioners v Barclays Bank plc at [65]:

“If a party wishes to freeze his opponent’s bank account, he cannot do so without the intervention of the court. Having obtained a freezing order and notified the bank, the applicant can expect that any responsible bank will respect the order. But he does not rely on the bank doing so. Rather, like anyone else who obtains a court order, he relies on the court being able to enforce its orders. So the applicant relies on the court ensuring that the bank does not flout its order and punishing the bank for contempt if it does. That is, after all, the assistance which the law provides to someone who shows that his opponent’s assets should be frozen.”

  1. This important distinction between notification or notice on the one hand and actual measures of enforcement on the other is one which the judge’s analysis at [39], concluding that such notification is in practical terms the carrying into effect of the freezing order and thus its enforcement, essentially disregards. The decision of the House of Lords in the Barclays Bank case was not cited to the judge in argument.
  2. Furthermore, the reference to the possibility of UBP being found to be in contempt of court if it did not comply with the terms of the Orders, at paragraph 9 of the DLA Piper LLP letter, did not somehow convert what was otherwise notification of the terms of the Orders into a measure of enforcement. At [40] of his judgment the judge referred to the letter containing “threats of contempt for any failure to comply” which seems to me somewhat to overstate the effect of the letter, but in any event, even if it was a threat, that is not itself a measure of enforcement, any more than a penal notice directed to third parties on the face of a English freezing order would be.
  3. In Masri v Consolidated Contractors (No. 2) [2008] EWCA Civ 303; [2009] QB 450 (another case not cited to the judge in argument) the claimant had obtained a money judgment against the defendants from the Commercial Court and a post judgment worldwide freezing order and receivership order were made by the Court. In the usual course, these contained penal notices. One of the arguments run by the defendants was that the receivership order and freezing order were “proceedings concerned with the enforcement of judgments” within the meaning of article 22(5) of the Judgments Regulation, particularly given the threat of contempt, so that whichever court where the English judgment was sought to be enforced had exclusive jurisdiction to make such orders, not the English Court (see [108] of the judgment of Lawrence Collins LJ). The Court of Appeal rejected that argument. At [123] Lawrence Collins LJ said that Article 22(5) was “concerned with actual enforcement and not with steps which may lead to enforcement” and at [124] that: “the orders may pave the way for execution, but they are not concerned with enforcement of judgments”.
  4. Although that case is not directly in point, I agree with Mr Samek QC that if a worldwide freezing order is not “concerned with enforcement of judgments”, by parity of reasoning, its notification to third party banks, even accompanied by a penal notice, cannot amount to a “measure of enforcement”, but is at most a step which may lead to enforcement.
  5. It seems to me that that conclusion also follows from the decision of Males J in Arcadia Petroleum Limited v Bosworth [2015] EWHC 3700 (Comm) on which Mr Samek QC also relied. In that case, a worldwide freezing order had been made by the Commercial Court which contained an undertaking by the claimants in standard form, not without the permission of the court, to seek to enforce the order in any country outside England and Wales, or to seek an order of a similar nature. The claimants were now seeking permission to enforce the order against assets in other jurisdictions, specifically in Switzerland, where the claimants had notified the order to various Swiss banks where the first two defendants held accounts. However, the banks had indicated that no action could be taken by them in respect of the accounts without an order of the Swiss Court (see [16] of the judgment of Males J). Accordingly, the claimants sought an order giving them permission to take whatever steps were necessary in Switzerland for the purpose of ensuring the effectiveness of the freezing order. That order was granted by Males J. The significance of the decision is that, as Mr Samek QC submits, there is no suggestion in the relevant part of the judgment at [16] to [18] that service of the freezing order on the Swiss banks was a breach of the undertaking not to seek to enforce the order outside the jurisdiction.
  6. It seems to me that that case provides confirmation, at least by inference from the fact that the contrary argument was not run by the defendants or raised by the judge, that service or notification of the terms of a worldwide freezing order on a third party abroad, even when the order contains a penal notice, does not amount to “enforcement” of the order. I do not consider that there can be any distinction in principle between that case and the present, given that paragraph 2(2) of the Civil Jurisdiction and Judgments Order 2001 provides that on registration, the Cypriot Freezing Order is, for the purposes of enforcement, to be of the same force and effect as if that Order had been made by the English Court.
  7. In my judgment, there is nothing in the decision of the Court of Appeal in the Banco Nacional case (upon which the judge placed some reliance) which is contrary to that conclusion. The case was concerned with the scope of “protective measures”, not with whether any particular step amounted to a “measure of enforcement” prohibited by Article 47.3 of the Judgments Regulation.
  8. Finally in terms of the authorities, contrary to what the judge concluded at [46] of his judgment which I quoted at [31] above, I consider that the decision of the Court of Justice of the European Union in Meroni v Recoletos Ltd does not support the conclusion that notification or service of the worldwide freezing order to third parties in that case amounted to the enforcement of the order. As Mr Samek QC pointed out, the passage from [49] of the Meroni judgment which the judge quoted: “it is for the applicants seeking to enforce the order to ensure that the third persons concerned are duly notified of the order” in fact continues: “and to prove that that notification has indeed taken place”. That reference to proof is clearly to the evidence required for an application to the Court, in fact in the context of an application for a declaration of enforceability by the Latvian courts of the English worldwide freezing order, where the relevant person against whom the declaration was sought was seeking to appeal the order under Article 34 of the Judgments Regulation. In other words, what the European Court was considering was what steps had to be taken as conditions of obtaining such a declaration of enforceability. It was not concerned at all with whether notification of the order amounted to a “measure of enforcement” under Article 47.3 and, with respect to the judge, nothing in this case supports his analysis.
  9. It follows that, in my judgment, the notification of the Cypriot Freezing Order and the Registration Order to UBP, even accompanied by reference to non-compliance being a potential contempt of court, was not a “measure of enforcement” prohibited by Article 47.3 of the Judgments Convention. Contrary to Mr Evans’ submissions, I do not consider that this conclusion will cause or did cause confusion or delay. The concern raised by UBP on 25 February 2016 related to misinformation they had from some source to the effect that the Cypriot Freezing Order had not been registered. Once it was clarified that it had, they complied with the Order and froze the relevant bank accounts. In the event, no question of any proceedings for contempt (which it is accepted would amount to enforcement) arises.

Conclusion

  1. In the circumstances, I consider that the appeal must be allowed and the Order of Picken J dated 22 June 2016 set aside.

Lord Justice Holroyde

  1. I agree.

Lord Justice McCombe

  1. I also agree.

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