Sunday, 7 October 2018

Non-recognition of a foreign State as a ground for opposition against a payment order


In the case between a Kosovar limited liability company and a Greek SA, the Greek Supreme Court was confronted with the question, whether the non-recognition of Kosovo by the Hellenic Republic may be considered as a valid ground for opposition against a payment order issued by a Greek court. The Supreme Court dismissed the final appeal, confirming the rulings issued by the instance courts [SUPREME COURT Nr. 1938/2017]



THE FACTS


A limited liability company with its seat in Ferizaj, Kosovo, filed an application for a payment order before the Thessaloniki CFI [Thessaloniki CFI 20115/2012, Armenopoulos 2014, pp. 2019 et seq.]. Following service of the order, the defendant filed an opposition, requesting that the order be declared null and void, because the application has been filed by a legal entity founded pursuant to the law of Kosovo, a region earlier belonging to the Federal Republic of Yugoslavia, which has not been recognized by the Hellenic Republic. As a consequence, this company has neither the capacity to be a party in proceedings before Greek courts, nor a standing to sue, and in the case at hand, no right to file an application for an order of payment.

The Thessaloniki CFI dismissed the opposition with the following reasoning: It is an erroneous assumption that the capacity of an entity (lawfully established according to the rules and regulations of the state of its seat) to be a party and to seek protection before Greek courts, should have been conditioned by the previous state recognition by the Hellenic Republic. The efforts of the opponents to link the above facts are running contrary to the prevalent view in the Greek and international doctrine of Private International Law: The notion of state as a connecting factor of a conflict of law norm, or the aplicable law of a state, to which the confilct rule refers, are totally disconnected with the recognition of the respective state entity from a public international law point of view. A non-recognized state is not equivalent to a non-existing state; it exists as a body of human beings living in a specific region, which has developed its own administrative structure, imposed to its subjects.

In addition, the court continues, there is evidence that the applicant has been lawfully established in its country of origin, as evidenced by a document issued by the UNMIK, which was additionally certified by the Liaison Office of the Hellenic Republic in Pristina, Kosovo’s capital. In particular, it is stated that the applicant has been founded as a limited company, registered in the Kosovo companies registry in 2003, pursuant to the rules of the administrative decree Nr. 2002/22, on the establishment of companies in Kosovo, issued on the grounds of UNMIK Regulation 2001/6, on business oprganizations.

For the reasons above, the CFI dismissed the opposition.

The appeal lodged by the Greek company was dismissed on the same grounds [Thessaloniki CoA Nr. 1883/2015, unreported]


THE RULING


The case was then brought to the Supreme Court. The appellant invoked that the instance rulings had interpreted the pertinent provisions of the Greek Code of Civil Procedure  (Art. 62 & 64) erroneously. In a rather laconic passage, and without entering into the merits of the opposition ground, the Supreme Court dismissed the ground of appeal, since it found no violation or misinterpretation in the instance rulings.

COMMENT

This has been a rather peculiar case, the first ever tackling with the matter in Greece. Notwithstanding the poor analysis of the matter, the result is welcome. For the Spanish speakers among you, the issue has been examined lately by Prof. Javier Carrascosa González, Murcia University, see: Estados no reconocidos y norma de conflicto, https://www.academia.edu/37459820/Estados_no_reconocidos_y_norma_de_conflicto = http://accursio.com/blog/?p=812.





Friday, 3 August 2018

No recognition of an Egyptian talaq on public policy grounds


A talaq divorce is rarely knocking at the door of Greek courts. A court in Thessaloniki dismissed the application for the recognition of an Egyptian talaq, invoking the public policy clause, despite the fact that the application was filed by the wife.
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THE FACTS


E, an Egyptian man, and G, a Greek woman, concluded a civil wedding in Cairo end December 2015, in accordance with domestic law. The spouses were residents of Cairo. On June 1, 2016, E divorced his wife before a notary public in Cairo. November 2016 G filed an application for the recognition of the talaq before the Thessaloniki Court of first Instance. In her application she stated being a resident of Thessaloniki. In the first hearing, the court ordered stay of proceedings, in order for G to produce evidence that the 3-month idda period has lapsed, and no revocation of the husband’s intention to divorce occurred [Thessaloniki CFI, judgment 5.5.2017, unreported]. In the second hearing, the court dismissed the application [Thessaloniki CFI, judgment 19.12.2017, unreported].

THE JUDGMENT


The reasoning of the judgment was the following: A divorce by repudiation is totally alien to the Greek legal order. It is contrary to Art. 8 & 14 ECHR, and Art. 5 of the 7th Additional Protocol to the ECHR. It then referred to two decisions of the European Court of Human Rights (case Markin v Russia, 22.03.2012 & S.A.S. v France, 01.07.2014). The court mentioned also Resolution nr. 1743 (2010) of the Parliamentary Assembly of the Council of Europe, on Islam, Islamism and Islamophobia in Europe. It invoked Art. 20.1 of the Greek Constitution (right to audience) in conjunction with Art. 6.1 ECHR. Finally, it supported its ruling on Art. 2.1 of the Greek Constitution, which protects the value of human being. The court made additional reference to the tendency of many jurisdictions to abolish the dissolution of marriage by talaq, and stated as an example the ruling of the Supreme Court of India, which declared talaq as unconstitutional. The fact that the application was filed by G was no reason to decide in favour of recognition: Solely the recognition of such an act would cause profound disturbance to the Greek legal order, if its effects are to be extended and applied in Greece on the basis of the Egyptian applicable rules.

COMMENTS


Before dealing with the outcome of the judgment, some brief remarks should be made in regards to the first judgment: the court found no public policy violation, given that it was G who filed an application for the recognition of the Egyptian talaq. At the same time, the unilateral nature of the talaq wasn’t reason enough to refuse recognition, due to Art. 323 nr. 3 Greek Code of Civil Procedure [CCP], which reads as follows: Subject to the provisions of international conventions, a judgment of a foreign civil court is given res iudicata effect in Greece without any proceedings, if … 3) the losing party has not been deprived of its right of defence and generally its right to participate in the proceedings, unless it has enjoyed equal opportunities to nationals of the country, whose court rendered the judgment. In other words, there was no discrimination against G, given that repudiation would take place in exactly the same manner with respect to an Egyptian wife.

Coming back to the second judgment, it needs to be clarified that the court had the powers to revoke the first decision ex officio pursuant to Art. 309 CCP [revocation of interlocutory decisions]. Obviously the court was not convinced with the reasoning of the first judgment, which was actually founded on two significant references to Greek legal authority (Prof. Tsouka & Prof. Vrellis). Instead, the court followed verbatim an old ruling of the Athens Court of Appeal (nr. 10179/1995, reported in Hellenic Justice 1997, pp. 638 et seq., non-recognition of a Sudanese talaq), especially on the issue that I wish to highlight, i.e. the initiative of G to apply for recognition. There are two counterarguments I would like to bring forward.

i.               There is strong supporting evidence emanating from various EU jurisdictions, that the public policy clause may not be invoked if there are clear indications that the wife consents to the divorce. Many scholars in Europe (e.g. Germany, France, Italy, Austria, Spain, the Netherlands, Norway, Switzerland) consider that the application made by the spouse is clear-cut evidence of consent. Special reference deserves a passage from Prof. Andrae [Internationales Familienrecht, 3rd ed. 2014, pp. 347 et seq, nr. 175], who unambiguously separates the abstract incompatibility of foreign law with domestic values, from the result of the recognition in the specific case. 

ii.                 The ruling of the court perpetuates the phenomenon of limping marriages. What’s worse, it forces the spouse to restart litigation in the country of destination, which is a heavy duty with plenty of costs and an insecure result. In the case at hand, G would have to file a divorce claim, which needs to be served to E’s address in Cairo in accordance with the 1965 Hague Convention; the claim should be translated; G has to convince the court that it has jurisdiction to hear the case; G has to convince the court that Art. 8 (d) Brussels III Regulation applies; she might also have to produce evidence on the Egyptian legislation, and demonstrate its incompatibility with domestic public order. This is because Greek courts have the tendency to apply national conflict of laws rules (Art. 14 in conjunction with Art. 16 Greek Civil Code), and a ground similar to that of Art. 8 (d) Brussels III Regulation is not to be found there. Finally, in the event of a positive outcome, G shall have to serve the judgment again to Cairo (preferably with a translation attached), because only final judgments may be registered in the Civil Registry books.
 

Thursday, 5 April 2018

Greek Supreme Court Ruling on the maxim ne impediatur legatio


Άρειος Πάγος, i.e. the Hellenic Supreme Court, issued its first ruling on the immunity of foreign states against execution. The judgment follows the path introduced by the German Constitutional Court in the famous Phillipinische Botschaft case from 1977 

[SC 29.11.2017, decision nr. 1937/2017, unreported] 

 THE FACTS


Appellant: K.P., a lawyer and legal counsellor of the Libyan State in Greece.
The appellee: The State of Libya [SoL], formerly the Great Socialist People’s Libyan Arab Jamahiriya

 The dispute began with the opposition filed before the Athens First Instance Court (FIC) on 31/8/2009 by the SoL against the attachment of its bank account in the National Bank of Greece by K.P. for the sum of 2.000.001 €. The opponent requested the annulment of the attachment because, 
     a. it was imposed on an asset not subject to seizure, and
               b. it is not in line with the leave of the Minister of Justice, granted in accordance with Article 923 Greek Code of Civil Procedure (CCP)[1].

The Athens FIC upheld the opposition and ordered the annulment of attachment[2]. The appeal of K.P. was dismissed[3]. Finally, K.P. filed an appeal on points of law. He invoked one of the standard grounds for a second appeal (cassation) in Greece, i.e. the erroneous interpretation of substantive law by the instance courts (Art. 559 point 1 CCP). 

THE RULING

I. The relevant law in question was the 1961 Vienna Convention on Diplomatic Relations, ratified from Greece by law decree Nr. 503/1970. Article 22.3 of the Vienna Convention provides that: "The premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution".

II. The Supreme Court interpreted the above rule as follows: The purpose of the privileges and immunities established with the above, as well as other provisions of this Convention, is not to benefit individuals, but to ensure the efficient performance of the functions of diplomatic missions, in their capacity as representatives of a foreign State, as expressly stated in the preamble of the Convention. Those provisions, in conjunction with Articles 951[4], 1022[5] Greek CCP and 966[6] Civil Code, lead to the conclusion that assets not subject to attachment are also the ones located in Greece, and belonging to a foreign government, even if they do not form part of the diplomatic mission’s equipment, as long as they have been intended to serve other public purposes. 

Further on, pursuant to the resolution adopted by the Institute of International Law in 1954, which is prevailing international practice since then, it is exceptionally admissible to grant injunctions and impose enforcement measures only to those assets related to trade and economic activities of a foreign State. The same path is followed by the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, based on the International Law Commission's 1991 draft, adopted by the UN General Assembly, which however has not yet entered into force; still, it is considered that it already codifies pre-existing customary law, establishing the rule of limited enforcement immunity as a rule of customary international law. 

Thus, it is  inter alia examined ad hoc and in concreto, whether state banks, or bank accounts in banks of the forum state, constituting ownership of a foreign State, do serve sovereign purposes (operational needs of a diplomatic mission), so as to enjoy immunity from execution, or trading purposes, which would lead to the opposite inference.

III. The SC referred subsequently to the judgment of the Athens CoA, which ruled as follows: "On 10/07/2009, K.P. seized in the hands of the National Bank of Greece the amount of 2.000.001 € from an account number belonging to the Great Socialist People's Libyan Arab Jamahiriya [Libyan government]. The bailiff’s attachment report was served duly on the defendant under Article 134 CCP[7], as evidenced by the pertinent service certificate. The attachment was founded on an enforceable title issued by the Athens FIC[8], ordering the defendant to pay the amount of 2 million € as lawyer’s fees. A writ of execution was served to the defendant again according to Article 134 CCP. K.P. requested and received the necessary leave by the MoJ (pursuant to Art. 923 CCP)[9], on condition that execution will not be carried out on things [immovable or movable] serving the exercise of sovereign power [imperium], or those serving other, i.e. cultural and / or educational purposes. On 20.07.2009, the National Bank proceeded to the declaration stipulated under Article 985 CCP[10], by virtue of which it certified the existence of the requested amount in the respective bank account of the defendant. 

The Athens CoA referred then to the evidence produced by the State of Libya in the first instance, i.e. a certificate of the accredited Ambassador of the Great Socialist People's Arab Jamahiriya in Greece, and the testimony of the witness, who was the superior Libyan diplomatic agent in the country: both certified that the seized account serves the operating expenses of the diplomatic mission / Embassy of Libya in Greece [payroll, rent, utility costs, etc]. In addition, it was evidenced that part of this sum is intended to be invested in the construction of a privately owned building for the Libyan embassy in Greece. Consequently, the enforcement was invalid, because the seized bank account was intended to finance the diplomatic mission, hence it serves sovereign duties of the Libyan government and enjoys immunity from enforcement under Article 22 of the Vienna Convention, which has been ratified both by the Hellenic Republic [1970] and the State of Libya [1977].

IV. Considering all the above, the Supreme Court held that the instant rulings did not err in the application and interpretation of the law [Articles 22.3 Legislative Decree 503/1970, in conjunction with Articles 951, 1022  CCP and 966 CC], and in the evaluation of existing evidence. In particular, and contrary to the assertions of K.P., the disputed seized bank account was intended to serve as a means of financing the diplomatic mission of the Libyan State; thus, it served the exercise of sovereign powers of the Libyan government.

COMMENTS

This is the first ruling of the Supreme Court dealing with the maxim ne impediatur legatio. Usually the efforts of judgment creditors against foreign states were hindered by the strict refusal of the MoJ to grant a leave for execution. Article 923 CCP has been considered as compatible both with the Greek Constitution and the European Convention of Human Rights. The ECHR issued two judgments in this respect: KALOGEROPOULOU and OTHERS v. GREECE and GERMANY [Case Nr. 59021/00, issued on 12/12/2002], and VLASTOS v. GREECE [Case Nr. 28803/07, issued on 16/04/2009]. The former forms part of the war reparations legal saga between relatives of Nazi atrocities victims in Greece and the Federal Republic of Germany; the latter is in much closer proximity with the Supreme Court ruling, since it is based upon similar facts, i.e. litigation of a Greek attorney at law against a foreign state for lawyer’s fees. The ECHR made no distinction between the two cases. In particular, in the Vlastos ruling, it simply made reference to its findings in the Kalogeropoulou case [see recitals 34-37 in the Vlastos judgment]. I expressed my hesitation to accept a verbatim interpretation in both cases, since I cannot understand how a solicitor’s fees case might destabilize the diplomatic relations of two countries, or at least as much as  the war reparations case, with its potential spill over effect [see note on the case VLASTOS v. GREECE,  Armenopoulos 2010, p. 282 et seq.].

However, as already noted, a leave was partially granted by the MoJ in the case at hand. Hence, the Supreme Court was confronted with a different set of issues. Admittedly, the ruling is devoid of a profound analysis in the subject matter. We found however a more in-depth elaboration in the CoA judgment: There, the court referred to a number of rulings issued in various jurisdictions [Germany, Austria, the Netherlands, USA, Italy, and Switzerland], in order to support its decision on a solid fundament.

The result is proving the major difficulties of judgment creditors against foreign states. The issue is of course not free from doubt, and a very good and up-to-date reading would be the thesis of Anja Höfelmeier, Die Vollstreckungsimmunität der Staaten im Wandel des Völkerrechts, Beiträge zum ausländischen öffentlichen Recht und Völkerrecht, Bd. 271, Berlin : Springer, [2018], especially pp. 185 et seq.


[1] Execution against foreign states may not take place without prior leave of the Minister of Justice’.
[2] Athens FIC 2386/2011, unreported.
[3] Athens CoA 1536/2013, Theory & Practice of Civil & Civil Procedure Law 2013, pp. 909 et seq., with note by MichaiIdis.
[4] On the enforcement of money claims.
[5] On the attachment of special assets.
[6] On non-fungible property.
[7] On the service of process abroad. Libya has not ratified the 1965 Hague Service Convention; there’s no bilateral convention in matters of judicial assistance between the two states.
[8] Decision 122/2008, unreported.
[9] Ministerial Decision Nr. 84485/ 25-6-2009, unreported.
[10] On the third-party declaration in garnishment proceedings.