David Lewin, Managing Director
According to a judgment rendered in October 2006 by a Romanian court, a Swedish insurer was ordered to pay compensation to a traffic injury victim for loss of income and medical care, as well as USD700,000 for non-economic loss. The awarded amount was said to be nine times what the victim could have been awarded by a Swedish court.
Enforcements of Foreign Judgments in Sweden
Some foreign judgments – in principle, final judgments rendered by a court in the European Economic Area – would be enforced in Sweden following a simplified procedure. This is in contrast to the procedure that applies to judgments rendered by courts outside of the European Economic Area. The latter are not directly enforceable in Sweden – rather, the matter would have to be tried ab initio. In the Swedish proceedings, these final foreign judgments would be admissible in evidence as proof of how the relevant foreign court would adjudicate the matter.
The injured person filed an application to the competent Swedish court, the Svea Court of Appeal, seeking a declaration that the Romanian judgment was executable in Sweden under the Brussels I Regulation (Sw. Bryssel I-förordningen).
The insurer took the position that the application should be denied for the following reasons:
- The Brussels I Regulation applies only to legal proceedings that have been initiated after the date the regulation came into force or, under certain circumstances, to legal proceedings that were initiated before it came into force.
- Romania became a member of the European Commission (EC) on January 1, 2007, which accordingly, was the date when the Brussels I Regulation came into force regarding Romania.
- Hence, the proceedings were initiated and the judgment was rendered in October 2006, before the Brussels I Regulation came into force regarding Romania.
In addition, the insurer asserted that the Romanian judgment was in contrast to basic principles under Swedish law due to the fact that the awarded amount was nine times that which the victim would have been awarded by a Swedish court.
The Svea Court of Appeal Decisions
The enforcement procedure before the Svea Court of Appeal is a two-tier system. An application is first decided upon by a sole judge. In this case the judge merely stated that the Brussels I Regulation applies in regards to Romania. Hence, the necessary requirements to declare the judgment enforceable in Sweden are fulfilled. The decision was then appealed to the Svea Court of Appeal, which consists of three judges. The court found that Romania became a member of the EC on January 1, 2007; basic treaties, laws and other legal regulations adopted by the EC as of the date of Romania’s joining are binding on Romania and no exceptions as to time or otherwise apply to Romania regarding the applicability of the Brussels I Regulation. Accordingly, the regulation is applicable regarding Romania with respect to judgments rendered before it joined the EC.
The court further stated that the Ordre Public Clause in the Brussels I Regulation may apply in case an acknowledgment or enforcement of a foreign judgment in an unacceptable manner involves a conflict with fundamental local law in the state where the judgment is maintained, or with a fundamental right acknowledged as basic under local law. In summary, the court found that the circumstances put forward by the insurer did not mean that the Romanian judgment was in conflict with fundamentals of Swedish law.
The Supreme Court Decision
The insurer appealed to the Supreme Court. In summary, the Supreme Court stated that: the Brussels I Regulation became binding on and shall apply in Romania as of January 1, 2007, when Romania joined the EC; there are no exceptions or specific rules for Romania with respect to the Brussels I Regulation and there is nothing supporting the regulation’s provisions on enforcement as being applicable to judgments rendered in Romania before the Brussels I Regulation came into force regarding Romania. Article 66 of the Brussels I Regulation cannot be given any meaning other than the fact that the regulation’s provisions on enforcement apply regarding judgments rendered after the regulation came into force in the respective member country.
Accordingly, the Supreme Court found that the provisions on enforcement in the Brussels I Regulation shall not be applied retroactively and that consequently the judgment is not enforceable in Sweden based on the Brussels I Regulation. With this outcome, the Supreme Court had no reason to consider the public policy issue raised by the insurer.
The Swedish Supreme Court decision is in line with a fundamental deprecation of giving retroactive effect to international treaties, which is reflected also by the 1969 Vienna Convention on the Law of Treaties. The principle has been followed by courts in other member states, such as Austria’s Supreme Court (OGH April 5, 2005).
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