Res Judicata for Foreign Freezing Orders?


Can foreign freezing orders prevent the forum from granting leave to attach provisionally local assets? The Rouen Court of appeal ruled so in a judgment of 24 March 2009.

The case was about the sale of a ship from a company incorporated in Panama to a companny incorporated in the Marshall Islands. The parties had concluded a memorandum of agreement whereby the buyer, which had paid a deposit upon the signature of the memorandum, would pay the price within three days of the notification of the delivery of the ship. The seller notified. The buyer did not pay. The seller terminated the contract, but kept the deposit. The buyer initiated arbitration proceedings in London (substantive claims are not known).

Parallel arrest proceedings

While the arbitration proceedings were pending, the buyer sought to arrest provisionally (saisie conservatoire) the ship in Greece. A Greek court granted leave to do so ex parte, but when the defendant challenged the order in inter partes proceedings, a Greek court set aside the order on the ground that two critical requirements of Greek law were not met: there was neither a good arguable case nor a real risk that the award would go unsatisfied.

When the ship showed up in France a year later, the buyer sought to arrest it provisionally again. The commercial court of Rouen (Normandy) granted leave to do so ex parte. The defendant challenged unsuccessfully the French order in inter partes proceedings. It then appealed.

Recognition of Foreign Order

The Court of appeal of Rouen allowed the appeal, and set aside the arrest. It did so on the ground that the dispute had been settled by the Greek court, not on the ground of French substantive law. Indeed, the Court ruled that French law had different requirements, but that this was irrelevant since the court was bound to recognize the foreign order. It underlined that the foreign order had been rendered between the same parties, had the same object and the same cause.

One would have expected the court to rule that the foreign order was res judicata and thus prevented any other European court  from deciding the dispute again. The court referred to article 33 of the Brussels I Regulation and held that it was bound to recognize the foreign order. It also held that the two disputes were the same by the Brussels I Regulation standards (parties, cause, object).

However, the court got it all wrong when it offered its final legal analysis. It held that the French order was irreconcilable with the Greek order. It concluded that, in such circonstances,  article 34 of the Brussels I Regulation demanded that the foreign order be recognized and the French court not issue a contradictory order. This was a rather innovative reading of article 34. Article 34 provides that, when one of the two irreconcilable judgments was rendered by the forum, it should always be preferred. Article 34  does not help recognition: it offers grounds for denying it.

Nevertheless, the decision is interesting. If the court had applied the res judicata doctrine instead of addressing the issue through the conflict of judgments doctrine, it would have reached the exact result that it wanted to reach.

It might then have wanted to discuss the issue of the applicable law to res judicata: res judicata of provisional orders is typically limited , as they often can be modified in case of new circumstances. This is what article 700 of the Greek Code of civil procedure provides. But did Greek law govern the issue?

I am grateful to Sebastien Lootgieter for drawing my attention to this case.

5 replies
  1. Alex Layton says:

    Dear Gilles,

    The facts sound very similar to those in Italian Leather v. WECO, case C80/00, [2002] ECR I-4995. The difference is that in this case there was no prior judgment of the domestic courts against which to test the reconcilability of the judgment from another Member State for the purposes of Art 34(3) – or even of a third Member State for the purposes of Art 34(4). So you are right that in this case there is no Art 34 ground for refusing recognition. (It is the equivalent of the case heard in the Tribunale di Bari in Italian Leather, which gave rise to the order which the German courts refused to recognise). But Italian Leather is relevant in identifying what can amount to irreconcilability in such cases.

    To my mind the interesting question posed by this case, which I think neither Hoffmann v. Krieg nor Italian Leather answers satisfactorily, is whether an order rejecting an application for failure to comply with procedural requirements in state A does preclude a fresh application in state B. The problem is particularly acute where one is dealing with an interim order, as (a) it may well not be a decision on the substance of any dispute and/or (b) the evidential basis may change over time (although that does not appear from your note to be the case here). If a fresh application could be made in State A which did satisfy the procedural and evidential requirements of that state (or would have done so if the assets were still located there), why should a fresh application not be made in state B?

    If the Brussels I Regulation is not in the business of forcing a convergence of procedural norms, why should it be forcing a convergence of the consequences of those norms, as this decision seems to imply?

    We need to work out a principled set of distinctions between final and interim orders, and between procedural and substantive orders, but without (at least too much) crossing the line into a review of the substance of the decision of the court of origin. I think you are on the right track in saying that the answer must be found in the doctrine of res judicata. To my mind, this emphasises the need for the development of a coherent European concept of res judicata, rather than the rag-bag of differing theories which prevail in differing national legal systems.


  2. Gilles Cuniberti says:

    Dear Alex,

    many thanks indeed for this detailed comment.

    I think I agree with a lot of what you have said. Let me however stress one point on which I may disagree, and ask one question.

    Disagreement: You say that Brussels I is not in the business of forcing convergence of procedural norms. That is correct. Generally speaking, it is not in the business of forcing general norms, ie rules of law, to converge. However, it is quite clearly in the business of forcing particular norms, ie decisions, to converge. In other words, not matter what law the foreign court applied, its decision must be respected, and the issue should not be relitigated. The result is that, if you find one court which applies a given law, you will in effect force all other courts to accept the result of the application of such law.

    Question: I would like to comment on your comment relating to change of evidence. It seems to me that the question could be framed in the following terms: one must identify the law which will say whether res judicata allows decisions to be reconsidered when the factual circumstances evolve. If the applicable law does allow this, then if the evidential basis changes, a new application in another state will be admissible.


  3. Alex Layton says:

    Dear Gilles,

    Let me respond to your supposed disagreement and your question together, and conclude with some questions of my own. First of all, I am not sure that we disagree. You say, “However, it [the Brussels I Regulation] is quite clearly in the business of forcing particular norms, ie decisions, to converge. In other words, not matter what law the foreign court applied, its decision must be respected, and the issue should not be relitigated. ”

    The key to this is what you mean by “decisions” and by “the issue”. If you mean a decision which, with finality, declares or alters the parties’ substantive rights, then clearly such a decision must be respected save in the very limited classes of case permitted by the Regulation. If you mean a purely procedural or evidential decision, then such a decision is not apt to be recognised under the Regulation. For example, an order that the evidence of a given witness be excluded from consideration for some reason would not preclude another competent court admitting that evidence under its own law.

    Thus far, I imagine we agree: the substantive legal effects of an order must be respected. But we may need to examine with care what those effects are – i.e., what “the issue” is. The examples above are the extremes of the spectrum; the problems arise in between. Let me take an example familiar to English lawyers. An English court concludes that a claimant has failed to establish a “good arguable case” that a defendant has broken their contract and consequently refuses to grant an interim freezing order (which, despite its name, operates only in personam) over the defendant’s assets in England. Does that give rise to a res judicata, such that it is not open to a French court, to which an application is then made for a saisie conservatoire over assets in France, to grant that measure? Is it different the other way around – if the English court grants the freezing injunction: is it open to a French court to refuse the saisie on the grounds that the claim on the substance is bound to fail? In the first case, the claimant could (try to) apply again on stronger evidence; in the second, he would not need to.

    In each case whose concept of res judicata is being employed to answer those questions – English, French, or autonomous European?Is the provisional freezing injunction a procedural or a substantive measure (and by whose characterisation, and does it matter)? Is it relevant that different assets (or the same assets in a different location) are in issue?

    At present I see no clear answer to these questions, and it is in this area that I think the law needs to develop.


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