Gambazzi Looses in Milan
On 24 November 2010, the Milan Court of appeal found that the English judgments delivered in 1998 and 1999 in the Gambazzi case were not contrary to Italian public policy and could thus be declared enforceable in Italy.
We had reported earlier on this judicial saga which has occupied the dockets of a number of higher courts of the western world in the last decade.
Most readers will remember that the Milan court had first referred the case to Luxembourg. The European Court of Justice had asked the national court to verify the following:
42 With regard, first, to the disclosure order, it is for the national court to examine whether, and if so to what extent, Mr Gambazzi had the opportunity to be heard as to its subject-matter and scope, before it was made. It is also for it to examine what legal remedies were available to Mr. Gambazzi, after the disclosure order was made, in order to request its amendment or revocation. In that regard, it must be established whether he had the opportunity to raise all the factual and legal issues which, in his view, could support his application and whether those issues were examined as to the merits, in full accordance with the adversarial principle, or whether on the contrary, he was able to ask only limited questions.
43 With regard to Mr Gambazzi’s failure to comply with the disclosure order, it is for the national court to ascertain whether the reasons advanced by Mr Gambazzi, in particular the fact that disclosure of the information requested would have led him to infringe the principle of protection of legal confidentiality by which he is bound as a lawyer and therefore to commit a criminal offence, could have been raised in adversarial court proceedings.
44 Concerning, second, the making of the unless order, the national court must examine whether Mr Gambazzi could avail himself of procedural guarantees which gave him a genuine possibility of challenging the adopted measure.
45 Finally, with regard to the High Court judgments in which the High Court ruled on the applicants’ claims as if the defendant was in default, it is for the national court to investigate the question whether the well-foundedness of those claims was examined, at that stage or at an earlier stage, and whether Mr Gambazzi had, at that stage or at an earlier stage, the possibility of expressing his opinion on that subject and a right of appeal.
In a ten page long judgment, the Milan Court of appeal explained why the English proceedings were not manifestly unfair to Gambazzi. The essentials of the decision are the following.
Betting on Winning on Jurisdiction
Gambazzi was able to convince Swiss courts to deny recognition to the English judgments because the documents he needed to defend himself had been retained by an English firm with which he had an argument over the fees which had been charged (Pounds 1 million).
The Milan court found that Gambazzi had admitted that he had hoped to win on jurisdiction and had therefore dedicated all its resources to the jurisdictional challenge, that he eventually lost before the House of Lords. As a consequence, he had consciously decided not to invest anymore on defending on the merits, if only because by doing so, he was taking the risk of being told that he had submitted to English jurisdiction (and so he would indeed be told by the New York Court of Appeals later at the enforcement stage). The Milan court was not ready to rule that his rights to defend himself on the merits had been violated, since this was the result, the Milan Court ruled, of an informed decision to focus on jurisdiction.
Proportionality of the Sanction
The heart of the decision of the Italian court is that the sanction suffered by Gambazzi was proportionate. The judgement repeated several time that the lesson from the ECJ judgment was that Contempt of Court was not a violation of the right to a fair trial per se, but only if disproportionate with the goals pursued by the institution, namely proper adminsitration of justice.
The conclusion of the Milan court was that, although debarment from defending was clearly severe, and unknown from Italian civil procedure, human rights are not absolute, proper administration of justice being a value which should also be considered. The issue was then whether such sanction was proportionate. The Court held that it was, for the following reasons: 1) Gambazzi had been repeatedly in default (the Court had also acknowledged, however, that Gambazzi had participated actively during the first stages of the English proceedings), 2) Gambazzi had no proper reason not to comply such as violating professional secrecy or foreign (i.e. Swiss) criminal law, and 3) Gambazzi knew about the sanction.
Many thanks to Remo Caponi for the tip-off
The whole saga started with an order against Gambazzi to disclose his assets which was grated by the English court as an ancillary order to an interim order for freezing assets. In this regard, it may be interesting to note that the Legal Affairs Committee of the European Parliament has recently (16 February 2011) published a draft report on interim measures for the freezing and disclosure of debtors’ assets in cross-border cases (See http://www.europarl.europa.eu/oeil/FindByProcnum.do?lang=2&procnum=INI/2009/2169 for a link to the document). In this draft report, the Commission is requested to submit proposals on free-standing instruments additional to those available under national law.
With respect to the order for disclosure of assets, Recommendation 13 reads (in part): “The European Parliament considers that it should be possible to seek the order at least following a judgment establishing a debt. The Commission should consider whether the order should be available at an earlier stage in the proceedings, for instance when the court having jurisdiction on the substance considers that there is a real risk that its judgment would not be satisfied, and what corresponding safeguards should be put in place.”
According to the Explanatory Statement attached to the draft, the Commission’s proposal is foreseen by July 2011.
This judgment was delivered on 24 November 2010 and it was made public on 14 December 2010. According to Article 133 Italian Code of civil Procedure, the decision may be cited as “Corte d’appello di Milano (court of appeal, Milan), Section I, 14 December 2010”.