A multinational case: Daimler Chrysler Canada v. Stolzenberg and Gambazzi in ten jurisdictions and counting
Canada: In 1992, following the collapse of Canadian investment company, Castor Holdings, incorporated in Montreal, $ 1.5 billion bankruptcy proceedings were initiated. Proceedigns were also underway against the company’s directors for paying out dividends of $15,5 million. Five of the directors did not settle the case and in August 2008 they were ordered by the Court to pay damages of $9,7 million.
England: In 1996, Daimler Chrysler Canada and its pension fund, which had suffered severe losses due to Castor’s collapse, initiated proceedings before the English Courts against, inter alia, the latter’s directors, claiming that Daimler Chrysler’s losses were due to the directors’ wrongful conduct.
The only defendant having a connection to England for the purpose of the English Courts seizing jurisdiction was the chairman of Castor, a German national named Stolzenberg, who had once owned property in London, but not at the time of service of the writs. In the House of Lords’ 2000 ruling, it was held that the intrinsic element was whether there was one defendant who was domiciled in England when the claim was issued by the English court, not when it was served on the defendants.
A global Freezing Order (then Mareva Injunction) was issued soon after the commencement of proceedings in England with the disclosure elements of which the defendants did not comply. Following such non-compliance to the prescriptions of an order as powerful as a Mareva Injunction, judgment in default was delivered for approximately €400 million.
New York: One of the defendants in the English proceedings was the owning entity of a hotel in mid-town Manhattan. Enforcement of the English judgment was sought in the State of New York in 2000. In its 2003 ruling, the New York Court of Appeals held that the English judgment was not incompatible with the requirements of due process of law and could thus be enforced in New York.
France: Enforcement proceedings were also initiated in France since Stolzenberg also had assets in Paris. The Cour de cassation held both the Mareva injunction and the English default judgment as being enforceable in France.
Switzerland: Gambazzi, a Swiss lawyer and director of Castor, faced enforcement proceedings against his assets in Switzerland. However, moving to the opposite direction from the French and New York court the Swiss Courts found the English judgment to be in breach of process and unable to be recognized.
European Court of Human Rights: Some of the defendants in the English case brought an action against the United Kingdom, arguing, inter alia, that being debarred from filing defence due to their non-compliance with the Mareva Injunction was not compatible with Article 6 of the European Convention on Human Rights (ECHR), namely the right to a fair trial. The Court threw the action out by holding it to be “manifestly ill-founded”.
Italy: Gambazzi’s assets in Milan led to enforcement proceedings in Italy as well. When enforcement proceedings where initiated before the Courts of Milan, Gambazzi’s defence had been the ‘public policy’ clause of Brussels I (Art. 27 thereof). The Milanese Court referred the matter to the European Court of Justice (ECJ) in August 2007 by virtue of the mechanism of Art. 234 EC, asking it to interpret Art. 27 of Brussels I.
Monte Carlo: The Court found that the English judgment was contrary to public policy, in that it did not state the claims of the plaintiffs or even refer to the writ of summons. By finding an absence sufficient reasoning behind the English judgment, the Court held that such judgment was in breach of the fundamental rules of procedure and Monte Carlo’s international public policy.
ECJ: Advocate General Kokkot issued her Opinion on the matter referred by the Milanese Court to the ECJ in December 2008. On the face of it, it seems that her Opinion could be construed as leaving all possibilities open and the ECJ’s Judgment should be awaited for definitive answers.
