The prism of public policy also helps weighing up the impact of the fair trial on cross-border tracing and recovery.
Overall speaking, any instrument of judicial cooperation in civil matters is inspired by the fair trial as a backbone of the European public policy common both to Member States and to the EU itself.
As regards the topic in question, it may prove appropriate to focus separately on evidence measures, disclosure orders concerning the debtor’s assets, and ex parte recovery measures.
To begin with evidence measures, the fair trail underlies Article 13 Regulation (EU) 2020/1783 which lets parties assist or participate in the taking of the evidence. Parties and representatives may be present and/or participate if the lex processus requires that taking of evidence be conduct through adversarial proceedings regardless of cross-border implications, or when is the requested court to call for such involvement in order to comply with the adversarial requirement established by its lex fori (Article 13(5)). This scenario is without prejudice to the ability of the requesting court’s delegates to be present or participate pursuant to Article 14.
Conversely, Regulation (EU) 2020/1783 makes it possible to curtail the judicial cooperation whenever the “special requests” submitted by foreign courts (i.e., the request to take evidence “in accordance with special procedures” of the lex processus) are incompatible with “national law” of the requested State, including the fair trial principles (Article 12 (3)). Similarly, direct taking of evidence that is “contrary to fundamental principles” of the requested State may be refused (Article 19 (7)(c)).
On a different standpoint, virtual presence and participation through communications technology (such as videoconference or teleconference) are supportive of the fair trial as they make the taking of evidence faster and cheaper, thereby improving the access to justice. However, IT technology cannot undermine the right to assist or participate in person, as well as to communicate in person with the representative, as corollaries of the right to defense (and, thus, of the fair trial)[22].
Turning to disclosure orders, it seems that no fair-trial principle impedes them to be enforced throughout the EU judicial space. A recent case before the Italian Supreme Court is illustrative in this respect[23].
The Italian Supreme Court ruled on the enforcement of a civil judgment which had been rendered after the issuance of a disclosure order followed by a worldwide freezing order[24].
The Court did not deem both the freezing injunction and the preliminary disclose order incompatible with the Italian public policy notwithstanding the injunction was sanctioned with contempt of court in the origin State (Guernsey). The Court reasoned in the light of the debtor’s general duties not to depauperate assets and to collaborate with judges by revealing its assets’ location. A disclosure order leads debtors to fulfil such duties for the effectiveness of the civil proceedings.
In this perspective, the Court made an interesting comparison with the information system that Regulation (EU) No 655/2014 establishing the European Account Preservation Order (“EAPO” [25]) grants the courts to get information on where the assets targeted through the preservation order are[26]. From such comparison, the Court concluded that no disclosure foreign order, even the more impactful because of the related sanctions[27], triggers incompatibility with the public policy. Actually, the more the measure is impactful, the more it makes the civil proceedings effective.
Moreover, when it comes to obtaining documents or information from persons under the scheme of Regulation (EU) 2020/1783, the law of the requested State and the lex processus (i.e., the lex fori concursus) may provide differently as to the sanctions against withholding the required asset. Under that regime, and according to the principle of territoriality of the procedural law, the law of the requested State applies (Article 12). In particular, the witness may refuse to be interrogated in accordance with the that law (Article 16). The witness may refrain from answering even if he has no significant contact with the requested State. He could even “take refuge” therein to escape the examination[28]. It follows that, if the lex fori concursus were to provide for tougher sanctions, the court could sidestep the Regulation and issue disclosure orders or orders of witness hearing, thereby remitting the consequences of inobservance to its lex fori.
It remains to be seen if there is any tension between national ex parte measures and fair trial. A tension can be traced, indeed, between the surprise effect of an ex parte order – aimed to protect the substantive rights of creditors by issuing and enforcing the order without prior notification to the debtor so as to prevent the latter from relocating the assets into a foreign country – and the debtor’s right to oppose the measure ahead of seeing its assets attached.
This tension lies beneath Article 2 (a) of the Brussels Ibis Regulation when stating that the notion of ‘judgment’ for the purposes of recognition and enforcement “does not include a provisional, including protective, measure which is ordered by such a court or tribunal without the defendant being summoned to appear, unless the judgment containing the measure is served on the defendant prior to enforcement”.
The provision follows up a well-consolidated CJEU’s case law. Since the Denilauler case[29], concerning an ex parte bank account freezing order, the CJEU has been consistently stressing that scheme and principles of the Brussels I Regulation surround only judgments rendered after an adversary proceeding, or a proceeding in which the defendant not appearing was duly summoned before the enforcement. In other words, the Brussels system is “fundamentally concerned with judicial decisions which, before the recognition and enforcement of them are sought […] have been, or have been capable of being, the subject in [the] State of origin and under various procedure, of an inquiry in adversary proceedings”[30].
Thus, the lack of adversary nature prevents ex parte provisional or protective measures from yielding effects outside the State of origin. Conversely, nothing in the Court’s rulings precludes ex parte measures to have local effects. Actually, parties may request all such measures as may be available under the law of the State in which the assets are located.
What if ex parte measures are ordered by insolvency courts in the scheme of the EIR? Given that the EIR relies on the Brussels Ibis Regulation as far as the enforcement is concerned, any national measures should undergo the Denilauler test.
Nonetheless, ex parte measures that the IPs activate to recovery debtor’s assets should be differently treated from ex parte measures concerning disputed third-party’s assets in ancillary adversary proceedings, such as those arising out of avoidance actions.
The first measures pertain to the powers to recovery the debtor’s assets that the IPs wield under (and in compliance with) Article 21. They pose no problems with respect to the debtor's right of defence, let alone when the debtor is divested. Insolvency-related adversary proceedings regarding third-party assets should instead comply with the third-party right of defence (as a right of respondent in the ancillary proceedings) so as for the proceedings to meet the fair trial principles. Therefore, the cross-border recognition of ex parte measures is likely to infringe the Denilauler principles in the second case. The same is for ex parte measures ordered in relation to proceedings commenced or to be commenced by the IP before courts having jurisdiction under the Brussels Ibis Regulation[31].
All in all, the IPs’d better demand ex parte measures to local courts, i.e., in the State where the assets are located, and the measures are to be enforced.