European Union: Application Of EU Service Regulation – Formalities Versus Objectives

Introduction

EU regulations aim to establish the uniform application of law throughout the European Union. In contrast to EU directives – which are implemented by national legislation, giving scope for variation – EU regulations apply directly across the entire European Union. However, at the practical level, differences between the procedural rules that apply in different member states make it difficult, if not impossible, to achieve the ideal of full uniformity. While expediency dictates that the application of regulations should not be restricted or obstructed by formalities, which can be validly remedied through simple steps, the legislation's basic principles and provisions and fundamental objectives of freedom, security and justice must be respected, taking the interests of all parties into account. Achieving this balance between expediency and principle is not easy given the many and complex differences between EU member states regarding their rules of procedure.

Facts

This issue was central to a recent case in the Supreme Court of Cyprus, Koza Micahel David v Bank of Cyprus Public Company Limited.1 The appellant argued that the first-instance court should have set aside the service of the writ of summons and order permitting service abroad due to the fact that he had not been:

  • informed, as the person to whom the writ of summons was addressed, of his right to refuse service through Annex II of the EU Service Regulation (1393/2007); and
  • served with the application and order pursuant to which service abroad was permitted.

The Supreme Court was guided by the European Court of Justice (ECJ) decision in Andrew Marcus Henderson v Novo Banco SA,2 in which it had repeated its earlier judgment in Alpha Bank Cyprus.3 The Supreme Court shared the ECJ's view that the EU Service Regulation must be interpreted and applied to ensure a fair balance between the interests of the party that advances the service and those of the addressee by reconciling the objectives of efficiency and speed of service of procedural documents with the need to ensure that the addressee's right to defence against the documents is adequately protected through the guarantee of their receipt.

Background

The Henderson case examined whether:

  • the service of the document instituting proceedings was valid despite the fact that the acknowledgment of receipt of the registered letter was not returned to the sender and it appears that the letter was received by a third party and not the addressee; and
  • the EU Services Regulation precludes national legislation, in this case Portuguese legislation, which requires that any defence that a judicial document served on a defendant residing in another EU member state is invalid (because it is not accompanied by a translation into a language that the defendant understands or an official language of the member state where service is to be effected, or due to the omission of the standard form set out in Annex II to the EU Service Regulation) be invoked by the defendant within a specified period or at the beginning of the proceedings and before any defence on the merits.

The ECJ found as follows:

  • Article 8(1) of the EU Service Regulation expressly provides that the addressee of the document to be served may refuse to accept it on the ground that the document in question is not drafted or accompanied by a translation in a language which he or she is deemed to understand.
  • The right to refuse to accept the document to be served constitutes a right of the addressee of that document.
  • The right to refuse to accept the service of a document stems from the need to protect the rights of defence of the addressee of that document, in accordance with the requirements of a fair hearing.4 These rights should not undermine the objectives of the EU Service Regulation – namely, to improve the efficiency and speed of judicial procedures and ensure the proper administration of justice.5
  • It must be ensured that not only the addressee of a document has received it, but that he or she can understand effectively and completely the meaning and scope of the action brought against him or her in order to effectively prepare a defence and assert his or her rights in the EU member state of transmission.
  • The right of refusal set out in Article 8(1) of the EU Service Regulation has effect once the addressee of the document is duly informed, in advance and in writing, of the existence of that right via the standard form set out in Annex II to the regulation.

In Henderson, the ECJ concluded that the non-return of the acknowledgment of receipt did not impair the postal transmission procedure, as that formality could have been replaced by a document which provides equivalent guarantees. The ECJ further concluded that it is for the court hearing the matter in the EU member state of transmission to satisfy itself that the addressee received the document in question in such a way as to ensure that his or her rights of defence have been respected.

As regards the fact that the registered letter containing the document to be served was received in the requested member state by a third party rather than the addressee, the ECJ noted that Article 14 of the regulation contained no express indication in that regard. While it can be deduced from Article 19(1)(b) of the regulation that the document to be served can be delivered not only to the addressee in person, but also, in his or her absence, to a person present at his or her place of residence, the ECJ once again stressed the need to ensure that all guarantees necessary for the effective protection of the addressee's rights of defence are respected. Thus, where appropriate, it is for the addressee to establish, by all admissible forms of evidence before the court hearing the matter in the member state of transmission, that he or she:

  • could not have known that judicial proceedings were being brought against him or her in another EU member state;
  • could not identify the subject matter and grounds of the claim; or
  • had insufficient time to prepare a defence.

The ECJ's conclusions indicate its preference for a purposive approach that:

  • looks at fundamental issues and principles, rather than an over-rigid focus on procedural deficiencies which can be validly redressed by taking simple steps; and
  • respects the fundamental rights of the person who advances the service and the person to whom service is addressed.

Comment

The Supreme Court adopted the same purposive approach and concluded that placing what it considered to be undue emphasis on procedural deficiencies which could be validly redressed would undermine the EU Service Regulation's objectives of ensuring the efficiency and speed of service of procedural documents. It therefore dismissed the appeal and upheld the first-instance court's conclusion.

Footnotes

1 Civil Appeal 208/2012, November 24 2017.

2 C-354/15, March 2 2017.

3 C-519/13, September 16 2015.

4 See second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union and Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

5 See Alpha Bank Cyprus, C-519/13, September 16 2015, EU:C:2015:603, Paras 30 and 31 and order of April 28 2016, Alta Realitat, C-384/14, EU:C:2016:316, Paras 48 and 49.

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