About this case:

• Citation:
  [2025] IESC 20
• Judgment:
  External link
• Court:
  Supreme Court

Delivering his judgment for the Supreme Court, Mr Justice Hogan stated: “Article 52 of the Brussels 1 recast precludes any review as to substance of the judgment sought to be recognised and the consistent case-law on Article 45(1)(a) (and its predecessor) confirms that recourse to the public policy exception must itself be confined to special and exceptional cases.”

Background

In 2006, the respondent secured 78 Irish investors to invest in the purchase of land and the development of a shopping centre in Poland through a ‘special purpose vehicle’ (SPV).

The investment was unsuccessful, with the investors claiming that the respondent had benefitted from the transaction, while they suffered a total loss.

63 of the investors established an Irish company, the appellant, for the purpose of litigating against the respondent in Poland. Each said investor executed under Polish law an assignment of their causes of action against the respondent to the appellant.

The assignments included a clause which stated that “the right to sell the debt to the third party has not been excluded”.

In 2021, the appellant secured judgment as against the respondent in the sum of approximately €6.33 million in the Polish Court of Appeal, which concluded that the respondent had wrongfully and without authority purported to enter agreements on behalf of the investors. Thereafter, the appellant sought to enforce the judgment in Ireland. 

The respondent contended that the Irish courts should refuse to recognise and to enforce the judgment where the assignments were champertous, in that they involved the transfer of a bare cause of action and permitted the onward transmission of the assignment to a unconnected third party and made arguments in relation to the alleged improper constitution of the Polish judiciary.

The High Court and Court of Appeal

The respondent was unsuccessful on both arguments before the High Court but succeeded on appeal to the Court of Appeal, which found that notwithstanding the fact that the commonality of identity between the original investors and the shareholders of the appellant met the requirements of a pre-existing genuine commercial interest in the claim, the possibility of onward transmission was clearly prohibited by Irish public policy as to the commodification of litigation.

As to whether public policy considerations would preclude the recognition of the judgment in Ireland, the Court of Appeal noted that the infringement would have to constitute a manifest breach of a rule of law regarded as essential in the Irish legal order, or of a right recognised as being fundamental therein. 

Having considered SPV Osus Ltd. v. HSBC Institutional Trust Services (Ireland) Ltd [2018] IESC 44; [2019] 1 IR 1, the Court of Appeal concluded that the prohibition on the enforcement of agreements amounting to assignments of a bare cause of action applied to the case before it.

Accordingly, the Court of Appeal refused recognition of the judgment on public policy grounds pursuant to Article 45(1)(a) of Brussels I (recast), finding it unnecessary to adjudicate on the respondent’s argument in relation to the independence of the Polish judiciary.

Leave to appeal to the Supreme Court was granted on the basis that while it was clear that a champertous agreement is unenforceable by reason of being contrary to the public policy in Ireland per SPV Osus, that case did not consider whether such a breach of public policy constitutes a manifest breach of a rule of law sufficient to warrant non-recognition under Article 45(1)(a).

The Supreme Court

Chief Justice O’Donnell considered that the critical fact in the case him was that “the Irish court is not being asked to enforce an assignment under Irish law: it is being asked to enforce a judgment obtained in another member state where such an assignment is and was perfectly lawful, and where there is a strong public policy, as a matter of both European and Irish law, in enforcing judgments obtained in the courts of other member states of the European Union”.

The Chief Justice continued: “The question is not whether an assignment of a claim with no restriction on onward assignment is contrary to Irish policy: it is whether Irish public policy requires the refusal of recognition of a judgment obtained in another country where any assignment is perfectly lawful.”

Finding that it does not necessarily follow that an Irish court must deny recognition where something contrary to Irish public policy is done in accordance with the legal system of another member state, Chief Justice O’Donnell emphasised that the concept that public policy should be narrower and more limited in private international law than in internal law applies with greater force in the context of the Brussels Convention and Brussels I (recast).

The Chief Justice found it unsurprising that the European Court of Justice considers Article 45 to be an exception which must be construed strictly, noting: “The public policy, as it were, in favour of enforcement of judgments of member states is of much greater weight and the public policy which requires non-enforcement must be of such a degree as to override that, and require and demand refusal of enforcement.”

Highlighting the test as restated in Case C-633/22 Real Madrid Club de Fútbol, the Chief Justice opined: “The concept of something being essential and fundamental suggests that it must go to the very core of, in this case, the legal order, and be so antithetical to that legal order itself that it simply cannot be permitted even indirectly when through the enforcement of a judgment of a court of another member state.”

Finding that the enforcement of the judgment in the case before him would not meet the threshold in Article 45, Mr Justice O’Donnell observed that whatever the public policy considerations were that weighed against enforcement were substantially balanced, if not outweighed, by the strong public policy in favour of giving effect to the judgments of courts of other member states.

The Chief Justice also considered that Irish public policy against assignment could not be said to be static as the law in that area is “in flux”, and that in any event, the case before the court did not have any of the characteristics of commodification or trading in litigation where there was no assignment to an unconnected third party.

Mr Justice Gerard Hogan considered that the starting point on appeal was that “this court must take the Polish judgment as it finds it. Save, perhaps, in exceptional circumstances, we are not entitled to look behind that judgment or to query the reasoning of that court” as to do so would run contrary to Article 52 of Brussels I (recast).

Mr Justice Hogan considered inter alia that the assignment was valid by reference to the Polish lex causa, noting: “If the lex causa has no issues with the assignment of a bare cause of action to an unconnected third party in a commercial case such as this, it is not for us to insist that they should.”

Finding that the court could not fairly say that the recognition of the Polish judgment would amount to a manifest rule of law regarded as fundamental in our legal order, the judge highlighted: “Insofar as one could say that the bare assignment of litigation claims to unconnected third parties raise public policy concerns, they relate to the manner of the administration of justice in this State. To repeat, however, if the law of the lex causa does not share these concerns so far as the administration of justice in their judgment rendering state is concerned, this is not our affair.”

Conclusion

Accordingly, the Supreme Court inter alia allowed the appeal and restored the decision of the High Court on the enforceability of the judgment.

Scully v Coucal Limited [2025] IESC 20