EUPillar C-406/09 Realchemie Nederland BV v Bayer CropScience AG (Grand Chamber) [2011] ECR I-09773

Summary

This case on Art 1 of Brussels I was referred to the CJEU in proceedings between Realchimie and Bayer concerning the enforcement in the Netherlands of six German court orders concerning an alleged patent infringement. These orders were a basic order prohibiting Realchimie from importing into, possessing or marketing certain pesticides in Germany, an order imposing the fine for breach of the prohibition imposed in the basic order, a periodic penalty payment order, and three determination of costs orders made pursuant to the three abovementioned orders. The orders were all served on Realchimie. Bayer made an application, under Brussels I, for a declaration of enforceability of the German orders in the Netherlands and this application was upheld. Realchimie brought an appeal pursuant to Art 43. It relied on the ground of refusal in Art 34 arguing that the basic order, the order imposing the fine and the periodic payment order could not be recognised and enforced in another MS as they were made without Realchimie being called to appear and without an oral procedure, and the three determination of costs orders could be neither recognised nor enforced as they formed an integral part of the three abovementioned orders. The appeal was dismissed on the ground that the German court orders were covered by Art 32 and could therefore be enforced in the Netherlands. The appellate court took the view that that order requiring Realchimie to pay a fine to the cashier of the German court in no way detracted from Bayer’s right to and interest in having Realchimie actually pay the fine to the cashier of that court, which constituted an incentive to comply with the basic order, and that Bayer may therefore pursue the enforcement of that order. At an appeal on a point of law, the referring court asked the CJEU whether the recognition and enforcement of an order for payment of a fine pursuant to the German Civil Code (ZPO) falls within the scope of Brussels I under Art 1. The CJEU examined the question by taking account of Recital 19 and its case-law on the Brussels Convention. It affirmed C 420/07 Apostolides that Brussels I’s scope, limited to ‘civil and commercial matters’, is determined essentially according to the factors characterising the nature of the legal relationships between the parties to the action or the subject-matter of the action. As regards interim measures, it affirmed 143/78 de Cavel and C 391/95 Van Uden that their inclusion in scope is determined not by their own nature but by the nature of the rights that they serve to protect. It observed that even though the fine at issue is punitive and having a penal nature under the ZPO, the dispute is between two private persons concerning an allegation of patent infringement and the action intends to protect private rights and does not involve the exercise of public powers by one of the parties to the dispute. It found that the legal relationship between Bayer and Realchimie must be classified as ‘a private law relationship’ and is covered by the concept of ‘civil and commercial matters’ in Brussels I. It stated that although the fine imposed must be paid to the German State, the fine is not recovered by the private party or on its behalf, and the actual recovery is made by the German judicial authorities, those specific aspects of the German enforcement procedure cannot be regarded as decisive as regards the nature of the right to enforcement. The CJEU explained that the nature of that right depends on the nature of the subjective right, for infringement of which enforcement was ordered, ie Bayer’s right to exploit exclusively the invention protected by its patent. The CJEU did not agree with AG Mengozzi and it held that Brussels I applies to the recognition and enforcement of a decision of a court or tribunal that contains an order to pay a fine in order to ensure compliance with a judgment given in a civil and commercial matter.