The Court of Appeal has allowed Michael Scully’s appeal and refused recognition in Ireland of two Warsaw Court of Appeal orders, ruling that the claims used to obtain the Polish judgment had been assigned in a way contrary to Irish public policy.
The judgment, delivered by Ms Justice Donnelly on 30 April 2024, concerned a Polish award against Mr Scully of PLN 28,391,106, plus statutory interest and costs. The Court of Appeal in Warsaw had issued the judgment in June 2021 and permitted enforcement proceedings in Ireland the following month. The High Court refused Mr Scully’s request to block recognition in November 2022. He appealed.
Coucal Ltd, an Irish company whose shareholders included investors in a Polish shopping-centre project, had brought the Polish proceedings on the basis of claims assigned to it by investors. The investors alleged that Mr Scully had entered agreements on their behalf without authority and that they had suffered losses. Those allegations describe the background to the Polish proceedings; the Irish appeal concerned whether the resulting orders could be recognised here.
The Court of Appeal accepted that the investors’ connection to Coucal as shareholders could amount to a genuine commercial interest in the claims. But it found that the assignment agreements expressly allowed Coucal to sell the claims to a third party. Applying the Supreme Court’s decision in SPV Osus, the court held that the possibility of onward transfer to an unconnected party made the assignments unenforceable under Irish law as a form of litigation commodification.
The court then considered whether that domestic rule could justify refusing recognition of a judgment from another EU member state. It concluded that the prohibition on such assignments was an essential rule of Irish public policy, connected to the administration of justice, and that enforcing orders obtained through the assignments would itself engage the conduct that the rule prohibits. The judgment stressed that refusal under the EU regulation is exceptional, but held that the public-policy exception applied in this case.
The court did not decide Mr Scully’s separate argument about the independence of a Polish judge who heard the appeal there. Because the appeal could be resolved on the assignment issue, it said it was neither necessary nor appropriate to address that ground or make a requested reference to the Court of Justice of the EU.
The Court of Appeal ordered that recognition be refused for the Warsaw orders dated 10 June and 7 July 2021. It indicated that Mr Scully appeared entitled to the costs of the appeal, while allowing Coucal to apply to the Registrar by 17 May 2024 for a hearing on costs.