The High Court has refused an application to prevent recognition or enforcement in Ireland of a Bulgarian judgment for €425,926, plus costs and interest. It also refused the applicant’s alternative request for an injunction or stay while related arbitration proceedings continue.
The judgment was delivered electronically by Mr Justice Barr on 22 December 2020. The Bulgarian judgment arose from two loan agreements between the parties, dated 28 March and 26 April 2011. The applicant accepted that he had entered into them. They provided for repayment by the end of 2011, were governed by Bulgarian law and gave the Bulgarian courts exclusive jurisdiction over disputes.
The Sofia City Court awarded judgment to the respondent on 31 October 2017. The applicant appealed, but the Bulgarian Court of Appeal affirmed the judgment in December 2018. The Supreme Court of Cassation refused to allow a further appeal in October 2019. The High Court noted that the applicant had been legally represented in the Bulgarian proceedings.
The applicant argued that the loans were connected to a wider investment in the Burgas Plaza shopping centre in Sofia. He alleged that the respondent had fraudulently induced him to invest and enter into related agreements, including the loans. He relied in part on an Isle of Man ruling that found Gort Holdings Ltd had a “good arguable case” of deceit when granting a worldwide freezing order against MRP Brazil Ltd. That ruling did not determine that fraud had occurred.
A separate ICC arbitration, commenced in 2020, was permitted to proceed against the respondent and one company. The applicant had appealed the exclusion of other proposed respondents. The High Court said the arbitration contained allegations of fraud, but no court or arbitral tribunal had found that the respondent or a company he controlled had committed fraud. The respondent denied the allegations and maintained that the loan agreements were separate from the wider investment arrangements.
The court held that the Brussels I Recast rules sharply limit challenges to recognition and enforcement of judgments from another EU member state. It said it could not revisit the Bulgarian court’s assessment of the loan agreements or review the substance of its judgment. An allegation of fraud, without a finding, did not meet the high threshold for refusing enforcement on Irish public policy grounds.
The court also refused a stay or injunction pending the arbitration. It said the regulation did not provide for that relief in these circumstances, and no appeal had been lodged in Bulgaria. The court refused all relief sought in the applicant’s originating notice of motion.