Antje Kunst*
* Antje Kunst is an
international lawyer and barrister of Pavocat Chambers, admitted to the Bar of
England and Wales, and the Bar of Berlin, advising and representing individuals
in a wide range of matters related to the CFSP, including employment cases. She
has appeared in numerous cases before both the Court of Justice and the General
Court, within the Court of Justice of the European Union. She was Counsel for
SC in the Eulex Kosovo case.
Photo credit: George Chernilevsky,
via Wikimedia
Commons
Introduction
On 18 January 2024 in Eulex
Kosovo v SC (Case C-785/22 P), a case that has been before the EU
courts since 2017, the Court of Justice ruled that an appeal against a default judgment
of the General Court is inadmissible before the Court of Justice if dual
proceedings are brought to both EU courts. In other words, appealing a default
judgment of the General Court to the Court of Justice, and simultaneously
asking the General Court to set aside its own default judgment, is not
permitted.
Until now, there was no case law
on this precise type of situation, and hence, the Court of Justice’s judgment
is highly significant for EU procedural law as a gap in the case law has now
been closed.
Previously in October 2022, the
General Court issued a default judgment in Case T-242/17
RENV, in favour of SC – a former member of contract staff of the EU Rule of
Law Mission in Kosovo (Eulex Kosovo) – following the failure of Eulex Kosovo to
file a defence, in this case. The
failure to file a defence occurred in referral proceedings after a successful
appeal before the Court of Justice in Case
C-730/18 SC v Eulex Kosovo, at a time the case was already ongoing for four
years.
In November and December 2022, Eulex
Kosovo filed not only for that default judgment of the General Court under
Article 166 of the Rules of Procedure of the General Court (RPGC) to be set
aside by the General Court itself, but
also brought appeal proceedings against that default judgment of the General
Court to the Court of Justice, with the consequence that not only the General
Court but also the Court of Justice became seized of the same subject matter. As
a result, SC had to defend against not only an opposition in proceedings before
the General Court, but also an appeal in proceedings before the Court of
Justice.
Default judgment which is the subject
of an application to set it aside is not a final decision
The judgment by the Court of
Justice in Case C-785/22 P clarifies that it followed from its own Statute that
an appeal is admissible only against a final decision of the General Court,
with respect to which no other legal remedies remain open (para. 29 of the judgment).
It also clarified that ‘[s]ince the exercise of such a remedy has the effect of
re-opening the proceedings before the General Court, a default judgment which
has been the subject of an application to set it aside cannot be regarded as a final
decision, within the meaning of Article 56 of its Statute’. Consequently,
it followed that an appeal brought against a default judgment which is the
subject of an application to set it aside is inadmissible (paras. 31 and 32 of
the judgment).
To have two bites at the
cherry is not permitted
In an entirely other case, Advocate
General (AG) Emiliou delivered an Opinion
on the same day, i.e. in Case C-766/21 P, Parliament v Axa Assurances
Luxembourg and Others stating that ‘[p]ermitting the use
of two legal remedies in parallel would be tantamount to allowing a defendant
in default to have two bites at the cherry – or, to continue with the
metaphor, to ride two trains at the same time’. The AG added to allow this
would be against the principle of equality of arms asking the correct question:
‘how could it be permissible for a party, which had failed to participate at
first instance, to nonetheless have the possibility to pursue one remedy before
the General Court, and another remedy before the Court of Justice, both
ultimately seeking the same outcome?’ (Para. 108, Opinion of Advocate General
Emiliou, Case C‑766/21 P, European Parliament v Axa Assurances Luxembourg
SA, Bâloise Assurances Luxembourg SA, La Luxembourgeoise SA,
Nationale-Nederlanden Schadeverzekering Maatschappij NV, ECLI:EU:C:2024:63).
The AG in that
case made another important point, in that allowing parallel proceedings could
cause confusion as to the suitable remedy in a particular case and contribute
to the escalation of costs for any party involved in parallel procedures (para.
109 of his Opinion).
Appeal may be admissible against
a default judgment if the opposition is late
The Court of Justice in Case
C-785/22 P, Eulex Kosovo v SC nonetheless stated that an appeal against a
default judgment may be admissible before it if the party has not asked for the
General Court to set aside its own judgment within the prescribed time limit of
one month pursuant to Article 166 RPGC.
Whilst this was not the situation
in Eulex Kosovo v SC, given that a request was made in time by the defendant to
the General Court for itself to set aside its default judgment, the Court of
Justice did state that if such a situation were to arise, such an appeal would
be inadmissible during the time the default judgment is not yet final, but
could be regularised, i.e. upon expiry of that time limit (para. 33 of the
judgment) ‘if that legal remedy has not be exercised’. Thus, according to the
Court of Justice, there is an exception to the rule if the party does not comply
with the time limit to file an opposition or does not file an opposition at all,
it can appeal the default judgment, once it is final, before the Court of
Justice.
Unhealthy choice of legal
remedies
To leave a choice of remedies to
the defendant, i.e. either to pursue an application to set aside a default
judgment based on Article 166 RPGC before the General Court, or an appeal
against such a judgment before the Court of Justice, is problematic. It is even
more problematic to allow an appeal, when the defendant does not manage to file
an opposition within the stipulated time limit of the specific legal remedy
under Article 166 RPGC, i.e. one month.
Specific remedy in Article 166
RPGC
In view of the considerations, AG
Emiliou, fully aware of the Court’s reasoning in Case C-785/22 P, Eulex Kosovo
v SC (see para. 102 of his Opinion), in his Opinion in Case C‑766/21 P, Parliament v Axa Assurances
Luxembourg and Others is entirely correct in stating that a defendant in
default cannot lodge an appeal against a first-instance decision because of the
requirement to make use of the specific remedy set out in Article 166 RPGC. ‘The
two procedural avenues are […] not only alternatives and mutually exclusive,
but also not interchangeable. […] to lodge an appeal, a party must fulfil the
formal requirements outlined in Article 56 of the Statute, in essence,
mandating participation at first instance. […] a defendant in default does not
fulfil that criterion. Any attempt to bring a successful appeal would seem
futile.’ (See paras. 101, 103 and 104 of the Opinion of AG Emiliou).
An appeal against a default
judgment before the Court of Justice will regularly unduly prolong proceedings
before the EU courts, with a possible referral back to the General Court due to
the incomplete provisional appraisal of the facts, within the procedure for
default judgments inaudita altera parte. The consequences for applicants will
be an unreasonable length of adjudication of their cases before the CJEU, and
of course, escalating their costs.
In order to avoid that defendants
more often fail to file a defence in the initial proceedings, despite being
requested to do so, the tight time limit of one month of the specific remedy set
out in Article 166 RPGC must be adhered to by defendants. There should not be
available another train which can be taken later, i.e. an appeal of the default
judgment after two months, if the train to the General Court is missed to use
the metaphor of AG Emiliou. The Court of Justice is not the correct forum to
set aside a default judgment as it is bound to address points of law only. It must
be left to the General Court to conduct the adversarial procedure in which the
principle audi alteram partem is respected with a complete appraisal
of the facts after it has not in the default procedure. (see also paras. 106
and 107 of the Opinion of AG Emiliou).
In the end, the view of Advocate
General Emiliou can only be agreed with, in that ‘the procedural avenue permitting
a defendant in default to submit an application to have set aside a judgment by
default before the General Court is the most appropriate (rectius, the only)
course of action that such a party may use in such circumstances.’
There is only one train and if
missed, there is no other train.
