In a recent judgement delivered by the First Hall of the Civil Court, it ruled that a foreign judgment delivered in Cyprus against a credit institution incorporated in the European Union is valid and enforceable in Malta.
Background of the Dispute
The case originated from a 2018 decision by the District Court of Nicosia, Cyprus, which ordered the credit institution and its director to pay the sum of €400,000 plus interest and expenses to creditors while the latter sought the recognition and enforcement of the same judgment before Maltese Courts.
The Bank challenged the enforcement in Malta, claiming an inconsistency in the debt due and that the true debt was only €55,000 and that the higher figure was contradictory, disproportionate, and against Maltese public policy. The company asked the Maltese courts to refuse recognition under EU Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments.
In this respect, the credit institution argued that the Cypriot judgment contained a major inconsistency: it mentioned €55,000 in conditional payments, however it delivered a judgement amounting to €400,000 if deadlines were not met. It claimed that enforcing such a judgment in Malta would be manifestly contrary to public policy (ordre public).
Meanwhile, the Creditors who sought to enforce the foreign judgement in Malta, insisted that the €400,000 debt was clearly stated in the Cypriot ruling. Therefore, it was far from contrary to public policy and should be recognised and enforced unimpeded. They argued that the €55,000 was only a conditional settlement mechanism, not the total debt. Furthermore, they submitted that Maltese courts cannot re-examine the merits of foreign EU judgments; if the debtor wished to contest the judgement or the award as delivered, it should have done so and appealed in Cyprus.
The Court based its considerations on Article 52 of EU Regulation 1215/2012 (Brussels I Recast), and held that a Maltese court cannot review the substance of a judgment delivered by another EU Member State. Although the EU Regulation allows certain derogations to this general rule, the public policy exception is a narrow remedy, reserved for cases involving a manifest breach of fundamental legal principles or rights. In this case, the alleged discrepancy was a matter of interpretation, not a breach of Maltese public order. Maltese public policy in fact demands respect for final judgments, whether local or foreign. Since no appeal was filed in Cyprus, the judgment is final and binding (res judicata).
The Court rejected the credit institution’s application in its entirety, confirmed that the Cypriot judgment is enforceable in Malta, and ordered it to pay the costs of the proceedings.
The Court rejected the credit institution’s application in its entirety, confirmed that the Cypriot judgment is enforceable in Malta, and ordered it to pay the costs of the proceedings.
Key Takeaways
This judgment highlights:
- The principle of mutual trust between EU courts.
- The limited scope of the public policy exception under EU law.
- The importance of pursuing remedies in the country of origin before challenging enforcement abroad.
For businesses and legal practitioners, the decision reaffirms Malta’s strict adherence to EU rules on the recognition and enforcement of foreign judgments.
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