On 4 October 2024, the Court of Justice of the European Union (CJEU) delivered its judgment in case C-633/22 Real Madrid Club de Fútbol, AE v EE, Société Editrice du Monde SA. This judgment clarifies the conditions for refusing the recognition and enforcement of judgments between EU member states on the basis of the public policy exception. The case is currently viewed primarily through the lens of safeguarding freedom of expression in the context of damages awarded for defamation, which constituted the central issue in the case. Nevertheless, the principles established in this decision may have broader implications for the recognition and enforcement of foreign judgments awarding damages that could be perceived as excessive (and thus having a punitive character).
In the case between Real Madrid and the publisher of the French newspaper Le Monde, the French courts were requested to enforce a Spanish judgment ordering Le Monde and its journalist to pay Real Madrid and one of its medical team members substantial damages for reputational harm. The Paris Court of Appeal ruled that the recognition and enforcement of the Spanish judgment would be contrary to French public policy, given that the damages awarded would have a deterrent effect on the media’s freedom of expression, as guaranteed by Article 11 of the Charter of Fundamental Rights of the European Union. The French Cour de Cassation then referred the question of whether such a deterrent effect on freedom of expression could constitute a public policy ground for refusing recognition and enforcement under the Brussels I Regulation to the CJEU, seeking guidance on how this could be established.
The CJEU’s ruling answers the question in the affirmative and underlines several key principles. Firstly, that mutual trust between EU member states does not negate the necessity to examine the compatibility of foreign judgments with fundamental rights. Secondly, that a deterrent effect of the damages on freedom of expression (guaranteed i.e. by Art. 11 of the Charter of Fundamental Rights of the EU and Art. 10 of the European Convention on Human Rights) may constitute a public policy exception justifying the refusal of recognition and enforcement of a judgment issued in another EU member state. Thirdly, and perhaps most importantly, that this infringement of freedom of expression may be found as a result of the award of damages that are disproportionate to the actual harm. In this regard, the CJEU ruled that the national court (dealing with the issue of recognition and enforcement) must ascertain whether the damages awarded in the foreign judgment are manifestly disproportionate to the damage to reputation at issue and thus able to have a deterrent effect on the exercise of freedom of the press in the member state in which the recognition and enforcement are sought. The CJEU has gone so far as to instruct national courts to take into account not only the actual extent of the harm, but also other circumstances of the case, such as the resources of the persons liable and the seriousness of their fault.
It will be interesting to observe how this case will further evolve before French courts and especially how national courts in EU member states will apply the principles set in this CJEU’s ruling to other cases.
It can be argued that there is no reason to distinguish between different fundamental rights and freedoms and if a recognition and enforcement of judgments imposing excessive damages can be found to be contrary to freedom of expression, it may also be found, depending on circumstances, to be in conflict with other fundamental rights, particularly the right to property under Article 17 of the European Charter of Fundamental Rights (or Protocol No. 1 to the European Convention on Human Rights). Thus, the principles set by the CJEU in the case C-633/22 should be applied in general to the recognition and enforcement of judgments issued in another EU member state that award damages that are manifestly disproportionate to the actual prejudice.
