Irish Supreme Court rejects public policy defence to recognition and enforcement of a foreign judgment

Recognition and Enforcement of EU Judgments in Ireland: The Irish Supreme Court delivers its Judgment in Scully v. Coucal Limited [2025] IESC 20

On 26 May 2025, the Supreme Court (the Court) delivered judgment in Scully v Coucal Limited and clarified the high threshold for refusing recognition and enforcement of a Polish judgment in Ireland on public policy grounds under Article 45(1)(a) of EU Regulation No. 1215/2012, Brussels I (recast)[1] (Brussels I (recast)). The Court held that, although an agreement to assign a bare cause of action would be unenforceable under Irish law, that should not automatically preclude recognition and enforcement in Ireland of a judgment obtained by the assignee from the court of another Member State in which the assignment was valid.

The judgments of the Chief Justice and Mr Justice Hogan can be found here.

Background

The judgment creditor’s initial claim before the Polish court was one for damages arising from a failed investment by Irish investors in a Polish shopping centre development. The investors established an Irish company, Coucal Limited, (Coucal) to pursue claims against the promoter, Mr Scully, in Poland. Each investor assigned their claim to Coucal, with the assignment including a clause that was argued to potentially permit onward assignments to unconnected third parties. The Polish Court of Appeal awarded Coucal a judgment in the amount of approximately €6.33m enforceable against Mr Scully. Coucal sought to enforce this judgment against Mr Scully in Ireland.

At first instance before the High Court, Mr Scully resisted enforcement, arguing that recognition of the Polish judgment should be refused by the Irish courts pursuant to Article 45(1)(a) of Brussels I (recast). He argued that the assignment was contrary to Irish public policy as it involved the transfer of a bare cause of action and permitted onward assignment to third parties, thus amounting to champerty. Concerns as to the independence of the Polish court were also raised by Mr Scully. In late 2022, the High Court dismissed both objections and granted recognition of the Polish judgment to Coucal. That decision was overturned by the Irish Court of Appeal in April 2024, which held that the recognition of the Polish judgment would be contrary to Irish public policy, because of the nature of the assignment of the claim. The Court of Appeal decision did not definitively resolve the question of the judicial independence of the Polish Court.

In considering the appeal by Coucal, the Supreme Court ruled that the narrow issue for decision was whether recognition of the Polish judgment should be refused on public policy grounds, as distinct from whether the assignment concerned would be unenforceable under Irish law.

Article 45(1) of Brussels I (recast)

Article 45(1) of Brussels I (recast) provides that recognition of a foreign (EU) judgment “shall be refused” in certain circumstances including under Article 45(1)(a) if such recognition is “manifestly contrary to public policy” in the Member State addressed.

In very detailed judgments, the Supreme Court allowed the appeal brought by Coucal. O’Donnell CJ held that for the public policy exception to apply, the public policy concern must be of such a strength and depth as to outweigh the significant interest in enforcing judgments of other EU Member States, and not merely be a public policy concern.

O’Donnell CJ emphasised that the public policy exception in Article 45(1)(a) of Brussels I (recast) is to be interpreted strictly. Refusal of recognition or enforcement is only justified where it would be “manifestly contrary” to a fundamental principle of the legal order of the State. O’Donnell CJ highlighted that this is a demanding test. O’Donnell CJ was of the view that the introduction of the word “manifestly” to Article 45(2)(a) in 2001 underscored the fact that there is a very high hurdle to be overcome by judgment debtors seeking a declaration for refusal of recognition of a foreign judgment on public policy grounds. The Supreme Court found that Mr Scully had failed to overcome this very high hurdle.

Interestingly for other cases in which judgment creditors are seeking recognition and enforcement of foreign judgments, whether from the courts of EU Member States or other foreign courts, O’Donnell CJ held that the Irish law on, and public policy against, assignments of causes of action is not static and has evolved, with the area of invalidity narrowing over time. He commented that given the “noteworthy and steady” development in this area, it could not be said that the public policy was of such depth and strength as to be regarded as essential to the Irish legal system. In that context, it is also noteworthy that O’Donnell CJ held that a person contracting in another Member State should not normally be entitled to complain of the application of the laws of that state to their conduct or transactions.

In its judgments, the Supreme Court ruled that the fact that Irish public policy would preclude a transaction in Ireland under Irish law, does not necessarily mean that an Irish court should deny recognition of a judgment that arises from such a transaction undertaken elsewhere in compliance with the law of that other legal system.

The Supreme Court in its judgment set out that: “The question is not whether an assignment of a claim with no restriction on onward assignment is contrary to Irish policy: it is whether Irish public policy requires the refusal of recognition of a judgment obtained in another country where any assignment is perfectly lawful… Because public policy would preclude something if done in Ireland, under Irish law, it does not necessarily follow that an Irish Court must deny recognition when done elsewhere and in accordance with the law of the legal system of that Member State whose judgments we are generally bound to recognise and enforce. There is a significant space between the two propositions which it is critical to maintain.”

According to Hogan J, save in exceptional circumstances, the starting point for the Court was that it must take the Polish judgment as it finds it. This was due to the prohibition on the conducting of a review of the substance of the judgment sought to be recognised that is contained in Article 52 of Brussels I (recast). Hogan J concluded that recognition can only be refused on public policy grounds where a judgment granting recognition and enforcement would result in a “manifest breach of a right recognised as fundamental within the legal order of Ireland”. Hogan J ultimately concluded that the Irish prohibition on bare assignments was rooted in concerns about the administration of justice in Ireland, not in a principle so fundamental as to justify refusing recognition of a judgment validly obtained in another EU Member State whose law permits such assignments (as is the case in Poland). He emphasised that the Brussels I (recast) regime is premised on mutual trust and the free movement of judgments, and that differences in procedural or substantive law between Member States do not, save in exceptional circumstances, justify refusal of recognition.

Whilst, as of the date of this publication, the Scully case is not yet fully resolved due to the outstanding question on judicial independence of the Polish court, the Supreme Court decision provides welcome clarity on the application of Article 45 (1) of Brussels I (recast) and the public policy exception to recognition and enforcement of foreign judgments from EU Member States.

For further information or if you have any queries on enforcement of foreign judgments in Ireland, please contact Enda Hurley, Partner, Gillian Cantrell, Senior Associate, Rachel Kemp, Senior Knowledge Lawyer, or your usual ALG Disputes & Investigations team contact.

Date published: 16 June 2025