Case of the Day: Avotiņš v. Latvia

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The case of the day is Avotiņš v. Latvia (ECHR 2016). Pēteris Avotiņš, an investment consultant residing in Latvia, had borrowed $100,000 from F.H. Ltd., a Cyprus company. FH sued in the Limassol (Cyprus) District Court, alleging that Avotiņš had failed to pay. The Cyprus court granted leave to serve the summons on Avotiņš outside of Cyprus after FH provided an affidavit giving the address of Avotiņš’s supposed habitual residence in Riga. Avotiņš later asserted that the address was neither his business address nor his home address, but rather merely the address of the place where he had signed the deed evidencing the debt.

FH submitted an affidavit of counsel stating that the summons was served by “recorded delivery” on November 16, 2003, which was curious given that the summons itself stated that it had been drawn up on November 17 and the Cyprus postal service receipt indicated it had been delivered and signed for on November 27—by someone other than Avotiņš, who said he had never received the summons.

The Cyprus court gave a default judgment for the amount of the debt with interest. FH then sought recognition and enforcement in the Riga City Latgale District Court and (in American lingo) to attach Avotiņš’s real property in Riga. FH gave an address for service that was different from the address it had given to the Cyprus court. FH clarified that it had simply assumed that the other address was Avotiņš’s address, and that the new address was the “officially declared home address” in the public records. The District Court refused to proceed, but the Riga Regional Court, an appellate court, set aside its decision. On remand, the District Court ruled in FH’s favor and recognized the judgment. Avotiņš claimed (and his claim was not disputed) that he learned of the proceedings only several months later, from a bailiff.

Having learned what happened, Avotiņš did not appeal form the Cyprus judgment, but he did appeal from the Riga Regional Court’s decision on the grounds that he had never received notice of the proceedings. He claimed that recognition of the judgment violated the Brussels I regulation, because of the lack of notice and for other reasons. The Regional Court allowed the appeal. But FH appealed again to the Senate of the Latvian Supreme Court, which again reversed and held that the judgment was entitled to recognition and enforcement. Avotiņš paid the judgment, and the attachment on his property was dissolved. Avotiņš then brought his claim against Cyprus and Latvia, alleging he had been denied his right to a fair hearing under Article 6 of the European Convention on Human Rights.

I’m not going to give the details of the reasoning. The gist of the decision is that there was no violation of Article 6, because (to simplify) Avotiņš had an effective remedy under Cyprus law. You can find coverage of the technical issues in the case in this post from Stian Øby Johansen and elsewhere on the web.

I first learned of the case by way of Marta Requejo’s post on Conflict of Laws.net. She suggested that those in the know, after reading the decision, had breathed a sigh of relief. So I read the decision expecting to find that the Court had ruled in Avotiņš’s favor. It seemed obviously right to me that if you obtain a judgment against me in state A even though I was not served with process and had no actual notice of the action, and if you try to enforce the judgment against me in state B, the courts of state B should refuse recognition of the judgment. Obviously readers who are sophisticated about European law had a different intuitive reaction to the situation than I did. Why?

This got me thinking along the lines of a short 2013 paper I wrote, Two Modes of Comity, which described two ways that courts in different jurisdictions can accord comity to one another’s judgments.

The first is like the way that courts of the US states accord full faith and credit to each other’s judgments. If you would have a defense to the judgment in the courts of state A (e.g., a defense that the judgment is void for lack of lack of notice), then you can raise the defense in the courts of state B. This kind of comity says, “we are all part of one big national system of courts and we trust each other enough to let the courts of state B put themselves in the place of the courts of state A.”

The second is like the way that the federal courts treat the judgments of the state courts when hearing collateral attacks on criminal sentences in habeas corpus proceedings. A prisoner can lose in a habeas corpus case even if a federal court would find, in the first instance, that there had been a constitutional error below, if the prisoner failed to exhaust his remedies in the state court or if the decision, while wrong, did not violate clearly established law. This kind of comity says, “the states are sovereign and their courts deserve respect. We federal judges respect them so much that we will defer to them except in egregious cases.”

I haven’t put it this way before, but I suppose you could say that the first model is a model that focuses on trust and the second model is a model that focuses on respect.

Now, which model animates Avotiņš? It seems to me that the decision embodies the second model, the model that says that the way you show comity to another court is by respecting its decision as long as the other court provides a mechanism for an aggrieved party to seek relief and as long as its decision wasn’t too egregious. I’m not saying that this is how European lawyers would describe the decision or its motivation. It’s just the way it looks to me from an outsider’s perspective, albeit an outsider from a legal system with centuries of experience in full faith and credit. I think that the European approach here makes sense given Europe’s political context today. It seems ever clearer that the EU is not on a path to becoming the “United States of Europe,” and so it makes sense that its mode of comity should be one appropriate to sovereigns showing each other deference and respect rather than one appropriate to states in a strong federal system acting as parts of a single national market and system of justice.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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