Strict Conception of the Public Policy Exception under the Brussels Regulation: Enforcement of Foreign Judgments Despite Domestic Champerty Prohibitions

1. Introduction

In Scully v Coucal Ltd [2025] IESC 20, the Supreme Court of Ireland considered whether an Irish court could refuse recognition and enforcement of a Polish judgment on the grounds that the underlying assignment of claims contravened Irish public policy (specifically, doctrines against champerty and maintenance). Michael Scully (“the Respondent”) had organized 78 Irish investors in 2006 to invest in a Polish property development. The vehicle for that investment was a Polish SPV controlled by Coucal Limited, an Irish company formed by 63 of the investors and empowered by written assignments of future claims against Mr. Scully. After the Polish Court of Appeal awarded Coucal approximately €6.33 million, Mr. Scully sought to block enforcement in Ireland under Article 45(1)(a) of the Brussels Regulation (Recast) on the basis that recognition would be “manifestly contrary to public policy.”

The narrow issue before the Supreme Court was whether the public-policy exception should be interpreted so as to bar enforcement of a foreign judgment that rests on an assignment of rights which would be unenforceable if brought in an Irish court directly. The Court held that, given the strong EU principle of mutual recognition and the strict test for a “manifest” public policy breach, recognition could not be refused merely because the underlying assignment would have been champertous under Irish law.

2. Summary of the Judgment

Chief Justice O’Donnell, delivering the lead judgment, restored the High Court’s decision and allowed enforcement. He emphasized:

The Brussels Regulation (Recast) prescribes a general rule of mutual trust and enforcement of Member-State judgments, with only a narrow public-policy exception.
An assignment of claims that is champertous under Irish law does not automatically attract refusal of recognition of a foreign judgment premised on it. The public-policy exception must be reserved for “fundamental” breaches that are “manifest”ly incompatible with core principles of the Irish legal order.
Domestic public policy toward assignments has evolved and does not amount to an absolute bar so profound that it overrides EU mutual recognition. The law against champerty is in flux and applies to direct enforcement of assignments, not to recognition of foreign judgments.
Consequently, the enforcement of the Polish judgment proceeds, notwithstanding the underlying assignment would be unenforceable if litigated from scratch in Ireland.

3. Analysis

3.1. Precedents Cited

The Court’s reasoning placed several earlier decisions in critical context:

SPV Osus v HSBC Institutional Trust Services [2018] IESC 44 – held that an assignment permitting onward sale of a cause of action offends public policy (champerty), invalidating such transfers under Irish law.
Trendtex Trading Corporation v Credit Suisse [1982] AC 679 – House of Lords authority endorsing the longstanding prohibition on assignments of bare causes of action, describing it as a “fundamental principle” and “manifestly involving the possibility of profit.”
Celtic Atlantic Salmon v Aller Acqua [2014] IEHC 421 – refused enforcement of a Danish judgment on public policy grounds where significant procedural disadvantages rendered the Danish process unfair to an Irish defendant.
Sporting Index v O’Shea [2015] IEHC 407 – refused to enforce a U.K. gambling-debt judgment under s. 36 of the Gaming and Lotteries Act 1956, treating the statutory ban on gaming contracts as an essential rule of Irish law.
Mayo-Perrott v Mayo-Perrott [1958] I.R. 336 – early common-law refusal of foreign-judgment enforcement where recognition would offend domestic public policy, but with a narrower conception of “public policy” in private international law.
Real Madrid Club de Fútbol v Société Éditrice du Monde (C-633/22) – CJEU authority reaffirming that the public-policy exception must be construed strictly and applies only to “manifest breach of a rule of law regarded as essential in the legal order.”

3.2. Legal Reasoning

The Court’s reasoning unfolded in several steps:

Distinct Domains: Irish public policy against champerty concerns direct enforcement of assignments under Irish law. By contrast, recognition of a foreign judgment rests on EU mutual-trust principles; the Regulation does not ask Irish courts to relitigate the validity of foreign assignments.
Strict Interpretation of Article 45: Following Apostolides, Meroni, and Real Madrid, the public-policy exception is an onerous hurdle. It applies only where enforcement of a foreign judgment would “manifestly” offend a fundamental, essential rule of the domestic legal order.
Degree of Breach: Domestic cases on champerty rest on a developing public policy. They do not reflect an absolute prohibition so deeply rooted that any foreign application must be blocked. The public-policy exception must measure both the importance of the domestic rule and the strength of the EU obligation to recognise foreign judgments.
Practical Fairness: No onward assignment actually occurred here. The investors merely combined in Coucal to enforce their own rights. There was no third-party profiteering or trading in litigation on a speculative basis.
Comparative Analogies: The Court likened this to recognition of potentially polygamous but actually monogamous foreign marriages ( HAH v SAA, Hamza ), illustrating that factual outcome matters in assessing public policy impact.

3.3. Impact

The Scully v Coucal decision clarifies the interplay between domestic anti-champerty policy and EU mutual recognition:

Irish courts will not reflexively refuse recognition of foreign judgments simply because the underlying transactions are champertous under Irish law.
The “manifest public policy” exception under Article 45 is reserved for egregious, fundamental breaches of core legal values—far beyond procedural quirks or commercial arrangements disfavoured domestically.
Litigants seeking enforcement of foreign judgments can proceed so long as the foreign assignment was lawful in its home jurisdiction and no fundamental Irish value is grossly violated.
This ruling may encourage cross-border assignments and funding structures, with assurance that, provided they comply with local law, they can produce enforceable foreign judgments across the EU.

4. Complex Concepts Simplified

Champerty & Maintenance: Historical rules forbidding third parties from funding lawsuits in exchange for a share of the proceeds. Today, they bar assignments of “bare causes of action” without genuine interest.
Assignment of a Cause of Action: Transferring the right to sue from one party to another. Under Irish law, a bare assignment permitting onward sale may be void for champerty.
Brussels Regulation (Recast), Article 45: Allows refusal of recognition/enforcement of an EU judgment only if it is “manifestly contrary to public policy” of the enforcing state.
Mutual Recognition: EU states generally must respect each other’s judicial decisions to ensure legal certainty and free movement of judgments.
Manifest Public Policy Exception: A narrow carve-out, applicable only where enforcing a foreign judgment would seriously offend a fundamental principle of the domestic legal order.

5. Conclusion

Scully v Coucal Ltd establishes a rigorous boundary around the public‐policy exception under Article 45 of the Brussels Regulation (Recast). It confirms that:

Domestic anti-champerty principles do not automatically translate into grounds for refusing recognition of foreign judgments.
The enforcing court must weigh the strength of its own public policy against the equally strong EU policy of mutual trust and enforcement.
Only where enforcement would manifestly offend an essential rule of the Irish legal order will Article 45 permit refusal.

This hierarchy preserves the integrity of both national public policy concerns and EU‐wide mutual recognition, ensuring that only the most egregious conflicts justify non‐enforcement of Member‐State judgments.