Real Madrid Club de Fútbol: European Court of Justice grapples with freedom of the press

According to Advocate General Szpunar, an order by a court of one of the member states to pay manifestly unreasonable high damages has a deterrent effect on journalistic freedom and freedom of information.[1] A Member State must refuse or revoke enforcement of judicial decisions that give rise to a manifest breach of freedom of expression.[2]

Background

Almost 10 years ago, on December 7, 2006, the French newspaper Le Monde published an article that linked the football club Real Madrid to Eufemiano Fuentes. Le Monde titled «Doping: First cycling, now football» and claimed that Fuentes who was involved in doping scandals related to cycling, had been in charge of the preparation of players belonging to the Spanish club.[3] The article was shared by numerous media outlets, particularly in Spain.

Real Madrid and a member of the medical team sought damages in Madrid based on harm done to their honour. The Court of First Instance ordered Le Monde and the journalist to pay 300.000€ to Real Madrid and 30.000€ to a member of its medical team. The Provincial Court of Madrid substantially upheld the judgment and the Supreme Court dismissed the appeal against the decision. However, French Courts refused to enforce the Spanish decisions, citing a breach of French international public policy and a deterrent effect on freedom of expression through disproportionate penalties.

On September 28, 2022, the Court of Cassation in Paris decided to refer several questions to the Court of Justice for a preliminary ruling.[4]

Starting point is the question if the Articles 34, 36, and 45 of the Brussels I Regulation and Article 11 CFREU must be interpreted as meaning that a financial penalty imposed for damages to a sports club’s reputation and its member of the medical staff by the publication of a story in a newspaper can manifestly infringe freedom of expression and therefore constitute a ground for refusing to recognize and enforce a judgment?[5] Even if the court refers only to Article 34 and Article 36 Brussels I Regulation, the questions referred to can be interpreted as meaning that the court is dealing with the question of whether there are grounds for refusing recognition and enforcement, Art. 45 Brussels I Regulation.[6]

The following questions by the court partially concern detailed aspects that also must be taken into consideration when determining the conditions for the recognition and enforceability of judgments, more precisely for the recourse to the ordre public clause. Therefore, all questions should be analyzed together.[7] They enquire about disproportionality, the difference between punitive and non-material compensation, and the relation between the deterrent effect of the penalty and the resources of the person/entity.[8]

The order of public clause

The relevant legal provisions regarding the ordre public clause are the Articles 34, 36, and 45 of the Brussels I Regulation.

Article 34 (1) of the Brussels I Regulation[9] states:

«A Judgment shall not be recognized:

If such recognition is manifestly contrary to the public policy in the Member State in which recognition is sought;»

Article 45(1) Brussels I Regulation states:

«On the application of any interested party, the recognition of a judgment shall be refused:

if such recognition is manifestly contrary to public policy (ordre public) in the Member State addressed;»

Article 36 Brussels I regulation provides in contrary:

«Under no circumstances may a foreign judgment be reviewed as to its substance.»

Progressive integration has led to the harmonization and recognition of other legal systems under the umbrella of EU law. Nevertheless, the Member States of the European Union have not submitted to the unconditional application of foreign law, the ordre public clause provides a valve, an exit door for the Member States. Although the ordre public clause is therefore primarily a national matter of application of the member states, the ECJ has decided that the order public clause is part of the interpretation of the regulation and its limits are determined by the ECJ.[10] Due to the exceptional character of the clause and its function as an obstacle to the free movement of judgments, the ECJ has ruled that the clause must be interpreted narrowly.[11] Consequently, the ordre public clause only applies when the enforcement of the judgment would result in a manifest breach of an essential or fundamental rule of law in the Member State enforcement is sought.[12] This definition is further restricted by two more elements. Firstly, the refusal to declare a decision enforceable may interfere with the applicant’s right to a fair trial, Article 47 (2) CFREU.[13] Secondly, the principle of mutual trust in the administration of justice, the basis of recognition and enforcement between the Member States.[14]

Article 11 of the Charter of Fundamental Rights of the European Union

Article 11 CFREU guarantees the right to freedom of expression which includes the freedom to receive and impart information and the freedom and pluralism of media. Article 11 CFREU corresponds to Article 10 of the ECHR. Pursuant to Article 52(3) CFREU, the meaning and scope of the guaranteed rights correspond to each other, while Union Law can provide a more extensive protection. From the structure of Article 11 CFREU, it can already be deduced that the freedom of media can be seen as a subcategory of the freedom of expression and information. The ECJ previously emphasized that in the context of media, an interference with freedom of expression and information takes the form of an interference with freedom of media.[15] Even though the Court of Cassation did not specify which paragraph it is referring to, the question that arises is whether a violation of the freedom of media, here in the form of the press, is a fundamental principle that can justify recourse to the ordre public clause.[16] The freedom of the press is a pillar of democratic societies and plays a crucial role in the European Union and its Member States. It guarantees access to information, expression of opinions, diversity, and among many more the transparency of decision-making processes. Due to its distinguished position, it must therefore be recognized that a manifest violation of the freedom of the press constitutes a ground for refusing the enforcement of a judgment.[17] This leads to a balancing of the fundamental rights in question, the freedom of the press, Article 11(2) CFREU, and the right to enforce judgments, Article 47 CFREU. None of the rights is absolute, the conflict must be resolved in accordance with Article 52(1) CFREU.[18]

Compensation and deterrent effect

Additional aspects that must be taken into consideration are the difference between punitive and non-material compensations and the potential deterrent effect of the penalty.

The applicants in the main proceedings have put forward that damages can only be examined when they are punitive and not compensatory in nature, as claimed by the Spanish courts.[19] This argument is based on Article 10 of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters which states that «Recognition or enforcement of a judgment may be refused if, and to the extent that, the judgment awards damages, including exemplary or punitive damages, that do not compensate a party for actual loss or harm suffered».[20] Nevertheless, «in exceptional cases, damages which are characterized as compensatory by the court of origin could also fall under this provision».[21]

Furthermore, the deterrent effect of a penalty itself might already be a ground for refusal of enforcement and justify recourse to the ordre public clause. The ECtHR also uses in its cases regarding freedom of expression the terms «dissuasive» and «chilling effect».[22] While there is not a clear definition of these terms, the ECtHR applies them when measurers produce negative effects that go beyond the individual instance and produce effects that prevent natural or legal persons from exercising their rights for fear of falling under these measures themselves.[23]

Final overview and conclusion

A recourse to the ordre public clause is only justified in cases of a manifest violation of fundamental principles. As mentioned, Art. 11 CFREU constitutes such a principle. Le Monde was fined 300.000€ (with interest and costs 390.000€), the journalist 30.000€. That the damages were mainly characterized as compensatory does not automatically oppose an application of the ordre public clause. It is not the objective of the enforcing Member State whether the penalty is proportionate but asses the deterrent effect of the penalty which leads to a manifest breach of freedom of expression or press in that particular Member State. The ECtHR ensures that the imposed penalty on media outlets does not pose a threat to their economic foundations.[24] The penalty in the present case represents 50% of Le Monde’s net loss and 6% of its liquid assets as of 31 December 2017.[25] Considering the newspaper’s commercial situation the imposed penalty is a threat to its financial stability which could cause a potential limitation of future journalistic activities. Under these circumstances, the compensatory damage is excessive and has punitive effects that are a threat to the exercise of freedom of the press guaranteed by Article 11(2) CFREU. Not only is Le Monde directly affected but the penalty also has generally a deterrent effect on media outlets in the Member State concerned and therefore is a setback in the manifestation of freedom of the press.

There are several indications that the ECJ will follow the opinion of the Advocate General, although it may take a different view on individual aspects of the questions referred.

Consequently, the ECJ may answer to the main question referred that the Articles 45, 34, and 36 Brussels I Regulation as well as Art. 11 CFREU must be interpreted as meaning that a financial penalty on a newspaper imposed for harm caused to the reputation of a sports club can manifestly infringe freedom of the press and justify recourse on the ordre public clause and therefore constitutes a ground for refusing to recognize and enforce a judgment given in another Member State.

[1] Advocate General, C-633/22, Real Madrid Club de Fútbol (2024).

[2] Ibid.

[3] Dopage: le football après le cyclisme, in lemonde.fr, 7 December 2006.

[4] Procedural steps and facts: Advocate General, C-633/22, Real Madrid Club de Fútbol (2024), para. 15-29.

[5] This first general question by the Court of Cassation has been clarified and specified by the Advocate General, Advocate General, C-633/22, Real Madrid Club de Fútbol (2024), para. 32-39.

[6] Id., para. 35.

[7] Id., para. 37.

[8] Id., para. 30.

[9] In the version applicable at that time, EC No 44/2002 of 22 December 2000.

[10] ECJ, C-7/98, Krombach (2000), para. 22.

[11] Id., para. 21; ECJ, C-590/21, Charles Taylor Adjusting (2023), para. 32.

[12] ECJ, C-7/98, Krombach (2000), para. 37.