«Heidi Lindfors Introduction... 346 Regulatory Basis of the European Enforcement Law. 347 Exequatur Yesterday, Today and Tomorrow. 348 Aiming at ...»
Cross-border Enforcement in the
Introduction ……..……..……..……..……..……..……..……..……... 346
Regulatory Basis of the European Enforcement Law ……..………. 347
Exequatur Yesterday, Today and Tomorrow ……..……..………… 348
Aiming at Steering National Enforcement ……..……..……..……... 352
European Enforcement Law and its Research ……..……..………. 356
Scandinavian Studies In Law © 1999-2012 346 Heidi Lindfors: Cross-border Enforcement in the European Framework 1 Introduction Cross-border enforcement has received very little attention in international civil procedural law research. The movement of judgments - judgment given in one country, its recognition and enforcement in others – has, as such, been recognised as an important continuation of court proceedings. The implementation of justice confirmed by a court in practice is decisively dependent on enforcement and its success, when a voluntary performance is not forthcoming. The enforcement procedure has been seen, however, as a national matter. In each country even a foreign judgment is enforced following national provisions, when the enforcement of a foreign judgment is accepted at all. A foreign judgment has also not been traditionally directly enforceable, but the enforceability had first to be confirmed by a national authority through a special exequatur procedure.
This was also the case until the beginning of the 2000s in the European Union. For the same reason, research on international enforcement has also concentrated, above all, on comparing the national regulations and systems of various states1 The enforcement systems are indeed different in different countries and thus offer an interesting comparison. There is a separate and independent authority in Sweden and Finland handling the enforcement, while in many other countries the enforcement belongs to the court’s (or its department’s) jurisdiction. In some countries the enforcement of the judgments can also be handled by private proxies. The procedures applied to enforcement also vary in different countries. In Roman law and partly also in common law countries intermediary measures are resorted to, for example, threatening with imprisonment and interest sanctions. An attempt is made to pressure the debtor into ‘voluntarily’ fulfilling the obligation set by the judgment. In the Germanic and Nordic countries the enforcement is direct. In these countries the debtor’s property is foreclosed to pay the claims of the creditors. The difference in the enforcement systems does present a challenge to uniform regulation of crossborder enforcement.
Cross-border enforcement in the European Union is now in transition. In ever increasing numbers, regulations have been given and are currently being prepared which, on the one hand, make it possible to directly enforce a judgment in another Member State and, on the other, contain provisions affecting national enforcement. The hegemony of exequatur seems to be losing ground. It is justifiable to say that there is every reason for a European enforcement law to be enacted. The above is also confirmed by the preparation of a Green Paper in the Union concerning the attachment of the assets in bank accounts. This article examines the European enforcement (debt recovery) law and the provisions forming its basis. Here the European enforcement law is understood to mean that section of the cross-border debt recovery law regulated by the European Union 1 See e.g. Kaye, Peter, Methods of Execution of Orders and Judgments in Europe, Wiley, Chichester 1996; Kerameus, Konstantinos: Enforcement in the International Context,
Nijhoff, The Hague 1997 and Andenas, Mads – Hess, Burkhard – Oberhammer, Paul (edit.):
Enforcement Agency Practice in Europe – JAI/02/FPC/19/UK, The British Institute of International and Comparative Law 2005.
regulations. The examination will focus particularly on the enforcement in civil and commercial law matters. Observations on the national legislation are presented from the perspective of Finnish law.
In this article only regulations forming the basis of the European enforcement law are dealt with, and which directly regulate enforcement in the Member States including exequatur. From the perspective of successful enforcement other EU judicial regulations can also have an indirect effect. For example, getting information about the debtor’s assets can affect the success of the enforcement in practice in an important way. The first and eleventh Directives on Companies Law partly regulate getting information about the financial situation of the debtor.2
2 Regulatory Basis of the European Enforcement Law
The Council Regulation No 44/2001 on the jurisdiction of courts, as well as on recognition and enforcement of the judgments in the area of civil and commercial law, can be considered the basic regulation of the European enforcement law, in other words, the Brussels I Regulation. The Brussels I Regulation still contains the regulations on exequatur, even though the procedure has been made easier compared to the original exequatur in the Lugano and Brussels Conventions. It is, however, already possible nowadays in certain situations, and in future even more often, that the enforcement of a foreign judgment can happen without exequatur. The Regulation No 805/2004 of the European Parliament and of the Council on creating a European enforcement order for uncontested claims (in other words the EEO Regulation) will in this respect start the ball rolling in the field of civil and commercial law. The judgments concerning uncontested claims intended by the Regulation can be enforced without exequatur being carried out in another Member State, if the judgment has been confirmed in the original country as European enforcement order.
In future the chosen procedure in the EEO Regulation might also continue in establishing a proposal for a regulation of both the European Parliament and the Council on a European order for payment procedure3, as well as Regulation of the European Parliament and of the Council establishing a European Small Claims Procedure4. On coming into force, both the regulations would bring a simple and swift procedure for handling uncontested or small pecuniary claims in addition to the traditional processes used in courts and other authorities.
2 See also Hess, Burkhard, Study on making more efficient the enforcement of judicial decisions within the European Union: Transparency of a Debtor’s Assets, Attachment of Bank Accounts, Provisional Enforcement and Protective Measures. Version of 2/18/2004, p.17.
3 Amended proposal for a regulation of the European Parliament and of the Council creating a European order for payment procedure, COM (2006)57.
4 Proposal for a regulation of the European Parliament and of the Council establishing a European small claims procedure, COM (2005)87.
Scandinavian Studies In Law © 1999-2012 348 Heidi Lindfors: Cross-border Enforcement in the European Framework Judgments given in these procedures would be directly enforceable in other Member States without exequatur. On the other hand, the creditor would still be able to get grounds for debt recovery for his or her claims in the traditional court proceedings. Resorting to the new payment demand processes would be voluntary. Resorting to the EEO regulation is also voluntary in the cross-border enforcement. The creditor can if he or she so wishes still apply for the enforcement of the judgment in a procedure in accordance with the Brussels I Regulation so exequatur does not necessarily disappear completely in collecting even the uncontested claims.
Nor is exequatur going to disappear in the near future in enforcement in Denmark.
Originally Denmark opted out of the application of the Brussels I Regulation and the Brussels Convention was applied between it and other Member States.
Currently, work is ongoing to widen the application area of the Brussels I Regulation to Denmark. The agreement has been signed but has not yet entered into force.5 Neither the EEO Regulation nor the future new regulations apply to Denmark, unless a comparable separate agreement is launched for them as well.
Collecting child maintenance nowadays follows the Brussels I Regulation or alternatively the EEO Regulation, when its application prerequisites are met. In the European Union, however, a proposal is being prepared for a regulation on court jurisdiction, applicable law, recognition and enforcement of judgments, and co-operation in matters relating to maintenance6 (a proposal for a regulation on maintenance later on). After coming into force, the regulation would replace the Brussels I and EEO regulations in the cross-border enforcement of maintenance obligations. In this regulation exequatur has also been abandoned.
The proposal for a regulation also contains provisions affecting the direct enforcement procedure, especially concerning staying and outlining the enforcement proceedings. The regulation would also go even further, and have a cross-border effect. The court could actually give an order directly applicable in another Member State, which would by its effects be comparable, for example, to recovering salary and assets in bank accounts according to Finnish law.
3 Exequatur Yesterday, Today and Tomorrow
Traditionally each state has enforced only the judgements handed down by its own judicial bodies.7 Enforcement in its own area has been part of a state’s sovereignty. The traditional point of view has assumed that to enforce in a certain country, the plaintiff has to set the court proceedings in motion in the 5 OJ L 299, 16.11.2005, p. 61 and OJ L 120, 5.5.2006, p. 22.
6 Proposal for a Council regulation on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, COM (2005)649.
7 Koulu, Risto, Täytäntöönpano Luganon ja Brysselin sopimuksen perusteella, Lakimiesliiton Kustannus, Helsinki 1996, p. 1.
Scandinavian Studies In Law © 1999-2012 Heidi Lindfors: Cross-border Enforcement in the European Framework 349 very same country regardless of a decision already given in the other state. The increase in international co-operation and cross-border economic activities has made the traditional point of view untenable. In Finland, for example, the traditional point of view remains in that the enforcement of a foreign judgment presupposes a particular norm, a provision in either a national or cross-national regulation, or an agreement between the Member State of origin and the Member State of enforcement. Without such a norm a foreign judgment will not be enforced.8 Recognition and enforcement of a judgment given in another state calls for trust in the functioning of the other state’s judicial bodies. To make international enforcement possible, from the point of view of the state’s sovereignty it is an easier step to allow enforcement of a foreign judgment in one’s area only on the prerequisite that the judicial body of one’s own country will first examine the enforceability of the judgment. The enforcement of a foreign judgment directly in this phase of development is not possible, but requires going through a particular confirmation procedure.
The Brussels I Regulation represents this development phase of the crossborder enforcement law. The starting point of the regulation is that a foreign judgment is not enforceable as such, but to achieve this feature the judgment must go through the confirmation procedure, exequatur.9 In exequatur the court (or other authority) of the Member State of enforcement examines that the judgment meets the prerequisites of enforceability. The exequatur is countryspecific: the court of each country can only determine the enforceability of the judgment as far as their own country is concerned. If the enforceability is applied for in many countries based on the same judgment, the creditor or other applicant for the enforcement must make several exequatur applications and the same judgment must go through several exequatur procedures.
Even though the Brussels I Regulation still leans strongly on exequatur, it, however, represents a more modern approach than the Brussels and Lugano Conventions, which were the first instruments in the wider European cooperation in cross-border recognition and enforcement.10 In the Brussels I Regulation exequatur has been made easier compared to its equivalent in the Conventions. For example, meeting the grounds for refusal is not checked in exequatur according to the Regulation. The grounds for refusal will only be examined if the decision concerning the enforceability of the judgment is appealed. In exequatur governed by the Regulation, the court will only verify the existence of the formal prerequisites of the enforcement. The verification is based on the documents provided by the applicant. The applicant must present the court with a certified copy of the judgment, as well as a certificate given by 8 This is a Nordic principle, which is also followed thus by the Swedish court. See Bogdan, Michael, Svensk internationell privat- och processrätt, Norstedts, Stockholm 1995, p. 272.
9 More about exequatur procedure, see for example, Kennett, Wendy, The Enforcement of Judgments in Europe, Oxford University Press 2000, p. 213-231.
10 The regional application area of the Brussels Convention has expanded with the expansion of the European Community and European Union. Respectively the regional application area of the Lugano Convention has shrunk as some of its partner states have joined the European Union.
Scandinavian Studies In Law © 1999-2012 350 Heidi Lindfors: Cross-border Enforcement in the European Framework the authorities of the Member State of origin that shows the enforceability of the judgment in the Member State of origin. In exequatur the court does not verify the substantive correctness of the foreign judgment, since this is absolutely forbidden. Neither does the court clarify the legal force because it is irrelevant from the perspective of recognition and enforcement of the judgment. The exequatur application must be processed immediately. To speed this up, the debtor or someone from the opposing party is not heard in the exequatur procedure. The opposing party has no right to be heard unless the decision concerning the enforceability of the judgment is appealed.