«Heidi Lindfors Introduction... 346 Regulatory Basis of the European Enforcement Law. 347 Exequatur Yesterday, Today and Tomorrow. 348 Aiming at ...»
According to the Brussels and Lugano Conventions the court handling the exequatur application must refuse to accept the application if any of the grounds for refusal are met. As stated above, in the enforcement according to the Brussels I Regulation the grounds for refusal are only examined if the decision regarding the exequatur application will be appealed. The grounds for refusal for the Brussels I Regulation are also more limited than those based on the Conventions. There are several grounds for refusal mentioned in the 34-35 Articles of the Regulation. In practice, the grounds for refusal are very seldom relevant. Grounds for refusal include recognising a foreign judgment would clearly be against the basis of the judicial system of the Member State in which recognition is being requested. A conflict of judgments concerning the same parties involved is also possible grounds for refusal. As the enforcement according to the EEO Regulation has abandoned exequatur, the existence of grounds for refusal is not verified according to the rules before the judgment is enforced. The debtor has, however, the right in certain situations to stop the enforcement of the judgment. The court in the Member State of enforcement can, upon the debtor’s application deny the enforcement of such a judgment which is in conflict with an earlier judgment concerning the same matter and between the same parties.
Even though exequatur in accordance with the Brussels I Regulation has been made easier in respect to its equivalent in the Conventions, processing the application will still, however, take time. The additional phase in a foreign country also requires more effort from the applicant and causes expenses.11 Exequatur can also be seen on a more general level as a hindrance to European 11 National regulations are applied to the reimbursement of the legal expenses caused by the exequatur procedure. In Finland responsibility for the legal expenses is determined according to Chapter 21 of the Code of Judicial Procedure. The Supreme Court gave its decision of 2004:43 on the responsibility of legal expenses due to exequatur, which depends on whether the matter in question is mandatory or non-mandatory. Declaring a civil law judgment enforceable, the Supreme Court considered it a non-mandatory matter, and thus the losing party of the judgment had also to pay for the legal expenses caused by exequatur.
Scandinavian Studies In Law © 1999-2012 Heidi Lindfors: Cross-border Enforcement in the European Framework 351 integration. The next phase in the development of the European debt recovery law was the removal of exequatur from the enforcement grounds of certain kinds of claim. The uncontested pecuniary claims referred in the EEO regulation can be enforced without exequatur. Instead of verifying the enforceability of the judgment in the Member State of enforcement, the authority in the Member State of origin should confirm the judgment with a particular certificate as European Enforcement Order. The European enforcement order will be enforced in the Member States following the same procedure as the national judgments. For the first time in the EU, the Member States must treat the decisions given by a court in another Member State like those given by their own courts.
The EEO Regulation does not concern all matters belonging to civil and commercial law, but just the uncontested claims. Therefore, it is important to define what is meant in the Regulation by an uncontested claim. In some cases ‘uncontested’, as intended in the Regulation, clearly goes beyond its standard linguistic meaning. An uncontested claim is taken to mean paying a claim for an amount of money which has become due or whose due date is mentioned in the document to be verified as enforcement order. Such a pecuniary claim can be considered uncontested when the debtor, in particular, has accepted it. The claim is also considered uncontested when the debtor has at no stage during the court proceedings objected to the claim in the manner of national procedural law concerning the procedure in question. A third situation where the claim can be said to be uncontested, is if the debtor is absent from the court session where the claim is being processed. Even if the debtor objected to the claim at the beginning of the court proceedings, the prerequisite of ‘uncontested’ is met, if he or she is not present or represented in the afore-mentioned session. In this situation an additional request is placed on the uncontestedness of the claim that such a procedure is considered, according to the legislation of the Member State of origin, to be a tacit admission of the claim or of the facts alleged by the creditor.
Appealing typically indicates that the parties involved disagree about the outcome of the end result. In other words, the matter must be understood as being contested in the standard linguistic sense. The EEO Regulation is, however, also applied to decisions given as grounds for European Enforcement Order because of the appeal application of the confirmed judgments. Even they are uncontested as understood in the Regulation.
Paralleling the European enforcement order to a national judgment as far as the enforcement is concerned, requires mutual trust from the Member States in the administration of justice practiced in other states.13 To justify that trust, the EEO Regulation sets certain minimum standards for the national procedure by which the judgments concerning the uncontested claims are given. With the help 12 Andersson, Torbjörn: Harmonization and Mutual Recognition: How to Handle Mutual Distrust, in Enforcement Agency Practice in Europe – JAI/02/FPC/19/UK, British Institute of International and Comparative Law 2005, p. 247.
13 About the trust and distrust between the Member States see Andersson, Torbjörn, Harmonization and Mutual Recognition: How to handle Mutual Distrust in Enforcement Agency Practice in Europe –JAI/02/FPC/19/UK, The British Institute of International and Comparative Law 2005, p. 249-251.
Scandinavian Studies In Law © 1999-2012 352 Heidi Lindfors: Cross-border Enforcement in the European Framework of the minimum standards one ensures that the debtor receives information in sufficient time about the legal proceedings concerning him or her, as well as about how a claim can be contested and the consequences of doing nothing and being absent from the trial. The Regulation does not obligate the Member States to change their legislation to meet the minimum standards, but are only allowed to confirm the judgment for European enforcement order when the procedure followed has met the minimum standards set by the Regulation.
The minimum standards apply to situations where defining the creditor’s claim as uncontested is a consequence of the debtor’s passivity or absence: the debtor has not objected to the claim in a manner prerequired by the national legislation or he or she has not been present in the court session handling the claim. The minimum standards set for the procedure are there to ensure, above all, the notification of the application for a summons or similar document is early enough and in a manner allowing the debtor a chance if wanted, to defend him or herself. However, the minimum standards concerning the debtor’s notification are not completely absolute. Even if the procedure in the Member State of origin does not meet the minimum standards, this can be remedied with certain prerequisites and the judgment can be certified as European order for enforcement.
4 Aiming at Steering National Enforcement
The starting point is the autonomy of debt recovery according to the Brussels I Regulation (and the Brussels and Lugano Coventions preceeding it).14 Enforcement happens in the Member States according to their national norms.
The Brussels I Regulation (or the Conventions) does not contain articles about carrying out the enforcement, the jurisdiction of the distrainers, distrainable property or choice of law in enforcement. However, these regulations are considered to have certain reflective effects on national enforcement. An example of the reflective effect is that one cannot carry out other enforcement procedures, except protective measures, on the property of the debtor before the decision in exequatur has the force of law. This injunction based on Article 47 of the Brussels I Regulation is valid, even if the national law would allow wider enforcement of judgments that are without the force of law. One can also consider the applicant’s right as a reflective effect, that is based on Article 50 of the Brussels I Regulation, to receive as wide free legal aid as possible in accordance with the national legislation, in exequatur and in the appeal application concerning a decision made in exequatur if the applicant has been granted free legal aid in the Member State of origin.
The EEO Regulation goes a step further than the Brussels I Regulation also in the respect that it has provisions that immediately concern the enforcement.
14 The autonomy of debt recovery can be said to be one expression of the common procedural autonomy. About procedural autonomy, see Pöysti, Tuomas, Tehokkuus, informaatio ja eurooppalainen oikeusalue, Forum Iuris, Helsinki 1999, p. 318.
15 The Brussels I Regulation also widened legal aid to apply to the appeal.
Scandinavian Studies In Law © 1999-2012 Heidi Lindfors: Cross-border Enforcement in the European Framework 353 On the other hand, these provisions are by their application rather limited, but one can see them as an opening to uniform European enforcement law. In cases where the debtor has appealed either for European grounds for enforcement to a confirmed judgment or applied for the correction or cancellation of a certificate that confirms the European grounds for enforcement, the organ taking care of the enforcement can limit the enforcement or stay it altogether. The first choice is that the enforcement authority will limit the enforcement proceedings to protective measures or orders security for the prerequisite of the enforcement.
The enforcement authority has discretionary power in choosing a suitable means.
The enforcement is limited where security is ordered to be given, a slightly misleading statement, though, at least in the Finnish judicial system. The enforcement can actually continue until the end after posting the security. If the debtor’s appeal is successful, the damages caused by the enforcement will be reimbursed from the security. As far as posting security is concerned, one must note that the debtor must not demand security just on the grounds that he or she is a foreign citizen or that he or she does not have a domicile or residence in the Member State of enforcement.16 In exceptional cases the enforcement authority can also stay the enforcement procedure. The prerequisites for staying are in principle met when it is rather likely that the appeal will lead to a positive solution on the debtor’s behalf.
In the proposal for a regulation of a European order for payment procedure a comparable regulating model has been adapted, which include provisions directly affecting national enforcement. In their content these provisions also follow those of the EEO Regulation. After the regulation has come into power, the European order for payment should be enforced without exequatur as a national judgment. With certain prerequisites, the enforcement of the order for payment could be refused by the court in the Member State of enforcement.
According to the proposal for the regulation, the organ responsible for the enforcement could, upon the defendant’s application, limit the enforcement or stay it altogether under unusual conditions. As with the European grounds for enforcement, the enforcement of the European order for payment, could also be limited to protective measures or one could demand the debtor post security for the prerequisite of the enforcement, the size of which would be defined by the enforcement organ.
The preparation of the proposal for the European order for payment procedure shows in an interesting way the quick formation of the regulatory basis of the European enforcement law. The proposal for a regulation by the Commission given in spring 200417 did not yet contain provisions directly affecting the enforcement procedure, even though exequatur had been already abandoned in this phase as a prerequisite of the enforcement of an order for payment. In the amended proposal18 of February 2006 by the Commission, the 16 A comparable injunction for demanding security from a foreign creditor is also followed in the enforcement according to the Brussels I Regulation.
17 Proposal for a Regulation of the European Parliament and of the Council creating a European order for payment procedure, COM(2004)173.
18 Amended proposal for a Regulation of the European Parliament and of the Council creating a European order for payment procedure, COM(2006)57.
Scandinavian Studies In Law © 1999-2012 354 Heidi Lindfors: Cross-border Enforcement in the European Framework provisions directly affecting the enforcement were included. The model adopted in the EEO Regulation is thus repeated in the later proposal.
Another proposal that implements the model of provisions directly affecting the enforcement applies to the afore-mentioned regulation of maintenance. Even currently the enforcement of the maintenance claims is based on the Brussels I or EEO Regulations. The proposal for the regulation is an attempt to remove hindrances in collecting maintenance in the European Union. The aim is to remove the hindrances through comprehensive measures, concerning international jurisdiction of authorities, applicable law, recognition and enforcement of decisions, co-operation of the authorities, as well as removal of hindrances to allow the court proceedings to proceed smoothly.