Recognition of foreign judgments on training cost repayment in the German legal system
The cross-border recognition and enforcement of foreign court decisions is becoming increasingly important in European legal relations. Particularly in the context of cross-border employment relationships and training contracts, companies and employees face numerous questions regarding the enforceability of contractual or judicially determined claims in other Member States of the European Union. A recent decision by the Higher Regional Court (OLG) of Frankfurt am Main addresses the question of whether a judgment issued in Croatia, concerning the repayment of training costs, can also be recognized and enforced in Germany (OLG Frankfurt am Main, Decision of 13.01.2022 – Ref.: 26 W 2/21; Source: urteile.news).
Legal background: European mechanisms for recognition and enforcement
In the European area, special regulations such as the Brussels Ia Regulation (Regulation [EU] 1215/2012) apply to the recognition and enforcement of judicial decisions. This regulation determines the extent to which judgments from one EU Member State can be recognized and enforced in other Member States—generally without special exequatur proceedings. In this context, it is particularly necessary to examine whether a ground for refusal exists, e.g., if the recognition would be contrary to public policy or if the right to be heard was violated.
Facts: Reclaiming training costs following a Croatian judgment
In the underlying case, a company entered into a contract with an employee in Croatia that included provisions regarding certain training costs. Following the training, the employee apparently left the company, after which the company, based on the contract clause, successfully sued before a Croatian court for repayment of the training costs. The Croatian court ordered the employee to pay the required amounts. As the employee had relocated to Germany, the company applied for recognition and enforcement of the judgment in Germany.
Decision of the OLG Frankfurt am Main
The OLG Frankfurt am Main ruled in favor of recognizing the Croatian judgment in Germany. The court considered the requirements of the Brussels Ia Regulation to be met. The court did not find any violation of German public policy (ordre public), nor any apparent breaches of the right to be heard. The agreement on the repayment of training costs was deemed effective under Croatian law and did not, in itself, violate fundamental principles of German legal understanding.
Ordre public review
As part of the so-called ordre public review, the OLG examined whether the recognition was opposed by serious circumstances incompatible with the fundamental values of the German legal system. In the court’s view, this was not the case, as repayment agreements for training costs are generally permissible both under Croatian and German law, provided that certain requirements such as transparency and appropriateness are met.
Significance of regulations on training cost repayment
Legal agreements on the repayment of training investments must always be assessed on a case-by-case basis, both from an employment law and a civil law perspective. The duration of the binding agreement, the actual improvement of the employee’s situation through the training, and the proportionality of the repayment claim play a central role. With its current ruling, the OLG emphasizes that a decision made in a Member State that takes these principles into account may also be upheld under German recognition law.
Practical impacts and significance for commercial activities
Companies and employees engaged in cross-border activities must increasingly expect that decisions regarding contractual obligations or cost reimbursements obtained in one EU Member State are enforceable throughout the European area. These EU legal mechanisms strengthen legal certainty in intra-European business transactions by ensuring that the relocation of assets or individuals within the EU does not become an obstacle to enforcement.
Interfaces with German and European labor and contract law
The decision highlights the necessity for contractual agreements to be clear and in accordance with the applicable law. Especially in international employment or training relationships, it is advisable to thoroughly review and document the training agreement, the relevant repayment provisions, and the included binding periods and modalities. It is important to note that, in the context of the EU law recognition procedure, national courts can only very limitedly review the substance of the foreign judgment. This serves to uphold the principle of mutual trust within the EU.
Further information
For companies as well as private individuals who wish to enforce or contest claims arising from employment, training, or other contracts with cross-border connections, foreign judgments raise complex questions. It is important to determine under what conditions and with which formal requirements a decision can be recognized and enforced in Germany, and whether there are any grounds to oppose it.
The Rechtsanwalt of MTR Legal regularly advise clients on cross-border contract structuring and the enforcement or defense of claims in the European economic area. If you have legal questions relating to the international recognition and enforcement of judgments, particularly concerning training contracts or repayment agreements under employment contracts, it is advisable to seek expert legal advice at an early stage.
