Enforcement of foreign judgments in Germany
A court judgment initially has effect within the borders of the state where the judgment was issued. However, in an increasingly international world where cross-border business relationships are more the norm than the exception, the recognition of domestic judgments abroad and vice versa is becoming increasingly important.
The recognition and enforcement of foreign judgments within the European Union are primarily governed by the Brussels I Regulation (recast), also known as EuGVVO, which pertains to jurisdiction and the recognition and enforcement of decisions in civil and commercial matters. This is explained by MTR Legal Attorneys at Law, which also supports its clients in litigation and in the enforcement of foreign judgments.
Automated recognition of decisions within the EU
According to the Brussels I Regulation (recast), decisions made in one EU Member State should be recognized in another Member State. This extends beyond court judgments to include, for example, provisional measures. The recognition of foreign decisions is intended to occur automatically, without the need for a separate procedure.
However, there can be so-called obstacles to recognition, which must be expressly asserted by the defendant. These obstacles to recognition are laid out in Article 45 of the Brussels I Regulation (recast). For instance, an obstacle may exist if the defendant was not served with the initiating document in time. Timely service of documents is particularly important in cross-border disputes since the receipt of the document usually triggers significant deadlines.
Another obstacle to recognition occurs if the decision is incompatible with another decision that has been issued between the same parties in the requested Member State, or if the decision is incompatible with an earlier decision issued in another Member State or a third country in a dispute involving the same claim. Moreover, the decision must be compatible with the public policy of the requested Member State.
Waiving the exequatur process in the EU
For the enforcement of foreign judgments from EU Member States, the requirement for a declaration of enforceability or so-called “exequatur procedure” has been eliminated. This is to prevent delays in the enforcement of foreign judgments. Article 39 of the Brussels I Regulation (recast) stipulates that “a decision that has been made in one Member State and is enforceable in that Member State shall be enforceable in other Member States without the need for a declaration of enforceability.” Thus, decisions from courts within the European Union are treated and enforced like decisions from German courts.
The enforceability of decisions from an EU Member State automatically exists in every Member State without a national exequatur procedure. This includes provisionally enforceable decisions. Automation is intended to save time and costs. Moreover, there is a trust within the EU in the legal systems of the Member States.
However, the enforcement process can be suspended to protect the debtor. This is possible if an appeal has been lodged against the decision in the Member State where the decision was made.
To achieve the enforcement of a foreign decision in a Member State, the creditor must present the decision of the court to the competent enforcement authority.
Enforcement of judgments from third countries
For the enforcement of foreign judgments from states outside the EU, national exequatur procedures are still required in Germany. The exequatur process allows for the recognition and enforcement of foreign judgments from third countries. For a judgment from a third country to be recognized in Germany, it must not contradict public order (ordre public) in Germany.
Additionally, agreements and regulations that exist with the third country must always be considered. These may replace a national exequatur.
Application of international law
The increase in international business relationships also leads to an increase in cross-border legal disputes. Since national jurisdiction ends at the country’s borders, it is important to clarify which national law applies. Furthermore, the jurisdiction can significantly influence the outcome of the legal dispute. Therefore, early strategic planning of litigation is advisable.
MTR Legal Attorneys at law supports in litigation and the enforcement of international judgments.
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