How are UK judgments currently enforced in Germany?
Enforcement of UK judgments in civil and commercial matters is currently carried out in Germany in accordance with Regulation No 1215/2012 of the European Parliament and of the Council of 12.12.2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Commercial matters (recast) ("Brussels Ia Regulation"). According to Article 36 (1) of that regulation, the "In a Member State" Judgments recognized in the other Member States – and thus enforced – without the need for a special procedure. In principle, a party wishing to enforce a judgment in the United Kingdom in Germany must produce a copy of the decision which satisfies the conditions necessary to establish its authenticity and the certificate issued pursuant to Article 53 of the Brussels Ia Regulation. The latter is issued by the court of origin and confirms that the judgment falls within the scope of the Brussels Ia Regulation. The Regulation allows for the immediate initiation of the enforcement procedure without first having to obtain a declaration of enforceability from a German court.
The refusal to recognize a judgment by the requested Member State can only take place at the request of a claimant if that claimant successfully demonstrates that one of the reasons set out in Article 45 (1) of the Brussels Ia Regulation exists. If an application for refusal of recognition is filed on any of these grounds, the court for which enforcement of the judgment is sought may suspend the enforcement proceedings. The suspension of the enforcement proceedings is not compulsory: the execution of the judgment may be continued while the procedure is enforceable.
Will these enforcement rules no longer apply after a no-deal Brexit?
Article 36 (1) of the Brussels Ia Regulation applies only to decisions which "In one Member State" of the European Union. Once Brexit has taken place, the UK will no longer be a Member State and the rules of the Brussels Ia Regulation will cease to apply after a no-deal brexit.
Will the bilateral agreement on the enforcement of civil and commercial judgments, which was used prior to the entry into force of the EU Regulation, be applied by the German courts?
German courts are expected to apply the Agreement on the mutual recognition and enforcement of judgments in civil and commercial matters concluded by Germany and the United Kingdom on 14.07.1960 ("German-British agreement"). The agreement contains provisions on the enforcement of judgments in civil and commercial matters which are based on the payment of a certain amount of money. According to Article VII of the Agreement, an application for a declaration of enforceability must be submitted to the competent court for the execution of judgments in the United Kingdom in Germany. Article III of the Agreement lists grounds for refusal of recognition which go beyond the grounds for refusal referred to in the Brussels Ia Regulation. Consequently, a judgment which is currently recognized and enforceable may be refused recognition and enforcement following the withdrawal of the United Kingdom from the EU. In addition, the question of whether there are grounds for refusing to recognize and enforce a judgment will be decided by exequatur. Enforcement can only begin once a German court has issued an order for enforcement. This will lead to a significant delay and cost increases in the execution of a UK judgment in Germany.
If not, what is the procedure for the execution of a UK judgment in Germany after the withdrawal?
The German-British agreement applies only to judgments that are based on the payment of a certain amount of money. For any other judgment in the United Kingdom, the German courts will therefore presumably apply the general rules for the recognition and enforcement of judgments in accordance with §§ 722 (1), 328 ZPO. Section 722 (1) ZPO provides for the need for an exequatur procedure. As under the German-British Agreement and unlike under the Brussels Ia Regulation, enforcement can not begin until the question of enforceability has been decided.
If the execution of a UK judgment is not completed before the withdrawal date, can the creditor change to another regulatory regime to ensure that the judgment is enforced?
The enforcement arrangements under the Brussels Ia Regulation, on the one hand, and the German-British Agreement and the ZPO, on the other hand, differ insofar as no exequatur procedure is necessary under the Brussels Ia Regulation. Thus, the court responsible for the enforcement proceedings can be called directly. This court is not the court responsible for exequatur proceedings under the German-British Agreement or the German ZPO. If a court comes to the conclusion that the creditor has initiated the wrong enforcement procedure, it will stop this procedure. The judgment creditor must then submit a second application under the correct regulatory regime.
It is not clear which position the German courts will take on the question of the proper enforcement procedure. The crucial question is how the German or European courts will interpret the wording of Article 36 (1) of the Brussels Ia Regulation as to what constitutes a "in a Member State"Is. It can be argued that "in a Member State"Means that the country of origin must be a Member State throughout the enforcement procedure or that it is sufficient if the country of origin was a Member State at the time the decision was taken. There are arguments for and against both perspectives. There will therefore be some uncertainty about decisions taken before Brexit in the United Kingdom, but enforcement has not yet begun or is ongoing at the time of Brexit.
This entry was first published on August 21, 2019 in the Lexis®PSL Dispute Resolution.
Do You Have Questions? Please contact: Dr. Kathrin Nordmeier
Practice Group: Litigation, Arbitration & ADR