Enforcement of titles from other states

In practice, it sometimes happens that a debtor only learns about a decision issued abroad in the course of enforcement - possibly even some time after the conclusion of the proceedings in the state of origin. What to do?

Firstly, one should immediately check which legal remedies can still be raised in the original proceedings in order to remove the decision.
However, in many cases there are also possibilities in the state of enforcement to take action against the execution.

The effect of court decisions is initially limited to the state in which they were issued. However, international conventions and European regulations, as well as section 328 of the German Code of Civil Procedure, allow judicial decisions of other states to be recognised domestically. Through recognition, they also have effect in the other state, i.e. they can be asserted in proceedings there as having already been decided. Recognition is already automatic by virtue of the statutory provisions. In contrast, for the enforcement in another state a declaration of enforceability is regularly required.

Recognition and enforcement of judgments from Non-EU countries

The recognition and enforcement of third-country judgments is partly regulated by international agreements (e.g. bilateral conventions with Norway and Israel; the Lugano Convention between the EU and the states of the EEA "Lugano Convention"). For other states, section 328 ZPO also provides for the recognition of foreign judgments under certain conditions. In order to enforce a Non-EU judgment in Germany, an application must be made for a declaration of enforceability of that judgment in Germany (Art. 38 Lugano Convention; § 4 AVAG). Outside these conventions, the declaration of enforceability is made by way of an action, § 722 f. ZPO. In this so-called exequatur procedure, the effect of the judgment is extended to Germany and the decision is provided with an enforcement clause. If the court decision contains a operative part that is not enforceable in Germany (in particular, the definiteness), this is adapted in the exequatur decision. The application for exequatur or the action is therefore aimed at obtaining a title that the German enforcement authorities can accept and implement.

Defence options

If a title from a Non-EU country is asserted against you in Germany, you can apply to refuse recognition if there are grounds for this provided for by law. These grounds are derived from section 328 of the Code of Civil Procedure, unless they are regulated differently in bilateral agreements with the state of origin of the judgment. As a rule, this includes:

if the courts of the state to which the foreign court belongs do not have jurisdiction under German law;
if the defendant did not enter an appearance and was unable to do so due to lack of proper service of process or the like;
if recognition of the judgment leads to a result that is manifestly incompatible with essential principles of German law, in particular if recognition is incompatible with fundamental rights;
if German judgments are not recognised in the state of origin.

The last point is also the reason why arbitration agreements are often advised for agreements with contracting parties outside the EU - there are a number of states that do not recognise German judgments. Judgments issued by their courts are then not recognised in Germany either.

Examples:

A court award of punitive damages that exceeds the actual damages many times over may violate the essential principles of German law - enforceability is limited in amount;
The original decision was issued on the basis of a procedural fraud;
The defendant did not receive service of process and had no knowledge of the proceedings; he no longer has the possibility to invoke ordinary remedies in the State of origin.

Usually, debtors only learn about the declaration of enforceability when it has already been issued. The reason for this is that section 6 AVAG provides that the declaration of enforceability is issued at the request of the creditor without hearing the debtor. The debtor can then lodge an appeal on the grounds on which recognition is to be refused. The time limit is usually 1 month from service of the exequatur order. Section 722 of the Code of Civil Procedure (applicable if there is no convention with the state of origin), on the other hand, provides that the declaration of enforceability is issued by judgment, i.e. involving the debtor. Here, the grounds for refusal are presented with the statement of defence.

Automatic recognition within the EU

Since the introduction of the Brussels Ia Regulation, judicial decisions are automatically recognised and enforceable in other Member States without the need for a decision in each Member State concerned. It is sufficient to apply to the court of origin for a certificate to be presented in other Member States. The procedure by which, at the request of a party, the enforceability of the judgment had to be declared by a court in the respective State of enforcement has been abolished (Art. 39 Brussels Ia Regulation).

Art. 43 Brussels Ia Regulation provides that debtors are served with the certificate by which the court of origin has confirmed the enforceability of the judgment in all Member States before the first enforcement measure is taken. It may happen that they only learn about the judgment through this service.

If the decision being enforced is in a language they do not understand, they can ask for a translation. If this is invoked, enforcement measures must be limited to protective measures - this can save time.

Grounds for refusal of recognition can also be asserted against judgments from other EU Member States. These are narrower under Art. 45 Brussels Ia Regulation than under § 328 ZPO.

Extension of a recognition of third State decisions

The ECJ has recently ruled (judgment of 7.4.2022, C-568/20) that a decision of a Member State court on the enforceability of a third-country judgment is automatically recognised and enforceable in the other Member States if it was preceded by adversarial proceedings. Accordingly, an application for a declaration of enforceability must only be made in one Member State for a judgment that was obtained in a third State. The effect can then be extended to all other Member States by means of a mere certificate from this court, i.e. enforcement can take place in all Member States. Here, strategic advantage can be taken of the fact that individual member states have a bilateral agreement with the state of origin. This seems to break through the prohibition of "double exequatur" (no declaration of enforceability of a declaration of enforceability), which applies under §§ 328, 722, 723 ZPO.