Tag Archive for: application opposing the enforcement

No execution of a Baltimore expired money judgment, even if previously given full faith and credit in Greece

/in /by

Creditors in international business transactions need to follow a three step plan in order to secure the satisfaction of their claims: Secure an enforceable judgment in their jurisdiction; declare the latter enforceable in the country of the judgment debtor; and proceed swiftly or at least timely to execution measures. Practice shows that the problems are usually appearing in steps 1 or 2. A recent ruling of the Greek Supreme Court demonstrates that potential pitfalls are to be expected even beyond.

 

THE FACTS

The parties are a Greek [GR] and an American company [US]. Following litigation before the courts of Baltimore, Maryland, US was in possession of an enforceable money judgment against G issued in October 1999. US moved to recognize the above judgment in Greece. Its application was successful, and no appeal was lodged by GR against the judgment of the Athens Court of 1st instance [Nr. 4138/2002, unreported].

For reasons not clarified in the ruling, US entered the enforcement stage only in June 2013, i.e. nearly 14 years after the Baltimore court had issued its judgment. Soon afterwards, i.e. early July same year, US rushed to the Baltimore court’s clerk, requesting the judgment’s renewal. The clerk granted the request late July. January 2014 GR filed an application to revoke the renewal which was sustained. In particular, the Baltimore court considered the request for renewal as inadmissible, because it was not filed timely, i.e. within 12 years following the judgment’s date of entry, in accordance with Rule 2-625 Maryland Rules, Title 2. Civil Procedure–Circuit Court.

Nevertheless, US moved ahead with enforcement in Greece. As it was to be expected, GR applied for stay of execution, which was however dismissed by the Athens 1st Instance Court [Nr. 6235/2015, unreported]. US appealed successfully [Athens CoA Nr. 3074/2016, unreported].

THE RULING

The reasoning of the Supreme Court’s ruling may be summarized as follows:

  • An expired foreign judgment previously declared enforceable in Greece does not affect the exequatur proceedings ex post.
  • The judgment debtor may however file an application for reversal or request the court to confirm the foreign judgment’s lack of enforceability in the state of origin. If enforcement has already begun, the judgment debtor may file an application for stay of execution.
  • The validity and enforceability of the foreign judgment are examined in accordance with the law of the country of origin, i.e. the country where the judgment was rendered.
  • The domestic judgment, i.e. the one issued in the exequatur proceedings, does not replace the original enforceable title; moreover, it simply extends its enforceability in the country of destination. If the foreign judgment is no longer enforceable in the country of origin, execution may not begin in the country of destination.
  • If execution may not take place for the main claim, it is equally forbidden for subsequent claims included in the foreign judgment, such as interest claims.
  • The fact that Greek law provides for a longer limitation time (20 years) may not lead to the assumption that the same rule should apply for the foreign judgment, simply because it has been recognized by a Greek court of law.
  • There’s no contradiction between the fact that the recognition of the foreign judgment in Greece is final and conclusive, and the fact that the US judgment may not be enforced due to its expiry pursuant to the rules of the law of origin.

AREIOS PAGOS Nr. 767/2019, unreported.

COMMENTS

I start with the provision which was the game-changer in the ordinary process of execution:

RULE 2-625. EXPIRATION AND RENEWAL OF MONEY JUDGMENT: A money judgment expires 12 years from the date of entry or most recent renewal. At any time before expiration of the judgment, the judgment holder may file a notice of renewal and the clerk shall enter the judgment renewed.

US showed negligence and paid for it. It is somehow questionable, why the clerk at the Baltimore court decided to grant renewal: The wording of the rule is clear and the maths could be done easily even by a child in elementary school.

The ruling of the Supreme Court is in line with standard case law in the country, which covers all foreign judgments irrespective of their origin.

 

 

Opinion of Advocate General Bobek in the case C-41/19, FX: Jurisdiction to rule on an application opposing enforcement of a maintenance decision

/in /by

In today’s Opinion, Advocate General Bobek analyses whether the courts of a Member State in which a maintenance decision delivered by the courts of another Member State is enforced have jurisdiction to rule on an application opposing the enforcement.

More specifically, the reference for a preliminary ruling originates in a dispute between a maintenance debtor residing in Germany and a maintenance creditor residing in Poland. The latter lodged with the referring court an application requesting the recognition of a Polish maintenance decision and a declaration of its enforceability in Germany in accordance with Maintenance Regulation. The referring court delivered an order for enforcement in respect of the Polish maintenance decision. On the basis of that order, the defendant sought the enforcement of this decision against the debtor in Germany. The maintenance debtor opposed the enforcement based on Paragraph 767 of the German Code of Civil Procedure (the ZPO) and argued that the claim underlying the maintenance decision has been settled by payment.

Before deciding on the merits, it was for the referring court to decide whether it has jurisdiction to rule on the application opposing the enforcement. As the Opinion explains, at point 29:

In a nutshell, it seems that the referring court understands that there are two mutually exclusive possibilities. If [the Maintenance Regulation] were applicable, that would mean that the referring court lacks jurisdiction under Article 3 of that regulation. It is only if [the Maintenance Regulation] cannot be applied that it would be possible to base jurisdiction on Article 24(5) of [the Brussels I bis Regulation], according to which the courts of the Member State of enforcement have jurisdiction in proceedings concerned with such enforcement.

Against this background, the Opinion confirms, at points 32 et 33, that while the Brussels I bis Regulation contains, in Article 24(5), an explicit rule granting exclusive jurisdiction in proceedings concerned with the enforcement of judgments to the courts of the Member State in which the judgment has been or is to be enforced, the Maintenance Regulation does not contain any explicit rule on jurisdiction regarding the enforcement of decisions in matters relating to maintenance.

Disagreeing with the referring court’s understanding of the issue of jurisdiction, at point 42, the Opinion states, however, that the rules on jurisdiction provided for in the Chapter II of the Maintenance Regulation establish jurisdiction with regard to the main procedure on the merits, but not with regard to the enforcement of such decisions.

Moreover, at points 43 et seq., the Opinion explains that a rule according to which enforcement belongs to the courts of the Member State where enforcement is sought is inherent in the system of the Maintenance Regulation and is an expression of what could be considered a general principle of international law:

43. […] even though Chapter IV of [the Maintenance Regulation] does not contain any explicit jurisdictional rule with regard to enforcement, that rule can be considered inherent in the system of that regulation.

44. In general terms, international jurisdiction for enforcement belongs to the courts of the Member State where enforcement is sought. As the Polish Government points out, that rule is an expression of what could be considered a general principle of international law connected with State sovereignty: it is only the authorities of the State of enforcement that are empowered to rule on the execution of decisions, as enforcement measures can only be carried out by the authorities of the Member State(s) where the assets or persons against which enforcement is sought are situated. That rule is valid, a fortiori, where a decision has already been recognised as enforceable in the Member State where enforcement is sought.

45. Therefore, it is not necessary to have recourse to Article 24(5) of [the Brussels I bis Regulation] as a supplementary provision in order to be able to establish that the courts of the Member State of enforcement also have jurisdiction with regard to the enforcement of maintenance decisions within the scope of [the Maintenance Regulation]. Indeed, that article can be considered as an expression of the general principle just mentioned. 

Next, at points 50 et seq., the Opinion addresses the question whether an application seeking to oppose enforcement based on the discharge of the debt is to be considered as appertaining, for the purposes of jurisdiction, to enforcement proceedings. The extensive analysis is followed by a summary, at point 85:

85. For those reasons, it is my view that jurisdiction to adjudicate on an action opposing enforcement based on the discharge of debt falls to the courts of the Member State where the enforcement is sought. For the sake of completeness, I wish to stress two points in lieu of a conclusion. First, the discussion in the present Opinion and the conclusion reached concerned only the ground of opposition based on the discharge of the debt. Second, beyond that specific ground, no position is taken on the overall compatibility of Paragraph 767 of the ZPO with EU law.

The Advocate General concluded, at point 86:

86. [The Maintenance Regulation] and, in particular, Article 41(1) thereof, should be interpreted as meaning that the courts of the Member State where the enforcement of a maintenance decision given in another Member State is sought have jurisdiction to adjudicate on an application opposing enforcement, in so far as it is intrinsically connected with enforcement proceedings, it does not seek the modification or review of the maintenance decision, and it is based on grounds that could not have been raised before the court that issued the maintenance decision. Those conditions appear to be fulfilled by the application of opposition to enforcement based on the discharge of the debt at issue in the present case, which is nonetheless ultimately for the referring court to verify.

The Opinion can be found here.