The Abolishment Of Exequatur from The Brussels Regulation
The true importance of a commercial claim lies in the fact that whether it can be enforced or not. A court judgment has less value if it is to be enforced with difficulties and delays, and it has no value if it cannot be enforced at all.
Enforcement and Recognition of Foreign Judgments within the Member States of the European Union came into force with the advent of the Brussels I Regulation. In the views of Professor Burkhard Hess, Brussels Regulation on Recognition and Enforcement is one of the most victorious accomplishments of the European Union till date.
Enforcement and recognition of decisions and foreign judgments of countries (European Union Members States) is recognized and entitled as an exequatur. There is no definitive legal definition of Exequatur, however according to the European Judicial Network, the definition of exequatur is defined in their glossary as:
“A concept specific to the private international law and refers to the decision by a court authorizing the enforcement in that country of a judgment, arbitral award, authentic instruments or court settlement given abroad.”
The rationale behind the use of exequatur is for a Member State of the European Union to consider and review a foreign judgement of another Member State. It should determine whether the decision seems to be compatible with the legal regulations and official procedure of the Member State where the decision is to be enforced. Also, it should be in accordance with the principles included in the convention, or in the European Union Regulation.
Requirements for Implementing Exequatur
It was settled in a French case that an exequatur can be awarded if certain requirements and formalities were satisfied. These requirements were specified in the case of Cornelissen and Co Avianca 2007, where it was held that before a foreign judgment is recognized and enforced in another Member State, it must be ensured that three conditions are satisfied. These are firstly that the claimant/ party should establish consistency and uniformity with the international public policy and procedural requirements. Secondly, it should be proved that there is no fraud in the law. Thirdly, that there should be an indirect jurisdiction of the foreign courts to approve and give permission for enforcing a judgement which has been delivered in a foreign European Union Member State.
The provisions which are listed in Chapter III Section 2 of EC Regulation No 44/2001 on jurisdiction, recognition and enforcement of judgments in civil and commercial matters assert that a judgement of a Member State of the European Union can only be enforceable and implemented in another Member State only if that particular judgment has been declared as enforceable in the Member State where the Judgement was originally given or delivered. This is a necessary requirement for enforcement that needs to be fulfilled and has been embarked in Chapter III Section 2 of EC Regulation No 44/2001. This requirement has been entitled as the “registration of enforcement” in the United Kingdom. The provisions which are listed in Chapter III Section 2 of EC Regulation illustrate/ define a uniform and a standardized method and system to attain and get hold of such a registration for enforcement. It also provides for inherent safeguards available for defendants of the Member States, and terms and conditions for appeals in the state court systems in the member States of the European Union. Thus, this (safeguards) was one of the most crucial issues to be considered while deciding whether or not to abolish the procedural requirement of exequatur from the EC Regulation No 44/2001 as this will result in fundamental violations of the Human Rights.
Problems in the Exequatur Procedure
There have been numerous inadequacies and weaknesses for Member States which have resulted from the use of the procedure of exequatur. The exequatur procedure made Member States litigation quite complex and was known to be very time-consuming and costly comparatively to the national litigation. It was known to be difficult because it took several months to obtain the judgment, therefore delaying the procedure of Member States enforcement. Not only this was the problem, it was also recognised that the procedure was quite costly. The average cost for straightforward cases in the European Union was found to be €2,200. For example, such an exequatur procedure in Bulgaria and Italy would cost between €1,100 to €3,800 and for more complex cases, the costs would even reach up to €12,700 or more.
The procedure of exequatur has been regarded as completely, a matter of formality in most of the cases among the 27 Member States of the European Union, which have similar uniform and synchronized policies and regulation in both civil and commercial matters.
Due to such problems and shortcomings arising, it had been the aim and intent of the Member States, which was finally accepted and recognized by the European Commission and European Council in December 2000, to abolish both the requirement and procedure of exequatur relating to foreign judgments in both the commercial and civil matters. It is said that the abolition of the exequatur procedure is expected to bring a small revolutionary change in the enforcement of judgments made by Member States and eliminate the shortcomings from the enforcement procedure. A number of problems were reported with the procedure of exequatur such as costs, delays and impediments involved in the procedure associated with it.
The Issue of Cost and Delay in Proceedings
The major setback which was identified was the cost associated with such court proceedings. The costs incurred in the exequatur proceedings was perhaps the most vital and significant feature which seemed to deter and discourage plaintiffs to start and pursue cases among the borders (Member States). According to Article 52 of the EC Regulation No 44/2001:
“In proceedings for the issue of a declaration of enforceability, no charge, duty or fee calculated by reference to the value of the matter at issue may be levied in the Member State in which enforcement is sought.”
Heidelberg Report suggests that on the whole, all Member States are charging costs for declaring the enforceability of Foreign Judgments and the method of the calculation of such costs is varied among the Member States. As every case of exequatur is different and distinctive from the other case, the costs incurred associated with them will not be uniform and thus, will vary. It was seen in a stakeholder survey that the major costs related with the exequatur procedure included its applications, the court fees and other legal expenses associated with it.
It was also alleged that the procedure of exequatur as to a large extent was a delaying and a prolonged procedure with high costs of proceedings associated with it. The idea and notion behind the acceptance of such a complex procedure was that such costs are necessary to incur with the intention that they provide a remedy and cure to violations in human rights cases. However, in practicality it has been seen that in most of the cases, for example, in between ninety to a hundred percent, applications dealing with the declaration of enforceability of foreign judgment in Member States, have always permitted. It has been seen in very rare circumstances and cases that such declarations have ever been appealed against.
As discussed above, relating to shortcomings in the exequatur procedure, it can be said without a doubt, that exequatur was a highly costly procedure. An example of such unnecessary costs is the fees of lawyers and legal representatives incurred by the “Judgment Creditor”. When a party/ claimant wants to enforce a judgment in another Member State of the European Union, it must attain a “declaration of enforceability” from the competent authority or Court in the other Member State. In order to do this, it is expected that the party or claimant will have to choose a local legal representative in order to commence the court procedures, and to represent before the enforcing authority. Therefore, the party or claimant would have to pay the fees of the legal representative as well for acquiring his/her services. The fact that the cost of legal representative is excessive, does not change the reality that the cost must be incurred, and that the person would have been more affluent without incurring such a cost. For all related persons, costs incurred in enforcement of foreign judgement cases among Member States would consist of: the ground work needed in preparing the required documents, translating the Member States Judgments, assigning a lawyer in the state of enforcement, e.t.c.
Recognition of Judgments
Article 33 of the EC Regulation No 44/2001 states that:
“A judgment given in a Member State shall be recognized in the other Member States without any special procedure being required.”
According to the European Commission Directorate General for Justice Report, the language of this Article is unclear and the meaning is blurred. It is also believed that there is no requirement of “special procedures” within Article 33 of the EC Regulation No 44/2001. This can be seen as another reason why the exequatur procedure has been abolished, as there is nonexistence, lack of a uniform and a standardized level of the European Union. As a matter of fact, however, when an experienced and capable state department of a Member State deals with an application for recognition of a foreign judgment, it will certainly or naturally ensure and confirm whether the foreign judgment fulfills and complies with the uniform grounds for refusal of the enforcement of the foreign judgement.
Enforcing Foreign Judgments
Problems are experienced during the enforcement part of the foreign judgments and do not generally arise in the recognition stage of the judgement. Most foreign judgments of member states are intended to provide full effect to the foreign judgement soon after, but to achieve this declaration of enforcement is a requisite. Article 41 of the EC Regulation No 44/2001 states that upon completion of some specified formalities and regulations, a foreign judgment will be declared enforceable directly and instantly. For example, the formalities of obtaining a valid copy of the foreign judgment and a standard form certificate. However, this procedure seems to be difficult as for example, it is not possible to dissent by just mentioning the grounds for refusal of the enforcement of the foreign judgement. It has been alleged that the Article 34 and Article 35 of the Brussels I EC Regulation No 44/2001 has created barriers in the recognition and enforcement of foreign judgments (exequatur).
The abolition of this procedure was strongly favored and supported by many, as discussed above, due to the complexity involved in its procedure. Along with costly implications and a time consuming procedure as it currently stands, other disappointing characteristics of the exequatur procedure were the required standardized rules on service of documents, the need of minimum standards of civil procedure. These together created a loophole in the desired EU private international law system thus not providing EU member states with a fair and effective judicial treatment.
In view of all the above discussions and considerations it was thus feasible to abolish from the Brussels I EC Regulation No 44/2001. The reason and grounds behind the abolition of exequatur is that it has proved to be very costly in proceedings. Many delays were caused in court proceedings due to the enforcement mechanism.
It is likely that the efficiency and the competence of this abolition the exequatur can be impaired by the variations between the state’s national laws at the level of enforcement in the individual Member States. According to the European Commission, the abolishment of exequatur is a progressive evolution seen in the European Union in the coming years.
In view of the above weaknesses and inadequacies faced by the Member States, the European Commission passed a new Regulation as the recast form of the Brussels Regulation on jurisdiction and enforcement of judgments in civil and commercial matters, Regulation No. 1215/2012 of the European Parliament and Council of December 12, 2012 (Brussels I Recast). It came into force on 10th January 10 2015, replacing Brussels I Regulation. Brussels I (Recast) and applies to court proceedings in all EU Member States commenced on or after January 10, 2015. It is been intended to provide a remedy for the alleged defects and shortcomings in its predecessor regulation, the Brussels Regulation (EC 44/2001). The Recast Regulation applies to legal proceedings commenced on and after 10 January 2015.
The central purpose of Brussels I Recast is to facilitate and accelerate the mutual recognition of judgments between Member States and promote their movement. The main amendment is to abolish the exequatur procedure by introducing a simplified mechanism for the recognition and enforcement of Member State judgments. The judgment creditor which was required to apply for a declaration of enforceability from the enforcing court under Brussels I is now only required to present to the enforcing court, a copy of the judgment and a standard certificate delivered by the court which rendered the judgment as stated in Article 53 of the Regulation.
In practice, it is recommended that the judgment creditor brings a translation of these documents in case the party resisting enforcement requests it, even though strictly required by Brussels I Recast. The judgment debtor may resist enforcement on the grounds set out in Article 45, which are limited and similar to those provided under Brussels I.
This streamlined procedure set by Brussels I Recast is in line with Regulation (EC) No. 805/2004, which came into force on October 21, 2005, and which, for the first time abolished the exequatur requirement for evident claims whose value and date is determined. All that is required now for enforcement is a certificate known as a “European Enforcement Order” from the court that delivered the judgment.
Cornelissen and Co Avianca 2007
EC Regulation No 44/2001 on jurisdiction, recognition and enforcement of judgments in civil and commercial matters
Chapter III Section 2 of EC Regulation No 44/2001 on jurisdiction, recognition and enforcement of judgments in civil and commercial matters
Article 52 of the EC Regulation No 44/2001
Article 33 of the EC Regulation No 44/2001
Article 41 of the EC Regulation No 44/2001
B Hess, T Pfeiffer, P Schlosser, ‘Report on the Application of Regulation Brussels I in the Member States’ (Study J L S/C4/2005/03)
European Judicial Network in Civil and Commercial Matters ‹http://ec.europa.eu/civiljustice/glossary/glossary_en.htm#Exequatur› Accessed 14 May 2012
Xandra E. Kramer and C.H. van Rhee. Civil Litigation in a Globalizing World, DOI (T.M.C Asser Press, The Hague)(2012)
‹ http://www.motte-suraniti-avocat.com/en/exequatur-french-lawyer-avocat-francais/exequatur-adoption› Accessed 12 May 2012
Ministry of Justice, ′ Revision of the Brussels I Regulation – How should the UK approach the Negotiations’(Consultation Paper CP18/10) (2010)
Civil Justice: The Reform of the “Brussels I” Regulation and the European Commission’s Green Paper on the Free Circulation of Public Documents: Frequently Asked Questions’ (14 December 2010)
‹http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/677› Accessed 12 May 2012
European Commission Directorate General for Justice, ‘Data Collection and Impact Analysis – Certain Aspects of a Possible Revision of Council Regulation No. 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (‘Brussels 1’)’ (Centre for Strategy and Evaluation Services 17 December 2010)
B Hess, T Pfeiffer, P Schlosser, ‘Report on the Application of Regulation Brussels I in the Member States’ (Study J L S/C4/2005/03)
European Commission Directorate General for Justice, ‘Data Collection and Impact Analysis – Certain Aspects of a Possible Revision of Council Regulation No. 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (‘Brussels 1’)’
(Centre for Strategy and Evaluation Services 17 December 2010)
Gilles Cuniberti, ‘Some Remarks on the Efficiency of Exequatur’(University of Luxemburg, Law Working Paper Series Paper Number 2012-01)
Michael Larobina and Richard Pate, ‘ The Status of Recognition and Enforcement of Judgments in the European Union’ (2011) WCOB Working Papers, Paper 7.
‹http://digitalcommons.sacredheart.edu/wcob_wp/7› Accessed 11 May 2012
Xandra E. Kramer, Harmonisation of Civil Procedure and the Interaction with Private International Law
‹http://ebooks.narotama.ac.id/files/Civil%20Litigation%20in%20a%20Globalising%20World/Chapter%206%20%20Harmonisation%20of%20Civil%20Procedure%20and%20the%20Interaction%20with%20Private%20International%20Law.pdf› Accessed 15 May 2012
Alberto Malatesta, ‘Towards the Abolition of the Exequatur in Europe: An Overview of the EC Regulations’ (2008)
‹http://www.biblio.liuc.it/liucpap/pdf/219.pdf› Accessed 11 May 2012
Ulrich Magnus and Peter Mankowski, European Commentaries on Private International Law: Brussels I Regulation (2nd Edition 2012)