Current Changes in European Procedural Law
Adoption of Council Regulation (EU) No 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters as per January 10, 2015
The Council Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters is the centerpiece of European interna-tional civil procedural law. It sets forth the rules governing the jurisdiction of courts and the enforcement of court decisions for the Member States of the European Union. Regulation (EU) No 1215/2012 (so-called "Brussels Ia") was adopted re-cently and recasts the Regulation (EU) No 44/2001 (so-called "Brussels I"). Brus-sels Ia applies to proceedings instituted on or after January 10, 2015. The following is a summary of the changes of the Regulation which are significant for business decisions.
Expanded Jurisdiction of EU Courts in Case of Proceedings Relating to Con-sumer Contracts and Proceedings against Employers from Non-EU Countries
Brussels Ia lays down the rules for the international jurisdiction of national courts in cross-border civil and commercial matters within the EU. The general principle that the European rules on jurisdiction shall only apply if the defendant is domiciled in a Member State still applies (article 6(1) Brussels Ia). There are, however, excep-tions to this general principle. Already under Brussels I, the European courts had jurisdiction for actions filed against persons domiciled outside the EU if there was an exclusive (European) venue for such actions (now: article 24 Brussels Ia) or if the parties had agreed on a jurisdiction clause (now: article 25 Brussels Ia). In ad-dition, Brussels Ia also establishes the jurisdiction of the EU courts for actions filed by consumers and employees against enterprises and employers from non-EU countries.
According to article 16(1) Brussels I, EU consumers could not bring proceedings in the courts at the places where they were domiciled against enterprises from non-EU countries which did not have a branch in a EU Member State. Instead they had to pursue their claims in the courts of the home state of the enterprise. Due to the efforts involved and the uncertainties associated with such an endeavor, consum-ers often refrained from doing so. Article 18(1) Brussels Ia has now significantly expanded the consumer protection regime. Consumers can now also take action at their domicile in the EU "regardless of the domicile of the other party to the con-tract". This possibility of conducting litigation "close-by" has a significant economic effect for enterprises whose sole activity in the EU, for instance, consists in selling products online from a third State into the EU, for example from the U.S. Such enterprises can now be sued by consumers directly in the courts at the places where these consumers are domiciled. Other agreements conferring jurisdiction for the benefit of the enterprise's local court cannot change this because the provi-sions on jurisdiction for consumer contracts are mandatory
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(article 19 Brussels Ia). Pursuant to article 21(2) Brussels la, similar rules apply to proceedings instituted by employees against employers that neither have their domicile or seat nor an establishment in a EU Member State. Pursuant to arti-cle 21(1)(b)(i) Brussels Ia, such employers can also be sued in the courts of the place within the EU where the employee performs or has performed the work ha-bitually. This is often the place where the employee is also domiciled.
Limitation of "Torpedo Actions" in Cases of Exclusive Jurisdiction
Quite frequently, a potential defendant anticipating that legal action will be initiated against him files a complaint against the potential plaintiff with a court not having jurisdiction in a Member State known for its slow legal system. The sole purpose of such a "Torpedo Action" is to delay a decision on the merits by the competent Eu-ropean court. Under the provisions of Brussels I, the court last seized had to sus-pend the proceedings until the court first seized had decided whether or not it had jurisdiction. This even applied in cases where the parties had agreed on a jurisdic-tion clause (which is presumed to be exclusive pursuant to article 25(1) sentence 2 Brussels Ia). The reason was the strict priority principle of article 27(1) Brussels I (now: article 29(1) Brussels Ia). This could impede the enforcement of justified claims for years. Henceforth, article 31 (2) (3) Brussels Ia excludes such abusive "torpedo actions" in cases of an exclusive jurisdiction agreement and provides that the court agreed upon in the jurisdiction agreement has "Kompetenz-Kompetenz", i.e. has the right to determine whether or not it has jurisdiction. Even if the agreed court was seized later, it is authorized to decide about its own jurisdiction. The court first seized must suspend the proceedings. If the court chosen by the parties in the jurisdiction agreement affirms its jurisdiction, the court first seized in the oth-er EU Member State must declare that it does not have jurisdiction.
This new regime on the priority of exclusive jurisdiction agreements complements a recent decision of the European Court of Justice (cp. NJW 2014, 1871) which was still passed on the basis of Brussels I. Even in the case of a statutory exclusive jurisdiction pursuant to article 22 Brussels I (article 24 Brussels Ia), the court of exclusive jurisdiction last seized may not suspend the proceedings or declare its lack of jurisdiction pursuant to article 27(1) Brussels I (article 29(1) Brussels Ia) only because the case is pending before another court. Rather, the European Court of Justice determined that the court having exclusive jurisdiction under the Regulation has to decide in the matter itself because of its exclusive jurisdiction.
Abolition of Exequatur Proceedings within the European Union
Another important change is the abolition of the exequatur proceedings within the EU. The principle of "no enforcement of foreign decisions without a declaration of enforceability" (article 38(1) Brussels I, Section 722(1) German Code of Civil Pro-cedure (Zivilprozessordnung; "ZPO") no longer applies in the EU with respect to judgments form EU courts. Pursuant to article 39 Brussels Ia, decisions of EU courts can now be enforced under national law without obtaining a declaration of enforceability in the country of enforcement. However, this does not mean that it is no longer possible to review the decision if an EU title is enforced in another EU Member State. Rather, pursuant to articles 41 et seqq. Brussels Ia, a reverse pro-cedure to prohibit the enforcement applies now. The implementing provisions ap-plicable in Germany in this respect are set forth in the new Sections 1110-1117 ZPO. To enforce its title, the creditor shall submit to the domestic enforcement authority a copy of the decision to be enforced and the certificate pursuant to arti-cle 42 Brussels Ia by which the original court confirms that the decision is fully en-forceable in the state of origin. These documents shall be delivered to the debtor before the first enforcement measure (article 43 Brussels Ia). Pursuant to arti-
cles 46 et seqq. Brussels Ia, the debtor may then request that the court refuses to declare the foreign judgment enforceable. In Germany, this procedure is subject to Section 1115 ZPO. An enforcement may only be refused if one of the grounds for refusing recognition as set forth in article 45 Brussels Ia exists. Furthermore, under Section 1117 ZPO, it is also possible to raise objections under substantive law against the enforcement which have arisen after the judgment had been reached. As under Brussels I, there shall be no révision au fond (article 52 Brussels Ia).
Europe-wide Enforcement of Decisions Passed in Ex-Parte Proceedings
Under the previous legal regime, the Europe-wide enforcement of provisional measures, such as attachment orders and interim injunctions, which had been passed ex-parte, was excluded for lack of participation of the opposing party. This could limit the impact of preliminary measures in international cases. This effect has been limited by article 2a (2) sentence 2 Brussels Ia in that ex-parte decisions can now be enforced if they have been served on the opponent prior to the en-forcement. As a consequence, however, the surprise effect often sought by the applicant in connection with such provisional measures still gets lost.
For further questions, please contact the following colleagues:
Dr. Günter Pickrahn, LL.M.
E-Mail: guenter.pickrahn@ bakermckenzie.com
Dr. Stephan Spehl, LL.M.
E-Mail: stephan.spehl@ bakermckenzie.com
Dr. Philipp Schütt
E-Mail: philipp.schuett@ bakermckenzie.com
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