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Which domestic laws and regulations govern the recognition and enforcement of foreign judgments in your jurisdiction?
Relevant for the recognition and enforcement of foreign judgments are the Enforcement Act, the Code of Civil Procedure and the Jurisdiction Act. Austrian case law is not binding, but strongly taken into consideration by the Austrian courts.
Which international conventions and bilateral treaties relating to the recognition and enforcement of judgments apply in your jurisdiction?
The most important treaty with regard to the recognition and enforcement of foreign judgments is the recast Brussels Regulation (EU Regulation 1215/2012). This lays down uniform rules to facilitate the free circulation of judgments in the European Union and applies to legal proceedings instituted on or after January 10 2015. It replaced the Brussels I Regulation (EU Regulation 44/2001), which remains applicable to all legal proceedings instituted before January 10 2015 (together the two constitute the Brussels Regime).
The following also regulate the recognition and enforcement of foreign judgments between EU member states:
- EU Regulation 861/2007 establishing a European small claims procedure;
- EU Regulation 1896/2006 creating a European order for payment procedure;
- EU Regulation 805/2004 creating a European enforcement order for uncontested claims; and
- EU Regulation 848/2015 on insolvency proceedings (which repealed the former EU Regulation 1346/2000 on insolvency proceedings).
The Lugano Convention (which came into force on January 1 2010) follows the legal framework of the Brussels Regime and facilitates the mutual recognition and enforcement of judgments handed down by the national courts of the EU member states and Iceland, Norway and Switzerland.
Bilateral treaties with other EU member states – due to the aforementioned multilateral treaties – are no longer relevant with regard to the enforcement of foreign judgments of other EU member states. Bilateral treaties with non-EU member states are:
- the Convention on the Recognition and Enforcement of Judgments and Settlements in Civil and Commercial Matters of May 23 1989 between Austria and Turkey and based thereupon the exchange of notes regarding Articles 17 and 18 of the convention;
- the Treaty on the Recognition and Enforcement of Judgments and Public Deeds in Civil and Commercial Matters of June 23 1977 between Austria and Tunisia;
- the Convention on the Recognition and Enforcement of Judgments, Arbitral Awards, Settlements and Public Deeds of July 5 1973 between Austria and Liechtenstein; and
- the Convention on the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters of June 6 1966 between Austria and Israel.
Which courts are competent to hear cases on the recognition and enforcement of foreign judgments?
According to the Enforcement Act, the competent court for the declaration of enforceability in general is the district court of the opposing party’s domicile. Once the declaration of enforceability has become effective, the foreign judgment may be enforced equally to domestic enforceable titles.
The application for the declaration of enforceability may be filed in conjunction with the motion for enforcement. In such cases, if the competent court for the declaration of enforceability and the competent court for the motion for enforcement differ, the application must be filed with the court competent for the enforcement proceedings.
The competent court for the motion for enforcement is:
- the district court where the land property that is the object of enforcement is registered;
- the district court where the immovable property that is not registered is located;
- the district court of the opposing party’s domicile in the case of enforcement of receivables; or
- the district court of the third party’s domicile in the case of garnishment orders.
Jurisdiction clauses agreed between the parties are inadmissible and will not be considered with regard to the declaration of enforceability and the motion for enforcement.
Distinction between recognition and enforcement
Is there a legal distinction between the recognition and enforcement of a judgment?
In general, the enforcement of foreign judgments in Austria is contingent on the application and issuance of a declaration of enforceability. Once the declaration has become effective, the judgment may be enforced (ie, the process for enforcement may be initiated). However, the application for the declaration of enforceability may be filed in conjunction with the motion for enforcement at the same time and with the same court.
In contrast to this twofold process for obtaining recognition and enforcement separately, the enforcement of judgments from EU member states is subject to a simplified procedure, which is governed by the recast Brussels Regulation. Under the Brussels Regime, as a general rule, a judgment rendered in an EU member state is recognised in other member states with no separate recognition proceeding. Further, a judgment issued in an EU member state which is enforceable in that member state is enforceable in any other member state without a declaration of enforceability. Notwithstanding this, there are a number of limited grounds on which the recognition and enforcement of a foreign judgment can be denied under the Brussels Regime. In terms of enforcement, a judgment rendered in another EU member state and enforceable in that state shall be enforced in any other member state when it has been declared enforceable there on the application of any interested party. The judgment creditor need only provide a copy of the judgment and a certificate which certifies that the judgment is enforceable and contains an extract of the judgment and relevant information on the recoverable costs of the proceedings and the calculation of interest.
Ease of enforcement
In general, how easy is it to secure recognition and enforcement of foreign judgments in your jurisdiction?
Provided that the legal prerequisites for obtaining a declaration of enforceability are fulfilled, Austrian courts in general take a positive approach to the recognition and enforcement of foreign judgments. However, outside the scope of the Brussels Regime, establishing the requirement of reciprocity can be quite burdensome.
Are any reforms to the framework on recognition and enforcement of judgments envisioned or underway?
In November 2016 Parliament passed an amendment to the Enforcement Act which restructures the international enforcement law and implementing accompanying laws to EU Regulation 655/2014, which establishes a European account preservation order procedure to facilitate cross-border debt recovery in civil and commercial matters. This instrument allows claimants to seek an order to preserve funds in defendants' bank accounts across Europe.
The amendment to the Enforcement Act did not change the substance of the international enforcement law, but formally rearranged the respective provisions on recognition and enforcement of foreign judgments to be more systematic.
Conditions for recognition and enforcement
Which types of judgment (eg, monetary judgments, mandatory or prohibitory orders) are enforceable in your jurisdiction and which (if any) are explicitly excluded from recognition and enforcement (eg, default judgments, judgments granting punitive damages)?
In general, all judgments ordered by a foreign court are enforceable in Austria. It is essential that the foreign judgment represents a writ of execution in its country of origin and is (at least temporarily) enforceable in that country. The foreign judgment need not take the form of a domestic writ of execution within the meaning of the Enforcement Act. However, it must meet certain requirements regarding its determinability and form as a writ of execution.
Further, Austrian public policy must be considered when assessing whether remedies are enforceable in Austria. Only remedies that do not violate the fundamental principles of Austrian law will be enforceable. For example, Austrian law does not countenance punitive damages. While there is no applicable case law, it has been argued that the concept of punitive damages may violate Austrian public policy and would thus be unenforceable in Austria.
How are foreign judgments subject to appeal treated?
In general, foreign judgments must be declared enforceable if they are enforceable according to the laws of the country of origin (ie, in granting the declaration of enforceability, the foreign judgment need not be final and legally binding according to the laws of the country where it was rendered).
In case of an appeal against the decision to grant the declaration of enforceability, the appeal court may – on the application of the party against whom enforcement is sought – stay the proceedings until the foreign judgment has become final and binding. Further, the court may specify the time within which such an appeal must be filed.
What are the formal and documentary requirements for recognition and enforcement of foreign judgments?
The party seeking a declaration of enforceability must submit the original foreign judgment or a copy issued by the court that rendered the judgment, as well as a certified translation of the foreign judgment (where applicable).
What substantive requirements (if any) apply to the recognition and enforcement of foreign judgments? Are enforcing courts in your jurisdiction permitted to review the foreign judgment on the merits?
The substantive requirements for the declaration of enforceability under Austrian law are as follows:
- The foreign judgment is enforceable in the country where it was rendered; and
- Reciprocity is ensured between the country of origin and Austria, by either bilateral or multilateral treaties or other regulations (eg, regulations on reciprocity).
Notwithstanding this, even if reciprocity is ensured by one of the abovementioned means, a declaration of enforceability may be refused if it is established that reciprocity is not practised by the country of origin.
In general, a foreign judgment may not be reviewed on the merits.
What is the limitation period for enforcement of a foreign judgment?
The statute of limitations is a question of substantive – not procedural – law. Thus, the limitation period depends on the claim in question and the law applicable to it. As such, the limitation period and the interruption of the limitation period must be assessed under the law that governs the claim in question.
Under Austrian law, a judgment may be enforced within 30 years of its entry into legal force, irrespective of which limitation period has been applicable to the claim awarded in the judgment. The limitation period starts from the day on which the judgment becomes legally binding. It is interrupted where a motion for enforcement is filed with and finally granted by the competent court.
In the case of a final judgment of a foreign court, Austrian law differentiates between the following two scenarios:
- If the foreign judgment is in principle enforceable in Austria, the statute of limitations must be assessed under the law applicable to the claim awarded in the judgment. Thus, Austrian courts may reject the declaration of enforceability where, under the applicable foreign law, the right to enforce the judgment has already become time barred.
- If the foreign judgment is not enforceable in Austria, such a final judgment only interrupts the statute of limitations under the law applicable to the claim awarded in the judgment and causes the limitation period to restart.
Grounds for refusal
On what grounds can recognition and enforcement be refused?
Besides the general requirements for the issuance of a declaration of enforceability (ie, enforceability in the country of origin and reciprocity), the declaration of enforceability may be denied if:
- the right to be heard has been violated – namely, the opposing party could not properly participate in the foreign proceedings due to irregularities in the proceedings;
- by way of the declaration of enforceability, an action will be enforced that is not admissible under Austrian law or that cannot be enforced at all; or
- the judgment manifestly violates basic principles of Austrian law (public policy).
- Simplified special rules apply with regard to judgments of other EU member states. Under no circumstances may a foreign judgment from another member state be reviewed as to its merits. According to the Brussels Regime, upon the opposing party’s application, recognition and enforcement will be refused if:
- the recognition or enforcement is manifestly contrary to Austrian public policy;
- the defendant was not served with the document that instituted the proceedings in sufficient time and in such a way as to enable the defendant to arrange for its defence;
- doing so is irreconcilable with a judgment given in a dispute between the same parties in Austria; or
- doing so is irreconcilable with an earlier judgment given in another EU or non-EU member state involving the same cause of action and the same parties.
Service of process
To what extent does the enforcing court review the service of process in the original foreign proceedings?
A declaration of enforceability of a foreign judgment may be declined if the defendant was not served with the document that instituted the proceedings and thus did not have sufficient time to arrange for its defence. Such an objection can be remedied where the defendant actually participated in the subsequent proceedings. Also, pursuant to Austrian case law, the service of a document in a foreign language to an Austrian addressee is not deemed to be properly served if no German translation of the document is attached. However, such an objection may be disregarded if the defendant could understand the content of the respective document instituting the proceedings.
Pursuant to the recast Brussels Regulation, the recognition and enforcement of a judgment may be refused where the judgment was given in default of appearance, if the defendant was not served with the document that instituted the proceedings (or with an equivalent document) in sufficient time and in such a way as to enable it to arrange for its defence.
What public policy issues are considered in the court’s decision to grant recognition and enforcement? Is there any notable case law in this regard?
Generally, Austrian courts examine foreign judgments for their consistency with Austrian public policy (procedural and substantive public policy). However, according to Austrian case law, the public policy standard is defined very narrowly. Refusing the declaration of enforceability or the enforcement of foreign judgments refers only to the violation of the fundamental principles of Austrian jurisdiction (eg, the mandatory principles of constitutional or criminal law). Under no circumstances may a foreign judgment be reviewed as to its merits. Objections to enforcement are not observed ex officio, but must be put forward by the parties. In practice, objections to enforcement based on this ground are fairly common, but succeed very rarely.
What is the extent of the enforcing court’s power to review the personal and subject-matter jurisdiction of the foreign court that issued the judgment?
When deciding on the declaration of enforceability, Austrian courts will examine whether, pursuant to Austrian rules on jurisdiction, the foreign court had jurisdiction over the legal matter. When assessing this prerequisite, it is sufficient for the jurisdiction of the foreign court to have been established under any of the Austrian provisions on jurisdiction, no matter whether this legal ground was actually applied in the state of origin. The objection of a lack of jurisdiction, for example, may be successfully established in the case of a default judgment of a court that did not have jurisdiction over the matter and to which the defendant did not submit at any stage of the proceedings.
Under the Brussels Regime, the jurisdiction of the court of origin will not be reviewed by the enforcing court. Further, the recast Brussels Regulation states that the test of public policy may not be applied to the rules relating to jurisdiction. In exceptional cases (eg, consumers and employees) the court, in its examination of the grounds of jurisdiction, will be bound by the findings of fact on which the court of the state of origin based its jurisdiction.
This also applies to the question of whether the enforcing court will examine whether the foreign court had subject-matter jurisdiction over the dispute.
Concurrent proceedings and conflicting judgments
How do the courts in your jurisdiction address applications for recognition and enforcement where there are concurrent proceedings (foreign or domestic) or conflicting judgments involving the same parties/dispute?
Austrian courts may refuse to issue a declaration of enforceability if the foreign judgment contradicts other final and conclusive judgments involving the same parties.
Further, under the Brussels Regime the court may refuse recognition and enforcement if:
- the judgment is irreconcilable with a judgment given between the same parties in the addressed member state; or
- the judgment is irreconcilable with an earlier judgment given in another member state or in a third state involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the addressed member state.
What defences are available to the losing party to a foreign judgment that is sought to be recognised and enforced in your jurisdiction?
Foreign judgments may not be reviewed as to their substance. The losing party may invoke that the general requirements for the issuance of the declaration of enforceability are not fulfilled or that a ground for refusal is given in the case at hand.
As the process for recognising and enforcing a foreign judgment is twofold, the losing party may also raise objections provided for in the Enforcement Act during the enforcement proceedings.
What injunctive relief is available to defendants (eg, anti-suit injunctions)?
In general, Austrian law does not provide for anti-suit injunctions.
The parties to the proceedings may file an appeal against the decision to grant the declaration of enforceability within four weeks of its issuance. However, such an appeal is not a reason to stay the enforcement proceedings. If the opposing party has appealed the writ of execution, it may apply for a stay of the proceedings in accordance with the Enforcement Act.
If the writ of execution is modified or suspended in its country of origin after the declaration of enforceability has become legally effective, the opposing party may file for the suspension or alteration of the declaration of enforceability. This application may be filed in conjunction with a motion to close, restrict or at least stay the enforcement proceedings.
If the enforcement is already approved before the issuance of a final declaration of enforceability (due to a conjunct motion for declaration of enforceability and enforcement), the enforcement proceedings must be initiated, but any realisation acts (eg, foreclosure sale of property or real property or transfer of receivables) are not to be initiated until the declaration of enforceability has become final and legally binding.
Recognition and enforcement procedure
What is the formal procedure for seeking recognition and enforcement of a foreign judgment?
Once a foreign judgment has been declared enforceable in Austria, its execution follows the same rules as those for a domestic judgment. The enforcement of judgments is regulated by the Enforcement Act. Austrian enforcement law provides for various types of enforcement. A distinction is made as to whether the title to be enforced is, on the one hand, directed at a monetary claim or a claim for specific performance and, on the other hand, a claim against which asset enforcement is to be levied. The usual methods for the enforcement of judgments are:
- seizure of property and real property;
- attachment and transfer of receivables;
- compulsory leasing; and
- judicial auction.
The enforcement itself will be executed by a bailiff (eg, by seizing movable property or drawing up a list of the debtor’s assets). Bailiffs are executives of the court and must comply with the court’s orders and instructions. They are ordered to pursue enforcement measures until the order is complied with or it is apparent that it cannot be complied with.
What is the typical timeframe for the proceedings to grant recognition and enforcement?
It takes approximately one to two months for a decision on recognition and enforcement to be rendered at first instance. This period may be extended by a further three to six months if the decision is appealed. The duration of the execution proceedings depends on whether the debtor opposes the execution measures and whether, and to what extent, it possesses executable assets in Austria.
Further, the parties to enforcement proceedings may request a stay of enforcement proceedings. The Enforcement Act enumerates certain grounds for such a stay of proceedings, including an application to set aside the judgment or a motion for the suspension or alteration of the declaration of enforceability. If the stay of the enforcement proceedings might endanger the satisfaction of the enforcing creditor’s claim, the court may order an appropriate security deposit from the applicant.
What fees apply to applications for recognition and enforcement of foreign judgments?
The application for the declaration of enforceability is not subject to court fees in Austria.
For the application for enforcement, court fees must be paid under the Court Fees Act, which also applies to the enforcement of domestic judgments.
Must the applicant for recognition and enforcement provide security for costs?
No, the applicant for recognition and enforcement in general does not have to provide security for costs.
The Enforcement Act enumerates certain grounds for a stay of proceedings, including an application to set aside the judgment or a motion for the suspension or alteration of the declaration of enforceability. If the stay of the enforcement proceedings might endanger the satisfaction of the enforcing creditor’s claim, the court may order an appropriate security deposit from the applicant.
Are decisions on recognition and enforcement subject to appeal?
The decision on the declaration of enforceability may be appealed within four weeks (or, in certain cases, within two months) of its delivery to the parties of the proceedings. Where the opposing party appeals the decision, the applicant may file a reply within four weeks of being served the appeal. The decision on the declaration of enforceability may be appealed partially or in its entirety. The appealing party is not bound by the prohibition of novation (ie, it is not restricted to supporting or confuting only the facts that were brought forward during the first-instance proceedings).
If the motion for enforcement is already approved (due to a conjunct motion for declaration of enforceability and enforcement) before the declaration of enforceability has become legally binding, the enforcement proceedings must be initiated, but any realisation act must be refrained from until the declaration of enforceability has become final and legally binding. This ensures that the foreign judgment will be enforceable against the opposing party insofar as the opposing party’s assets may already be seized and attached but not yet realised. Realisation acts (eg, foreclosure sales of property and immovable goods) may be initiated once the declaration of enforceability becomes final.
How does the enforcing court address other costs issues arising in relation to the foreign judgment (eg, calculation of interest, exchange rates)?
Court costs and attorneys’ fees, as well as interest claims, are usually taken into account when deciding on the enforceability of a foreign judgment. When recognising a foreign judgment, Austrian courts do not convert the damage award into local currency. However, once the realisation acts are being undertaken, the award must be converted into local currency.
Interest rates that violate Austrian public policy (eg, an annual interest rate of 100%) are unenforceable.
Enforcement against third parties
To what extent can the courts enforce a foreign judgment against third parties?
The principles of agency or alter ego to enforce a judgment against a party that is not stated in the judgment do not apply in Austria. A foreign judgment can be enforced only against the party that is named as debtor in the foreign judgment.
Partial recognition and enforcement
Can the courts grant partial recognition and enforcement of foreign judgments?
The declaration of enforceability may recognise only parts of a judgment – for example, where certain parts of the judgment would violate Austrian public policy, but other parts meet the prerequisites for enforcement under Austrian law. For instance, the declaration of enforceability may be granted with respect to the awarded capital, but not for the awarded interest. However, such a separation comes into question only if it is possible to clearly and distinctly separate the admissible part from the part that would violate public policy.