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Conditions for recognition and enforcement

Enforceable judgments

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 types of judicial decision are recognisable and enforceable.

The fact that a judgment rendered in matters of civil law grants punitive damages in principle does not hinder recognition and enforcement in Germany. Nevertheless, recognition and enforcement of such a judgment could be seen as an infringement of public policy and therefore denied. The same applies with regard to enforcement of such a judgment.

Under the EU Recast Brussels Regulation (1215/2012), default judgments are enforceable provided that the court of the other member state confirms – in accordance with Section 53 of the regulation – that the document instituting the proceedings or an equivalent thereof has been served on the debtor. Under domestic law, default judgments are enforceable if:

  • the document by which the proceedings were initiated was served on the defendant; and
  • the defendant had sufficient time to defend itself.

The following decisions are neither recognisable nor enforceable:

  • preliminary decisions;
  • decisions based only on procedural grounds;
  • notarial deeds; and
  • court settlements (if the court had the role of only executing and authenticating the settlement).

Further, enforcement is limited to judgments with an enforceable title. Thus, declaratory judgments, judgments affecting a legal relationship and judgments dismissing a complaint are not enforceable.

How are foreign judgments subject to appeal treated?

Under domestic law, recognition of foreign judgments is possible even if the judgment is subject to appeal. However, enforcement of a foreign judgment is possible only based on a final ruling by a court having international jurisdiction according to German law. Further, the judgment must relate to the field of civil law.

A foreign judgment rendered in an EU member state can be enforced even if it is subject to appeal, provided that it is enforceable under the law of the EU member state that rendered the judgment.

Formal requirements

What are the formal and documentary requirements for recognition and enforcement of foreign judgments?

A formal procedure for recognition or enforcement is unnecessary for EU member state judgments  (cf Article 36 of the EU Recast Brussels Regulation).

The party seeking to invoke a judgment given in another EU member state must provide a copy of the judgment which satisfies the conditions necessary to establish its authenticity under the law of the EU member state rendering the judgment and the certificate pursuant to Article 53 of the EU Recast Brussels Regulation (cf Article 37).

With regard to judgments from non-EU member states, enforcement requires an exequatur procedure. Once enforcement has been declared admissible, the judgment creditor may seek enforcement under the same rules which apply to the enforcement of domestic judgments. 

Substantive requirements

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?

Under Article 36 of the EU Recast Brussels Regulation, judgments rendered in EU member states are automatically recognised in Germany. However, under Article 45 of the regulation, the judgment debtor can raise objections against the recognition on the basis of certain grounds for refusal.

The same applies with regard to enforcement; judgments rendered by EU member states are automatically enforceable in Germany (Article 39 of the EU Recast Brussels Regulation) provided that the judgment debtor does not raise grounds for refusal of enforcement under Article 46 of the regulation in conjunction with Article 45. The judgment creditor is not required to obtain a declaration of enforceability.

Under Article 45 of the EU Recast Brussels Regulation, counterparties can raise the following grounds for refusal:

  • Recognition or enforcement is contrary to public policy in the EU member state addressed.
  • The judgment was given in default of appearance, where the defendant was not served with the document which instituted the proceedings or with an equivalent thereof in sufficient time and in such a way as to enable it to arrange its defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible to do so.
  • The judgment is irreconcilable with one that was delivered in the member state addressed with regard to the same parties.
  • The judgment is irreconcilable with an earlier judgment given in another member state or a third state which had the same cause of action and concerned the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the member state addressed.

As far as domestic law applies, Section 328(1) of the Code of Civil Procedure provides that foreign judgments are automatically recognised, except where one of the following grounds for refusal applies:

  • The foreign court was incompetent under German law.
  • The document by which the proceedings were initiated was not duly served on the defendant or in such time to allow the defendant to defend itself.
  • The judgment is incompatible with a previous judgment issued or a foreign judgment previously recognised in Germany.
  • The recognition is incompatible with fundamental principles of German law, especially fundamental civil rights.
  • Reciprocity is not granted (ie, the state of origin does not recognise German judgments under the same conditions under which Germany recognises judgments deriving from that state).

Further, under Section 723(2) of the Code of Civil Procedure, foreign judgments must be declared enforceable if they are:

  • legally binding and enforceable in the state of origin; and
  • recognisable under Section 328 of the code (see grounds for refusal above).

Beyond that, the German courts cannot review foreign judgments on their merits. Under Section 723(1) of the Code of Civil Procedure, a so-called ‘revision au fond’ (ie, a review of the substance of an arbitral award) is prohibited.

Limitation period

What is the limitation period for enforcement of a foreign judgment?

In general, the statute of limitations is a question of substantive and not procedural law. Therefore, the limitation period depends on the claim in question and the applicable law. Primarily, the law that governs the claim in question must be evaluated to further asses the limitation period and its suspensions.

Under Section 197(1)(3) of the Civil Code, claims that have been declared final and absolute become statute barred after 30 years. This section generally also applies to foreign judgments. However, the requirements for recognition must be met (see Section 328 of the Code of Civil Procedure if domestic law is applicable or Article 45 of the EU Recast Brussels Regulation if EU law is applicable).

Under Section 204(1)(1) of the Civil Code, the limitation period is suspended by the bringing of an action for:

  • the grant of a court certificate of enforceability; or
  • the issue of an order stating that the judgment is admissible for enforcement. 

Grounds for refusal

On what grounds can recognition and enforcement be refused?

The grounds for refusing recognition or enforcement are conclusively set out in Article 45 of the EU Recast Brussels Regulation as follows:

  • Recognition or enforcement is contrary to public policy in the EU member state addressed.
  • The judgment was given in default of appearance, where the defendant was not served with the document which instituted the proceedings or with an equivalent thereof in sufficient time and in such a way as to enable it to arrange for its defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible to do so.
  • The judgment is irreconcilable with one that was delivered in the member state addressed with regard to the same parties.
  • 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 member state addressed.
  • The defendant was a policyholder, insured or beneficiary of an insurance contract, the injured party was the consumer or an employee and the judgment was not issued by the court with exclusive jurisdiction.
  • The judgment conflicts with the exclusive jurisdiction of another EU member state court.

Under Article 46 of the EU Recast Brussels Regulation, the enforcement of a judgment will be refused on the application of the person against whom enforcement is sought if one of the grounds of refusal referred to in Article 45 of the regulation applies.

As far as domestic law is applicable, Section 328(1) of the Code of Civil Procedure provides that foreign judgments will not be recognised if the following grounds for refusal are fulfilled:

  • The foreign court was incompetent under German law.
  • The document by which the proceedings were initiated was not duly served on the defendant or in such time to allow the defendant to defend itself.
  • The judgment is incompatible with a previous judgment issued in Germany or a foreign judgment previously recognised in Germany.
  • The recognition is incompatible with fundamental principles of German law, especially fundamental civil rights.
  • Reciprocity is not granted (ie, the state of origin does not recognise German judgments under the same conditions under which Germany recognises judgments deriving from that state).

Enforcement is refused on the same grounds as the above. Under Section 723(2) of the Code of Civil Procedure, the invoked court cannot deliver the required judgment of enforcement (exequatur) if the judgment’s recognition is ruled out pursuant to Section 328 of the code.   

Service of process

To what extent does the enforcing court review the service of process in the original foreign proceedings?

Pursuant to Article 45(1)(b) of the EU Recast Brussels Regulation, recognition and enforcement may be refused where the judgment was given in default of appearance if the defendant was not served with the document which instituted the proceedings (or with an equivalent thereof) in sufficient time and in such a way as to enable it to arrange its defence. According to Section 1115 of the Code of Civil Procedure, the regional court of the jurisdiction in which the obligor has its general venue has competence to refuse recognition or enforcement.

Within the scope of German law, Sections 328 and 723 of the Code of Civil Procedure apply. The court must review whether the defendant:

  • was duly served with the document by which the proceedings were initiated; and
  • had sufficient time to defend itself.

The foreign state procedural rules apply to the question of whether the defendant was duly served. In contrast, the German standards apply to the question of whether the defendant had sufficient time to defend itself. In general, two to three weeks are sufficient in this regard.

Public policy

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?

Under both Article 45 of the EU Recast Brussels Regulation and Sections 328 and 722 of the Code of Civil Procedure, the courts can examine public policy issues. The consistency with German substantial and procedural public policy will be addressed.

However, German case law defines the public policy standard narrowly in order to avoid prohibited reviews on the merits. Recognition and enforcement are refused only if fundamental principles of German law (especially constitutional law) are violated. If the defendant is a German citizen, German constitutional principles must be applied more stringently.  

Jurisdiction

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?

Within the ambit of the EU Recast Brussels Regulation, the German courts do not usually review the jurisdiction of foreign courts. In special cases (ie, matters relating to insurance, consumer contracts and contracts of employment), recognition can be refused on the application of one party if the foreign court did not have jurisdiction.  

Within the scope of German law, recognition and enforceability of a foreign award will be refused if the foreign court did not have international jurisdiction according to German law. Thus, German procedural law and not the law of the foreign state determines whether a foreign court had international jurisdiction. The German courts will examine whether a foreign court would have had jurisdiction if it had hypothetically applied German procedural law. 

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?

Under Article 45 of the EU Recast Brussels Regulation, recognition and enforcement can be refused if a judgment is irreconcilable with an earlier judgment given in another EU member state or a third state which involves the same cause of action and is between the same parties. Such earlier judgment must fulfil the conditions for recognition in the member state addressed.

Under Sections 328 and 723 of the Code of Civil Procedure, recognition and enforcement will be refused if a foreign judgment is:

  • incompatible with a judgment delivered in Germany or an earlier judgment that was handed down abroad; and
  • set to be recognised.

The same applies if the proceedings on which such judgment is based are incompatible with proceedings that became pending earlier in Germany. 

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