When it comes to cross-border debt recovery, the European Enforcement Order is a particularly effective legal instrument, but its subtleties are often unfamiliar to creditors and debtors alike. Introduced by Regulation (EC) No 805/2004 of 21 April 2004, this mechanism radically changes the way in which legal decisions are enforced within the European Union. For a full understanding of what the EEO is, its origin and its scope of application, please refer to our introductory article on the EEO. European Enforcement Order.
A silent revolution in the enforcement of decisions
The central principle of the European Enforcement Order (EEO) is simple but radical: a judgment certified as a European Enforcement Order in one Member State is directly enforceable in all other Member States (except Denmark), without any prior exequatur procedure.
"A judgment certified as a European Enforcement Order shall be recognised and enforced in the other Member States without the need for a declaration of enforceability and without any possibility of opposing its recognition. (Article 5 of Regulation No 805/2004).
The Court of Cassation made this clear in a judgment of 22 February 2012: a judgment certified as an EEO in the State of origin "shall be recognised and enforced in the other Member States without the need for a declaration of enforceability and without any possibility of challenging its recognition" (Civ. 2e, 22 February 2012, no. 10-28.379).
How does the EEO work in practice?
Immediate but controlled execution
Once certified in the Member State of origin, the judgment can be presented directly to the enforcement authorities in another Member State. The creditor simply needs to provide :
- A dispatch of the decision
- A copy of the European Enforcement Order certificate
- If necessary, a translation of the certificate
This operational simplicity does not mean that there are no rules. The enforcement procedure itself remains governed by the law of the Member State where enforcement is sought (Article 20(1) of the Regulation). This simplicity is made possible by a rigorous upstream certification procedure. To find out more about the practical aspects of this procedure and the minimum guarantees that must be met, see our article dedicated to the European Enforcement Order certification procedure.
For example, if you wish to enforce in France a German judgment certified as an EEO, the practical arrangements for seizure will follow the French rules of the Code of Civil Enforcement Procedures.
Extremely limited grounds for refusal of enforcement
This is where the EEO's formidable strength lies. Unlike the general regime introduced by the Brussels I bis Regulation (no. 1215/2012), the grounds for refusing enforcement are drastically reduced.
The only substantive ground for refusal is set out in Article 21 of Regulation 805/2004: incompatibility with an earlier decision given between the same parties in a dispute involving the same cause of action. Three cumulative conditions must be met:
- The earlier decision was given in the State of enforcement or can be recognised there
- The incompatibility was not and could not have been invoked in the State of origin
- The previous decision concerns the same parties and the same dispute
The German Federal Court of Justice confirmed this restrictive approach in a judgment of 24 April 2014, stating that no review of public policy is possible in the State of enforcement (BGH, 24 April 2014, VII ZB 28/13).
Suspension or limitation of enforcement: a limited safety valve
Article 23 of the Regulation authorises the court in the State of enforcement to suspend or limit enforcement in certain restrictive circumstances, in particular where the debtor has lodged an appeal against the decision or applied for the withdrawal of the certificate in the State of origin.
The Lyon Court of Appeal recalled (14 October 2010, no. 09/04873) that "the assessment of the minimum standards provided for in Article 18 of the Regulation is a matter for appeal in the Member State of origin", and that an application for suspension of enforcement may only be made to the court in the State of enforcement if an appeal has already been lodged in the State of origin.
A useful but controversial tool
Concrete benefits for the creditor
Compared with the general regime of the Brussels I bis Regulation, the EEO has one major advantage: the impossibility of invoking violation of public policy as a ground for refusing enforcement. This restriction is of considerable benefit to the creditor.
For companies involved in cross-border transactions, this instrument can considerably reduce recovery times and costs. Imagine a French SME that has obtained a judgement against a German customer: with an EEO, it can go directly to a German bailiff without having to go through the hassle of an additional procedure.
Criticism and concerns
Several legal experts have expressed reservations about this mechanism. L. D'Avout points out that the EEO "leads to a real disruption in the law of cross-border enforcement" and calls for "the reinstatement of the traditional reservation of manifest infringement of local public policy and individual fundamental rights" (L. D'Avout, Rev. crit. DIP 2006, p. 1).
The question is all the more relevant as the EEO may apply to judgments rendered by default, where the debtor's silence is deemed to be tacit recognition of the claim. In these situations, the procedural guarantees may seem insufficient.
The place of the EEO in the European legal landscape
With the adoption of Regulation 1896/2006 creating a European order for payment procedure and the general abolition of exequatur by the Brussels I bis Regulation, the EEO's initial appeal has waned.
A 2017 European evaluation report notes that "in more and more Member States, the European Enforcement Order Regulation is tending to lose importance" and that "the combination of these instruments could render the EEO Regulation obsolete" (Report JUSR/2014/RCON/PR/CIVI/0082, p. 334).
Towards harmonisation of European civil procedures
The EEO is part of a wider movement to harmonise civil procedures within the European Union. In 2017, the European Parliament adopted a recommendation on common minimum standards for civil proceedings, which contains a proposal for a directive.
The aim is to strengthen mutual trust between Member States, which until now has been "more decreed than proven", as R. Tinière notes (in Mélanges Oberdorff, 2015, p. 71).
For your company, understanding these developments will help you optimise your cross-border debt collection strategy. A specialist legal advice can help you determine whether the EEO is the most appropriate option for your situation or whether other European instruments would be more effective. The firm remains at your disposal to analyse your cross-border receivables and determine the most appropriate strategy for each situation. Don't wait until your debts become irrecoverable: the sooner you act, the greater your chances of recovery.
Sources
- Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims
- Civ. 2e, 22 February 2012, no. 10-28.379, Bull. civ. II, no. 36
- Lyon Court of Appeal, 14 October 2010, no. 09/04873, D. 2011. 1509, obs. A. Leborgne
- Bundesgerichtshof (German Federal Court of Justice), 24 April 2014, VII ZB 28/13
- L. D'AVOUT, "La circulation automatique des titres exécutoires imposée par le règlement 805/2004 du 21 avril 2004", Rev. crit. DIP 2006, p. 1
- "An evaluation study of national procedural laws and practices in terms of their impact on the free circulation of judgments", Report JUSR/2014/RCON/PR/CIVI/0082, 2017
- Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Ia)
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