The State, the Union, the citizens and their legitimate interests, or how the EU opens up new opportunities for the citizens of Europe
The present day legal framework of the European states and of the European Union provides for a rich variety of mechanisms for protection of creditor interests in civil and commercial legal relations. In cross-border transactions creditors may protect their interests both through traditional means stipulated in the national jurisdictions and through the provisions of the EU law. This means that there are two levels of legal regulation – the national level and the supranational level, which are in relation to one another. On the higher level is the legal system of the European Union, the norms of which take precedence over the legal systems of the EU member states. With a view to achieving the goals of the EU set forth in the foundation treaties, the authorized institutions of the Community engage in active legislative activity in the field of private law, thus providing regulation on jurisdiction, recognition and enforcement of judgments in civil and commercial matters pursuant to the primary Regulation No 44/2001, the creation of a European judicial network of civil and commercial matters by Decision of the Council №2001/470/ЕО, introduction of European order for uncontested claims by Regulation 805/2004, creation of a procedure for an European order for payment under Regulation №1896/2006, and the creation of a European small claims procedure under Regulation № 861/2007. All these European acts open up new horizons before the EU citizens and protect their rights. They provide creditors with additional options which represent a whole new set of instruments in their legal disputes with debtors.
Economic aspects of the problem of uncontested claims
One of the most important problems of private law impacting directly on the economic systems in the modern world is the need for adequate regulation of the collection of uncontested receivables. The significance of the problem calls for regulation given the amount of damages resulting from delayed or thwarted repayments of uncontested receivables. The cumulative effect of such damages may bring about insolvency or other negative economic consequences for the companies, e.g. sustaining the effect of the domino through chains of interdependent liabilities. Provided that the debtor does not object to a given creditor’s claim, it is unwarrantable for the common market of the EU to have superfluous judicial formalities impeding the collection of debt. Accounting for the requirements of the internal market, in the year 1999 in Tampere, the European Council put on the agenda a number of specific goals aimed at catalyzing cooperation in the field of civil jurisdiction.
Subject matter and place of Regulation 805/2004 within the legal system of the EU
Regulation 805/2004 of the European Parliament and of the Council of 21.04.2004 is made in the spirit of theo bjectives set forth at the meeting in Tampere, and like most of the other acts in the field of judicial cooperation in civil and commercial lawsuits, it is legally grounded on art. 67, para 4 of the Treaty on the functioning of the European Union. The Regulation is aimed at implementing the Community’s goal of creating and expanding the area of freedom, security and justice, which is also in unison with the overarching objective of the Union of maintaining the smooth functioning of the internal market. The EU level regulation abides by the principle of subsidiary set forth in the foundation treaties, and it governs only those important issues relating to the internal market and the EU policies which the cannot be settled by each member state separately. In addition, the EU level regulation abides by the principle of proportionality which ensures that no excessive measures be taken in implementing the regulation necessary for the achievement of the targeted objectives. The subject matter of the regulation is the introduction of a European Enforcement Order for uncontested claims which to permit, by laying down minimum standards, the free circulation of judgments, court settlements and authentic instruments throughout all Member States without any intermediate proceedings needing to be brought in the Member State of enforcement prior to recognition and enforcement.
Scope of the Regulation
The Regulation applies to civil and commercial matters, whatever the nature of the court or the tribunal – art.2, para 1. The scope of its application expressly leaves out revenue, customs and the administrative lawsuits, as well as cases in which the state is liable for acts of omission and commission in the exercise of state authority – acta iureimperii.The regulation does not apply to the civil status and legal capacity of natural persons, property rights ensuing from matrimonial relationship, wills and succession, procedures relating to bankruptcy, company insolvency, judicial arrangements, compositions and analogous proceedings, social security and arbitration. There is also a special exemption clause applicable to oneofthememberstates– Denmark. Pursuant to art.3 theregulation applies to judgments, court settlements and authentic instruments on uncontested claims.
The receivable is deemed unchallengeable in the following circumstances:
– The debt or has expressed consent validated through an agreement approved by the court or concluded in court in the course of legal proceedings – art.3, para 1, letter a); or
– The debtor has raised no objection in the course of the legal proceedings under the procedure rules valid in the member state by origin – art.3, para 1, letter b); or
– The debtor has not appeared or has not been represented in court in relation to that receivable after he has initially impugned the claim in the course of the legal proceedings, in as much as such behavior is a conclusive acknowledgement of the receivable – art.3, para 1, letterc; or
– The debtor has expressly acknowledged the debt in a public document – art.3, para 1, letter d).
The regulation also applies to a judgment delivered on an appeal against judgments, consent judgments or public documents certified as European grounds for enforcement – art.3, para 2.
The possibility for recognition of judgments on unchallengeable receivables in another member state under Regulation 805/2004 does not cancel orexclude the possibility for the creditor to request acknowledgement under the general rules of Regulation 44/2001 – art. 27. In this case the creditor faces alternative possibilities. All the same, the rules of Regulation 805/2004 are more relaxed and free from superfluous formalities, which proves being more effective, fast and economical.
Legal definitions in the regulation
The regulation contains legal definitions of some of the concepts containedt herein which substantially simplifies its interpretation. The basic definitions are listed in art. 4 of the Regulation, the most important of which are asfollows:
– ”judgment” is any decision rendered by a court in a member state, irrespective of what name that judgment is given, including adecree, order, ruling or a judgment summons, as well as taxation for the costs of a court official;
– ”receivable” is a money receivable which is subjected to execution or the maturity of which is determined in a court order, judicial convention or a public document;
– “public document” is any document formally drawn up or registered as a public document the certification o fwhich is related to the signature and content of the document; same is drawn up by a public or other body authorized to this purpose by the member state, from which it originates; a public document is also deemed an agreement for obligations for support concluded with an administrative organ or endorsed by it;
-“member state by origin” is the member state where the decision has been pronounced, the judicial convention has been concluded or approved, or the public document has been drawn up or registered and has been cerified as European grounds for enforcement;
– ”member state of enforcement” is a member state where enforcement of the judgment, judicial convention or the public document has been demanded following certification thereof as European grounds for enforcement;
– “court by origin“ is the court approached with the trial as of the date of fulfillment of the conditions under art.3, para 1, letters a), b) or c).
Purpose and nature of the European grounds for enforcement of unchallengeable receivables and legalization of the judgment as European enforcement
The purpose of creating European grounds for enforcement of unchallengeable receivables is to remove whatever procedural formalities and obstacles preventing the enforcement of judgments delivered in a member state other than the member state of the enforcement.This type of procedure should be distinguished from the procedure laid down in Regulation 1896/2006. The latter provides for the creation of a new means for creditor protection – a procedure for a European order for payment, whereas Regulation 805/2004 does not provide for a new procedure but only eases to the extent possible the procedure for enforcement of the national judgments on unchallengeable receivables in all member states (except for Denmark), thus creating European grounds for enforcement and eliminating the need for exequatur. Pursuant to art.5 of the Regulation a judgment certified as European enforcement grounds in the member state by origin is recognized and executed in the other member states without the need for a declaration of execution, which is in contrast to the requirements under Regulation 44/2001, and without a possibility for opposition to its recognition. A judgment on an unchallengeable receivable delivered in a member state is certified as European grounds for enforcement, upon the filing at any moment of an application with the court by origin and after having met all the requirements under the regulation. These requirements demand that the judgment be subjected to execution in the member state by origin, that it not contradict the jurisdictional provisions under chapter 2, sections 3 and 6 of Regulation 44/2001,and that the court procedure in the member state by origin have complied with the minimum procedural requirements under Regulation 805/2004which guarantee that the document for starting the unchallengeable receivables procedure has been served on the debtor and he/she has been informed about the consequences of failing to file an opposition or appear in court. Should only a part of the judgment be in conformity with the requirements of Regulation 805/2004, there is the possibility for the creditor to demand that only that part of the judgment be certified as European grounds for enforcement. The certificate for European grounds for enforcement is issued in a standard form and in the language of the judgment.
Rectification and withdrawal of a European Enforcement Grounds Certificate and peremptory rule
A certificate for European grounds for enforcement, through a declaration before the court by origin, is:
– rectifiedif, owing to a material error, there is a discrepancy between a judgment and the certificate
– withdrawn if it is clear that the certificate has been issued in breach of the provisions of the regulation
Pursuant to art.10, para 4 of the Regulation the issuance of a certificate for European grounds for enforcement is not subject to appeal.
Apart from the rules under the Regulation, the enforcement procedures arelaid down by the law of the member state of enforcement. A judgment which is certified as European enforcement will be executed on the same terms as a judgment delivered in the member state of enforcement. The creditor must submit to the competent enforcement authorities in the member state of enforcement a copy of a judgment as well as a copy of a European enforcement certificate which both must conform to the requirements for a standard of proof, and also, if necessary, a copy of the certificate or a translation thereof in the official language of the member state of enforcement. Pursuant to art. 20, para 3, a party which demands enforcement of a European enforcement certificate in a member state cannot be subjected to the requirement to provide whatever pledge, agreement or a deposit under whatever name , on the grounds that it is a foreign national, a non-local, or a person who does not reside in the member state of enforcement The judgment or its certification as European grounds for enforcement may under no circumstances be subject to re-consideration in the member state of enforcement. Pursuant to art. 29 the member states must collaborate with one another to ensure that the public at large as well as the professional circles are fully informed about the methods and procedures for enforcement in the members states, more specifically, through the European judicial network of civil and commercial lawsuits, created in accordance with Decision 2001/470/ЕО
Judicial conventions and public documents
The certification and execution of judicial conventions and public documents relating to unchallengeable receivables are governed for reasons of expedience by the rules for judgments on undisputed receivables, with some exceptions specified in the Regulation.