CJEU gives creditors additional enforcement mechanism

Almost three decades ago, The Court of Justice of the European Union held in Owens Bank (C-129/92) that the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters did not apply proceedings in a Contracting State over enforcement of a judgment given in civil and commercial matters in a non-contracting State.

Since then, it has been unclear whether the Convention applied to a judgment issued in a Contracting State if the judgment in question related to enforcement of a judgment from a non-contracting State.

The issue was brought to the attention of the Court under Article 267 TFEU by the Oberster Gerichtshof (Supreme Court, Austria) under the Brussels I bis Regime, as part of a preliminary ruling request in the case H Limited C-568/20, in relation to the enforcement in Austria of an order for payment issued by the UK High Court of Justice based on two judgments issued in Jordan.

In its judgment, the Court responded to the preliminary question in the affirmative, by stating that: "Article 2(a) and Article 39 of [the Brussels I bis Regulation] must be interpreted as meaning that an order for payment made by a court of a Member State on the basis of final judgments delivered in a third State constitutes a judgment and is enforceable in the other Member States if it was made at the end of adversarial proceedings in the Member State of origin and was declared to be enforceable in that Member State. The fact that it is recognized as a judgment does not, however, deprive the party against whom enforcement is sought of the right to apply, pursuant to Article 46 of that regulation, for a refusal of enforcement on one of the grounds referred to in Article 45".

What to expect

Following the Court's decision, creditors of judgments issued by a non-Member State court will now benefit from an additional enforcement mechanism when they are unable to collect full receivables due to them as part of enforcement proceedings they file in a Member State. Apart from the option of filing a new and fresh enforcement claim in another Member State based on the domestic enforcement rules of the said Member State, the judgment creditors can request an order for payment in another Member State, based on the enforcement decision issued by the first Member State. This order for payment will be recognized and enforced in any other Member State under the Brussels I bis Regulation.