Cooperation with foreign partners gives Polish entrepreneurs the chance to grow and conquer new markets. However, sometimes it is necessary to recovery of receivables from an Italian counterpartywhich does not fulfil its obligations. In this article, we present the most important legal issues and practical tips on how to effectively recover money from an Italian business partner, using the example of the case of a Polish entrepreneur cooperating with an Italian company s.r.l. (limited liability company).
Jurisdiction of the Polish court and the possibility of obtaining an order for payment
The first step is to check that the the agreement with the Italian contractor there was a provision for characteristics of the law and jurisdictions specific court. If, as in our example, it follows that all disputes will be resolved before the polish court and according to Polish law, then the trader has a solid basis for a claim in Poland.
In such a situation it is possible to obtaining an order for payment w proceedings by writ of payment before a Polish court, which significantly speeds up the claim process. Once the injunction becomes final, you can efficiently transfer the execution in Italywithout the need to initiate additional proceedings for the recognition of the Polish judgment. This simplified procedure results from Brussels I bis Regulations, which prescribes the mutual recognition of judgments between EU Member States.
If you are interested in detailed information on debt recovery in the European Union, we encourage you to read our article:
How do I pursue receivables from EU counterparties?.
Translation of documents - necessity or unnecessary expense?
The question often arises as to whether, during international debt recovery documents should be translated into the language of the debtor's country of establishment. In most cases, in order to avoid procedural problems, it is necessary to present the claim and the annexes in a language that the debtor understands.
EPiR Regulation 2020/1784 This is because it allows the defendant to refuse to accept documents if they are not in a language he or she understands. In practice, this means that once the documents have been received from the Polish court, the Italian debtor may choose not to understand their content, which will significantly prolong the whole process. Therefore recommended is to ensure sworn translation already at the stage of filing a claim in Poland.
Securing claims in Poland and Italy
Effective recovery of receivables from an Italian counterparty often requires prompt security of claims. A Polish court can issue a security order on the debtor's assets (e.g. by seizing a bank account), which can then be enforced in Italy. In addition, there is European Account Preservation Order (EOPA), allowing the debtor's funds to be blocked in banks within the EU even before a final judgment has been obtained.
The ENZ is particularly useful if there is a risk that the debtor will try to exit assets from one country to another Member State. In order to obtain such an order, the cross-border nature of the claim and the need to secure funds urgently must be demonstrated.
Example: A Polish transport company threatened with non-payment from an Italian principal applied for an EOPA. As a result, the court ordered that the debtor's bank account in Italy be blocked, preventing free disposal of the funds.
If you would like to expand your knowledge of debt liability in limited companies, we recommend the article:
Liability for debts in limited liability companies.
Enforcement in Italy - costs and procedures
When a Polish court rules a final order for payment or judgment, please report to of the italian enforcement authority with the application and the certificate of enforceability. It is also necessary to remember to translate the documents into Italian language. Enforcement costs typically range between 5% and 10% of the value of the claim, depending on the specific action taken.
We also invite you to read our next article, in which we discuss further aspects of debt recovery in the EU:
Recovery of debts from EU counterparties (part 2).
Summary and recommendations
Collection of receivables from foreign counterparties, including from Italyrequires careful preparation of documentation and knowledge of international legal procedures. Above all, prior contractual arrangements regarding this which court and whose right will be competent in the event of a possible dispute.
Let us remember that contracts shall be drawn up for the duration of the conflictand not just to set out the terms of the cooperation. Carefully drafted clauses on jurisdiction and applicable law help avoid many problems in the event of a counterparty's insolvency. It is therefore advisable to think through the provisions of the contract from the outset and adapt them to possible contentious situations.
If you have additional questions regarding international debt recovery, we invite you to contact our law firm. We will be happy to help you recoverregardless of the location of your debtor.
Contact us:
- Tel: 606608089
- Email: sekretariat@bktkancelaria.pl
- www.bktkancelaria.pl
