European Enforcement Order (EEO) is a key tool in cross-border debt recovery in the European Union. It enables creditors to recover debts quickly and efficiently from debtors residing in another Member State, eliminating the need for complicated and time-consuming court procedures. With the EEO, a judgment, court settlement or authentic instrument issued in one EU country becomes enforceable in another, without the need for an additional declaration of enforceability. This is a significant simplification in cross-border enforcement uncontested claims.
In this article we will explain what is European Enforcement Order, in respect of which judgments it can be obtained, which claims are considered uncontested and what steps must be taken to use it effectively to recovery of debts from the EU.
What is the European Enforcement Order (EEO) and what is it used for?
European Enforcement Order (EEO) is a certificate which may accompany a judicial decision, a court settlement or an authentic instrument. Its main purpose is to ensure the free movement of such a document within the European Union. The EEO is necessary for the enforcement in a Member State of a judgment, court settlement or authentic instrument drawn up in another Member State, in respect of uncontested claim. It ensures that a creditor does not have to go through additional procedures to declare an act enforceable in another Member State, which significantly speeds up the debt enforcement.
European Enforcement Order is similar in this respect to the European order for payment, which also simplifies the recovery of debts from EU counterparties. For more on this topic, see our article: Recovery of debts from EU counterparties (part 2).
For which judgements can an ETE be obtained?
European Enforcement Order may be obtained in respect of judgments in which the subject matter of the dispute is a claim for payment of a specific sum of moneywhich has become due. In the case of Poland (as well as most other European countries), such a judgment must have been issued after 21 January 2005. The exceptions to this rule are Bulgaria and Romania, where such a ruling must have a date later than 1 January 2007.
For the purposes of EU rules, it is not only Polish or European documents called 'judgments' that are considered to be judgments. For the purposes of ETE is also considered to be a judgment:
- judgment
- injunction
- provision
- enforcement order
- determination of costs or expenses by the court clerk.
The requirement is that it must have been issued by a court in any Member State except Denmark. Such a judgment, in order to be a basis for obtaining a ETEmust concern an uncontested pecuniary claim in a civil or commercial matter. It may also concern maintenance obligationswhich makes European Enforcement Order a versatile tool in cross-border debt recovery. It is worth noting that European Enforcement Order does not have to refer to the entire judgment. If only parts of it meet the requirements for its issue, the title may be issued only in respect of those parts.
An uncontested claim - or what kind of claim? Definition and examples
To undisputed claims are deemed to be those about which the debtor has no objection. This may be the case in several instances, which is key to the applicability of the European Enforcement Order:
- Explicit acknowledgement of the claim: The debtor has expressly agreed to the claim by acknowledging it.
- No objection during the proceedings: In progress court proceedings the debtor has never objected to the claim in accordance with the relevant procedural requirements under the law of the Member State of origin. It is important to note that if the debtor has never lodged an objection, the court must examine whether the debtor's silence or inaction can be regarded as a tacit recognition of the claim under the law of the Member State of issue - this may vary from country to country.
- Failure to appear after initial challenge: The debtor failed to appear or be represented at the court hearing of this claim, after initially contesting the claim during the course of the court proceedings. It is a condition that, under the law of the Member State of issue, such conduct shall be treated as tacit acknowledgement of the claim or admission of the facts presented by the creditor.
Information required to initiate an EEO procedure
Before applying for European Enforcement Order first initiate litigation in any EU country (other than Denmark) with the debtor on one side. In order to initiate proceedings on the merits, an appropriate document must be filed with the court. Regardless of which country it is filed in, it must meet the minimum requirements, i.e. it must contain:
- Names and addresses of parties;
- The amount of the claim;
- If interest on the claim is demanded, the rate of interest and the period for which interest is demanded, unless statutory interest is added automatically to the principal in accordance with the law of the Member State in which the judgment was given;
- Identification of the basis of the claim.
When lodging such a document, the debtor must be informed of the steps he or she must take to contest the claim. Such information can already be included in the document initiating the proceedings, but can only be served in the summons for the court hearing. Such information is:
- Procedural requirements to contest a claim, including the time limit within which a claim can be contested in writing or the date of the court hearing (as the case may be);
- The name and address of the institution to which the reply is addressed or before which it must appear (as the case may be);
- Indication of whether or not there is compulsion of counsel;
- Consequences of failure to object or to appear, in particular, as the case may be, the possibility of a judgment or its enforcement against the debtor and the liability for the costs of the legal proceedings.
Irrespective of whether or not they will contain information regarding the contestation of the claim, the debtor must be served with the document instituting the proceedings and the summons to the hearing.
How to apply for a European Enforcement Order (EEO)?
Application for European Enforcement Order must be addressed to the competent authority in the Member State of origin. This will normally be the court hearing the case on the merits. The application can be made at any time - either at the initiation of the proceedings or later. This flexibility facilitates recovery of debts from the EU.
What if there is a refusal to issue an ETE?
Sometimes, despite meeting most of the requirements, it may be possible to refuse to issue a European Enforcement Order. In such situations, however, the creditor has options.
When minimum standards for service have not been met
If the court has refused to issue ETE by reason of the lack of service on the debtor of the document instituting the proceedings or of the summons to a court hearing, this non-compliance can be remedied. The creditor may file a new application for European Enforcement Order, if:
- The judgment will be served on the debtor in accordance with the requirements of Article 13 or 14 and
- The debtor shall have the opportunity to challenge the decision by means of a full judicial review and shall have been duly informed in or with the decision of the procedural requirements for such a challenge, including the name and address of the institution with which the challenge must be lodged and, as appropriate, the time limit for doing so; and
- The debtor did not challenge the judgment in accordance with the relevant procedural requirements.
In such circumstances, the court may issue a certificate European Enforcement Order.
If the European Enforcement Order was not issued for other reasons
The creditor has two options if European Enforcement Order was not issued for other reasons:
- Appeal against the refusal to issue European Enforcement Orderwhere this possibility is provided for in national law;
- Enforce the judgment in another Member State in accordance with the exequatur procedure laid down by Regulation No 44/2001 (Link to regulation).
If the European Enforcement Order contains an error
If, between the judgment and the certificate ETE there is a difference due to a material error, the creditor may request the court issuing the certificate to rectify it.
What can a debtor do in response to a European Enforcement Order (EEO)?
The debtor on whom the European Enforcement Order, also has some scope for action, both in the ETE issuing state and in the executing state.
In the country issuing the ETE
The debtor may, like the creditor, ask the court issuing the certificate to correct a material error that appears on it. If ETE it was clearly wrongly issued - e.g. where the debtor is not really a debtor, or where there is a dispute - the person to whom the title was addressed may ask the issuing court to revoke it European Enforcement Order. If it does, there are no specific EU-wide rules relating to this procedure - each country will therefore use its own national law.
If a judgment is no longer (suspended or limited) enforceable under the law of the Member State in which it was given, the debtor may apply to the court that gave the judgment for a certificate of non-enforceability or limitation of enforceability. The debtor may also appeal against the decision on which the judgment was based ETE. In such a case, only if it turns out that this appeal was unsuccessful can the creditor obtain a new certificate ETE.
In the country implementing the ETE
The debtor may seek refusal to enforce a judgment if the judgment certified European Enforcement Order irreconcilable with an earlier judgment given in any Member State or in a third country, provided that:
- The earlier ruling was made in relation to the same subject matter and involved the same parties;
- The earlier decision was made in the Member State of enforcement or fulfils the conditions necessary for its recognition in the Member State of enforcement;
- The irreconcilability of the judgments was not and could not be raised in the court proceedings in the Member State of issue.
The debtor may also seek a suspension or limitation of the enforcement of the judgment if he or she has challenged the certificate on the basis of which the judgment was issued ETEor if he has requested the rectification or withdrawal of a ETE.
Summary: The European Enforcement Order - a simple way to recover debts in the EU
European Enforcement Order can be a very simple and effective way to recovery of debts in European Union countries. It is a tool that, without additional court procedures and formalities, can lead to a recovery of debts (including maintenance) in cases where the debtor is abroad. In addition to the requirements as to the nature of the case (there must be a cross-border element and the case must be o undisputed claim) it has no particular requirements in terms of additional documentation. By the way, it allows you to take advantage of the possibility of making corrections when it comes to significant errors or omissions in a letter. It is therefore an extremely helpful tool, although often underestimated when it comes to enforcement of judgments in other countries of the European Union.
If a foreign counterparty is delaying payment of an invoice or you are aware of the risk of insolvency of the company you are working with and would like to protect yourself against the lack of funds from the counterparty to cover your receivables - please contact us. We will be happy to support you in securing your interests and recovery of debts from the EU!
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