Settlement of cross-border disputes
Settlement of cross-border cases and problems related to enforcement of judicial decision in another Member State has become increasingly more significant. Various legislative instruments have been adopted in the European Union in order to simplify and speed up solving cross-border litigations, reduce costs and allow immediate enforcement of judicial decision.
Cross-border case is a case in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court or tribunal with jurisdiction. When settling such disputes, it is useful to be aware of the Regulation on European order for payment procedure (1) and the Regulation on European Small Claims Procedure (2). These legal instruments simplify gross-border litigations. The court does not apply these regulations itself, so it depends on the will of the claimant – i.e. the claimant has to file with the court an application in the form provided in the Annex of relevant regulation.
European order for payment procedure and European small claims procedure only apply to civil and commercial matters in cross-border cases (e.g. in case of monetary claim arising from sales contract or particular contract of services), it shall not extend to administrative matters. The scope of the regulation in different type of civil and commercial matters requires individual verification (3).
What is European order for payment procedure?
European order for payment procedure governs the expedite procedure of orders for payment in cross-border cases – i.e. procedure where the claimant can obtain the enforced judicial decision without actual review of the case, unless the debtor makes objections to the monetary claim. Where an objection is made, the proceedings will continue in accordance with the rules of ordinary court procedure, unless the claimant has explicitly requested that the proceedings be terminated in that event.
European order for payment procedure can be initiated for monetary claims of any size. If the debtor does not make an objection, the court will declare the European order for payment to be enforced immediately. An important advantage of the European order for payment procedure consists in the fact that European order for payment does not require separate recognition and declaration of enforceability in another Member State – i.e. in the State where the judicial decision is to be enforced. Based on a European order for payment, a creditor can address bailiff directly and initiate enforcement proceeding.
What is European small claims procedure?
In case of minor monetary claim (basic claim does not exceed 2000 euros) and in case for example the European order for payment procedure has failed, because the debtor has made an objection, it is possible to settle the dispute within the framework of European small claims procedure. This regulation provides an alternative to the procedures of minor claims existing under the laws of the country where the court is situated.
The advantage of European small claims procedure is that cross-border litigations are expected to be settled more quickly, at reduced cost, and creditor is given enforcement document, which allows immediate enforcement of judicial decision. This means that similar to the European order for payment, the judicial decision adopted in relevant proceedings can be immediately recognised and enforced in another Member State.
(1) Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006, creating a European order for payment procedure. In this Article, it is referred to as “Regulation on European order for payment procedure”; See also Commission Regulation (EU) No 936/2012 of 4 October 2012 on amending the Annexes to Regulation (EC) No. 1896/2006 of the European Parliament and of the Council (creating a European order for payment procedure).
(2) Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007, establishing a European Small Claims Procedure. In this Article, it is referred to as “Regulation on European small claims procedure”.
(3) See Articles 2-3 of the Regulation on European order for payment procedure, and Articles 2 and 3 of the Regulation on European small claims procedure.