Regulation (EU) 1215/2012 applies from 10 January 2015 and replaces Regulation 44/2001 from that date. Its main achievement is the abolition of exequatur although a party may invoke the same grounds that under the previous regime to oppose recognition or enforcement. Furthermore, the new Regulation includes amendments in other areas, such as lis pendens and extends the application of the jurisdiction provisions on consumer and employment contracts.
Application and Scope
Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Regulation) introduces a significant reform of the common European rules previously established in Regulation 44/2001, the so-called Brussels I Regulation. The importance of the reform is linked to the fact that the Regulation covers litigation relating all commercial matters, with the exclusion of insolvency proceedings that remain governed by Regulation 1346/2000 which is currently under review. It may be noted that after its adoption the Regulation has been amended by Regulation (EU) 542/2014 that refers to certain issues raised by the Unified Patent Court.
The new regime introduced by the Regulation applies only to legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded on or after 10 January 2015. Regulation 44/2001 shall continue to apply to judgments given in legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded before 10 January 2015.
Uniform Jurisdiction Rules
The reform of the Brussels I Regulation has been the focus of much attention in recent years, especially in connection with the main goals of the review process: the enlargement of the scope of its jurisdiction rules and the abolition of exequatur. Concerning the first of those two basic goals, the final result reflects the failure of the EU to fully unify the jurisdiction rules applicable to defendants not domiciled in a Member State. The new Regulation modifies the previous situation in this respect only with regard to the jurisdiction rules over consumer contracts and individual contracts of employment. In disputes concerning those matters –which are added to claims falling within the exclusive jurisdiction grounds and the provisions on prorogation of jurisdiction agreements– the new regime is also applicable to situations in which the defendant is not domiciled in a Member State.
Therefore, in the new system, all claims other than those covered by the exclusive jurisdiction rules (rights in rem; the validity of the constitution, or the dissolution of companies or other legal persons, or the validity of the decisions of their organs; the validity of entries in public registers; and the registration or validity of industrial property rights), founded on a prorogation of jurisdiction agreement, or related to consumer contracts or individual contracts of employment, remain subject to the jurisdiction rules of each Member State when the defendant is not domiciled in a Member State (or in Switzerland, Iceland and Norway where the 2007 Lugano Convention applies). In Spain such rules are contained in Article 22 Ley Orgánica del Poder Judicial (LOPJ).
Abolition of exequatur
With regard to the second main goal of the reform, the abolition of exequatur in the new Regulation makes it possible to proceed directly to the enforcement in other Member States of a judgment which is enforceable in the Member State of origin without any declaration of enforceability being required. Judgments given by the courts of a Member State are to be treated as if they had been rendered in the Member State addressed. Moreover, in Annex I, the new Regulation establishes a model certificate that has to be served on the person against whom enforcement is sought in reasonable time before the first enforcement measure. Such model certificate, with all the relevant information about the judgment, will facilitate the cross-border enforcement of judgments within the EU. In light of the diversity of enforcement measures existing under national procedural laws, the Regulation allows for an adaptation based on a functional equivalence principle. Under this principle, where a judgment contains a measure or order which is not known in the law of the Member State addressed, that measure or order should, to the extent possible, be adapted to one which, under the law of that Member State, has equivalent effects attached to it and pursues similar aims and interests.
The safeguards implemented in the new system restrict the transformation resulting from the abolition of exequatur in the final text of the Regulation. The Regulation gives to the person against whom enforcement is sought the possibility to apply for the refusal of the enforcement to the competent court of the Member State where enforcement is sought. The application for refusal of enforcement shall be submitted in Spain to the Courts of First Instance (Juzgados de Primera Instancia). Enforcement will be refused where one of the grounds for refusal of recognition or enforcement, as set out in Article 45, is found to exist. Those grounds apply in addition to the grounds for refusal or of suspension of enforcement under the law of the Member State addressed for judgments rendered by its own courts.
To assess the limited progress achieved by the new Regulation, it is noteworthy that the grounds to refuse enforcement under the Regulation are the same as those provided for by Regulation 44/2001 to deny exequatur: public policy, respect of the rights of defence of the defaulting defendant; incompatibility between judgments; and very limited verification of the jurisdiction of the rendering court. Therefore, the grounds to refuse enforcement remain unchanged and the main progress refers to a procedural development. Since the need for a special procedure (exequatur) is abolished, the control now takes place directly within the framework of the enforcement itself by enabling the party against whom enforcement is sought to bring an application for the refusal of the enforcement. Such an application may deeply affect enforcement, since the court in the Member State addressed may: limit the enforcement proceedings to protective measures; make enforcement conditional on the provision of security; or suspend the enforcement proceedings.
Lis pendens
Other significant amendments introduced by the new Regulation refer to coordination of parallel proceeding and particularly lis pendens. The Regulation establishes an exception to the general lis pendens rule based on granting priority to the court first seized. In order to prevent abusive tactics, when an exclusive choice-of-court agreement is involved, the new Regulation grants priority to the court designated in such an agreement. This exception allows the designated court to decide on the validity of the agreement and on the extent to which the agreement applies to the pending dispute. The new Regulation reinforces the effects of choice of forum agreements and intends to foster coordination with the 2005 Hague Convention that the EU will soon join. Furthermore, the new Regulation introduces a flexible mechanism enabling the coordination between proceedings in the courts of a Member State and proceedings pending in the courts of third States. Under this mechanism, a court of a Member State may stay its proceedings, considering in particular whether a judgment of a third State will be capable of recognition and enforcement in the Member State concerned and the proper administration of justice.
Arbitration
The initial Proposal presented by the Commission also intended to improve the interface between the regulation and arbitration which is a source of uncertainty. It included a specific rule to prevent parallel court and arbitration proceedings, and eliminate abusive litigation tactics. The proposed rule obliged a court seized of a dispute to stay proceedings if its jurisdiction was contested on the basis of an arbitration agreement and an arbitral tribunal had been seized. Notwithstanding this, the text finally adopted does not include such a rule. However, the Preamble of the new Regulation reaffirms the view that the Regulation does not apply to arbitration and contains a non-exhaustive list of issues that fall outside the scope of the Regulation, such as proceedings relating to the establishment of an arbitral tribunal, the powers of arbitrators, any aspects of an arbitration procedure, or the annulment, review or enforcement of an arbitral award.
Moreover, the Preamble states that nothing in the Regulation prevents the courts of a Member State from referring the parties to arbitration, from staying or dismissing the proceedings, or from examining whether the arbitration agreement is null and void or incapable of being performed, in accordance with their national law. The Regulation expressly confirms that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards takes precedence over the Regulation.
Conclusion
In sum, the modernisation brought about by the new Regulation does not hide that it only has partially achieved its intended goals. The extension of the rules on jurisdiction to defendants not domiciled in a Member State has been very limited and hence national jurisdiction rules remain applicable to many situations being a source of disharmony and distortions. Furthermore, the abolition of exequatur amounts in practice mainly to the disappearance of a procedural obstacle and facilitates enforcement by establishing a common model certificate, but does not alter the previous situation as to the possible grounds to refuse recognition and enforcement of judgments rendered in another Member State.
