The enforcement of a foreign judgment is the recognition and enforcement in one jurisdiction of a judgment issued in another jurisdiction. A judgment given by one country’s court has no force by itself in another country.
When does enforcement of a judgment become an issue?
A creditor who has a judgment from a foreign court may want to enforce the judgment in the country in which the losing party has his assets.
There is no unified system in Cyprus for the enforcement of Foreign Judgments. The mechanism for the enforcement of foreign judgments exists via several pieces of legislations namely:
• EU Legislation
• Bilateral Treaties and Multilateral Conventions
In general, the Cyprus Court’s attitude is to assist in the enforcement of foreign judgments, provided the following requirements are met:
(i) The foreign judgment has been issued by a court, which has jurisdiction, in accordance with the Cypriot rules in the conflict of laws;
(ii) The enforcement of foreign judgment will not violate Cypriot public policy;
(iii) The foreign judgment has been made on merits, and not according to procedure;
(iv) The foreign judgment has not been obtained by fraud; and
(v) The proceedings, which led to the issue of the foreign judgment, were not contrary to natural justice.
Foreign judgment may be judgments issued by courts in the European Union or judgment issued by courts outside the EU.
The Republic of Cyprus, being an EU member state, is bound by EC Regulations No. 1215/2012 (recast EC Regulation No. 44/2001), No. 805/2004, No. 1896/2006 and No. 861/2007 for civil and commercial matters.
The EC Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
This Regulation has resulted to the abolition of the exequatur proceedings at the enforcement of judgments from other Member States, and as a result no declaration of enforceability is being required anymore from the court of enforcement (no intermediate proceedings). This is one of the most important amendments in the recast of the Brussels I Regulation. Instead, a judgment creditor will simply have to present a copy of the judgment and a standard form certificate and can then begin the enforcement process.
Article 36 of EC Regulation No. 1215/2012, a judgment given in a Member State, which is enforceable in that Member State, shall be recognized in the other Member States without any special procedure being required.
Pursuant to Article 39 of the said Regulation, a judgment given in a Member State which is enforceable in that Member State shall be enforceable in the other Member States without any declaration of enforceability being required.
Also, pursuant to Article 40, an enforceable judgment shall carry with it by operation of law the power to proceed to any protective measures which exist under the law of the Member State addressed.
It should be noted that under Article 35, an application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the national law of that Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter. Such protective measures shall be ordered without serving the Brussels I Certificate on the judgment debtor meaning that the protective measure must be obtained ex-parte without notice to the judgment debtor.
The procedure for the enforcement of judgments given in another Member State shall be governed by the law of the Member State addressed. A judgment given in a Member State which is enforceable in the Member State addressed shall be enforced there under the same conditions as a judgment given in the Member State addressed (Article 41).
A party who wishes to recognize and enforce in a Member State a judgment given in another Member State shall produce a copy of the judgment which satisfies the conditions necessary to establish its authenticity and a certificate certifying that the judgment is enforceable and containing an extract of the judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest.
Pursuant to Article 43, where enforcement is sought of a judgment given in another Member State, the certificate issued pursuant to Article 53 shall be served on the person against whom the enforcement is sought prior to the first enforcement measure. The certificate shall be accompanied by the judgment, if not already served on that person. Moreover, Article 43 is inapplicable where the person seeking enforcement of a judgment has already proceeded to protective measures which exist under the law of the Member State addressed, in accordance with Article 40.
Grounds for refusal of recognition pursuant to Article 45 of EC Regulation No. 1215/2012:
(a) if such recognition is manifestly contrary to public policy in the Member State addressed;
(b) where the judgment was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so;
(c) if the judgment is irreconcilable with a judgment given between the same parties in the Member State addressed;
(d) if the judgment is irreconcilable with an earlier judgment given in another Member State or in a third State involving the same cause of action and between the same parties, provided that the earlier judgment fulfills the conditions necessary for its recognition in the Member State addressed; or
(e) if the judgment conflicts with:
Sections 3, 4 or 5 of Chapter II of the said Regulation, where the policyholder, the insured, a beneficiary of the insurance contract, the injured party, the consumer or the employee was the defendant; or
Section 6 of Chapter II of the said Regulation.
The EC Regulation No 805/2004 of the European Parliament and of the Council of 24 April 2004 creating a European Enforcement Order for uncontested claims
Under EC Regulation No 805/2004, creditors have the choice to apply for a European Enforcement Order (EEO) for uncontested claims. The purpose of this Regulation is to create an EEO for uncontested claims to permit the free circulation of judgments, court settlements and authentic instruments throughout all Member States without any intermediate proceedings needing to be brought in the Member State of enforcement prior to recognition and enforcement. The automatic recognition & enforcement is allowed once a certificate is issued by the court of origin, following an application to the court of origin. It is important to note that there is no need to obtain a declaration of enforceability of the EEO in the Member State where the enforcement is sought, although pursuant to Article 20 of the said Regulation, the enforcement procedures as such are to be governed by the law of the Member State of enforcement.
The EC Regulation No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European Order for payment procedure
Under EC Reg. No. 1896/2006, creditors have the choice to apply for a European Order for Payment. The procedure simplifies, speeds up and reduces the costs of litigation in cross-border cases concerning uncontested pecuniary claims in civil and commercial matters.
The European Order for Payment is recognised and enforced in all EU countries (except Denmark), without the need for any intermediary proceedings in the EU country of enforcement or a declaration of enforceability, prior to its recognition and enforcement.
This Order does not involve obtaining a judgment following any court actual proceedings, but merely includes the completion of a form, which sets out the pecuniary claim for a specific amount.
European Small Claims Procedure- EC Regulation No. 861/2007
The European Union (EU) small claims procedure applies in cross-border litigation to civil and commercial matters for monetary claims of under EUR 2000. It has been available since 2009 in all EU countries, except Denmark, and it is available to litigants as an alternative to national procedures existing under the laws of the Member States.
Since it does not replace similar national procedures, the European Small Claims Procedure is optional, meaning that there is also normally a national procedure which can be used to pursue the claim, thus the choice to make use of it is left for the claimant to make.
However, again judgments are recognised and enforceable in other EU countries without the need for a declaration of enforceability, which is definitely considered as an advantage if enforcement shall be sought in another Member State.
In Cyprus, the rules concerning the procedure on recognition, enforcement and execution of foreign judgments are contained in Law No. 121(1)/2000. This Law applies where the judgment issued is by a non-EU country or a country with which Cyprus has concluded an agreement for mutual recognition and enforcement of judicial decisions and arbitral awards.
Cyprus is bound by various Bilateral Treaties relating to the recognition & enforcement of foreign judgments with countries like the Russian Federation, Ukraine, China, Belarus, Georgia, Egypt etc. Cyprus is also a signatory to various Multilateral Conventions relating to the same. Cyprus is also signed to a various Multilateral Conventions relating to the same matter. The types of enforceable judgments or orders are usually specified in the said Treaties.
Non-EU Judgments from countries with which Cyprus has no Bilateral Treaty
A foreign judgment has no direct operation in Cyprus but it may be enforced by action or counterclaim at common law.
A judgment creditor seeking to enforce a foreign judgment, which was obtained in a country outside the EU and with which Cyprus has not concluded a bilateral treaty, has the option of bringing an action on that foreign judgment, applying for a summary judgment on the ground that the defendant (judgment debtor) has no defence.
The creditor may, in the meantime, also apply for interim reliefs, i.e. freezing orders, blocking assets held by the judgment debtor. The aim and/or necessity to apply for an interim relief relates to the prevention of the judgment debtor/respondent from transferring any amounts from his/her bank account in Cyprus so that if the foreign judgment is successfully registered and enforced, the said amounts in the bank account can be used in order to satisfy the creditor’s claim.