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New rules for recognition and enforcement of judgments—does easier mean better?

From January 2015 creditors holding a judgment issued in an EU member state will be able to obtain recognition or enforcement of the judgment in another member state without initiating an additional court proceeding.

A bill to amend the Civil Procedure Code adopted by the Polish government on 14 October 2014 provides that rulings in civil and commercial matters issued by courts in other European Union member states, as well as court settlements and official documents from member states, may be enforced in Poland without the need for an enforcement order from a Polish court. The proposed amendment follows from adoption of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which enters into force on 15 January 2015. Regulation 1215/2012, which is directly applicable in the member states, is a recast version of Regulation 2001/44, commonly known as the “Brussels I Regulation.”

Clarifying how the recast Brussels I Regulation will be applied in Poland, the amendment introduces a new Book IV in Part Four of the Civil Procedure Code. This section of the code is to contain general regulations governing court rulings, court settlements and official documents from other member states covered by the system of automatic enforceability. This legislative manoeuvre is intended to systematise the treatment of EU civil procedure and make it easier to navigate this field within the Polish code. The proposed Art. 115313 of the Civil Procedure Code provides a list of rulings constituting a writ of enforcement—not a writ of execution—which clearly indicates under the Polish legal system that it is not necessary to apply to the court for an enforcement clause. A condition for automatic enforceability of a foreign judgment is that it is enforceable in the state in which it was issued.

Under an interesting new institution provided for in Art. 54 of Regulation 1215/2012 and the proposed Civil Procedure Code Art. 115314, if a foreign judgment contains a measure or order unknown in Poland, it is nonetheless to be applied in Poland. The bill provides that this task would be left to the bailiff, but the bailiff could apply to the court for issuance of a relevant order. It would have to be seen in practice how this solution works and how well-prepared bailiffs are for handling this challenge related to the merits of foreign judgments.

Clearly the proposed changes would make it easier to enforce cross-border claims. But they also raise the question of potential abuses and infringement of the debtor’s right to a defence. The instrument in EU and Polish law designed to prevent this is refusal of recognition or enforcement. Under the proposed Art. 115321, the debtor could apply to the regional court for the debtor’s domicile or registered office for refusal of enforcement of a foreign judgment. The creditor could respond to the application, and then the court would decide on the application without holding a hearing. Either party could appeal from this ruling to the court of appeal, after which a cassation appeal could be filed with the Supreme Court of Poland.

It may be doubtful whether this instrument ensures a sufficient level of protection for debtors. The enforced judgment would not be subject to review on the merits by the Polish court, and the court could refuse recognition only under the grounds set forth in Art. 45 of Regulation 1215/2012, which are narrower than those currently set forth in Art. 1146 of the Civil Procedure Code. Moreover, filing of an application for refusal of enforcement might not prevent execution, which could have irreversible consequences.

Paweł Mazur, Dispute Resolution & Arbitration Practice, Wardyński & Partners