As a historical matter, jurisdictional awards rendered in foreign states have been approached with suspicion by national authorities, situation which was first of all triggered by the principle of sovereignty and territoriality of effects of the national laws . In modern times, the strict enforcement of these principles in jurisdictional matter has become an impediment to the development of international exchanges, where the need of recognizing the effects of foreign judgments (particularly in terms of enforced judgment in a different state than the one where the ruling was made) led to the development of rules of international private law, comprising the requirements which, once ascertained by way of court scrutiny, compel to the recognition of the effects of the foreign judgment requested by the interested party.
As shown in the juridical literature, “the efficiency of exchanging material and spiritual goods between countries and entities from different states could not be provided without the existence of virtuality of the legal sanction, whose expression is given by the judgments rendered by a different state than the one where they are subsequently applied.” By recognition of a foreign judgment we should read the recognition of its effects, except for the enforceable power. In its common meaning, the notion of recognition includes any effects of a court or arbitration award except for the enforceable power.
Case Study on the Vesting and Enforcement of a Judgment Ruled Abroad on the Greek Territory
The first situation refers to the enforcement of a foreign arbitration award (arbitration venue: Paris) by a Romanian creditor at the headquarters of the debtor (Greece). The arbitration award issued abroad is definitive and enforceable, but the procedures which need to be followed vary depending on the country where the enforcement is to take place. By the award, the arbitral tribunal will only enforce the mandate given by the parties, which is why the rendered judgment is the same in nature as the arbitration clause. The powers exerted by arbitrators and their jurisdictional competence derive from the sole will of litigant parties , Arbitri munus non est publicum ut judicis. The mandate given to arbitrators by the litigant parties is a private mandate. If a contract concluded abroad needs to be complied with, then, the arbitral award ruled in another country needs to be equally complied with, since it is contractual in character .
The inadmissibility of the revision on the merits of the arbitral award in most regulations adopted lately is the consequence of its contractual characteristic. If no kind of goods of the debtor can be identified , nor can any assets which can be tracked down on the Romanian territory, the enforcement procedure be started within Greek borders in view of enforcing the Arbitral Tribunal award.
Basically, an arbitration award ruled as part of an international arbitration is enforceable in Greece after following the procedure of recognition of this judgment by the competent court (known as exequatur ).
The first stage consists in the submittal of a proceeding before the competent court by which to request the recognition of the arbitration award in Greece. In view of ruling of the judgment, the Greek court shall verify the following, pursuant to the applicable legislation:
- the existence of the title issued in another country;
- the enforceable characteristic of the title;
- if the issued order meets public order;
- if the title complies with bonos mores;
- if there is a clause or a treaty between the two countries setting forth different rules;
- if the award regulates the relation between two private entities;
- if the award can be enforced;
- if the losing party had the opportunity to defend itself;
- if the award in question is not contrary to a judgment rendered in Greece in the same case and during the same period of time (no authority of res judicata, respectively).
Subsequent to the recognition of the judgement in Greece, it can be enforced through the agency of a receiver, who can either block the debtor’s company accounts, or pursue its movable or immovable assets.
In conclusion, the stages of enforcement of a judgment in Greece are the following:
• recognition of the foreign judgment in Greece;
• vesting with an enforceable title in Greece;
• approval of the enforcement;
• the actual enforcement by seizure constituted on goods and the garnishment of accounts;
• the potential appeal against enforcement, formulated by the debtor;
• challenging way exerted before the competent court.
Case Study on the Vesting and Enforcement of a Judgement Ruled in Romania on the Territory of Italy In this case, we are talking about a court judgement rendered by the Bucharest Court of Appeal which had to be vested and enforced in Italy. Matters of Italian civil procedure. The more common way is the procedure by which it is aimed at the creditor acquiring the right for enforcement of an amount of money or a good. This procedure applies in all cases where, based on a court decision or an equivalent measure, the creditor is entitled to an amount of money.
The procedure implies the constitution of seizure of goods belonging to the debtor in question and the subsequent entrusting of money to the creditor (when money is seized), of the good or of money obtained following the selling of goods at auction within the enforcement of a judgment procedure (to turn goods into money), as applicable. This procedure, known as “enforcement of a judgment”, is governed by different rules, depending on the nature of the good, if it is immovable (“enforced judgment of immovables”) or movable (“enforced judgment of movables”).
The enforced judgment procedure mentioned includes a procedure by which the creditor can obtain material goods held by the debtor and which, at the enforced judgment date, are in the possession of a different person (a third party who has no connection to the dispute) or a request of the debtor against a third party. This procedure allows the creditor to obtain what is owed to it, in the former case by enforcement of the good (which is owned by the debtor but is in the possession of a third party), and in the latter case, by way of procedures involving the third party and resulting in the replacement of the debtor with the creditor in the relations with a third party which needs to execute its obligations towards the creditor, not the debtor. This type of enforced judgment can be explained by the fact that receivables are a source of enrichment and advantages, namely they are included in the (legal) definition of the person’s assets. The receivables of third parties are deducted from the debtor’s assets and transferred to the creditor’s. The procedure is known as “enforcement through third parties”. In this case, we are in the situation of a court decision providing for all measures adopted by a court in connection with judicial procedures which need to be applied, by virtue of the law, namely the definitive judgement (to make a payment) which cannot be revised by a higher court or the provisional enforceable judgement (generally, all judgements rendered in first instance are enforceable, except for the case where the appeal court suspends the enforcement).
In view of starting the enforced judgment procedure, the acquirement of consent of the court in view of launching the enforced judgment procedures is not necessary, since the nature of the request is established by the judgement. It is sufficient for the record office of the competent court to decide upon the enforced judgment, to verify whether the request is formally correct and to apply the “enforcement formula”, namely a formula set forth by the law stating that public institutions act pursuant to their field of jurisdiction.
The competent court in the matter is the court of first instance with general jurisdiction. Once the substantive jurisdiction is established, the territorial jurisdiction shall be established also. When the enforced judgment implies movables or immovables, the court in the jurisdiction of which the goods are located has competence; when enforced judgment refers to request involving a third party, the court in the jurisdiction of which the third party is domiciled has competence.
The enforced judgment procedure has the same structure as the trial procedure, as they are decided upon by a court. They are carried out based on deeds issued or authorized by the court which heard the parties within contradictory procedures and can generate actual trials. As a result, considering this trait, defence is always required in enforcement procedures.
According to the Italian law, an additional requirement needs to be met, which does not practically make reference to the enforcement procedure, but which precedes it. Before initiating the procedure, the creditor shall submit to the debtor a document – the precetto (a subpoena), by which the debtor is requested to willingly fulfil its obligation under the judgement. Subsequently, it sets a date and notifies the debtor that non-compliance will result in the enforced judgment of the decision. The purpose is to grant the debtor a deadline by which it can willingly comply, thus avoiding the enforced judgment of the decision, at the same time establishing a deadline for the creditor (ninety days) by which the enforced judgment procedure shall be launched.
Pursuant to the Italian law, enforcement procedures are subject to the control of the court. A person against whom enforced judgment is requested can challenge the exertion of such control in court, by opposing enforced judgment (similarly to the one in the Romanian law). Counteraction can be carried out by the debtor or any person who incurred a loss following the actions of the creditor (for instance, when the parties claim that goods subject to enforcement are actually theirs). Counteraction to enforced judgment can be expressed before or during the enforcement procedure.
The reaction of the debtor and of third parties is a challenge of enforcement, if they should deny the right of enforcing the request or to continue enforcement, for subjective and objective reasons. Challenging ways are also allowed when the individual deeds of the enforcement judgment comprise irregularities in form. In this case, the instrument is known as appeal against deeds of enforcement.
In the case of the appeal against enforcement, the competent court in the cases whose scope is represented by sums in question hears the parties as part of ordinary and independent procedures, and they subsequently deliberate.
The appeal against enforcement deeds is submitted to the enforcement court which examines the requests and renders the judgement. In both cases, the only challenging way allowed against the decision is the one which can be forwarded to the Court of Cassation.
The appeal against enforcement can be made prior to or during the procedure. Thus, there is no specific deadline. However, there is a natural deadline, namely the conclusion of the enforcement procedure.
On the other hand, the appeals against enforcement deeds need to take place within five days following the performance of the appealed against deed. When there is solid reason to proceed in this way, the court holds the enforced judgment in abeyance and decides upon the measures necessary to prevent the non-owed losses. If the enforcement procedure reaches the stage when funds are distributed, then abeyance is compulsory.
In what concerns procedural stages related to the launching of the enforced judgment, we mention that they are as follows: • Vesting with enforceable title in Italy;
• Recognition of the foreign judgement;
• Consent on enforcement;
• Actual enforcement by seizure placed on the goods of the debtor and the garnishment of accounts;
• The procedure preliminary to the launching of enforced judgment, the “precetto” – subpoena in view of willing enforcement of the judgement;
• Potential appeal against enforcement counteracted by the debtor;
• Challenging way before the Court of Cassation.
International conventions do not contain a definition of the foreign judgements recognition institution; however, by regulating it, they refer to the recognition of its authority. Art. 54 of the Washington Convention of 1965 on the Settlement of Investment Disputes between States and Nationals of Other States shows the following: “Each Contracting State shall recognize an award rendered pursuant to this Convention as binding […] as if it were a final judgment of a court in that State.”
Not least, the foreign arbitration awards are recognized their probative value before the courts of Romania – under the reserve of their rendering by a foreign competent arbitral tribunal – concerning the situations of fact ascertained by the respective judgment (art. 370 of the Code of Civil Procedure).