One central legal question in international trade is whether a judgement rendered in a foreign country is also enforceable in another country.
In the EU, the recognition and enforcement of international judgements are regulated in civil and trade law by the so called Brussels I Regulation that has significantly facilitated the enforcement of judgements rendered in EU countries. Similar rules also exist in Iceland, Norway and Switzerland where the recognition is based on the Lugano Convention.
Now the Brussels I Regulation has been revised by Regulation (EU) 1215/2012 and the revised Brussels I Regulation will simplify further the recognition and enforcement of judgements rendered in other member states. It will take full effect on 10 January 2015 and will mainly be applied to proceedings that commence after 10 January 2015. The Lugano Convention has not been revised in a similar way so the reform will not be applied to countries outside the EU.
The most significant reform in the revised Brussels I Regulation is the abandonment of the tradition whereby a judgement rendered in another member state had to be separately verified as capable of being executed in the target country’s courts. In the revised Regulation, the judgement given in another member state shall be recognised and enforced as a national judgement would be. In practice, from now on the one seeking enforcement has to deliver an official copy of the foreign judgement to a national execution authority as well as a certificate from the foreign court that guarantees that the judgement is capable of being executed. The certificate needs to contain information regarding the judgement and associated legal expenses and interest.
The person against whom enforcement is sought can oppose enforcement of a judgement by applying for refusal (Article 46). In Finland, the application must be addressed to a district court situated in the same area as the national execution authority who is dealing with the matter. The court may decide on refusing the enforcement based on the same grounds as now. The grounds for refusal are very limited and primarily concern the appropriateness of the original service of the application for a summons.
In addition to the procedural revision, the Brussels I Regulation 1215/2010 contains more amendments. For example, the revised Regulation enables the execution of precautionary measures and other temporary measures based on the foreign judgement without hearing the defendant. The prerequisite for this is that the defendant has been informed of the foreign judgement before the application for execution is made. Also, if the judgement contains a measure or an order that is not known in the law of the receiving country, such measure or order must be adapted to a measure or an order known in the law of the receiving country that has equivalent effects attached to it and that pursues similar aims and interests (Article 54). The current Regulation does not contain similar provision.
The revised Brussels I Regulation will facilitate the recognition and enforcement of judgements in other EU member states. It should be noted that the Brussels I Regulation is still used only in civil and trade law judgements. In practice, civil law and trade law encompass the majority of legal questions relating to companies’ international trade.
Enforcing judgements rendered outside the Brussels I Regulation and Lugano Convention is still much more limited and requires an international convention binding the country in question.
It should be noted that arbitral awards made in international arbitration are widely recognised and enforceable also in foreign nations. Under the Convention on the Recognition and Enforcement of Foreign Arbitral Award, also known as the New York Convention, which was concluded in 1958, the parties widely recognize the arbitral awards made in another convention member state. At the moment, 153 countries have ratified the New York Convention.