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European Enforcement Orders – An Easier Way to Enforce Uncontested Judgments?

In Chachani Misti v (1) Hostsplanet Ltd & (2) Finn Grimpe [2016] EWHC 983 (Ch) the High Court has considered an application for a European Enforcement Order (“EEO”) for the first time.

The EEO enforcement process is governed by EU Regulation (EC) No 1003/2008 (the “Regulation”). A judgment creditor may apply to the court which has handed down the judgment for an EEO certificate enabling a judgment creditor to enforce that judgment in any other EU member state by simply registering the certificate with the court of that other state. There is no requirement for any formal recognition of the judgment in the state where enforcement is sought and no requirement to serve the EEO certificate or judgment on the judgment debtor. By avoiding the requirement for recognition and service, obtaining an EEO certificate is a faster and less expensive enforcement method than the standard EU enforcement mechanism under the 2001 Brussels Regulation. A significant further benefit of obtaining an EEO is that the grounds for challenging one once granted are far more limited compared to enforcement under the 2001 Brussels Regulation.

In order obtain an EEO the judgment must have been made on or after 21 January 2005 and arise from uncontested civil or commercial claims. The claim must also meet certain minimum procedural standards (discussed further below) and judgments in relations to particular types of proceedings, such as bankruptcy and arbitration, are not enforceable by the EEO process.

The case

The Claimant sought to use the EEO enforcement process to enforce an English High Court judgment in default for $100,000 against both defendants for an infringement of copyright. As neither defendant had taken part in the initial court proceedings (having failed to file either an Acknowledgment of Service or Defence), the Claimant sought to enforce the judgment using the simplified EEO enforcement process.

The court sought an explanation as to how the Claimant had satisfied the additional procedural safeguard in the Regulation that the defendants must have had a proper opportunity to defend the claim.

The particular problem the Claimant faced was that, while it had a valid email address for the Second Defendant, it had no physical address for service . The Claimant was able to remedy this problem in the initial court proceedings by obtaining retrospective consent from the High Court to serve the Claim Form by an alternative method (i.e. by email).

However, under the Regulation a claimant can only obtain an EEO if, where a claimant has served proceedings by an electronic method, the defendant “expressly accepted the method of service in advance” (Article 14 (1)(f)). Furthermore, the Regulation states that service under Article 14(1) was not admissible for the purpose of obtaining an EEO “if the debtors address is not known with certainty”.

As a result of the narrowly drafted procedural safeguards in the Regulation the valid service of the claim by email on the Second Defendant fell short of the procedural safeguards for obtaining an EEO.

The Claimant was forced to rely upon Article 18(2) of the Regulation, which states where a claimant is unable to comply with the procedural requirements such non-compliance “shall be cured if [?] it is proved by the conduct of the debtor in the court proceedings that he has personally received the document to be served in sufficient time to arrange his defence”.

The Claimant sought to rely upon a short email response from the Second Defendant following service of the claim by email stating: “Just send documents by email” to show that the Article 18(2) requirement had been met and therefor EEO should be granted.

High Court Decision

The court agreed that the short email from the Second Defendant did qualify as conduct in the proceedings showing that he had received the document and allowed the application for an EEO.

The court found that the Second Defendant’s email response was sufficient conduct “in the court proceedings” to satisfy the requirements of Article 18(2). In doing so the court confirmed that the conduct required in order to satisfy Article 18(2) extends to conduct going wider than formal steps taken “in the proceedings” and extends to steps that are informal or not procedurally required in the proceedings.

Conclusion

This case highlights the procedural safeguards that must be satisfied before an EEO will be granted but also shows that the High Court can take a flexible approach in applying them. The lesson for the judgment creditor is to ensure not only that service is effected lawfully, but where email is relied on, to obtain the judgment debtor’s consent where possible. Difficulties will continue to arise where overseas defendants fail to accept or acknowledge service at all.

If you would like to discuss any of the issues raised further please speak to your usual contact or e-mail Charles Spragge or Max Palmer.

This news was posted on 27 May 2016.

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