The Netherlands: The Recast of the Brussels Regulation
Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, also known as the Brussels Regulation, came into effect on March 1st, 2002. It set out a system for the allocation of jurisdiction and the reciprocal enforcement of judgments between EU Member States as well as Denmark. Generally, in civil and commercial matters, the Brussels Regulation governs jurisdictional issues before the EU Member State courts. Additionally, it provides a framework for the mutual recognition of judgments within the EU.
EU Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) ("the Recast") will be effective as of January 10th, 2015. The Recast hence applies to all legal proceedings, all executed or registered authentic deeds and all settlements approved by the court on or after January 10th 2015. There are some key changes and the headline reforms will be explained briefly below.
Abolition of the exequatur procedure
The proceedings by which judgments from one EU Member State are given effect within another member state has been simplified. The so called exequatur proceeding will be brought to an end. A declaration of enforceability of judgments of another EU Member State will no longer be required to execute a "foreign" judgment. The party that has been ordered to execute the judgment does, however, have the possibility to request for rejection of recognition or enforcement if there is a grounds for rejection. Enforcement of judgments within the EU Member States will therefore become much easier.
No more "Torpedo actions"
The lis pedens rule has been renewed. The lis pedens rule was adopted by the EU Court of Justice under the Brussels Regulation. It stipulates that once proceedings are brought in one EU Member State first, all other EU Member State courts must stay any proceedings involving the same parties and same cause of action pending the first court’s decision on jurisdiction. This is even the case if a proceeding has been brought in breach of an exclusive jurisdiction clause in favour of another EU Member State court and irrespective of the amount of time that the jurisdictional issues may take to resolve. The Brussels Regulation encouraged so called "torpedo actions" whereby proceedings are (wrongly) commenced in one EU Member State court to delay any proceedings in the chosen court. Under the Recast, there is no room for such maneuvers. The Recast specifically provides that if an EU Member State court – in favor of which an exclusive jurisdiction clause exists – is seized, any other EU Member State court must stay its proceedings.
Employment law competence
The current Brussels Regulation is applicable in civil and commercial matters where the defendant has domicile in an EU Member State. The current regulation is therefore not applicable if the defendant doesn't reside within an EU Member State. The Recast changes this general rule and has an exception for non-EU employers (no domicile within one of the EU Member States). Under the Recast, this type of employer can be summoned to appear before the courts of an EU Member State. The competent court is the court of the EU Member State in which the employee usually works or has worked. If the employee has more than one workplace (spread over more than one EU Member State) and the non-EU employer is the defendant, then non-EU employer will be deemed to be domiciled in the Member State that has a branch, agency or other establishment of that employer. In that case, the courts of that Member State are competent.
As of January 10th, 2015, it will become much easier to execute judgments from courts in "foreign" jurisdiction in your own Member State and to execute "domestic" judgments in other Member States. The Recast will also make it (almost) impossible to abuse the lis pedens rule if an exclusive jurisdiction clause exists. Finally, when it comes to employment law competence, the jurisdiction has been broadened in such a way that non-EU employers can also be summoned before the courts of EU Member States. Consequently, the rights of employees can be better protected. Only the future will tell if another recast will be necessary.
For more information on cross border execution or other legal matters in The Netherlands, contact our International Desk attorneys.
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