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Collection abroad becomes easier

Collection abroad becomes easier

The large majority of Dutch entrepreneurs who do business with parties across the border will have to deal with foreign non-payers at one time or another. As a Dutch entrepreneur, you may often have the feeling that it is difficult to collect your claim abroad. That is not (always) the case, as this article informs you.

What is the European Enforcement Order?
Until recently, there was little you could accomplish abroad with a Dutch court decision in which your foreign counterparty was ordered to pay money. Specifically, you first needed to obtain leave to enforce (an exequatur) from a foreign court in order to be able to enforce the Dutch decision abroad. Since the end of 2005 however, a European regulation has provided the possibility to have Dutch court decisions easily enforced in other EU member states. You can ask the Dutch judge to authenticate his decision as a European Enforcement Order.

Conditions for enforcement
There are conditions for the authentication as European Enforcement Order. The case must involve an uncontested claim, for instance. There are also requirements that guarantee that the non-payer’s interests are not lost sight of. For instance, before authenticating the decision the Dutch judge tests whether the particular writ of summons contains sufficient information on the claim. The non-payer must be informed of the grounds for the legal action and the amount of the debt, for example. The introductory writ of summons must also make it clear to the debtor how and within what time period the claim can be contested.

Decision sent to the foreign bailiff
Once the Dutch decision has been authenticated as a European Enforcement Order, you can have this decision sent to (the foreign equivalent of) the Dutch bailiff, which can then take measures to enforce the judgement against your foreign counterparty.

If the decision cannot be authenticated, for example because your counterparty contests the claim, the so-called exequatur procedure must be followed. In this process, the formal aspects of the Dutch decision must first be tested abroad by a judge in that other country. This procedure can take some time and involve additional costs. All in all, the European Enforcement Order is a suitable instrument for collecting an (uncontested) claim on your foreign non-payer within a relatively short period of time and at reasonable costs.

Even easier collection with the European Payment Order
As of 12 December 2008 it became even easier to collect claims on foreign debtors established in a European Union member state. The authentication as European Enforcement Order takes place by the issue of a standard form. A separate form is no longer required in order to obtain a European Payment Order therefore. The European Payment Order is a standard notification in which the foreign debtor is notified by the law court that he must either pay the amount cited in the payment order to the claimant, or wage a defence against the claim.

It must also be pointed out in this context that all judicial decisions in the area of commercial law can be authenticated as European Enforcement Orders. The European Payment Order is only given for a claim based on a trade agreement, an unpaid invoice therefore.

Each member state itself appoints an authority that is authorised to issue payment orders. In the Netherlands, it is the courts that are authorised to issue payment orders. The payment order can be immediately enforced in all EU member states.

Does your claim satisfy the conditions?
Before you can collect your claim on a non-payer using a European Payment Order, it is important to figure out whether the conditions stipulated have been met. The payment dispute must take place within a contractual commercial-law relationship and the claim may not be contested. The dispute must also be of a cross-border nature. At least one of the parties involved must have its place of residence or habitual residence in a member state other than the member state of the court to which application is made. European law determines the appointed law court in each member state that is authorised to issue the payment order. The main rule is that the court in the non-payer’s country of residence is authorised. Alternative judges are also authorised, such as the judge of the country where the characteristic performance under the contract is performed.

How do you submit a request?
You can submit a request for a payment order by submitting a standard form to the court in the Netherlands or to the competent court in the other member state. The forms are identical for all member states of the European Union. This form reports the required information for the payment order, such as the specification of the claim and the non-payer’s details. After receipt of the documents, the court grants the order on the basis of the form and the documents submitted. The court can also deny the request for a payment order, for instance if information is missing or the formal requirements have not been satisfied.

The non-payer is not heard before the order is issued. If he does not agree with the order, he must submit a statement of defence to the court as soon as he becomes aware of the payment order. The intervention of a lawyer or local counsel is not required for this.

Conclusion: take advantage of it
In this article we draw your attention to interesting international developments that make it easier to force your non-paying debtors who are located in other EU member states to pay, while you incur relatively limited costs.

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