Nowadays, it is common for companies to operate across the entire European market, not just in Slovenia. However, doing business across the European Single Market is not always plain sailing and problems can arise when attempting to recover cross-border debts, which can prove an expensive endeavor. In this article, we bring you the easiest and cheapest way to recover cross-border debt.

At the level of the European Union (with the exception of Denmark), uncontested pecuniary claims (such as overdue invoices) can be recovered through a European order for payment. The latter is defined in the Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure (EOP Regulation).

The EOP Regulation allows for the recovery of uncontested claims that have fallen due in civil and commercial matters based on a standardized procedure using standard forms. After an application has been completed on the appropriate form, the court examines it and issues the European order for payment within 30 days. Court fees are payable depending on the claim amount. Once the European order for payment has been served, the debtor can object the European order for payment within 30 days. If the debtor files an objection, how the procedure will play out is up to the creditor, who can mark on the form how the procedure should be continued in the event of an objection. The creditor may choose between the following options: i) the procedure shall continue before the national court; ii) the procedure shall continue in accordance with the European Small Claims Procedure, or iii) the procedure shall be terminated. If the debtor does not lodge an objection the European order for payment becomes enforceable; the translation is then sent to the Member State of enforcement, which executes the European order for payment in accordance with its national law.

Where the creditor already has an enforceable document, it may be enforced in one of the Member States (except Denmark) with the European Enforcement Order for uncontested claims governed by Regulation (EC) No 805/2004 of 21 April 2004 (EEO Regulation).

The EEO Regulation was adopted in order to lay down minimum standards for the free circulation of judgments, court settlements and authentic instruments, without additional unnecessary procedures. The procedure of the EEO Regulation is also applicable, for example, when enforcing enforcement orders on the basis of an authentic instrument, if the debtor has assets abroad. However, as pointed out, it applies only to uncontested claims, which means that, inter alia, one of the following conditions must be met: i) the debtor has expressly agreed to the claim by admission or by means of a settlement approved by a court or concluded before a court during the proceedings; ii) the debtor has never objected to the claim during the court proceedings in accordance with the relevant procedural requirements; iii) the debtor was not present or represented at a court hearing regarding the claim after initially objecting to the claim during the court proceedings, if such conduct implies tacit admission of the claim or the facts alleged by the creditor, or iv) the debtor expressly agreed to the claim in an authentic instrument. However, if the enforceable document does not meet the conditions specified in the EEO Regulation, the execution is possible under Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (BU I).

The BU I Regulation provides that a foreign judgment is enforceable in other Member States without any declaration of enforceability being required in a special procedure. For the enforcement procedure, a copy of the judgment and the certificate set out in Annex of the BU I issued by the court in the country of origin of the judgment, must be provided. On the application by any interested party (usually the debtor), recognition of a judgement may be refused if certain conditions are met (for example, if the recognition is manifestly contrary to public policy (ordre public) in the Member State addressed).

Author:  Tina Marciuš Ravnikar, Associate (Fabiani, Petrovič, Jeraj, Rejc d.o.o.)