Enforcement of British Judgments in Germany Following a “No-Deal Brexit”

A “no deal brexit” – i.e. a withdrawal of the United Kingdom from the European Union without an agreement on future relations – cannot be ruled out at present. Then, from one day to the next, the law of the European Union would no longer apply to the United Kingdom.

One of the consequences of this would be that EU law on mutual recognition and enforcement of judgments would no longer apply. Will British judgments no longer be enforceable in Germany (and vice versa)?

This would not be the case, but enforcement would become more complicated. The exact nature of the legal situation will depend on the UK’s behaviour after the Brexit. In detail:

1. Current Legal Situation

Regarding the relations between the Member States of the European Union, the Regulation of 12 December 2012 (hereinafter referred to as “EUGV Regulation 44/2001 (Brussels I)”) regulates the recognition and enforcement of judgments in civil and commercial matters. Accordingly, judgments of other member states are enforceable without further ado and without special proceedings. The judgment debtor is not even heard. If he wishes to oppose enforcement, it is up to him to apply for non-enforcement. The grounds for refusing enforcement are very limited (e.g. manifest infringement of the public policy). In short, enforcement is almost as simple as for domestic judgments.

2. Legal Situation After Brexit

In the case of a “No-Deal Brexit”, the EUGV Regulation 44/2001 (Brussels I) no longer applies in relation to the United Kingdom. How the legal situation then presents itself depends on the conduct of the United Kingdom:

(a) Situation Without Further Action

If the United Kingdom does not take any further steps, in future the creditor must first go through a special procedure in Germany in which a German court determines the admissibility of enforcement by means of an enforcement order (so-called exequatur procedure). The conditions for enforcement are also more restrictive in detail than previously under the EUGV Regulation 44/2001 (Brussels I).

However, the principle of liberal recognition and enforcement of foreign judgments would continue to apply. It would still not be necessary for the judgment to be “correct” under German law, but only for there to be no expressly regulated ground for refusal. One reason for refusal to enforce is that, conversely, enforcement of German judgments abroad is not guaranteed. However, this is likely to continue to be the case in the United Kingdom even after a “No-Deal Brexit”. For then an agreement of 14 July 1960 between the Federal Republic of Germany and the United Kingdom on the mutual recognition and enforcement of judicial decisions would again apply. Thereafter, Germany and the United Kingdom (under certain conditions) agree to the mutual enforcement of judgments.

If the British courts adhere to this, the German courts will also continue to declare British judgments enforceable here.

(b) Trade Between Companies: Accession of the United Kingdom to the Convention

In cross-border trade, companies often enter into court agreements with each other. In such cases, the legal situation described in (a) above would probably not apply for long. On 28 December 2018, the United Kingdom entered into the Hague Convention on Choice of Jurisdiction Agreements of 30 June 2005 (hereinafter referred to as the “HCCP”). The HCCP is an international convention which so far regulates the recognition and enforcement of judgments between the member states of the EU on the one hand and Mexico, Montenegro and Singapore on the other.

The HCCP obliges the contracting states to recognise jurisdiction agreements between merchants and to recognise and enforce judgments handed down on the basis of such agreements in a simplified procedure. The New York Convention of 1958 on the Recognition and Enforcement of Arbitral Awards is a model for this regulation.

For Germany, the details of this procedure are governed by the Act on the Execution of Interstate Recognition and Enforcement Contracts in Civil and Commercial Matters (hereinafter referred to as “AVAG”). The main difference compared to the situation described under a) above is that enforcement under the HVDC and AVAG does not require a separate judgment in Germany on recognition and enforceability. At the creditor’s request, the Regional Court orders the granting of an enforcement clause for the foreign judgment. This is done without hearing the debtor. The clause is issued by the judicial officer.

However, the United Kingdom’s accession to the HCCP is not yet final but subject to reservation. Given the uncertainties surrounding the Brexit and the unpredictable behaviour of the UK Government, it does not seem certain that the UK will actually become a legally effective member of the HCTI.

Outside the scope of the HVDC – i.e. for merchants without a jurisdiction agreement as well as for private individuals – the same applies anyway as stated under a): According to this, creditors would from now on have to go through a separate judicial recognition procedure in Germany after a “No-Deal Brexit” before they could enforce a British judgment here.

(21 October 2019)