FAQ: European Civil Procedure and Conflict of Laws

The Brussels Ia Regulation — EC No 1215/2012, in force since 10 January 2015 — is the central instrument of European civil procedure law and governs, in civil and commercial matters, both the international jurisdiction of the courts of EU member states and the recognition and enforcement of judgments between member states, with no prior declaration of enforceability — the so-called exequatur — being required since 2015.

The general rule is the principle actor sequitur forum rei, whereby the court at the defendant's domicile has jurisdiction. In addition, the Regulation provides for special jurisdictions — for example at the place of performance for contractual claims — as well as exclusive jurisdictions, in particular for rights in rem over immovable property, where the court of the place where the property is situated always has jurisdiction.

International jurisdiction in German-Italian litigation is governed by the Brussels Ia Regulation and is based on several grounds of jurisdiction. The general jurisdiction under Art. 4 lies at the defendant's domicile — if a German claimant sues an Italian company, the Italian courts will in principle have jurisdiction. In addition, Art. 7(1) provides a special jurisdiction for contractual matters at the place of performance of the characteristic obligation, i.e. for the sale of goods at the place of delivery and for services at the place where the service is provided, while Art. 7(2) in tort matters connects to the place of the harmful event or the place where the damage occurred. For rights in rem over immovable property, Art. 24 establishes exclusive jurisdiction at the place where the property is situated, which cannot be excluded by agreement. Finally, the parties may, by means of a valid choice-of-court agreement under Art. 25, derogate from general jurisdiction and thereby determine the forum themselves.

A choice-of-court clause — also known as a prorogation clause — under Art. 25 Brussels Ia enables the parties to designate by contract the jurisdiction of a specific court of an EU member state. The agreement must be concluded in writing or in a form which accords with practices established between the parties or with a usage in international trade, and an effective clause confers in principle exclusive jurisdiction, unless the parties have agreed otherwise.

Choice-of-court clauses are, however, subject to certain limits: exclusive statutory jurisdictions under Art. 24 Brussels Ia — in particular for rights in rem over immovable property — cannot be derogated from by party agreement, and in consumer matters prorogation clauses to the detriment of the consumer are only of limited effect. In my advisory practice it becomes clear time and again that the careful drafting of a choice-of-court clause in every commercial contract with a party from another EU state is one of the most important protective measures.

The concept of lis pendens — pendency of proceedings — in the European context refers to the situation where proceedings involving the same cause of action between the same parties are pending before courts in two different EU member states. The Brussels Ia Regulation addresses this situation in Art. 29 by providing that the court first seised retains jurisdiction, while the court subsequently seised must stay its proceedings or decline jurisdiction once the jurisdiction of the court first seised has been established.

In practice, the so-called "torpedo" proves to be a particularly relevant tactical problem: a claimant deliberately brings proceedings before a court known to be slow — for example in certain regions of southern Italy — in order to block the jurisdiction of the faster German court. In my advisory experience it is therefore advisable to guard effectively against this risk by means of a carefully drafted exclusive choice-of-court clause under Art. 31(2) Brussels Ia.

The Rome I Regulation — EC No 593/2008 — determines the law applicable to contractual obligations and grants the parties freedom of choice under Art. 3, while in the absence of such a choice the law of the party effecting the characteristic performance applies under Art. 4. Overriding mandatory provisions and rules of public policy within the meaning of Art. 9 remain unaffected in all cases.

The Rome II Regulation — EC No 864/2007 — governs the law applicable to non-contractual obligations, in particular in cases of tort, unjust enrichment and negotiorum gestio. The general rule here is the law of the place where the damage occurs — the so-called lex loci damni under Art. 4. Both Regulations apply uniformly in all EU member states and displace the respective national conflict-of-laws rules, meaning they also provide the governing framework for determining the applicable law in German-Italian legal transactions.

The lex rei sitae — the law of the place where the property is situated — is a fundamental principle of private international law, under which rights in rem over immovable property, in particular ownership, mortgages and easements, are always governed by the law of the state in which the property is located. Italian property law therefore always applies to property situated in Italy, regardless of the nationality of the parties or the law they have chosen by contract.

In practice, this means that all questions of acquisition of title — the trascrizione —, mortgages — ipoteca — and easements — servitù — are governed by the provisions of the Codice Civile. The EU Succession Regulation, too, which opens up freedom of choice of law for the succession statute, expressly leaves the lex rei sitae untouched as regards proprietary acts such as registration in the land register.

Since the Brussels Ia Regulation entered into force in 2015, judgments in civil and commercial matters are recognised and enforced between EU member states without any prior exequatur proceedings. The creditor presents to the enforcement authority in the destination state the complete judgment, a certified translation and the certificate under Art. 53 Brussels Ia — the so-called standard form I — whereupon the judgment is enforceable as if it were a domestic decision.

Article 45 Brussels Ia nevertheless provides for narrowly defined grounds for refusal, which in practice rarely succeed: enforcement may be refused if it would be manifestly contrary to the ordre public of the member state addressed, if the defendant was not served with the document instituting the proceedings in sufficient time, or if the judgment is irreconcilable with a domestic or earlier judgment. In my advisory practice in German-Italian legal transactions, however, these objections very rarely succeed, as both legal systems comply with the same European procedural standards.

The European Payment Order — governed by the EuZahlBefehlVO, EC No 1896/2006 — provides a uniform EU order-for-payment procedure for cross-border monetary claims in civil and commercial matters. The competent court issues the payment order without prior hearing of the debtor, and the debtor then has 30 days in which to lodge a statement of opposition. If no opposition is lodged, the payment order is declared enforceable and is directly enforceable in all EU member states without any further exequatur proceedings.

Compared with the purely national German Mahnverfahren, this instrument offers a considerable practical advantage: a European Payment Order obtained in Germany can be enforced directly in Italy without any additional intermediate proceedings — which enables a significant acceleration of debt recovery, particularly in cross-border commercial disputes.

The European Enforcement Order — governed by the EuVTVO, EC No 805/2004 — enables the direct cross-border enforcement of judgments on uncontested claims without any prior exequatur proceedings. The prerequisite is that the claim is uncontested, meaning the debtor has not opposed it, has acknowledged the debt or has failed to participate in the proceedings. The court of origin certifies the judgment as a European Enforcement Order by means of a standard form — Annex I of the EuVTVO — whereupon it becomes directly enforceable in all EU member states.

For contested judgments, the exequatur requirement has also been abolished since the Brussels Ia Regulation entered into force in 2015, so that Brussels Ia is often the more direct and efficient route in practice. The European Enforcement Order nonetheless retains its independent significance for situations in which Brussels Ia does not apply — for example in respect of certain subject matters or special cases falling outside its scope.

The European Small Claims Procedure — governed by the EuGFVO, EC No 861/2007, as amended by EC No 2421/2015 — applies to cross-border civil and commercial matters with a value in dispute of up to 5,000 euros. It is a standardised written procedure that does not require a mandatory oral hearing: both claimant and defendant use standard forms, and the court delivers its judgment on the basis of the written documents submitted. The resulting judgment is then certified as a European Enforcement Order and is directly enforceable in all EU member states.

For German-Italian disputes of low value — such as rental disputes relating to holiday properties or minor commercial claims — this procedure proves in practice to be a particularly cost-effective and efficient alternative to ordinary proceedings.

The ordre public exception — anchored in Art. 45(1)(a) Brussels Ia — allows a member state to refuse recognition or enforcement of a foreign judgment where to do so would be manifestly contrary to the fundamental values and legal principles of the member state addressed. This reservation clause must, according to consistent case law, be interpreted narrowly, so that mere deviations from national law or differences in procedural arrangements are by no means sufficient.

Recognised cases of application include in particular judgments that violate fundamental rights, those where there has been a manifest breach of the right to be heard, and decisions based on evidence obtained by unlawful means. In German-Italian practice, however, ordre public objections very rarely succeed, as both legal systems comply with the same European legal standards and the threshold for a manifest violation is correspondingly high.

The European Insolvency Regulation — EIR, EU No 2015/848 in the 2015 recast — governs, in cross-border insolvencies, both the jurisdiction for opening the main insolvency proceedings and the applicable insolvency law, as well as the automatic recognition of insolvency proceedings in other EU member states. Jurisdiction is based on the centre of the debtor's main interests — the so-called COMI (Centre of Main Interests) —, with the registered office being rebuttably presumed for companies.

For German-Italian legal transactions this means that insolvency proceedings opened in Germany over a German company are automatically recognised in Italy and the German insolvency administrator can at the same time access assets located in Italy. Italian creditors are entitled to lodge their claims in the German proceedings, and in respect of immovable property located in Italy special protective measures may in addition be taken under the applicable national law.