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Procédure civile

I attended recently a discussion among scholars about the notion of periculum in mora for the purposes of Article 7 of the Regulation 655/2014. In this context, attention was drawn to the decision of the Tribunal da Relação de Guimarães of 10 September 2020, which held (among other) that

IV. The preservation order requires proof of the requirements for the adoption of preventive measures: urgency, “fumus boni iuris” and “periculum in mora”.

V. The mere impossibility of collecting the claim, namely in an enforcement action instituted for that purpose, without being associated with any other element, is not enough to demonstrate the periculum in mora.

Looking at the text of the Regulation, the Portuguese court can hardly be criticised. According to Article 7(1),

The court shall issue the Preservation Order when the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for a protective measure in the form of a Preservation Order because there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim against the debtor will be impeded or made substantially more difficult.

The provision shall be read together with Recital 14:

The conditions for issuing the Preservation Order should strike an appropriate balance between the interest of the creditor in obtaining an Order and the interest of the debtor in preventing abuse of the Order.

Consequently, when the creditor applies for a Preservation Order prior to obtaining a judgment, the court with which the application is lodged should have to be satisfied on the basis of the evidence submitted by the creditor that the creditor is likely to succeed on the substance of his claim against the debtor.

Furthermore, the creditor should be required in all situations, including when he has already obtained a judgment, to demonstrate to the satisfaction of the court that his claim is in urgent need of judicial protection and that, without the Order, the enforcement of the existing or a future judgment may be impeded or made substantially more difficult because there is a real risk that, by the time the creditor is able to have the existing or a future judgment enforced, the debtor may have dissipated, concealed or destroyed his assets or have disposed of them under value, to an unusual extent or through unusual action.

The court should assess the evidence submitted by the creditor to support the existence of such a risk. This could relate, for instance, to the debtor’s conduct in respect of the creditor’s claim or in a previous dispute between the parties, to the debtor’s credit history, to the nature of the debtor’s assets and to any recent action taken by the debtor with regard to his assets. In assessing the evidence, the court may consider that withdrawals from accounts and instances of expenditure by the debtor to sustain the normal course of his business or recurrent family expenses are not, in themselves, unusual. The mere non-payment or contesting of the claim or the mere fact that the debtor has more than one creditor should not, in themselves, be considered sufficient evidence to justify the issuing of an Order. Nor should the mere fact that the financial circumstances of the debtor are poor or deteriorating, in itself, constitute a sufficient ground for the issuing of an Order. However, the court may take these factors into account in the overall assessment of the existence of the risk.

It should be noted, though – and it has been highlighted in the abovementioned exchange of views – that the national court actually makes a very restrictive interpretation of the periculum in mora, even when a judgment has already been delivered favoring the creditor. It is not enough that the enforcement cannot be carried out in Portugal due to lack of assets there; nor that the debtor resides in another country (Spain, in the case at hand). The creditor has to prove that there is an intention on the part of the debtor to dissipate his assets, and the link between such intention and the risk of not recovering the moneys.

The ‘subjective’ element seems to be a feature common to other Member States’ interpretation of Article 7 (such as Lithuania or Germany – see LG Bremen, ruling of 7 January 2020 – 3 O 2166/19), but not to all (Spain being, for instance, one with a much more lenient understanding of the requirement: apparently, the mere impossibility of enforcement in Spain suffices for the judicial clerk, who is the one in charge at this stage, to grant the order). Moreover, and somehow funnily, the Portuguese court reaches its conclusion arguing on the basis of the similarities between the provision of the Regulation, and Article 391 of the national Code of Civil Procedure. The trend appears to be shared by other Member States, like, again, Germany and Lithuania.

In the light of the foregoing, a request for interpretation to the CJUE would not be a surprise. Unfortunately, it will hardly address any longer the policy issue of whether it makes sense to subject the cross-border preservation order to the periculum in mora requirement in spite of having obtained a decision  (see against B. Hess, ‘Article 7 Regulation 655/2014’, in Scholsser/Hess, Europäisches Zivilprozessrecht, 5th ed., para 2, forthcoming).

NoA: Note that urgency is not mentioned under Article 35 of the Brussels I bis regulation, and that measures which, because they are urgent, are ordered without the defendant being summoned to appear, are not to be recognised and enforced under the Regulation unless the judgment containing the measure is served on the defendant prior to enforcement.

Many thanks to Carlos Santaló (MPI Luxembourg) for the information on the topic as well as feedback.

Jonathan Fitchen who is recognised as a leading scholar on the conflict of laws aspect of authentic instruments has just published a book titled “The Private International Law of Authentic Instruments” under the Hart Studies in Private International Law.

The abstract reads as follows:

This helpful book will equip the lawyer – whether notary, barrister or solicitor – with the legal information necessary to understand what an authentic instrument is (and what it is not), what it can (and what it cannot) be used to do in the course of contentious or noncontentions legal proceedings.
The book takes a two part approach. Part one focuses on an explanation of the nature of the foreign legal concept of an authentic instrument, setting out the modes of creation, typical domestic evidentiary effects and the typical domestic options to challenge such authentic instruments. Part two then examines and analyses authentic instruments under specific European Union private international law regulations, focusing on the different cross-border legal effects allowed and procedures that apply to each such.
Rigorous, authoritative and comprehensive, this will be an invaluable tool to all practitioners in the field.

More information on the book can be found here

The Court of Justice (Grand Chamber) delivered on 24 November 2020 its judgment in case C‑59/19 (Wikingerhof GmbH & Co. KG v Booking.com BV), which is about an action seeking an injunction against commercial practices considered to be contrary to competition law:

“Point 2 of Article 7 of Regulation (EU) No 1215/2012 […] must be interpreted as applying to an action seeking an injunction against certain practices implemented in the context of the contractual relationship between the applicant and the defendant, based on an allegation of abuse of a dominant position by the latter in breach of competition law”.

Source: http://curia.europa.eu/juris/document/document.jsf;jsessionid=0B3C35184AED407DFB5B8CDCFD47AD38?text=&docid=234206&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=15723679

Join us on 15 December 2020 at 12 noon (The Hague) for the launch of the Elgar Companion to the Hague Conference on Private International Law, edited by Thomas John, Rishi Gulati and Ben Köhler.

The book will be launched by Christophe Bernasconi, Secretary General of the HCCH, and is followed by a conversation and Q&A on a key theme that emerged in the Companion: the importance of private international law to providing access to justice. The speakers are:

• Professor Xandra Kramer, Erasmus University, and Deputy Judge, District Court, Rotterdam, NL
• Justin Gleeson SC, Barrister and Arbitrator, Banco Chambers, Sydney, AUS

Register here: https://lnkd.in/d7cyVF4. 

The Companion is a unique guide to the HCCH. 35 leading international experts contributed to this work. Their contributions offer a unique critical assessment of, and reflection on, past and possible future contributions of the HCCH to the further development and unification of private international law.

For more information on the book, including endorsements by Lord Collins, Professor Basedow, Professor Silberman, Justice de Nardi, Professor Neels and Professor Reyes, click here.