This article refers to a number of problems regarding the international jurisdiction for issuing temporary and protective measures, as well as the related matters on the recognition and the enforcement of such measure on other states - including EU member states and Republic of Croatia. Current situation cannot be considered as efficient especially having in mind certain decisions of the European Court and unpredictable outcome of the proceedings relating to the temporary measures which could be conducted in the EU member states and Croatia. Therefore the authors plead for the revision of the Regulation 44/2001 and similar legislative interventions in Croatia.
1. We believe that one recent case (finalized in 2010) will provide the best introduction to the issue of recognition and enforcement of foreign temporary measures. Case of Motorola Credit Corporation v Uzan and others[1] illustrates very well the importance of temporary measures in proceedings, but also the complexity of a particular case containing a foreign element, which places significant legal challenges before the court. Specifically, in 2002 Motorola Corporation (along with Nokia) requested a temporary measure (handing over the deposit shares to the court) before the Court of New York, as means of securing payment for their claims obtained from the proceeding conducted for fraud against their Turkish business associates, Uzan and others. In short, the plaintiff claimed that he financed the construction of mobile communication network in Turkey, which was implemented in the field by Telsim Mobil Telekomunikasyon Hizmetleri A. S. and Rumeli Phone Sistemreli A. S. After a while, the Turkish partner stopped repaying the loan, and thus Motorola, suspecting a fraud, raised a complaint against persons whom they believed were behind Telsim and Rumeli Telefon, Uzan family and their business partners. They requested a temporary measure through the Court of New York to freeze Telsim shares, owned by Standart Telekom, none of which were the parties to the main proceedings, but were holding certain assets in the territory under the Court of New York jurisdiction. It should only be mentioned that the loan agreements provided that the contract is governed by Swiss law and that all disputes relating to it will be addressed by the three-member arbitration panel in Switzerland, according to the International Arbitration Rules of the Zürich Chamber of Commerce. In order to secure his claim, the plaintiff attempted to obtain a temporary measure prohibiting the disposal of assets in England as well, and its enforcement was carried out in Switzerland at the Swiss Federal Court.
2. Therefore, the afore mentioned shows a great practical importance of temporary measures as a special means of judicial involuntary security of claims, which is much needed in every civil law system as a guarantee for realization of rights. Specifically, creditors are often forced to request the security of their rights, and consequently of various claims, since the proceedings for their definitive realization can last a long time. In order to prevent the debtor to change the state of affairs during that period by disposing and reducing the assets, and thus to hinder or prevent the settlement, temporary measures are at the disposal of the creditor. Without such possibility, a regular proceeding for the protection of rights would often be meaningless because the position of the creditor would become significantly more difficult. He would be forced to exercise the protection by initiating additional proceedings which would be aimed at restoring previous state of affairs, contesting legal actions of the debtor (actio pauliana) etc.
3. Security is sometimes necessary even if there is an enforceable instrument with respect to the rights of creditors, but the enforcement cannot yet be implemented, for example, if there is a deadline for voluntary compliance with the obligations that were laid down by court's decision or if there is pactum de non petendo. This mostly involves securing the realization of claims, which will most likely be ordered to the debtor in the future enforceable instrument, but sometimes it is necessary to temporarily regulate the relationship between the parties, or order the debtor to refrain from certain actions, to act or abide - usually in the disputes regarding possession, labour and family.
4. Security can refer to all types of claims, including both pecuniary and non-pecuniary, and can be specified in different types of proceedings, so it can be determined in civil and extra-contentious proceedings, as well as in criminal and administrative proceedings. In comparative law there are different types of security claims.[2]
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5. The subject of this paper is not voluntary security (e.g. establishment of a pledge, or transfer of ownership for security based on the agreement of the parties), but only those that relate to certain temporary measures against the will of the debtor. Primarily we deal with the issues of international jurisdiction of courts and other bodies in making decisions on temporary measures, and recognition of the effects of those decisions in other states.
1. Croatian law provides for different types of security - enforced establishment of a pledge right on the property, previous enforcement, and previous temporary measures.[3] At this point it should be noted that the security through forced establishment of a mortgage on the property may be ordered only if the creditor already has an enforceable instrument, which defined his pecuniary claim.[4] Previous enforcement is also ordered to secure the claims set out in the enforceable instrument, but only for the non-pecuniary claims.[5] Previous measures are in turn ordered to secure pecuniary claims determined by decisions of the competent authorities or through settlements made before them, and in the notary instruments - if the claims set forth in these documents are not due or the decisions of the competent authorities have not become enforceable.[6] On the other hand, the provision of temporary measures may be ordered when the creditor proves likelihood of his claims, and show the danger that it will not be possible to realize it, or its realization will be much more difficult if the temporary measure is not determined.[7] Usually accepted view, including the Croatian law, is that security through temporary measures can be requested not only for the duration of the proceedings but also before its initiation.[8] That is the proper attitude, and we can consider it useful for the protection of creditors - since temporary measures should constitute a tactical surprise for the debtor and disable him, in the period when he is expecting the initiation of the proceeding, to have at his disposal the object of security or to change the state of affairs in order to prevent or obstruct the settlement of creditors. However, one should also take into account the interests of debtors and disable fraudulent acts of creditors in a way that if he cannot prove the existence of his claim and show the danger that it will not be realized or its realization will be significantly difficult, he must do it on the level of probability. Certainly, if it would turn out that the measure was unjustified, he should also be given the right to compensation. This is foreseen in Croatian law as well.[9]
2. The above described security measures may have different names[10] in comparative law, and can be classified in various ways.[11] Some of them are intended only for the preservation of the current situation[12] to secure that the creditors' claims which either are not due or are not defined in the document on the basis of which its forced realization could be ordered. Most often the issue is the prohibition or restriction of the disposition of some property that could be used for future enforcement. On the other hand, some security measures actually govern the relationship between the parties, so the debtor may be ordered to pay a certain sum of money during the divorce proceedings, to refrain from any action for the duration of the court proceedings, and the like. Some are by their very nature in personam, and generally refer to the person they are determined for. This person does not necessarily have to be a participant in the proceedings, for example, in case of an order to a bank to withhold payment from the debtor accounts and similar. The effects of the others relate primarily to the "res" (in rem), for example, temporary seizure of belongings, entry of restrictions regarding disposition of property in public books and similar. Types of temporary measures, according to their content, are limited only by imagination of the legislators of individual states and motions of the parties.
3. Taking the afore mentioned into consideration, lets imagine what are the challenges for a judge or other person who has to make a decision on temporary measures in internationally marked case, or what sort of dilemma has the one that must enforce the temporary measures. Almost all modern legal systems recognize temporary measures, but there are differences with respect to their scope, content, prerequisites for the determination etc.
1. Certainly, from the standpoint of creditors (the proponents of temporary measures), if there is a competitive jurisdiction of the court which is competent to decide on the merits of the dispute and the court which has jurisdiction over the enforcement of temporary measures, practical question arises - whether to request from a court which has the jurisdiction for determining the merits or one which would be responsible for enforcing it? This problem occurs in the national law as well, and if the courts in question are in different countries it
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is even more emphasized. From the standpoint of a particular court, the questions arise of whether it has jurisdiction for ordering temporary measures which are supposed to have extraterritorial effects, as well as whether it will recognize the one ordered by a foreign court if it should be carried out on its territory - this also applies to situations when it has the jurisdiction to address the merits, and to situations when this is not the case.
2. If the determining of the temporary measure is requested before the start of the proceedings, it would be opportune to do so before a court that has jurisdiction over its enforcement - of course, if it has jurisdiction, and if the jurisdiction of the court which would be competent to decide on the merits is not exclusive. In such a case, the proponents of the temporary measures should seek its justification in a certain period of time - usually this would be done in a way that he should submit evidence of initiating the proceeding in which his right will finally be realized. The reasons for this action could be found after the start of the proceeding. In this case it is not actually the problem of recognition and of forced enforcement of measures, since it will be both determined and implemented by the same court. Thus, according to Croatian law, which in enforcement proceedings and security proceedings generally accepts exclusively local, and therefore also the international jurisdiction of the courts,[13] with respect to temporary measures it is still allowed for them to be determined by the court that should enforce them, and not the court that decides on the merits, however it should not be considered exclusive.[14]
3. Previously stated position may, in our view unjustifiably, be criticised, and it can be considered that the court should not have the jurisdiction on merits if the object of security is not under their jurisdiction. For example, if the plaintiff in the proceedings before the Croatian courts should secure his claim through temporary measure that would include a prohibition of the disposal of any property in the United States, the question would arise whether the decision on temporary measures should be requested from a Croatian or from a U.S. court? If it would be done by a Croatian court, it is clear that its decision should have extraterritorial effect, so it would raise an additional question of its recognition and enforcement in the United States. By all accounts, the U.S. courts would recognize such a temporary measure, and enforce it. Sometimes they allow such a possibility in "exceptional circumstances" - and so have recognized and enforced a temporary measure of a Venezuelan court, which referred to "freezing of assets" for securing the claim regarding maintenance.[15] As for the United States, the position that only final decisions of the court (res judicata) can be recognized is being more and more abandoned.[16]
4. What would be the view of a Croatian court in opposite situation, given the absence of judicial data, we can only speculate. We believe that the foreign temporary measures could be recognized and enforced in Croatia. This stems from the provisions of Article 17 of the Enforcement Act, which stipulates that the foreign court decision, and subsequently the foreign temporary measures may be implemented, although some concerns could be expressed about it.[17] In fact, it is quite certain that foreign temporary measure is a "judicial decision", but this provision could be interpreted in such a way that it applies only to those decisions which were decided on the merits. It would be wrong, because the relevant provisions of the Law on Resolving Conflicts of Laws with Regulations of Other Countries in Certain Affairs also applies to all court decisions.[18] However, decisions on temporary measures should nevertheless comply with other provisions stipulated by this law, so they should be enforceable in the country of origin, and would not be recognized if the opposing party could not participate in the proceedings in which they were ordered.[19] In that sense, this regulation could be amended in a way that would clearly predict how it relates to the decisions on temporary measures that could be recognized even if they are determined in the proceedings in which the opposing party could not participate - if it is possible for her to refute it with some legal remedy, and if the proponent has given a guarantee for possible damages done the counter party when the decision was unfounded. Certainly, with regard to the preconditions for further recognition, the existing provisions relating to public order should apply, as well as the absence of exclusive jurisdiction of Croatian courts.
1. Our opinion is that we should accept the possibility of temporary measures ordered by the courts that do not have jurisdiction to rule on the merits - if the object of security is in the territory of the state ordering the temporary measure, or if its enforcement is in its territory. Of course, if it should be implemented in the territory of another country this would not be considered as possible. It is quite clear that, if the court of a Member State is not competent to decide on the merits, nor there is any asset of the counterparty in its territory, or for some other reason there
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is no competency to enforce temporary measures, a decision it would bring would be pointless.
2. Regulation 44/2001 generally allows that a court which is not competent to make a decision on the subject matter determines a temporary measure.[20] What it does not clearly and unambiguously resolve is: 1) when it would not be allowed, and 2) whether the temporary measures determined in such a way would have effects in the territory of other Member States of the European Union? The same problem arises in the case of temporary measures ordered by the court that is internationally responsible for resolving the merits, and which should be carried out in the territory of another state.
3. The decision on temporary measures should be considered a "judgment" according to Regulation 44/2001. In its relevant provision it is not sufficiently precise, so there may be different views.[21] Specifically, the questions are: 1) whether it applies only to decisions that are not subject to subsequent changes (res iudicata) or also to those which do not fall into this category, including temporary measures, and 2) whether ratione materiae is applicable to all types of temporary measures predicted by legal systems of individual countries?
4. Both questions should generally be given a positive response, although it should provide for exceptions, especially in those cases where the court that issued the decision on temporary measures is not responsible for its enforcement and when the debtor -the opponent of the security in the state of recognition and enforcement of the temporary measures is not protected by the warranty of the proponent for possible damage which could be caused to him if it turns out that the temporary measure was unjustified.
5. With regard to this issue, the judgment of the European Court in the case of Turner v. Felix Fareed Ismail Grovit et al[22] should be mentioned. In this case, the English court had jurisdiction in the labour dispute against Spanish respondent - employer. However, he subsequently initiated the proceedings before the Spanish court for compensation regarding employment, and the English court, according to the plaintiff's claim, should have issued a temporary measure that would have the effect of extraterritoriality, that is, which would prohibit the Spanish respondent to initiate the proceedings before the Spanish court. An opinion was requested from the European Court regarding the possibility of ordering such temporary measures which was quite clear in his refusal.[23]
6. The judgement of the above mentioned court in the case of Van Uden Maritime BV, trading with Van Uden Africa Line v. Kommanditgesellschaft in Firma Deco - Line and others relating to Article 24 of the Brussels Convention, which is substantially identical to Article 32 of the Regulation should particularly be mentioned.[24] According to it, a temporary measure that was ordered to temporarily fulfil contractual obligations cannot be considered a "decision" in the sense of that provision - if the proponent does not provide a guarantee in case of his failure in the proceedings on the merits, and if it does not relate to a specific property that is within the jurisdiction of court of the state of recognition.[25] Although the temporary enforcement is recognized and known as a temporary measure in many EU member states, many of them request, as a precondition for determining the temporary measure, security from the plaintiff in case he does not succeed in the merit proceedings.
7. Besides this, the discussions on this topic often state the significance of the judgement of the European Court in the case of Hans-Herman Mietz v Intership Yachting Sneek[26] where the issue of jurisdiction of the court that ordered a temporary measure was raised. The decision in question is one of the Dutch Court in the kort geding proceedings (proceedings for determining temporary measures, and which are characterized by urgency and can be initiated independently of the proceedings on the merits).[27] Similarly, as in the previous case, the European Court ruled that it was a violation of Article 31 of the Regulation, although the explanation was different; it started from Article 289 of the Dutch Code of Civil Procedure, and through this it concluded that the kort geding proceeding is in accordance with Article 31 of the Brussels Regulation, however, the decision it made, is not considered a temporary measure, because, as in the afore mentioned case, the temporary enforcement cannot be regarded as a temporary measure because the contractor did not give a guarantee in case of failure of the main dispute (which, as we have previously mentioned, in some EU countries is a necessary prerequisite for the determination of this measure). We believe that such an interpretation clearly raises the question of qualifications. According to our understanding, it would be necessary to specifically define what should be considered as "temporary measures" since the provision of Article 31 states that "... such temporary, including protective measures as may be available under the law of that State ..." can be differently interpreted.[28] Besides, this example clearly testifies to the need to harmonize national rules in the EU, or as will be discussed below, the need for a new supra-national regulations that will solve the issue of temporary measures in a new way and bring more legal certainty and enable effective enforcement of judgments in the EU.
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8. In addition, the European Court held that the provision of Article 32 of the Regulation applies to temporary measures - but it allows that the exceptions are not provided by it. Therefore, it would be more practical to amend this provision as well and to solve the problem in a clearer way. This is required also by the reasons of legal certainty.
9. All of the above, the ambiguities, legal gaps, and consequently a lack of legal certainty, called for an ongoing debate in the EU on new solutions that will enhance and facilitate the implementation of decisions and judgments, especially after the entry into force of the Treaty of Amsterdam (May 1st 1999) which has reformed legislative activity. A big step in that direction has been made by bringing various instruments which regulate jurisdiction, recognition of international judgments, and cooperation between the courts, but there is still no satisfactory legal framework that would allow the decision or a verdict to be ultimately enforced. The enforcement of the judgment is often referred to as the "Achilles heel" of civil proceedings in the EU.
10. Issue in question has been present for a long time, so at this point we bring the results of the debate that led to finding the best solutions to this problem. These are presented in the Green Paper on Improving the Efficiency of the Enforcement of Judgments in the European Union: The Attachment of Bank Accounts[29] (the Green Paper).
11. The aim of this Green Paper (as all others) is to "start of extensive consultation among interested parties on how to increase the effectiveness of enforcing pecuniary claims in Europe", because "the current fragmentation of national rules on the enforcement often prevent cross-border debt recovery. The contractor while waiting for order enforcement is often faced with unfamiliar legal systems, procedural requirements, language barriers that require additional costs and delay the enforcement process."[30]
12. Since in some countries there is a system of freezing bank accounts that has proven to be an effective measure of receivables, recent proposals are pursuing that direction. Before we analyze in detail the proposals it should be noted that the attachment of the account signifies the procedure of actually blocking or freezing of movable property of the debtor held by a third party, and also prevents the third person to pass the possession to someone else.[31]
13. It is known today that the funds from one bank can be moved to another in a very short time, regardless of whether it is a domestic or a foreign bank. System of blocking accounts would be ineffective, if it did not contain a mechanism to prevent the debtor to transfer funds to another account. This was recognized as a problem, but there is no such requirement for a blockade (seizure, freeze) that could be implemented throughout the Union.
14. New solutions are sought regarding these issues. It is therefore necessary, to form a European order for freezing bank accounts that would allow the contractor to secure a certain amount of money, depending on the claim, which would at the same time prevent the debtor to transfer funds to other accounts in other banks in the EU. Such an order would be valid throughout the Union, and would be directly enforced in each state without conducting the recognition proceedings. It is necessary to secure adequate protection of creditors, which will protect the entire system from abuse.[32] However, although this sounds logical, acceptable and simple, it is necessary to make some dramatic changes in order to realize it. We need to create a new, independent process at the EU level, which would be consistent with the measures that exist in the national legislations of the Member States, or to unify the rules of Member States with a new Directive that should contain additional rules that would allow the court order to block the bank account issued in one Member State to be in force in the entire territory of the Union.[33]
15. In addition to these issues of shaping the system of "European Account Preservation Order Regulation", the debate offered numerous questions concerning the development of the procedure, for example, at which point the contractor may request the issuance of this order, before the proceedings, along with the start of the proceedings, or at any time during the proceedings, but one should also be careful to protect the debtors so they would not suffer any damage or unjustified loss, especially if the order is issued prior to the proceedings. Therefore, the possibilities of the creditor to settle the damage that the debtor may suffer if the creditor fails in his claim should be taken into account. Moreover, it is necessary to provide evidence that the circumstances justify the creditor's demand, and that it is likely that the creditor will succeed in the proceedings. In addition, it is necessary to prove the urgency. The creditor must prove the existence of circumstances indicating that the debtor will try to evade or obstruct the realisation of the claim. One should carefully consider the nature of the claim, taking into account the differences between the legal systems of the Member States, and in doing so, to take into account the interests of both parties. The question whether the security amount should be determined in court proceedings or it should be determined by national law was put up for the debate.[34]
16. According to previous experiences in Member States where there is an order to block the account,
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the debtor is not informed of the issuance of this order, as this would be contrary to the original purpose for which the order was issued. The 'element of surprise' would fail. Such a solution was put up for the discussion - the question was whether, in spite of everything, the debtor should be informed about the issuance of this order.[35]
17. As for jurisdiction, the solutions were offered in the wake of the afore mentioned: the court having jurisdiction on the merits should be responsible for the issuance of the order, and in addition to its issuance the jurisdiction can be given also to the court of the respondent's residence if he lives elsewhere, as well as to the court of any Member State where the bank in which the debtor has an account is located.[36]
18. Without going deeper into the details, let us just mention the important question of exequatur. The Commission has taken the view that the order should be carried out directly on the whole territory of the EU, but has opened the debate on whether or not to abolish exequatur.[37]
19. After this brief review of recent debates about the direction in which the final shaping of the legal issues of the enforcement of foreign temporary measures in the EU should go, let us just say that we desire a faster transformation of these proposals into an instrument of the community, of which we will soon be part of, because we believe that it is essential, and that it would contribute significantly to increasing legal certainty.
1. The issue of recognition and enforcement of foreign temporary measures at the international level is not systematically organized, and the same applies to the European Union. We cannot say that there is a well established practice of the courts, nor scientific bibliography, although we should mention some recent exceptions.[38]
2. Preliminary draft of the Hague Convention on Jurisdiction and the Recognition of Foreign Judgments in Civil and Commercial Matters of 30 October 1999 allows the court with international jurisdiction to order any temporary measure - thus even the one that would have extraterritorial effect, without exceptions. The same is the position of the court in whose territory the property on which the temporary measure applies. As far as the courts which are not competent to decide on the merits goes, nor there are assets on their territory which would be the object of security, they can order it only if its enforcement was done in the state of the court that issued the order on temporary measure, and if the purpose is a temporary protection of proponents' claim in an ongoing proceedings or which will be initiated.[39] These provisions do not really address the issue of recognition of temporary measures in other states.[40]
3. Transnational principles of civil procedure of 2004 deal with the issue of the recognition of temporary measures in terms of assumptions for their determination in national law,[41] but stipulate that if they are met, all the temporary measures which are not contrary to public policy should be recognized in other states.[42]
4. Broader interpretation of international treaties and regulations of individual countries should still lead to the conclusion that the recognition of foreign temporary measures in their territory is possible in principle - under certain assumptions usually prescribed to them. The problem is that they are not usually sufficiently clear and precise, and always raise additional questions.
5. Same applies to some international treaties signed by Croatia, which do not mention the possibility of recognition and enforcement of foreign temporary measures; however, they leave the possibility for their recognition - although not without some doubts. Specifically, they mention the recognition of "final courts' judgement", a term which, in our view, includes also temporary measures. Certainly, the final judgement on a temporary measure implies that the opposing party to the proceedings had the opportunity to participate - thus the recognition of temporary measures that were determined ex parte is dubious.
6. For example, the contract with Turkey provides for the recognition of "judicial decisions" and the decisions of other authorities that are equal to judicial decisions,[43] which certainly presupposes a decision on temporary measures, which are not judgments, and which are ultimately used for deciding on the merits of the plaintiff but usually have some other name - in Croatia "solution." The contract ratione materie refers to "final court judgements" which determine which solutions the temporary measures can be, while some other assumptions need to be fulfilled - certainly one that is related to the fact that the opposing party to the proceedings was able to participate in it. It is not clear whether the linguistic imprecision, i.e., whether there was an intent of the parties to extend the scope of this treaty to a final judgement on temporary measures or not. However, the Croatian regulations also provide that the temporary measures could be recognized and enforced in the Republic of Croatia. This stems from afore
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mentioned provisions of the Enforcement Act and Civil Procedure Act.
7. When it comes to Croatian treaty with Turkey, this provides for mutual recognition of "judgements" so it will recognize: 1) judgements made in any contracting party if they are valid and enforced on its territory, 2) if the summons was properly submitted to the respondent, in accordance with the right of the contracting party that made the decision, 3) if the parties to the proceedings were not denied their right to a defence and were not serviced with the summons to the court and were not given the opportunity to be represented in the event of their incapacitation to act, 4) if there is no final judgement rendered in the same legal matter between the same parties on the territory of the contracting party where the recognition and enforcement is requested, 5) if there is no pending proceedings regarding the same legal matter between the same parties before the court of the contracting party where the recognition and enforcement is requested, and 6) if the judgement is not contrary to the fundamental principles of law and public policy of the contracting party where the recognition and enforcement is requested. What remains unclear in this agreement is whether the term "judgement" is considered a decision on temporary measures as well. That, considering that the foreign temporary measure would not be recognized "if there is pending proceedings in the same legal matter" before the court of the state of recognition or it had already rendered a judgement in such matters. Since we do not have applicable (English) text of this agreement, we cannot with certainty give answer regarding the scope of these provisions, that is, whether it applies only to decisions on the merits or on other judgements. If that is not the case, it literally assumes that foreign temporary measures would not be recognized if there is an ongoing proceeding on the merits in the state of recognition. We think it would not be the right solution for every situation.
8. Thus, if there would be an ongoing proceedings before the Turkish court, the temporary measure ordered by the Croatian court, applicable, for example, to the prohibition of disposal of the funds in the bank account in Turkey, it could not be recognized in that state. Parties would have to ask the Turkish court to order such a measure, although the situations when the Croatian court would be more practical for reasons of urgency or cost-effectiveness. However, it can be considered that a temporary measure ordered by the Turkish court having jurisdiction regarding the merits should be recognized, and which would apply to such a prohibition on Croatian territory.
9. Afore mentioned also refers to the Croatian treaties with Bosnia and Herzegovina,[44] (which does not apply to the Republic of Srpska),[45] Macedonia,[46] and Slovenia.[47] Their relevant provisions are almost identical, except that, unlike the treaty with Turkey, they provide an additional assumption that exclusive jurisdiction of the state of recognition must not exist. According to all these treaties ex parte temporary measures could not be recognized, since they have often intended to be a sort of a surprise for debtors, and which significantly reduces their effectiveness.
1. Considering the perspective of creditors who are residents in the European Union, and the courts in the Member States, the previously mentioned issues arise - before which court may the determining of the temporary measure be sought and whether it will have extraterritorial effect - various situations that Croatian courts will face can be analyzed - of course, if and when Croatia becomes an EU member state. For example, 1) a creditor residing in one Member State may have a claim against a person residing in this state, and the object of security may be located on the territory of another member state, or 2) a creditor residing in one Member State may have a claim against a person ordinarily resident in the territory of another Member State, and the object of security is in the state of residence of the creditor, 3) the creditor residing in one Member State may have a claim against a person who resides in another Member State, and the object of security is in the area of the state residence of the debtor, and 4) the creditor residing in one Member State may have a claim against a person who resides in another Member State, and the object of security is on the territory of a third Member State.
2. In the case referred to under 1) there is no jurisdiction of a domestic court to address the merits, but temporary measure ordered by the court would assume that its effects are recognized on the territory of another member state. We believe that this should be possible with the above mentioned limitations (see p. 8 and 9). A particular problem could still constitute an ex parte recognition of temporary measures, as in the case of mentioned Croatian bilateral treaties.
3. In the case under 2) the creditor could, regardless of whether the court of his residence has jurisdiction on the merits, request from the court the security of his claims which will definitely be determined in the final judgment - so the question of its recognition and enforcement would not even arise.
4. In the case referred to under 3), two different situations may occur. If the jurisdiction on the merits lies on the court of the creditor's residence,
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it would face the problem of whether its temporary measure would be recognized in domain of court that should enforce it? However, if the jurisdiction on the merits lies on the court of the state of the debtor, where the temporary measure should be enforced, could it affect the court of the creditor not to order the temporary measure at all? We believe that in the first case the effects determined in that way should be recognized, whereby the limits specified under point 26 should be taken into account. In the second case, the reasons for the conclusion that the creditor's state court should not be able to order the temporary measure with extraterritorial effect have prevalence.
5. In the case referred to under 4) it is clear that the court which should enforce the temporary measure does not have jurisdiction on the merits, so the question is whether it will recognize the judgement of other courts that might have jurisdiction, or would it have jurisdiction for its determination? This situation is similar to that described in 1). We think that this court would have jurisdiction in its determining, and it should, in any case, recognize a temporary measure ordered by the court having jurisdiction on the merits, if other assumptions are met.
6. Due to a series of concerns laid out in this paper, we consider that in the foreseeable future Regulation 44/2001 should be amended or special regulation enacted which would arrange the issue of jurisdiction and recognition of temporary measures in the European Union. In relation to this, more systematic efforts during the last decade may be observed. This particularly applies to those temporary measures which the would prevent the debtors to access the funds in the bank accounts in the Member States.[48] ■
NOTES
[1] 322 F. 3d 130, 134 (USCA 2nd Cir); [2002] EWCA Civ 989 (English CA); BGE 129 III 626 (Swiss Federal Tribunal), according to Baughen, S., Shipping law, Routledge - Cavendish, NewYork 2009. p. 416.
[2] See infra n. 13.
[3] This according to the legal text in force during the time of writing this article (Official Gazette, 57/96, 29/99, 173/03, 194/03, 151/04, 88/05 i 67/08), as well as according to the legal text which should be completely in force on 15 October 2012, Official Gazette, 139/10, 125/11, 150/11, 154/11, 12/12 and 70/12). New Enforcement Act will in the following text be labelled as EA2010.
[4] Enforcement Act, Article 258. "On the basis of an enforceable instrument which determines the pecuniary claim, the security creditor has the right to seek security of the claim by creating a lien on the security debtor's real estate.", See Article 262. EA2010.
[5] Ibid., Article 281., In order to provide security for a non-pecuniary enforcement that cannot be secured by a conditional registration in a public book, the court may, on the basis of a judgment reached in civil proceedings, order a preliminary enforcement if the enforcement creditor shows probable the danger that, due to the deferral of enforcement until the judgment becomes legally effective, enforcement would be impossible or significantly more difficult and if he provides security for the damage that the enforcement debtor might incur due to such enforcement." See Article 298, EA 2010.
[6] Ibid., Article 284., Par.1., "A temporary measure shall be ordered for the purpose of securing a pecuniary claim on the basis of: 1. a decision of a court or administrative body that has not yet become legally effective; 2. a settlement made before a court or administrative body, if the claim determined therein has not yet matured; 3. a notary decision or notary instrument, if the claim determined therein has not yet matured. (2) The court shall, on the basis of the instruments referred to in paragraph 1 above, order a preliminary measure if the security creditor shows probable the danger that the realisation of the claim would be made impossible or significantly more difficult without such security." See Article 301., Par.1., EA2010
[7] Ibid., Article 296., "(1) A temporary measure for securing a pecuniary claim may be ordered if the security creditor shows probable the existence of the claim and the danger that without such a measure the security debtor shall prevent or make significantly more difficult the collection of the claim by alienating his property, concealing it or disposing of it in some other way. (2) A security creditor does not have to prove the danger referred to in paragraph 1 above if he shows probable that the security debtor would sustain only inconsiderable damage by the proposed measure; (3) It is considered that the danger referred to in paragraph 1 above exists if the claim has to be realised abroad." Regarding the non-pecuniary claims see Article 298. "(1) For the purpose of securing a non-pecuniary claim a temporary measure can be ordered if the security proposer shows the likelihood of his claim, then: 1. if he shows the likelihood of the danger that without such measure the debtor would prevent or make more difficult the realization of the claim, particularly by changing the current state of affairs, or 2. if he shows likelihood of the need for the measure in order to prevent violence or damage that could occur cannot be compensated. (2) Provisions of Article 296. Par. 2 and 3 of this Act are also applicable when determining temporary measures in securing non-pecuniary claims." See Articles 313. and 315 EA2010
[8] Ibid., Article 293., Par.1., "A temporary measure may be proposed before the institution or during the course of judicial or administrative proceedings and after these proceedings terminate, until the enforcement is implemented." See Article 310, Par.1. EA2010.
[9] Ibid. Article, 306., Par.1. "The security debtor has the right to claim from the security creditor damages he incurred by a temporary measure which has been determined as unfounded or which the security creditor failed to justify." See Article 323, Par.1., EA2010
[10] Temporary measures, preventive measures, injunctions, attachments, provisional measures, protective measures, interdictos, medidas preventivas, medidas provisionales, medidas cautelares and similar.
[11] See for example, Kessedjian, Note on Provisional and Protective Measures in Private International and Comparative Law, Preliminary Document No 10 of October 1998 for the attention of the special Commission of November 1998 on the question of jurisdiction, recognition and enforcement of foreign judgments in civil and commercial matters, p. 3. "The first of these comprises all the measures which are by nature in presonam, i.e., they are addressed to the person of the debtor and enjoin him to do or not to do something or, as in the case of attachments, instruct somebody (who may be a third person extraneous to the main case) not to relinquish property for the benefit of the debtor, or perhaps to relinquish property of the benefit of the creditor. The second comprises all the measures in rem, the effect of which will be felt chiefly on the thing or asset which has been seized or sequestered. One may point to a further dichotomy, as between measures which establish
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a priority claim for the creditor, and those which are neutral in this respect. Finally, there is a third dichotomy as between measures which are intended to take extraterritorial effect and those which, by contrast, are limited in their effects to the territory of the State in which they were ordered."
[12] "Conservatory measures" as it is usually called in international literature. Besides them, the term 'regulatory measures' which include wide array of measures, from ones who have the aim of preserving the existing state of affairs, to those who can take on the shape of a temporary settlement, and also 'anticipatory measures' which can secure the claims such as the ones in main proceedings in a way that it orders temporary payment of a certain sum of money until the litigation is finalized. For more see: Kramer, X. E.: Harmonisation of Provisional and Protective Measures in Europe, Storme, M.: Procedural Laws in Europe, Towards Harmonization, Maklu: Antverpen/Apeldoorn 2003. pp. 305-319.
[13] See, Dika, Građansko ovrąno pravo, I. Knjiga - Opće građansko ovrąno pravo, Zagreb 2007. p.103
[14] Enforcement Act, Article 33.b. "Territorial jurisdiction provided in this Act is exclusive." However, Article 292., Par.1. and 2. determine "(1) Before instituting litigation proceedings or some other judicial proceedings on a claim that is being secured, the territorial jurisdiction to adjudicate on motions for security by temporary measures shall lie with the court that would otherwise have had jurisdiction to adjudicate on motions for enforcement. The territorial jurisdiction to implement temporary measures shall lie with the court that would otherwise have had jurisdiction to implement the enforcement.
(2) After instituting the proceedings referred to in paragraph 1 above, the jurisdiction to adjudicate on motions for security by temporary measures shall lie with the court before which the proceedings have been instituted. If the circumstances of an individual case so justify, the motion may also be filed with the court referred to in paragraph 1 of this Article." Courts in United States as well decide on temporary measures in cases when they have jurisdiction over their implementation, independently of whether they have jurisdiction to decide on the merits. So, for example, in one case before the Swiss court, the U.S. court determined a temporary measure by banning the disposal of the real estate in Washington, even though none of the parties to the proceedings had residence on the territory of United States, and although it could not in any case have jurisdiction for solving the merits. Barclay Bank v. Tsakos, 543 A. 2d 802 (DCCA 1988) according to Kessedjian, p. 21., Provision on exclusive local jurisdiction of courts in enforcement proceedings and the security procedure is not included in EA2010. See Article 43.
[15] 650 So. 2d 1028 (Fla. Dist. Ct. App. 1995.). According to Kessedjian, p. 22. Here the decision of the U.S. court should be mentioned, which recognized the temporary measure ordered by the Brazilian court that banned the disposal of pecuniary assets in a joint account during the divorce proceedings. Ibid. p. 23.
[16] Loc. cit.
[17] Enforcement Act, Article 17, "Enforcement based on a foreign judgment may be recognised and enforced in the Republic of Croatia only if the judgment meets the conditions for recognition and enforcement laid down in an international treaty or law." EA 2010 does not include such provision, but it proscribes the judicial jurisdiction for enforcement of foreign court decisions. See Articles 41 and 42.
[18] See Law on Resolving Conflicts of Laws with Regulations of Other Countries in Certain Affairs, Official Gazette 53/91, 88/01, Article 86. "(1) Foreign court decision is equalized with the decision of the court of Republic of Croatia and has legal effect in Republic of Croatia only if it is recognized by the court of the Republic of Croatia. (2) Foreign court decision is, according to paragraph 1 of this Article, considered also a settlement reached before the court (court settlement). (3) Foreign court decision is also considered a decision made by another authority which, in the state where it was determined, is equalized with a court decision, that is, court settlement if it regulates the relationships predicted in Article 1 of this Law."
[19] Ibid., Articles 87 to 92.
[20] Council Regulation (EC) No 44/2001 of December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, Official Journal L 012, 16/01/2001 P. 0001 - 0023, Article 31 "Application may be made to the courts of a Member State for such provisional, including protective measures as may be available under the law of that State, even if, under this Regulation, the court of another Member State have jurisdiction as to the substance of the matter."
[21] Article 32 "For the purposes of this Regulation, "judgement" means any judgment given by court or tribunal of a Member State, whatever the judgment may be called, including a decree, order, decision or enforceable instrument, as well as the determination of coasts or expenses by an officer of the court."
[22] C - 159/02, judgement from 27 April 2004.
[23] Ibid. "Convention is to be interpreted as precluding the grant of an injunction whereby a court of a Contracting State prohibits a party to proceedings pending before it from commencing or continuing legal proceedings before a court of another Contracting State, even when that party is acting in bad faith with a view to frustrating the existing proceedings."
[24] C - 391/95., judgement from 17 November 1998.
[25] Ibid "Temporary payment of a contractual consideration does not constitute a temporary measure within the meaning of Article 24 of the Convention of 27 September 1968 unless, first, repayment to the respondent of the sum awarded is guaranteed if the plaintiff is unsuccessful as regards the substance of his claim and, second, the measure sought relates only to specific assets of the respondent located or to be located within the confines of the territorial jurisdiction of the court to which application is made."
[26] C - 99/96., European Court Judgement from 27 April 1999.
[27] Kramer, X. E., op. cit. p. 307., 308.
[28] Same, Kramer, X. E. op. cit. p. 312-315.
[29] Green Paper on improving the efficiency of the enforcement of judgments in the European Union: the attachment of bank accounts; Commission staff working document - Annex to the Green Paper on improving the efficiency of the enforcement of judgments in the European Union: the attachment of bank accounts COM (2006) 618 final from 24 October 2006.
[30] Ibid, p. 2.
[31] Ibid, "The term "attachment" in this Green Paper denotes a procedure which attaches or freezes a debtor's moveable property which is in the hands of a third party and prevents the third party from giving up a possession of the property." p. 2.
[32] Ibid., p. 3
[33] Ibid., p. 4.
[34] Ibid., pp. 4 and 5.
[35] Ibid., p. 6
[36] Loc. cit.
[37] Ibid, "Once an attachment order has been issued by a court in a Member State, the question arises how it should be enforced. Given to need to act swiftly and the purely protective nature of the instrument, it is suggested that an attachment should take effect directly throughout the European Union without any intermediary procedure (like a declaration of enforceability) in the Member State requested being required.", p. 8.
[38] See Rijavec, Rinstweilige Verfugungen mit Internationalem Bezug, Mirko Vasiljevic, Reiner Kulms, Tatjana Josipovic, Maja Stanivuković (Edit.), Private Law Reform in South East
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Europe, Limber amicorum Christa Jessel Holst, Faculty of Law University of Belgrade, Belgrade, [2010] 320; Rolf Sturner, Masanori Kawano (Edit.) Comparative Studies on Enforcement and Provisional Measures, Mohr Siebeck, Tubingen, 2011., and a bit older paper Maher/Rodger, Provisional and Protective Remedies, The British Experience of Brussels' Convention, [1999] 48 ICLQ
[39] See, Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters adopted by the special Commission On 30. October 1999 (Prel. Doc. No 11). Since in such case the question of extraterritorial effect of a determined temporary measure does not appear, it is not clear why this provision is included in the Draft text. Article 13. "1. A court having jurisdiction under Articles 3 to 12 to determine the merits of the case has jurisdiction to order any provisional or protective measures. 2. The courts of a State in which property is located have jurisdiction to order any provisional or protective measures in respect of that property. 3. A court of a Contracting State not having jurisdiction under paragraphs 1 or 2 may order provisional or protective, provided that - a) their enforcement is limited to the territory of that State, and b) their purpose is protect on an temporary basis, a claim on the merits which is pending or to be brought by the requesting party."
[40] See, Shulz's reaction from 20 February 2001., Annex F(i), Provisional and protective measures
[41] ALI / UNIDROIT Principles of Transnational Civil Procedure 2004, "...8. Provisional and Protective Measures 8.1 The court may grant provisional relief when is necessary to preserve the ability to grant effective relief by final judgment or to maintain or otherwise regulate the status quo. Provisional measures are governed by the principle of proportionality. 8.2 A court may order provisional relief without notice only upon urgent necessity and preponderance of considerations of fairness. The applicant must fully disclose facts and legal issues of which the court properly should be aware. A person against whom ex parte relief is directed must have the opportunity at the earliest practicable time to respond concerning the appropriateness of the relief. 8.3 An applicant for provisional relief should ordinarily be liable for compensation of a person against whom the relief is issued if the court thereafter determines that the relief should not have been granted. In appropriate circumstances, the court must require the applicant for provisional relief to post a bond or formally to assume a duty of compensation."
[42] Ibid, "...30. Recognition. A Final judgment awarded in another forum in a proceeding substantially compatible with these Principles must be recognized and enforced unless substantive public policy requires otherwise. A provisional remedy must be recognized in the same terms."
[43] Treaty between the Republic of Croatia and Republic of Turkey on providing assistance in civil and commercial matters, Official Gazette - International Treaties, 15/2000, Article 17. "1. Each country, party to the agreement, will under the conditions from this Treaty, recognize and enforce following court decisions determined on the territory of the other party to the agreement: a) court decisions determined in civil and commercial matters and decision of other authorities in civil matter which are equalized with court decisions; b) court decisions in criminal cases regarding property claims. 2. Judgements in civil and commercial matters determined after this Treaty has entered into force will be the object of recognition. Decisions stated in point a) Paragraph 1 of this Article will be taken into consideration only if the legal consequence related to these decisions occurred after this Treaty entered into force."
[44] Treaty between Government of Republic of Croatia, Government of Bosnia and Herzegovina and Government of Federation of Bosnia and Herzegovina regarding legal assistance in civil and commercial matters, Official Gazette -International Treaties, 12/96, Article 10. "Contracting states, under the conditions of this Treaty recognize and enforce court decisions in their territory regarding civil matters and court settlements in such cases determined and settled before the court of another contracting state." Article 21. "1. Decisions from Article 20 of this Treaty are recognized and enforced if: 1) the decision is final and determined according to the law of the contracting state in which territory it was determined, 2) if for the matter, for which the decision has been determined, the court of the contracting state does not have exclusive jurisdiction, and in whose territory the recognition, that is if the enforcement of the decision is sought, 3) if in the case of the decision, determined in her absence, the party who did not appear and did not participate in the proceedings, and against whom the decision was made, according to the law of the contracting state in whose territory the proceeding was conducted, was regularly and timely informed of the proceeding, and in case of her incapacitation to act, if she was properly represented, 4) if the final decision in the same legal matter, between same parties, has not been determined before the court of the contracting state, in which territory the recognition and enforcement is requested, 5) if before the court of the requested state there is no ongoing proceedings regarding the same legal matter and between the same parties, 6) if the recognition and the enforcement of the decision is not contrary to the Constitution and legal order of the requested state. 2. Decision regarding the recognition and enforcement of the decision of the requesting state is determined by the competent court of the requested state."
[45] See Special Annex to the Treaty on Legal Assistance in Civil and Criminal Matters (Point 1.) "Contracting parties agree that this Treaty temporarily applies only to the territory of Federation of Bosnia and Herzegovina, while special Treaty will arrange the issue of its application to the Serbian entity in Bosnia and Herzegovina."
[46] Treaty between the Republic of Croatia and Republic of Macedonia on legal assistance in civil and criminal matters, Official Gazette - International Treaties, 3/95.
[47] Treaty between the Republic of Croatia and Republic of Slovenia on legal assistance in civil and criminal matters, Official Gazette - International Treaties, 3/94. Article 20, "Contracting states, under the conditions of this Treaty recognize and enforce court decisions in civil matters in their territories, and court settlements in such cases, determined and settled before the court of the other contracting state." See also Article 21. "1.Decision from Article 20 of this Treaty are recognized and enforced: 1. if the decision is final and enforceable according to the law of the contracting state in which territory it was determined, 2. if the matter for which the decision was made is not under the exclusive competency of a court of the contracting state in which territory the recognition, that is, enforcement of the decision is requested, 3) if in case of a decision determined in her absence, the party who did not appear and did not participate in the proceedings, and against whom a decision has been made, according to the contracting state in which territory the proceedings were conducted, regularly and timely has been informed about the proceedings, and in the case of her incapacitation to act, if she was properly represented, 4. if in the same legal matter, between the same parties, a final decision has not been made before the court of the contracting state in which territory the recognition or enforcement of the decision is requested, 5. if before the court of the receiving state there is no ongoing proceedings regarding the same legal matter and between the same parties, 6. if the recognition and the enforcement of the decision is not contrary to Constitution and legal order of the receiving state. 2) Decision regarding the recognition and enforcement of the decision of the requesting state is determined by the competent court of the receiving state."
[48] See Draft Programme of Measures for Implementation of the Principle of Mutual Recognition of Decisions in Civil and Commercial matters, Official Journal C 012, 15/01/2001 P. 0001 - 0009. See also previously mentioned Green Paper on improving the efficiency of the enforcement in the European Union: the attachment of bank accounts.
Lábjegyzetek:
[1] The Author is Faculty of Law University of Rijeka.
[2] The Author is Faculty of Law University J.J. Strossmayer in Osijek.
Visszaugrás
