In its day-to-day practice in the context of claim recovery proceedings, the Litigation and Arbitration Law Department of Belzuz Abogados S.L.P. – Portugal Branch has come across various situations in which one of the parties was domiciled or habitually resident in a foreign country. In seeking the best solution for recovering debt simply and speedily without incurring high legal costs, it has made use of the European order for payment procedure.
This procedure, which was created by Regulation (EC) no. 1896/2006 of the European Parliament and of the Council, of 12 December 2006, is applicable to all cross-border cases, i.e. cases in which one of the parties has their domicile or habitual residence in a Member State, with the exception of Denmark, where this legislation does not apply.
Created with the goal of permitting the free circulation of European orders for payment, its executive force is recognised in all the Member States. It offers a straightforward and much quicker procedure that reduces the costs associated with raising an action for recognition of cross-border debt, providing creditors with another procedural means that they can use as an alternative existing domestic procedures.
It should be noted that the scope of application of the procedure is restricted to civil and commercial matters: tax, customs and administrative matters are excluded. The regulation also sets out other situations in which this procedure cannot be applied.
If this means of claim recovery is chosen, the application is made on a specific form (standard form A as set out in Annex I). Identification and formulation of the petition requires particular care, so that the debtor, when he learns of it, will be in possession of all the information necessary to decide whether he is going to accept it or, on the contrary, lodge a statement of opposition.
Moreover, when drawing up the application for an order - and in this respect this procedure differs from the requirements of a national order procedure - the creditor is required to provide as full a list as possible of the evidence supporting the application.
Once the appropriate judicial fee has been paid, the application is forwarded to the court, which will then carry out an assessment both of competence and of the merit of the application. This permits ab initio screening for applications that are manifestly unfounded or do not meet the requirements for application of the Regulation, which are excluded forthwith.
Screening by the court is followed by service of the order for payment on the defendant. This is done in accordance with specific rules on service established in the Regulation.
The aim of the rules on service is to achieve the certainty or at least a high degree of probability that the documents of service have effectively been brought to the attention of their intended recipient. Thus the rules of the Regulation sweep away the whole legal fiction surrounding this topic.
Once the order has been successfully served, the defendant has a period of 30 days to lodge a statement of opposition. This is simply a matter of completing the form that accompanies the order (standard form F, as set out in Annex VI) and delivering it to the court seised of the proceeding. The defendant is not required to substantiate his opposition.
If the event of opposition, we are in the presence of one of two situations: either the proceeding ends, because the creditor stated in the application submitted that this was his wish if opposition was lodged or, if he did not do so, the action passes to the common civil form of proceeding, governed by the law of the Member State of origin, i.e. in which the procedure was initiated.
If the debtor has not contested the order for payment, or has done so after the stipulated deadline, the court of origin declares the European order for payment enforceable. For this purpose it uses standard for G, in Annex VII, which is then sent to the creditor.
Once in possession of an enforceable European order for payment, the creditor can enforce it in any Member State: it is equivalent to an enforceable judgment issued in the State of enforcement and the process is governed by the national laws of that State.
If the creditor wishes to enforce the order in another Member State, he must present a copy of the European order for payment to the enforcement authorities in that State, along with the declaration issued by the court of origin that rendered the order enforceable and, if necessary, a translation of the order into the official language of that Member State.
The merit of the order cannot under any circumstances be reexamined by the Member State of enforcement.
The Litigation and Arbitration Law Department of Belzuz Abogados, SLP – Portugal Branch has vast experience in advising and representing clients in claim recovery proceedings using the European order for payment procedure, and a team of qualified professionals to advise the parties involved, whether via the consensual approach or in the context of litigation or arbitration.
Litigation and Arbitration Law department | Portugal
Belzuz Abogados SLP
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