4th March 2019
by Christian Bogaru, Managing Partner
Regulation (CE) n° 1896/2006 – European order for payment procedure
Regulation (CE) n° 1896/2006 of the European Parliament and of the Council of December 12th , 2006 creating a European order for payment procedure, (consolidated version of 14.07.2017) (called hereafter (CE) n° 1896/2006).
The regulation n° 2015/2421 of December 16th, 2015 (called hereafter n° 2015/2421) modified the regulation n° 1896/2006. On December 24th, 2015, this regulation was published in the Official Journal of the European Union (L341/1). This regulation has been practical since July 14th, 2017.
The ratione materiae, ratione temporis and ratione loci fields of application of the regulation n° 1896/2006.
The ratione materiae field of application of this regulation covers civil and commercial matters. The following matters are excluded from the ratione materiae field of application of the regulation: marriage regime, tax matters, customs and administrative issues, the wills and the successions, bankruptcy, debt agreement and other similar procedures, social security, receivables arising from non-contractual obligations unless they have been agreed between the parties or if there was an acknowledgement of debt or if they relate to liquid debts arising from joint ownership of property.
The regulation n°1896/2006 has been practical since December 12th, 2008 (except for articles 28, 29, 30 et 31 practical since June 12th, 2008).
This regulation is practical to cross-border disputes, to wit the dispute that involves a party whose habitual residence or domicile is in a State other than the State whose jurisdiction has been seized. The regulation is practical in every member State except for Denmark.
The objectives of the regulation n°1896/2006
This regulation aims at simplifying, accelerating and reducing settlement costs in the cross-border disputes and to allow the free circulation of payment orders within member states. This European order for payment procedure allows the recovery of liquid pecuniary claims due on the date on which the application for an order for payment is submitted.
The contributions of the regulation n°1896/2006
This regulation suppresses the exequatur procedure that was mandatory until then. Thanks to the implementation of European payment procedure, European demand for payment benefits from recognition and execution of the decisions in each European Union member State, except for Denmark. Henceforth, no declaration is necessary to certify the legal enforceability of an act. This regulation offers an option to the creditor that can either seize the national judges or use the European procedure. Nonetheless if the creditor resort to national judges he must have recourse to the exequatur procedure.
Considering its optional character, this regulation does not aim to standardize the different national legislations in force but only to offer another procedure.
When the demand for payment procedure doesn’t satisfy all the required conditions, the Court can issue a proposal for modifications of the request. If the complainant accepts this offer, the jurisdiction issues a demand for payment for the part of the request accepted by the complainant. In the event of the complainant not respecting the deadline set by the jurisdiction or if he refuses the offer made by the Court, the jurisdiction rejects the European demand for payment in its entirety.
The modifications brought to the regulation n° 1896/2006 by the regulation n° 2015/2421
The modification to the regulation n° 1896/2006 mainly relates to the effects of the opposition to the European demand for payment formulated by the defendant.
The article 7, as amended by the new regulation, allows the applicant to indicate to the judge which procedure he wishes the judge to enforce to his demand, within the scope of the later civil procedure, when the defendant objects against an order. In case of opposition by the defendant, the complainant can inform the jurisdiction. The complainant can inform the jurisdiction after, provided that he informs the jurisdiction before the order for payment being issued.
The article 17 pertaining to the effects of objection introduces the possibility of continuing the procedure in accordance with the small claims settlement European procedure introduced by the regulation n° 861/ 2007. If the complainant does not make an express choice, the judge applies the national procedure.
The article 25 states that, in a member State, extra legal costs cannot be collected for the civil procedure deriving from the objection, if the legal costs of the procedure in this member State are lower than these perceived within the scope of the European demand for payment procedure.
The article 30 of the new regulation empowers the Commission to adopt delegated acts in compliance with article 31.
The article 31, as modified by the new regulation, imparts the powers of the delegation bestowed on the Commission and its potential revocation by the Parliament or by the Council after its publication in the Official Journal of the European Union. The revocation does not affect the validity of the acts in force. The delegated acts must be notified to the Parliament and to the Council that has two months, extendable period, to express its objections concerning the content of the notification.
The interpretation given by the Court of Justice of European Union (CJEU) to the regulation n° 1896/2006
The article 6 of the regulation (CE) no 1896/2006, read in combination with the article 17 of the same regulation, must be interpreted as meaning that an objection to a European demand for payment that does not contain a dispute concerning the authority of the jurisdiction of the member State of origin is not an appearance, as defined in article 24 of the regulation (CE) no 44/2001 of the Council of December 22th, 2000, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. Furthermore, the fact that the defendant puts forward pleas related to the substance of the case when he objects is irrelevant. (CJEU, Goldbet Sportwetten GmbH against Massimo Sperindeo, Oberster Gerichtshof against Austria, June 13th, 2013, court case C-144/12).
The article 20 of the regulation (CE) no 1896/2006 cannot be applied by analogy to a case in which the European order for payment wasn’t notified or wasn’t notified validly to the defendant. To ensure the rights of the Defense, the defendant must be allowed to exercise an independent right of appeal in front of the corresponding judge of the member State of origin that enables him to bring forward the evidence that he didn’t receive any notification related to the order for payment and, as the case may be, to make its invalidity certified (3rd chamber of the CJEU, Eco cosmetics GmbH & Co. KG and Raiffeisenbank St. Georgen reg. Gen. mbH against Virginie Laetitia Barbara Dupuy and Tetyana Bonchyk, September 4th, 2014, interlocutory questions, introduced by Amtsgericht Wedding, joint cases C-119/13 et C-120/13).
The regulation (CE) no 1896/2006 doesn’t provide information concerning the powers and the obligations of the Court. That is why, these questions of procedure will remain, according to the article 26 of the regulation, governed by the national law of the member State. (CJEU, Flight Refund Ltd against Deutsche Lufthansa AG, March 10th, 2016, case C‑94/14).