Generally, it is not difficult to enforce foreign judgments in Germany since Germany is a contractual partner of several international treaties covering this topic. However, as mentioned in last month’s newsletter article, there is no agreement between Germany and the United States regarding the mutual recognition and enforcement of judgments. On these grounds, it is not possible to simply hire a marshal in Germany for the collection of the debts based on a U.S. judgment. Rather, a so called ‘Exequaturverfahren’ is required; Meaning that the beneficiary of a U.S. judgment has to file an action with a German Court first in order for the foreign judgment to be recognized under German law and to receive the declaration of enforceability. Only a positive decision gives access to foreclosure.

Under Sections 328 and 722 of the German Civil Procedure Code, the main requirements for enforcing foreign judgements are as follows: The judgment must be final and effective. In particular, the appeal proceedings in the United States must be already time-barred. However, not only judgments are enforceable: all final court decisions in civil law can be enforced if they were made during a judicial proceeding
in which the Defendant was heard. For this reason, a settlement-judicial, as well as out-of-court   has no chance of being recognized if the court did not make a decision. For the same reasons, it is also impossible to enforce a temporary order or an injunctive relief order. However, in order to respect a foreign decision, the substantive accuracy of the judgment is not questioned (prohibition of ‘revision au fond’).

Additionally, the foreign court must have had jurisdiction under German Law. This requirement is quite strange as jurisdiction under U.S. law follows different rules than under German law. According to German legislature, the reason why this requirement is necessary, is the existence of German rules for an exclusive jurisdiction in certain matters that need to be respected.
Furthermore, the court decision that should be enforced cannot be contrary to a former domestic or foreign judgment.

The decision also cannot be contrary to fundamental German principles; in particular, to fundamental rights (“Grundrechte”) or other important principles guaranteed by the German constitution. These relevant principles are generally similar to the principles stated in the Uniform Foreign Money Recognition Act. However, one important exception is punitive damages. These judgments are not enforceable in Germany because, under German law, only the compensation of damages is considered to be sufficient. A punishing function is not known under German law.

If you have any U.S. judgments that should be enforced in Germany, please do not hesitate to contact us, and it will be our pleasure to advise you in that matter.

Best regards
und viele Grüße aus Charlotte
Reinhard von Hennigs
www.bridgehouse.law