The European Payment Order procedure
The basis for the European Payment Order can be found in Regulation No. 1896/2006 (hereinafter: Regulation), which entered into force on December 12, 2008. The Regulation applies to all countries within the European Union with the exception of Denmark. The European Payment Order enables the recovery of cross-border claims through a uniform procedure. Like the European Account Preservation Order, the European Payment Order procedure uses a standard form (Article 7 Regulation) which must be submitted to the court of The Hague (Article 2 Implementation Act).
The standard form must contain all the information concerning the parties and the nature and the amount of the claim. Subsequently, the court serves the payment order on the debtor without the debtor being summoned (a so-called ex parte decision). The debtor then has the option of contesting the invoice within 30 days (Article 12 Regulation). In that case, depending on the choice of the claimant, the case can either be referred to the ordinary civil court to be dealt with under national law, it can be continued with a European Small Claims Procedure (which will be discussed in the next blog), or it can be stopped.
If no defence is put forward by the debtor, the European Payment Order becomes enforceable ipso jure (Article 18 Regulation). A copy and translation will be sent to the competent authorities of the Member State in which the order is to be enforced. Enforcement takes place in accordance with the national rules and procedures of the Member State in question (Article 13 Regulation).
The debtor's defences
As just discussed, the debtor has the possibility of submitting a statement of defence within 30 days of service, which is also provided in a standard form (Article 16 Regulation). In the statement of defence the debtor does not have to state the reasons for contesting the payment order. It is sufficient to state that he contests the payment order. The statement of defence shall be submitted to the court that issued the payment order.
If the statement of defence is lodged within 30 days, the proceedings will continue under the civil procedural law of the Member State of origin or through the European Small Claims Procedure. The debtor can defend himself by claiming that the court did not have jurisdiction to hear the application for the payment order (pursuant to Regulation No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters). The debtor has to put this defence forward before any other defence. If the debtor does not do so and does appear before the court, this is regarded as tacit choice of forum.
If the debtor does not put forward a defence or the court rules against him, enforcement follows. The court in question then declares the European Payment Order enforceable. Together with the European Payment Order the declaration of enforceability creates an enforcement order for the creditor. The enforcement order allows the bailiff to proceed with enforcement. The law of the Member State where enforcement takes place governs the enforcement procedure (Article 21 Regulation).
The European Payment Order is an easier way to collect claims against foreign (legal) persons. However, one should take into account the rules regarding the submission of the application and the jurisdiction.
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