Recognition and Enforcement of U.S. Civil Judgments in Germany
After obtaining a U.S. civil judgment against a German defendant, it may be difficult to obtain monetary damages. If the German defendant does not reside or is otherwise judgment-proof in the United States, a plaintiff may look abroad to collect the monetary damages it is owed under US law. Although the US has taken steps to officially join the Hague Judgments Convention, a treaty which standardizes a process for the international recognition and enforcement of judgments, the US still has a several steps to complete prior to the Hague Judgments Convention’s entry into force. For US plaintiffs to collect money they are owed while the treatymaking process is ongoing, US plaintiffs may recover under the German Code of Civil Procedure.
Current State of Affairs: U.S. Ratification of Hague Judgments Convention Pending
Although the United States signed the Hague Judgments Convention on March 2, 2022, there remain several steps for the US to formally adopt the Hague Judgments Convention, including a 2/3 majority vote by the US Senate. As such, there is no guaranty that the Hague Judgments Convention will be ratified by the United States.
The six steps for the U.S. to make a treaty are overviewed in the graphic provided below:
Best Route Today: Obtaining an Execution Judgment from a German Court
While the Hague Judgments Convention continues on its unpredictable path towards formalization, US plaintiffs may make use of the German Code of Civil Procedure (Zivilprozessordnung—ZPO) mechanism for the recognition and enforcement of foreign judgements. To enforce a foreign judgment in Germany an execution judgment (Vollstreckungsurteil) from a German court must first be obtained. ZPO § 722(1).
Per ZPO §§ 723(2), 328, the existence of any of the following would prevent the issuance of an execution judgment by a German court:
- If the U.S. court did not have jurisdiction as determined by German law;
- If the defendant did not enter an appearance in the underlying US matter and invokes ZPO § 328, and the defendant was either not duly served or was not served in sufficient time to enable them to defend themself;
- If the U.S. judgement is irreconcilable with either an earlier foreign judgement or previously pending proceeding in Germany;
- If recognition of the U.S. judgement leads to a result that is manifestly incompatible with fundamental principles of German law; or
- If reciprocity is not guaranteed.
The above list of exclusions has been interpreted by German courts to exclude monetary judgments based on punitive damages, among other things. The nuances and application of German law to recognize and enforce a U.S. judgment in Germany emphasize the importance of involving a German attorney experienced in recognition and enforcement of U.S. judgments from the outset. At BridgehouseLaw, we have the experience needed to pursue enforcement of U.S. civil judgments effectively and efficiently.