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25 August 2015
Foreign court orders are enforced in accordance with domestic law. According to domestic law, the enforcement of awards for monetary sums or the payment of moneys to third parties must generally occur pursuant to the provisions on the enforcement of monetary claims. However, the courts have thus far held that if a payment is effected abroad, rather than domestically, by exchanging currencies (potentially considering the rules on foreign currency transactions), the obligation goes beyond a mere monetary payment.
The Supreme Court recently opined(1) that, irrespective of whether the decreed obligation is a real or improper foreign currency obligation, currency manipulation is no longer as prevalent as it was in the 1950s. Like all other EU member states, Slovakia is part of the Single Euro Payments Area (SEPA), which sets out domestic conditions for payments within Europe. The court thus ruled that although the debtor in the case at hand had no foreign currency account, a currency exchange was required in order to transfer the applicable funds to Slovakia – a transaction which no longer poses any real concerns. As such, the court held that – at least in relation to transactions between SEPA countries – the earlier jurisprudence regarding the special treatment of payments in foreign currencies before a foreign court is outdated; enforcement should thus be executed in accordance with the rules on the enforcement of monetary claims. The court went on to state that whether the enforcement of a claim is likely to succeed is irrelevant in relation to enforceability and jurisdiction. Jurisdiction is based on the residence of the potential third-party debtor, in accordance with Article 39(2) of the EU Brussels I Regulation.
The court thus ordered the debtor to post a US dollar amount with a Slovakian court based on the Slovakian court order.
For transactions between SEPA countries, the court has clarified that the enforcement of an obligation to pay a monetary claim in a foreign currency must be executed in accordance with the rules on the enforcement of monetary claims.
For further information on this topic please contact Klaus Oblin at Oblin Melichar by telephone (+43 1 505 37 05) or email (firstname.lastname@example.org). The Oblin Melichar website can be accessed at www.oblin.at.
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