Supreme Court rules on enforcement of foreign monetary claims

Dr. Klaus OblinSenior Counsel, OBLIN Rechtsanwälte GmbH

Introduction
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.

Decision
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foreign court is outdated; enforcement should thus be executed in accordance with the rules on the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.

 

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