06-16-2014

The new EuGVVO: Decrease of "Torpedo Proceedings"




The European Parliament and the Council of the European Union revised the Brussels I Regulation (Regulation No 44/2001) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The revised regulation (Regulation No 1215/2012) is already in force, but will only apply to proceedings within the EU from 10 January 2015. Beside the optimisation of the enforcement process across EU member states, a key change will affect the strengthening of choice of court agreements against so-called "Torpedo Proceedings".

Currently, it is possible to delay proceedings by filing an action for a negative declaration in a court (negative Feststellungsklage) of a member state other than the designated one. Under the current regulation, the court nominated by the parties must stay its proceedings until the court in which proceedings are first commenced has determined whether it has jurisdiction. Such a strategy is particularly effective if a party is bringing the action for declaratory relief before a court in a state with a reputation of a slow judicial system.

Aim of the revised regulation is to end torpedo proceedings by providing that any other member state court first seized of an action must stay proceedings if the court designated in the choice of court agreement is also seized. According to article 31 (2) and (3) of the revised Brussels I Regulation, the first court shall stay the proceedings until such time as the court seized on the basis of the agreement declares that it has no jurisdiction under the agreement. Where the court designated in the agreement has established jurisdiction in accordance with the agreement, any court of another member state shall decline jurisdiction in favour of that court.

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