Ways to collect a debt within the European Union

Unreliable debtors are a source of great consternation. Private limited companies under Dutch law deliver goods and want to be paid accordingly. If this does not happen voluntarily, then you, in the capacity of director/majority shareholder, must go to court in extreme cases. If your debtor has its registered office in the Netherlands, in most cases you will be able to apply to a Dutch court. But what happens then if you have done business with a European party? Do you absolutely have to cross the border to collect your debt?

Thanks to various European directives, it has become easier and cheaper over the past few years to collect foreign debts. For instance, you can apply for a payment order for uncontested, due-and-payable claims against a debtor that has its registered office in an EU Member State (with the exception of Denmark). An uncontested claim exists if your debtor has expressly recognised the claim, fails to appear or does not put forward a defence. The application for a European Order for Payment (EOP) must be submitted to the competent court. In many cases, this is the court that is competent in the area where your debtor has his place of business – unless you have agreed that the Dutch court is competent.

Standard form
Your application for an EOP is to be submitted via a standard form. The contents of this form are the same for all Member States and available in every language. Due to the fact that the information is filled in using numeric codes, documents no longer require translation. You can submit the form yourself to the competent court. If it has been completed properly and fully, the court will issue an EOP. After service or notification, your debtor will have 30 days’ time to put forward a defence. If he chooses to do so, a substantive inquiry will follow. If your debtor does not put forward a defence and payment is not forthcoming, the court will declare the EOP enforceable and you may then have it enforced.

Review
It is possible that the debtor has not in fact received the EOP, for instance, because it was delivered to someone who did not give it to him. Suppose that your debtor takes note of the EOP only after 30 days. In that case, he can no longer put forward a defence because the period of time therefor has expired. Nonetheless, the debtor would then have the opportunity to apply for the EOP to be reviewed. That application must be submitted within four weeks of the reason for reconsideration has been made known to him. The EOP is no longer valid if the court deems the review valid.

Enforceable across Europe
Another effective procedure that can be employed for collecting debts from foreign debtors is the European Enforcement Order (EEO). In the event of an uncontested claim, you can apply to the Dutch court, if it is competent thereto, to certify its judgment as an EEO. Certification of the judgment is carried out by way of issue of a standard form, which judgment is then enforceable in all EU Member States, with the exception of Denmark. The intervention of a foreign court is not necessary to that end.

Small claims
If your claim amounts to less than € 2000, you can avail yourself of the European Small Claims procedure. This procedure can be carried out by the applicant himself at the competent court. This means, consequently, that you need not engage a lawyer to that end. In order to start the procedure, you must fill in a claims form in the language of the competent court. Your debtor will then be invited by the court to reply in writing, after receipt of which reply the court will give a judgment within 30 days. The judgment is enforceable in all EU Member States (with the exception of Denmark). It is possible that the court will hear the case. If so, then it is still not necessary to engage a lawyer.

Competence
If you want to lodge a claim with a Dutch court, it will have to be competent. In cross-border commercial matters, the rule of thumb is that disputes must be lodged with the court that is competent in the area where your debtor has his place of business. The court that is competent in the area where the agreement was executed is also competent.

If you have not stipulated otherwise, you will more than likely have to go to a foreign court. You could, however, agree with your debtor that the Dutch court is competent in the event of disputes. This must be done in writing in a language that is understandable to your debtor. The best way to do this is in a written agreement that your debtor signs to indicate his agreement. Whether this stipulation can also be incorporated into your general terms and conditions will depend on what is customary in your sector. You will have to prove what the customs of your sector are – not only in respect of the incorporation of a choice of forum clause into the general terms and conditions, but also as regards the declaration of its applicability and the delivery of those terms and conditions.

Which court is competent?
A Dutch supplier delivered hardware and software licences to a German buyer. He also carried out the implementation activities. The goods were delivered and the work was performed in Germany, but the customer did not pay the invoices. The Dutch supplier’s general terms and conditions stipulate that the Dutch courts are exclusively competent. Whereas the supplier’s general terms and conditions were declared applicable every time, he handed them to his customer but once – something he had done no less within the framework of another agreement.

Choice of forum
The supplier submitted his claim to the Dutch court. Yet the German buyer invoked the incompetence of this court because, according to him, no legally valid choice of forum – that is to say, he deemed the Dutch court not competent to hear the case – had been agreed. The Dutch court stated first and foremost that for a choice of forum to be valid, it is necessary that an actual agreement thereto exist between the parties. In the opinion of the Dutch court, repeated reference to the general terms and conditions and the one-off delivery thereof are insufficient. It also rejected the supplier’s position that such a procedure was customary in the ICT sector. So take good note that a choice of forum must be expressly agreed! District Court of The Hague, 29 February 2012, HA ZA 11-2151

Weighing up the pros and cons of a review
A German kitchen supplier received a European Order for Payment for its claim against a Dutch general partnership. The court notified the general partnership thereof by means of a registered letter. Whereas this letter had been sent to the business address of the general partnership, it was received by someone other than the partners. They themselves took note of the letter only much later.

Review
Since a defence could not be put forward anymore for that reason, the general partnership applied for a review. The general partnership argued that due to the incorrect delivery of the EOP, it did not have the opportunity to put forward a defence in a timely manner. The court considered that based on the acknowledgment of receipt, it was evident that the EOP had been delivered to a person who was present at the business address of the general partnership. In the process, the court assumed that the postman made sure that that person was authorised to take receipt of the letter. This reasoning lead to the conclusion that the EOP had been made known to the general partnership in the proper manner. And it is for that reason that it was at the risk and expense of the general partnership that the EOP did not end up with the partners. District Court of The Hague, 9 August 2012, National Case-Law Number: BX6428 

Marieke van Dongen