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1 Page 1 of 8 FOR EDUCATIONAL USE ONLY EU: Case C-398/92 Celex No. 692J0398 European Union Case Law COURT OF JUSTICE Judgment of the Court (Sixth Chamber) of 10 February Mund & Fester v Hatrex Internationaal Transport. Reference for a preliminary ruling: Hanseatisches Oberlandesgericht Hamburg - Germany. Seizure order - Sufficient grounds: enforcement of a judgment in another Contracting State party to the Brussels Convention - Prohibition of discrimination. Case C-398/92. European Court Reports 1994 page I-0467 Text outline Text Index Year (Dates) References Bibliographic Information ELLIS Publications. European Communities. Text EEC Treaty - Fourth indent of Article Convention on Jurisdiction and Enforcement of Judgments - Connection of Treaty with both the Convention and the national provisions referred to by the Convention (EEC Treaty, Art. 220; Convention of 27 September 1968) 2. Community law - Principles - Equal treatment - Discrimination on grounds of nationality - National provision authorizing seizure based on the presumption of foreseeable difficulties in the event of a judgment being enforced abroad - Presumption not justified where enforcement takes place in a Member State party to the Brussels Convention - Unlawful (EEC Treaty, Arts 7 and 220; Convention of 27 September 1968) SUMMARY 1. By providing that the Member States shall, so far as is necessary, enter into negotiations with each other with a view to ensuring for the benefit of their nationals the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts and tribunals, the purpose of the fourth indent of Article 220 of the Treaty is to facilitate the working of the common market through the adoption of rules of jurisdiction for disputes relating thereto and the elimination, as far as is possible, of diffculties concerning the recognition and enforcement of judgments in the territory of the Contracting States. It follows that the provisions of the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, concluded on the basis of that article and within the framework defined by it, and also the national provisions to which the Convention refers, are linked to the EEC Treaty. 2. Article 7 of the Treaty, read in conjunction with Article 220 thereof and the Brussels Convention, precludes a national provision of civil procedure which, in the case of a judgment to be enforced within national territory, authorizes seizure only on the ground that it is probable that enforcement will otherwise be made impossible or substantially more difficult but, in the case of a judgment to be enforced in another Member State, authorizes seizure simply on the ground that enforcement is to take place abroad.

2 Page 2 of 8 The distinction made by such a provision is not justified by objective circumstances, since all the Member States are Contracting Parties to the Brussels Convention and the conditions for enforcing judgments and the risks attached to the difficulties raised by enforcement are the same. ISSUE 1 In Case C-398/92, REFERENCE to the Court under Article 177 of the EEC Treaty by the Hanseatisches Oberlandesgericht (Higher Regional Court), Hamburg (Federal Republic of Germany), for a preliminary ruling in the proceedings pending before that court between Mund & Fester and Hatrex Internationaal Transport, on the interpretation of Article 7 of the EEC Treaty, read in conjunction with Article 220 of the Treaty and the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1972 L 299, p. 32), as subsequently amended, THE COURT (Sixth Chamber), composed of: G.F. Mancini, President of the Chamber, C.N. Kakouris (Rapporteur), F.A. Schockweiler, P.J.G. Kapteyn and J.L. Murray, Judges, Advocate General: G. Tesauro, Registrar: J.-G. Giraud, after considering the written observations submitted on behalf of: - Mund & Fester, by Juergen Kroeger of the Hamburg Bar, - the German Government, by Ernst Roeder, Ministerialrat in the Federal Ministry of the Economy, and Alfred Dittrich, Regierungsdirektor in the Federal Ministry of Justice, acting as Agents, - the Commission of the European Communities, by Bernd Langeheine and Pieter Van Nuffel, members of its Legal Service, acting as Agents, having regard to the report of the Judge-Rapporteur, after hearing the Opinion of the Advocate General at the sitting on 16 December 1993, gives the following Judgment GROUNDS 1 By order of 16 November 1992, which was received at the Court on 23 December 1992, the Hanseatisches Oberlandesgericht (Higher Regional Court), Hamburg, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 7 of the EEC Treaty, read in conjunction with Article 220 of the Treaty and the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1972 L 299, p. 32), as subsequently amended (hereinafter referred to as the 'Brussels Convention'). 2 That question was raised in the course of proceedings brought by Mund & Fester, a German company, against Hatrex Internationaal Transport (hereinafter referred to as 'Hatrex'), an

3 Page 3 of 8 international carrier having its registered office in the Netherlands, for a seizure order against assets of Hatrex in Germany. 3 Hatrex transported hazelnuts from Carsamba (Turkey) to Hamburg which were damaged in transit by moisture arising from failure to make the lorry transporting them watertight. 4 Mund & Fester, which acquired rights by subrogation as the result of the transfer of the debt, claimed damages and, to ensure that the debt was recovered, lodged an application on 23 June 1992 at the Landesgericht (Regional Court), Hamburg, pursuant to Paragraph 917 of the Zivilprozessordnung (German Code of Civil Procedure, hereinafter referred to as 'ZPO'), for a seizure order against the lorry belonging to Hatrex which was used to carry the hazelnuts and which was still in Germany. 5 Paragraph 917 of the ZPO provides as follows: '(1) An order for the seizure of assets shall be made when it is to be feared that enforcement of the judgment would otherwise be made impossible or substantially more difficult. (2) The fact that judgment is to be enforced abroad shall be considered sufficient grounds for a seizure order.' 6 By order of the same day the Landesgericht Hamburg refused to authorize seizure It considered that the grounds laid down in Paragraph 917(2) of the ZPO did not exist because the judgment in question was to be enforced in a Contracting State party to the Brussels Convention. 7 Mund & Fester appealed against the order of the Landesgericht Hamburg to the Hanseatisches Oberlandesgericht Hamburg, claiming inter alia that the interpretation of Paragraph 917(2) of the ZPO was not affected by the Brussels Convention. 8 Considering that judgment on the application for a seizure order depended on whether the grounds for seizure laid down in Paragraph 917(2) of the ZPO existed where a judgment was to be enforced in the Netherlands, the Hanseatisches Oberlandesgericht Hamburg decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling: 'Does the need to enforce a seizure order abroad (Paragraph 917(2) of the Zivilprozessordnung) also constitute grounds for seizure where such enforcement would take place in a State which has adhered to the EEC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968 (the Brussels Convention)?' 9 By its question, the national court is essentially asking whether Article 7 of the EEC Treaty, read in conjunction with Article 220 of the Treaty and the Brussels Convention, precludes a national provision of civil procedure which, in the case of a judgment to be enforced within the national territory, authorizes seizure only on the ground that it is probable that enforcement will otherwise be made impossible or substantially more difficult, but, in the case of a judgment to be enforced in another Member State, authorizes seizure simply on the ground that enforcement is to take place abroad. 10 In order to answer that question, it must first be considered whether that provision falls within the ambit of the EEC Treaty. 11 The fourth indent of Article 220 of the EEC Treaty provides that the Member States shall, so far as is necessary, enter into negotiations with each other with a view to securing for the benefit of their nationals the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals, although it is not intended to lay down a legal rule directly applicable as such but merely to mark out the framework of negotiations between the Member States (see judgment in Case 137/84 Mutsch [1985] ECR 2681, at paragraph 11). Its purpose is this: to facilitate the working of the common market through the adoption of rules of jurisdiction for disputes relating thereto and through the elimination, as far as is possible, of difficulties concerning the recognition and enforcement of judgments in the territory of the Contracting States. 12 It is on the basis of that article and within the framework defined by it that the Member States

4 Page 4 of 8 concluded the Brussels Convention. Consequently, the provisions of that Convention relating to jurisdiction and to the simplification of formalities concerning the recognition and enforcement of judgments and also the national provisions to which the Convention refers are linked to the EEC Treaty. 13 In this case, it must be considered whether the national provision at issue in the main proceedings introduces discrimination on grounds of nationality prohibited by Article 7 of the Treaty. 14 The Court has consistently held that that provision prohibits any discrimination on grounds of nationality within the field of application of the Treaty. The article forbids not only overt forms of discrimination based on nationality, but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (see judgment in Case 22/80 Boussac [1980] ECR 3427 at paragraph 9). 15 The national provision at issue in the main proceedings entails a covert form of discrimination. 16 While examination of Paragraph 917(2) of the ZPO reveals no overt discrimination based on nationality, since it applies in all cases where a judgment is to be enforced abroad, even if the assets forming the subject of the seizure belong to a German national, it is nevertheless the case that, as the Commission correctly points out, the latter situation is rare, the great majority of enforcements abroad being against persons who are not of German nationality or against legal persons not established in the Federal Republic of Germany. It follows that the national provision in question leads in fact to the same result as discrimination based on nationality. 17 However, that finding is not sufficient to conclude that a provision such as that at issue in the main proceedings is incompatible with Article 7 of the Treaty. For that it would also be necessary that the provision in question should not be justified by objective circumstances. 18 In that connection, it must be borne in mind that a seizure order guarantees the creditor the opportunity of enforcing a subsequent judgment against the debtor effectively and within the prescribed time. According to Paragraph 917(1) of the ZPO, seizure is to be authorized where it is reasonable to fear, in the light of the circumstances of the case, that enforcement of the subsequent judgment would otherwise be made impossible or substantially more difficult. By virtue of Paragraph 917(2), such difficulties are presumed from the mere fact that enforcement is to take place in a State other than the Federal Republic of Germany. 19 While such a presumption is justified where the subsequent judgment is to be enforced in the territory of a non-member country, it is not justified where enforcement is to take place in the territory of the Member States of the Community. All those States are Contracting Parties to the Brussels Convention whose territories may be regarded as forming a single entity, as indicated in the Report on the Brussels Convention (Official Journal 1979 C 59, p. 1, particularly at p. 13). 20 Consequently, although the conditions for enforcing judgments and the risks attached to the difficulties raised by enforcement are the same in all the Member States, Paragraph 917(2) of the ZPO in essence considers those risks and difficulties to be sure and certain solely because enforcement will take place in the territory of a Member State other than Germany. 21 It follows that the national provision is not justified by objective circumstances. 22 In the light of the foregoing, the answer to the question submitted must be that Article 7 of the EEC Treaty, read in conjunction with Article 220 of the Treaty and the Brussels Convention, precludes a national provision of civil procedure which, in the case of a judgment to be enforced within the national territory, authorizes seizure only on the ground that it is probable that enforcement will otherwise be made impossible or substantially more difficult, but, in the case of a judgment to be enforced in another Member State, authorizes seizure simply on the ground that enforcement is to take place abroad. COSTS Costs

5 Page 5 of 8 23 The costs incurred by the German Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. RULING On those grounds, THE COURT (Sixth Chamber), in answer to the question referred to it by the Hanseatisches Oberlandesgericht Hamburg by order of 16 November 1992, hereby rules: Article 7 of the EEC Treaty, read in conjunction with Article 220 of the Treaty and the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, precludes a national provision of civil procedure which, in the case of a judgment to be enforced within national territory, authorizes seizure only on the ground that it is probable that enforcement will otherwise be made impossible or substantially more difficult, but, in the case of a judgment to be enforced in another Member State, authorizes seizure simply on the ground that enforcement is to take place abroad. Index Subject BRUSSELS CONVENTION OF 27 SEPTEMBER 1968 Date of judgment 1994/02/10 Date lodged 1992/11/23 Date overview OF DOCUMENT...: 10/02/1994 OF APPLICATION...: 23/11/1992 Celex number 692J0398 Case citations EEC Treaty Article 7 [157E007] : N EEC Treaty Article 220 [157E220] : N Agreement [468A0927(01)] : N EEC Treaty Article 220 [157E220]-T4 : N 11 Case 137/84 [684J0137]-N11 : N 11 Case 22/80 [680J0022]-N09 : N 14 Acts cited in ruling I EEC Treaty Article 7 [157E007] I EEC Treaty Article 220 [157E220] I Agreement [468A0927(01)] Year (Dates) References Bibliographic Information

6 Page 6 of 8 Authoring institution COURT OF JUSTICE Basic treaty European Economic Community Legal instrument JUDGMENT ECJ Document type Judgment Type of procedure REFERENCE FOR A PRELIMINARY RULING Authentic language GERMAN Mund & Fester v Hatrex Internationaal Transport. Reference for a preliminary ruling: Hanseatisches Oberlandesgericht Hamburg - Germany. Seizure order - Sufficient grounds: enforcement of a judgment in another Contracting State party to the Brussels Convention - Prohibition of discrimination. Case C-398/92. Plaintiff Mund & Fester Defendant Hatrex Internationaal Transport Observations Federal Republic of Germany Commission Judge Kakouris Advocate-General Tesauro National Court *A8* Landgericht Hamburg, Beschluss vom 23/06/92 (406 O 97/92) *A9* Oberlandesgericht Hamburg, Vorlagebeschluss vom 16/11/92 (6 W 53/92) - Die deutsche Rechtsprechung auf dem Gebiete des internationalen Privatrechts im Jahre 1992 no Europaische Zeitschrift fur Wirtschaftsrecht 1993 p Europaisches Wirtschafts- & Steuerrecht - EWS 1993 p.78 -Neue Juristische Wochenschrift 1993 p Praxis des internationalen Privat- und Verfahrensrechts 1993 p International Litigation Procedure 1993 p NOTES - Ehricke, Ulrich: Praxis des internationalen Privat- und Verfahrensrechts 1993 p *P1* Oberlandesgericht Hamburg, Schreiben vom 24/05/94 (6 W 53/92) Nationality FEDERAL REPUBLIC OF GERMANY Commentary X: Revue de jurisprudence de droit des affaires 1994 p Martonez Sßnchez, Antonio: Gaceta Jurodica de la C.E. y de la Competencia - Boleton 1994 no 91 p.29-31

7 Page 7 of 8 Idot, Laurence: Europe 1994 Avril Comm. no 166 p Thummel, Roderich C.: Europaische Zeitschrift fur Wirtschaftsrecht 1994 p Volken, Paul: Schweizerische Zeitschrift fur internationales und europaisches Recht 1994 p.1-2 Mok, M.R.: TVVS ondernemingsrecht en rechtspersonen 1994 p.137 Schultsz, J.C.: Nederlandse jurisprudentie Uitspraken in burgerlijke en strafzaken 1994 no 385 Ter Kuile, B.H.: Nederlandse jurisprudentie Uitspraken in burgerlijke en strafzaken 1994 no 385 Bischoff, Jean-Marc: Journal du droit international 1994 p X: Giustizia civile 1994 I p Gaudemet-Tallon, Helene: Revue critique de droit international prive 1994 p Gieseke, Horst: Europaisches Wirtschafts- & Steuerrecht - EWS 1994 p Couwenberg, I.: Rechtskundig weekblad p. 58 Geiger, Rudolf: Praxis des internationalen Privat- und Verfahrensrechts 1994 p Wolf, Christian: Juristenzeitung 1994 p Matthews, Paul: Lloyd's Maritime and Commercial Law Quarterly 1994 p Schwander, Ivo: Aktuelle juristische Praxis - AJP 1994 p Vasilakakis, Vangelis: Elliniki Epitheorisi Evropaikou Dikaiou 1994 p Van Doorn, Juliette: Revista de Instituciones Europeas 1994 p Slotboom, M.M.: Euridica 1994 no 3 p.6-7 Mankowski, Peter: Neue juristische Wochenschrift 1995 p Koch, Robert: Europaische Zeitschrift fur Wirtschaftsrecht 1995 p Borras Rodroguez, Alegroa: Revista Jurodica de Catalunya 1995 p Schack, Haimo: Zeitschrift fur Zivilprozess 1995 p Schlosser, Peter: Zeitschrift fur europaisches Privatrecht 1995 p Garcimarton Alferez, Francisco J. Heredia Cervantes, Ivßn: Gaceta Jurodica de la C.E. y de la Competencia - Serie D 1995 no 23 p Rosenow, Ralf: Schwei zerische Zeitschrift fur internationales und europaisches Recht 1995 p Vassalli di Dachenausen, T.: Il Foro italiano 1995 IV Col.237 Pietrobon, A.: Il Foro italiano 1995 IV Col Ameli, François De Baets, Caroline Ehricke, Ulrich Kennett, Wendy Van Haegenborgh, Geert Verschuur, Rene: European Review of Private Law 1995 p Duintjer Tebbens, H.: S.E.W. Sociaal-economische wetgeving 1996 p Anton, A.E. Beaumont, P.R.: The Scots Law Times 1996 p.a3 Publication reference European Court Reports 1994 page I-0467 SUMMARY... Para 1... Para 2 ISSUE 1 GROUNDS... Para 1... Para 2... Para 3... Para 4... Para 5... Para 6... Para 7... Para 8... Para 9 Text outline

8 Page 8 of 8... Para Para Para Para Para Para Para Para Para Para Para Para Para 22 COSTS... Para 23 RULING END OF DOCUMENT Copr. (c) West 2004 No Claim to Orig. Govt. Works

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