Enforcement of Judgments 2019

Last Updated August 07, 2019

Austria

Law and Practice

Authors



KNOETZL is Austria’s first large-scale dispute resolution powerhouse dedicated to high-profile and significant cases. KNOETZL's diverse expertise encompasses civil, commercial, sovereign, corporate and fraud litigation, focusing on liability claims, corporate – including M&A, financing and joint venture disputes – banking, insurance and financial derivatives cases, investor protection, business and political crime, asset-tracing and provisional measures, such as freeze orders and attachments, in domestic and international contexts, and in enforcement of foreign judgments and arbitral awards. The firm’s practice covers international commercial arbitration, investment protection and arbitration-related court proceedings, mediation and ADR. KNOETZL is well regarded for its disputes work at the intersection of civil and criminal matters. Distinguished international law firms, corporate decision-makers and general counsels frequently turn to KNOETZL to act as their Austrian disputes counsel.

Introduction

Austrian courts are known for their efficiency and this also applies to the enforcement of (foreign and domestic) judgments.

The relevant provisions of domestic law pertaining to enforcement proceedings are contained in the Austrian Code of Civil Procedure (Zivilprozessordnung, CCP) and the Austrian Enforcement Act (Exekutionsordnung, EA). Moreover, as Austria is a member state of the European Union (EU), the relevant regulations (such as Regulation No 1215/2012 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters) apply.

In addition, Austria is party to a number of multilateral and bilateral treaties that deal with the recognition and enforcement of judgments, among them the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (2007) or – currently dormant – the bilateral treaty with the United Kingdom and Northern Ireland providing for the reciprocal recognition and enforcement of judgment in civil and commercial matters (1961), which may become more relevant in future, pending the result of Brexit.

Identifying Assets

In Austria, there are several public registers that may prove useful in identifying assets of another party. The most relevant of these are the Land Register (Grundbuch), the Company Register (Firmenbuch), the Tradespersons Register (Gewerberegister), the Insolvency Register (Ediktsdatei), the Trade Mark and Patent Register (Marken- und Patentregister).

Regarding immovable assets, the Austrian Land Register, which is kept by the courts of the federal states, can be consulted. It includes information on ownership, mortgages and the more recent underlying documents such as purchase and mortgage agreements. While all persons may enquire regarding ownership of a specified property, only certain registered persons (such as notaries, lawyers or other public bodies) or persons who have a proven legal interest may search for a specific legal or natural person and obtain a list of property owned by that person or access underlying documents.

When identifying the asset position of company, the first step is to check the Austrian Company Register, which is kept by the courts of the federal states and by the Commercial Court of Vienna. Depending on the type of company, the Company Register may include information on the managing directors and shareholders (including addresses), the company’s equity and (abbreviated) annual accounts. The Company Register is open for public inspection without the need to show any specific legal interest or justification. A certified copy can be obtained from the competent court or from a public notary.

In order to obtain information on the commercial activities of specific legal or natural persons, the Austrian Tradespersons Register, which is kept by local administrative authorities, may prove helpful. Under Austrian law, most trades may only be carried out by certificated tradesmen. The Tradespersons Register lists the trades registered by a specific legal or natural person. It is accessible online.

The Austrian Insolvency Register is an online database, kept by the competent courts which publish all relevant decisions related to insolvency proceedings. It is publicly and easily accessible online. The database shows whether a party is subject to insolvency proceedings as well as the status of those proceedings. In addition, the Insolvency Register also lists court-ordered auctions of assets.

The Austrian Trade Mark and Patent Register offers a freely accessible online database. It identifies ownership of registered intellectual property, including national and European patents, trade marks and designs.

If a creditor has already obtained a (first-instance) court decision which has not yet become final and binding (because it is subject to an appeal by the debtor), Austrian law provides for 'preliminary enforcement' to secure monetary claims (Exekution zur Sicherstellung, Section 370 et seq EA). Such protective measures are, however, only available based on a not-yet enforceable decision by an Austrian court or a court of a member state of the EU.

Prior to a court decision, freezing orders and injunctions are available as 'interim measures' (einstweilige Verfügungen, Section 378 et seq EA). Moreover, as Austria is a member state of the EU its courts may issue a European Account Preservation Order (based on Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014) to freeze bank accounts within the EU.

To prevent the enforcement of a future court decision from becoming considerably more difficult or even impossible, a party may request interim relief either in the course of pending proceedings or before filing a claim. In the latter case, usually a short time period (often just one to three months) is set by the court as the deadline for initiating main proceedings to decide upon the claim that is to be secured. If no main proceedings are initiated within the given period of time, the interim relief will be lifted by the court.

Although it is not necessary to fully prove the underlying claim, the requesting party will be required to show that it’s claim is sufficiently substantiated. If in doubt, courts will order the party requesting interim relief to post security that serves to mitigate against loss by the opposing party should it incur damages based on an interim measure that is ultimately not justified.

Interim measures to secure monetary claims require the requesting party to plausibly show 'subjective endangerment' of the claim based on specific actions of the opposing party. This 'subjective endangerment' is a high threshold and requires the party to make plausible to the court that, if the interim relief is not granted, the opposing party will ultimately undermine the outcome of the main proceedings by, in the meantime, taking steps to hamper enforcement by damaging, destroying, hiding, or otherwise dissipating assets.

In limited cases, it is sufficient to show 'objective endangerment' which is given, in particular, if enforcement would otherwise be outside of the EU or in states where international treaties ensuring enforcement are not in place.

Interim measures are also available to secure non-monetary claims such as performance of specific acts, obligations to cease-and-desist, etc. For such claims, it suffices to make plausible to the court 'objective endangerment' such as imminent violence or irreversible harm.

Procedure to obtain interim relief: in general, if the claim is already subject to ongoing main proceedings, the court competent for the main proceedings also has jurisdiction over requests for interim relief. In other cases, the jurisdiction lies with the competent district court (Bezirksgericht) at either the opposing party’s domicile or at the location of the asset that is subject to the interim injunction or at the place where the act of enforcement will take place or – in cases of garnishment orders – at the third party's domicile.

In many cases, Austrian courts will decide on an application for interim relief within a few days. In more complex cases, it may take a week or two until a decision is rendered. Upon application, the court may issue its decision ex parte if the requesting party convinces it that, otherwise, the goal of the relief sought could be frustrated.

Each party may file legal remedies against the court's decision on the interim injunction within 14 days after the respective party has been served with the court's decision.

To protect parties from the adverse consequences of an interim measure, Austrian law imposes liability on the requesting party for damages incurred as a result of an unjustified interim injunction. In addition, the court may impose a fine on the requesting party if it transpires that the request was baseless and filed wilfully (ie, with malintent).

Asset Disclosure Orders are limited under Austrian Law. However, they are available in enforcement proceedings. Upon application of the creditor the court will order third-party debtors, social security agencies, and the debtor to disclose specific information.

In enforcement proceedings aimed at seizing monies on Austrian bank accounts held by the debtor, it is not necessary to specify the actual account number. It suffices to name the bank and request the court to order the bank to disclose any such accounts. Austrian banks are by law obliged to comply with this information request and are liable for any incorrect information.

Enforcement proceedings for attachment of earnings may be initiated even if the identity of the debtor’s employer is unknown. Upon application of the creditor, the court will request this information from the social security agencies, which are by law obliged to provide such information.

Should a request to the social security agencies not show any regular income or if no movable assets of value are found, the debtor can be ordered by court to provide a statement disclosing all assets (Vermögensverzeichnis, Section 47 et seq EA). If the debtor refuses to draw up an inventory of assets, the court may impose imprisonment of up to six months. Incorrect disclosures are sanctioned by criminal law.

As of 1 January 2019, it is possible for creditors who can show that they have (i) a claim against the debtor and (ii) legitimate doubts as to the debtor’s creditworthiness to instruct a lawyer or notary to access the Enforcement Register (Exekutionsregister) which contains court data regarding enforcement proceedings conducted against the debtor. The information includes the number of pending enforcement proceedings (including the owed amounts) for the past two years, whether enforcement measures regarding moveable assets have been successful, and whether the debtor was ordered to provide a statement disclosing all assets (Vermögensverzeichnis) in the past year.

The Register of Beneficial Owners (Register der wirtschaftlichen Eigentümer) is accessible for certain groups of registered users, generally entities who are subject to anti-money-laundering obligations, including lawyers, notaries, (chartered) accountants, banks, various types of agents, etc. It allows determination of the (indirect) commercial owners of companies registered in Austria.

The Association for Credit Protection (Kreditschutzverband von 1870) maintains a database with information on companies as well as on individuals. It contains company profiles, branch profiles, monitoring and early warning systems for the purpose of informing (potential) creditors about the financial standing of their business partners. As the accuracy of this online database cannot be guaranteed, a double check with other available data is always highly recommended.

Austrian courts decide by means of determinations (Beschlüsse) and judgments (Urteile). Determinations generally deal with procedural issues, order measures, and can dispose of a claim if it is rejected for procedural reasons. Judgments are decisions on a claim based on its merits.

Generally, a judgment will finally decide on the subject matter of a dispute in its entirety. However, under various circumstances, usually related to the complexity of the case, the courts may decide on the matter in several steps and issue interlocutory, partial, or supplementary judgments.

An interlocutory judgment (Zwischenurteil, Section 393 CCP) ultimately serves to structure proceedings into various phases by first deciding on an issue that needs to be clarified in order for a final decision to be rendered. In most cases, the aim will be to determine whether a claim is in principle justified on the merits (without review of quantum). There are two types of interlocutory judgments which must be distinguished in terms of their binding effect: a 'simple' interlocutory judgment, which only has binding effect on the court itself within the proceedings, and a 'declaratory' interlocutory judgment upon application of a party – this is a genuine declaratory judgment and therefore has binding effect between the parties. In both cases, an interlocutory judgment is not enforceable.

A partial judgment (Teilurteil, Section 391 CCP) may be employed if multiple (unrelated) claims are raised within one action or if the claim is otherwise severable. A partial judgment can then, for example, be rendered regarding individual claims that are ready for decision, parts of a claim that have been acknowledged by the defendant, or a main claim respectively a counterclaim, if only one is ready for decision. A partial judgment has the effect of a final judgment and is fully enforceable.

A supplementary judgment (Ergänzungsurteil, Section 423 CCP) is rendered upon application of a party, if the court failed to initially deal with all claims raised in their entirety or failed to render a decision on costs. A supplementary judgment has the effect of a final judgment and is fully enforceable.

Judgments can also be distinguished and have different effects based on the nature of the relief requested and respectively granted.

A performance judgment (Leistungsurteil) contains a performance order which can relate to performance of payment or specific performance. Specific performance includes the order of positive action by the defendant, the order to defendant to tolerate an action of plaintiff, or an order to the defendant to cease and desist. A performance judgment is always enforceable. However, attention must be paid to formulate the request for relief that shall be granted in a manner that is not vague; it must be sufficiently clear and specific what the performance shall be.

A constitutive judgment (Rechtsgestaltungsurteil) directly effects the rights of the parties and changes the legal situation. A constitutive judgment either establishes, amends or nullifies a legal relationship between the parties. This effect is automatic as soon as the judgment is final and binding. Accordingly, a constitutive judgment does not require enforcement.

A declaratory judgment (Feststellungsurteil) clarifies the existence or non-existence of a legal relationship or a right. It may also be requested to establish the authenticity or falseness of a document. Due to its nature a declaratory judgment can be relied upon but cannot be enforced.

If one party refrains from participating in the proceedings and, in particular, fails to appear in court, the court may – upon request of the other party that is not in default – render a default judgment (Versäumungsurteil, Section 396 CCP). If the non-defaulting party fails to make such an application, the proceedings are suspended.

The main prerequisite is that the defaulting party has properly been served with a writ – ie, is aware that it is required to either to file a written submission or appear in court. Moreover, the defaulting party has various legal remedies against the default judgment at its disposal. However, if no action is taken, the default judgment becomes final and binding and is fully enforceable.

Austrian enforcement proceedings are bifurcated into two steps: (i) authorisation proceedings (Exekutionsbewilligung) and (ii) the actual enforcement (Exekutionsvollzug). Both fall within the competence of the enforcement court.

The prerequisite for enforcement is an enforceable title, such as the judgment of a court awarding a claim, which has been formally confirmed as enforceable (usually be means of an official stamp). Such confirmations are issued by the court that rendered the judgment, after the judgment has become final and binding (no further appeal possible) and expiry of the performance period (in which the judgment debtor has the opportunity to voluntary comply with the judgment).

For the sake of completeness, under Austrian law an enforcement title (Exekutionstitel) is not only a judgment but may, inter alia, also be a public deed or an enforceable notarial deed. In all cases, the enforcement title must be sufficiently specific – ie, allow the court of enforcement to clearly determine what the creditor is entitled to receive.

Once a creditor has obtained an enforceable title, it can apply for enforcement at the competent district court (Bezirksgericht) at the either the debtor’s domicile or at the location of the asset that is subject of the enforcement or at the place where the act of enforcement will take place or – in cases of garnishment orders – at the third party's domicile.

The application for enforcement is done by means of official standard forms and must contain the following mandatory information:

  • the name of the creditor;
  • the name of the debtor;
  • a description of the facts relevant to determine jurisdiction of court;
  • a statement that there is a claim against the debtor that is due but remains unfilled;
  • the specification of the enforceable title confirming claim (which must be submitted together with the application for enforcement);
  • the requested measure(s) of enforcement (eg, attachment of earnings);
  • if necessary, the exact designation of the objects that shall be subject to enforcement.

In the case of enforcement of monetary claims, the application must in addition state:

  • the amount to be recovered by means of enforcement;
  • any ancillary fees or interest etc claimed.

The court of enforcement will only examine the formal requirements based upon the application and – if it is satisfied that all formal requirements are met – will authorise enforcement by means of a court order.

There is also a simplified enforcement authorisation procedure that does not require the submission of the enforceable title. This simplified procedure is only applicable to Austrian judgments and if the value of the claim to be enforced does not exceed EUR50,000.

In Austria, actual enforcement (ie, implementation of the enforcement measures) also falls within the competence of the courts and its officers. There is no private enforcement.

Austrian law provides for a number of enforcement measures and allows the creditor to choose which enforcement measure(s) shall be implemented to combine several measures, if this is appropriate. However, only those enforcement measures listed in the Enforcement Act are available. Furthermore, certain enforcement measures are only available for certain types of claims. The available enforcement measures are categorised according to whether they serve to enforce (i) monetary claims or (ii) specific actions of the debtor.

Monetary claims can be enforced by means of measures directed against immovable property (Liegenschaftsexekution), moveable property (Fahrnisexekution), claims of the debtor against third parties (Forderungsexekution), or rights such as intellectual property (Rechteexektuion).

Immovable Property

Immovable property is real estate, including the buildings on it, unless these are non-permanent structures (Superädifikate). The predominant enforcement measures available are as follows.

Establishment of lien (Section 87 et seq EA)

This measure does not directly lead to the satisfaction of the claim of the enforcing creditor but merely secures the subsequent satisfaction of the enforceable claim in the rank of incorporation as entered into the Land Registry (meaning it does not give priority over pre-existing liens). It is usually combined with other measures.

Foreclosure (Section 133 et seq EA)

This measure leads to auction of real estate of the debtor by the court. The order of the court will promptly be entered into the Land Register, thus barring any subsequent transactions that would affect the property. However, the creditor does not obtain priority over pre-existing liens, etc. In the actual enforcement, the court will have the property appraised by an expert and set an auction date; both the appraisal and the date of the auction are made public. The auction itself will be carried out by the judge in a court hearing. The lowest bid is half of the appraised value. The highest bidder wins the auction. The proceeds of the auction are distributed among the creditors; any surplus is paid to the debtor. The actual auction procedure, including the distribution of proceeds, can be appealed. In particular, it is possible to outbid the successful bidder within 14 days, if the successful bid was less than three-quarters of the appraised value.

Administration (Section 97 et seq EA)

The measure of administration aims to satisfy the claim from the proceeds of the administration of a property (such as rental income) or a part of a property of the debtor. The measure will be recorded in the Land Registry and also restricts certain rights of the debtor regarding the administration of the property as the court will appoint a receiver for this purpose. The measure is terminated as soon as the creditor's monetary claim has been satisfied.

Movable Property

Movable property are all objects that can be moved from one place to another without damaging their substance.

Attachment and auction (Section 249 et seq EA)

This measure leads to the court-ordered seizure of property of the debtor, followed by a public auction (in a licensed auction house). The court order must specify the location(s) at which the property of the debtor shall be seized. The actual enforcement is conducted by an officer of the court, who may enter the property by means of force (eg, with the help of a locksmith). The objects are seized by means of describing them and recording them in a list. The destruction, damage or removal of already seized items is punishable by law, therefore the objects are only physically seized if so requested by the creditor. Certain objects of personal use (that allow for a decent but modest lifestyle) or emotional value (such as family photos) or covering basic needs (food for four weeks) may not be seized. The auction procedure is similar to that described above regarding immovable property.

Surrender of specific property (Section 346 et seq EA)

This measure is directed against a specific movable object. The officer of the court may seize the precisely defined movable object and hand it over to the creditor against a receipt.

Monetary Claims of the Debtor against Third Parties

Monetary claims of the debtor against third parties are in most cases claims against banks holding accounts of the debtor and attachment of earnings (salary or wages) of the debtor. For these cases, the creditor is not obliged to name a specific bank account or name the employer, instead the court will order the bank or request the social security agencies to provide this information (Drittschuldneranfrage). Note that, regarding attachment of earnings, the debtor must be left with an amount that is equivalent to the minimum subsistence level (as defined by law).

Attachment and collection (Section 290 et seq EA)

The measure actually consists of two orders: one forbidding the third-party debtor to make payment to the debtor (prohibition of payment) and another forbidding the debtor to dispose of his claim against the third-party debtor (prohibition of disposal). The third-party debtor is subsequently obliged to provide the court with any relevant information regarding the attached claim (such as assignment of the claim, attachments by other creditors or, in case of an employer, known family maintenance obligations of the debtor) and is liable for damages incurred by the creditor due to incorrect or incomplete information. The collection (and then transfer to the creditor) is generally effected by bank transfer.

Rights or Intangible Assets

Rights or intangible assets of the debtor may also be the subject of enforcement proceedings. The most common cases are intellectual property or shares in companies.

Attachment and exploitation (Section 330 et seq EA)

As a first step, this measure entails attachment of the right and an order forbidding the debtor to dispose of this right. The actual measures that allow the creditor to recover its monies depend on the right. For example, the court may order a patent to be subject to receivership (allowing the creditor to collect any licence fees) or that the patent shall subject to administration (including the right to grant licences, again allowing the creditor to collect any monies paid for such licences) or the court may (ultimately) also order sale of the patent (allowing the creditor to be satisfied by the proceeds).

Non-monetary Claims

Non-monetary claims are in general specific actions that the debtor is obliged to undertake (or cease-and-desist from).

Substitution (Section 353 et seq EA)

This measure obliges the debtor to undertake an act within a specified time. If the debtor fails to do so, the creditor may have this act performed by another person and request enforcement of the costs incurred as a monetary claim.

Penalisation (Section 353 et seq EA)

If the act can only be performed by the debtor or the debtor violates its obligation to cease and desist, the court will first threaten and can then impose penalties in form of fines or imprisonment.

If the debtor is insolvent and insolvency proceedings have been opened, this results in a prohibition of legal proceedings (relating to the assets of the debtor) both regarding main proceedings and enforcement proceedings. As a result, pending proceedings are stayed and no new proceedings may be initiated. All claims must be acknowledged by the court-appointed insolvency receiver. The proceedings are governed by the specific provisions that apply in insolvency proceedings.

One important point to note is that liens that were granted within the last 60 days prior to the opening of insolvency proceedings are automatically invalidated by law.

In general, enforcement proceedings are concluded quickly and effectively by Austrian courts. The authorisation process takes place ex parte and accordingly a decision is often rendered within a week or two. Should the decision authorising enforcement be appealed, it may take between two to six months to obtain a final decision. Regarding the actual enforcement process, much depends on the measure chosen. Foreclosure and auction of real estate will take longer than attachment of earnings.

The costs for enforcement comprise lawyer’s fees, a possible advance to cover costs of actual enforcement measures (such as obtaining an appraisal of the value of real estate to be auctioned) and court fees. Whereas court fees to obtain a judgment are relatively high compared to other jurisdictions (approximately 1.2% of the amount in dispute and increasingly more for each level of appeal), the court fees for enforcement are relatively modest, amounting to approximately 0.25% to 0.3% of the amount to be enforced. Should the decision on enforcement be subject to appeal, the court fees are approximately 0.4% to 0.45%. Should a further recourse to the Austrian Supreme Court – which is limited – be permissible, the court fees are approximately 0.5% to 0.6% of the amount to be enforced.

All available means to identify defendants’ assets are described in 1.1 Options to Identify Another Party's Asset Position, above.

The decision to grant (or deny) enforcement is subject to appeal which must be raised within 14 days of service of the decision on the party. This, in particular, ensures the debtor’s right to be heard as the authorisation of enforcement proceedings is generally granted ex parte.

Overall, Austrian Enforcement law is creditor-friendly which is also reflected in the fact that legal remedies against decision of the enforcement court generally do not have a suspensory effect. However, it is possible to a request a stay of enforcement measures together with the appeal.

There are three actions that lead to suspension of enforcement proceedings, as detailed below.

  • Opposition on substantive grounds (Oppositionsklage, Section 35 EA). In an opposition action on substantive grounds, the debtor asserts circumstances that occurred after the rendering of the judgment on the main claim that annul the substantive claim or at least lead to postponement of enforcement (eg, full performance, deferment of performance).
  • Opposition on formal grounds (Impugnationsklage, Section 36 EA). In an opposition action on formal grounds, the debtor asserts circumstances according to which the prerequisites for enforcement are not yet given (eg, the performance period determined in the judgment on the main claim has not lapsed).
  • Third-Party Action (Exzindierungsklage, Section 37 EA). If, in fact, the object against which enforcement measures are directed does not belong to the debtor, the entitled third party can – by showing its entitlement – obtain a declaration of inadmissibility of the enforcement measure (which is then repealed).

If the conditions for enforcement are no longer met, the enforcement may be discontinued (or limited) upon application or ex officio.

A constitutive judgment does not require enforcement. Due to its nature, a declaratory judgment can be relied upon but cannot be enforced. For more details see 2.1 Types of Domestic Judgments, above.

In Austria, judgments are not freely accessible to the public. There is no central repository of judgements. However, there is an online register of judgments, which publishes a selection of judgments of the Austrian courts in anonymous form. Its goal is to allow access to available case law, rather than publishing the outcome of a specific legal dispute. This online register contains mainly decisions of the Austrian Supreme Court and judgments by Courts of Appeal, but only to the extent their significance extends beyond the individual case.

Specifically regarding enforcement proceedings, it is possible to access the Enforcement Register which contains court data regarding enforcement proceedings conducted against a debtor, including the number of pending enforcement proceedings.

The general rule under Austrian law (Section 406 EA) is that, if no treaties apply, foreign judgments will only be recognised and declared enforceable if:

  • they are enforceable in the state of origin (a certification of enforceability must be provided); and
  • 'formal reciprocity' has been agreed in international treaties or determined by an Austrian regulation; exceptions apply in family law and with regard to civil/marital status. Formal reciprocity requires that Austrian judgments are, also in practice, not treated any differently from judgments of that state.

In cases where the respective treaties do not already contain special rules on recognition requirements – this includes in particular the international transportation treaties – Austrian law further requires (Section 407 EA) that:

  • hypothetically applying Austrian rules on jurisdiction, the court of origin had international jurisdiction;
  • the Statement of Claim (or other document initiating the proceedings) was duly served on the defendant(s) under the laws applying in the state of origin;
  • no grounds for refusal of recognition/enforceability exist (see in more detail below).

Regulation No 1215/2012 of 12 December 2012 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (‘Brussels I recast’) provides uniform laws for the recognition and enforcement of judgments within EU member states.

Brussels I recast, applicable since January 2015, has simplified enforcement of judgments within the EU, and now only requires filing of a copy of the judgment and a standard form certificate.

In parallel, the Lugano Convention, which contains a very similar set of rules, continues to apply between Austria and Iceland, Norway and Switzerland.

Further EU Regulations governing specific enforcement issues include:

  • Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004, creating a European Enforcement Order for Uncontested Claims;
  • Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006, creating a European Order for Payment Procedure;
  • Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007, establishing a European Small Claims Procedure;
  • Regulation (EC) No 2201/2003 of the Council of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility (which replaces the former Council Regulation (EC) No 1347/2000);
  • Regulation (EC) No 4/2009 of the Council of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations;
  • Regulation (EU) No 2016/1104 of the Council of 24 June 2016, implementing enhanced co-operation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of the property consequences of registered partnerships; and
  • Regulation (EU) No 2015/848 of the European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings.

Where Brussels I recast and the Lugano Convention do not apply, multilateral and bilateral treaties have priority over the subsidiary provisions of the Austrian Enforcement Act.

The following multilateral treaties to which Austria is a party (exemplary list) either contain specific rules on enforcement or provisions relevant to enforcement proceedings:

  • the Hague Convention of 1 March 1954 on Civil Procedure and the Convention of 5 October 1961 abolishing the Requirement of Legalisation for Foreign Public Documents;
  • various international transportation treaties, including COTIF, (CIV, CIM), CIGR, CMR and the Convention on the Registration of Inland Navigation Vessels of 25 January 1965;
  • in the area of family law, the Hague Conventions on matters of family law and civil status of 1958, 1961, 1980, 1996, 2000 and 2007, the Convention on the Recognition of Decisions relating to the Validity of Marriages of 8 September 1967.

Outside such multilateral treaties, Austria has been rather reluctant to enter into bilateral treaties on recognition and enforcement of judgments. Currently, bilateral treaties are in place, for example, with Israel (BGBl 1968/349), Liechtenstein (BGBl 1956/212, 1975/114) Tunisia (BGBl 1980/305) and Turkey (BGBl 1992/257).

The main difference between enforcement of domestic and foreign judgments is the need to first obtain the declaration of recognition and enforceability of a foreign judgment. Once this prerequisite is fulfilled, the same provisions apply to the enforcement proceedings and no further differentiation to domestic judgments is made.

From the perspective of the Austrian enforcement courts, there are two main groups of foreign judgments:

  • judgments rendered by courts of EU member States (including Denmark) and Lugano Convention parties, which do not require separate recognition proceedings; and
  • judgments rendered by courts of other states, which require recognition proceedings.

The main prerequisite for all judgments to be enforced is that the relief granted is clearly stated.

In general, Austrian law, does not differentiate between categories and types of judgments. Special rules apply, however, in particular in the area of family law (adoption, matrimonial issues, parental responsibility) and the recognition of insolvency proceedings.

Regarding default judgments, the right to be heard is safeguarded by the Austrian courts, both under Brussels I recast and under Austrian law. Pursuant to Section 408 EA, if the defendant was not provided with sufficient opportunity to participate in the proceedings which gave rise to the judgment due to procedural irregularities, Austrian courts may refuse recognition and enforcement of the judgment.

Brussels I recast further provides a stricter regime for interim measures than for final judgments, requiring, in particular, jurisdiction of the court granting interim relief also to be competent for the main proceedings. However, if this requirement is met, Brussel I recast permits enforcement also of ex parte interim measures, provided the decision has been served on the defendant(s) before enforcement. Outside of the regime of Brussels I recast, ex parte interim orders are generally not enforceable in Austria.

One further point to note is that Austrian law does not have an instrument equivalent to punitive damages and, accordingly, will not enforce a judgment (or that part of judgment) awarding such damages.

EU Judgments

Under Brussels 1 recast, no separate recognition proceedings are required allowing the creditor to move directly to obtaining a declaration of enforceability and proper enforcement proceedings.

The application for enforcement is to be made to the competent domestic court. The creditor must provide, together with the enforcement application, a copy of the judgment, which must be accompanied by a certificate issued by the court that rendered the decision in the country of origin (pursuant to Article 53/Annex 1 Brussels I recast). The translation of the judgment is not mandatory. However, the court may order the creditor to produce a (certified) translation of the judgment.

According to Article 41 paragraph 1 Brussels I recast the procedure for enforcement shall be governed by the law of the member state in which enforcement is sought. This means that, in effect, domestic Austrian enforcement provisions apply directly.

Debtor’s Defences

There are several limited grounds on which recognition of a judgment rendered by the courts of an EU member state can be denied. These exceptions include cases in which the recognition of the judgment is manifestly contrary to the public policy of the EU member state in which recognition is sought, or if the judgment was rendered in violation of due process. Other grounds for the denial of recognition are, inter alia, if the decision is irreconcilable with a previous judgment between the same parties.

According to the Austrian Supreme Court, the requirement that the foreign judgment be enforceable in the state of origin does not imply a requirement that the judgment could indeed be enforced in the country in which it was rendered, but rather that such judgment is only formally enforceable.

According to Article 20 of Council Regulation (EC) 805/2004 “a judgment certified as a European Enforcement Order shall be enforced under the same conditions as a judgment handed down in the Member State of enforcement.” A claim is considered uncontested if:

  • the debtor has expressly agreed to it by admission or by means of a settlement which has been approved by a court or concluded before a court;
  • the debtor has never objected to it in the course of the court proceedings;
  • the debtor – after having initially objected to the claim in the course of the court proceedings – has not appeared or been represented at the further court hearings, provided that such conduct amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the member state; or
  • the debtor has expressly agreed to it in an authentic instrument.

Proceedings

The application for the enforcement of a European Enforcement Order must be accompanied by the following documents:

  • a copy of the judgment which satisfies the conditions necessary to establish its authenticity;
  • a copy of the European Enforcement Order Certificate which satisfies the conditions necessary to establish its authenticity; and
  • where necessary, a transcription of the European Enforcement Order certificate or a translation thereof into the official language of the court of enforcement.

Debtor’s Defences

The enforcement of a European Enforcement Order can be refused only if, upon application of the debtor, the court determines that the European Enforcement Order is irreconcilable with an earlier judgment rendered in any member state or in a third country, provided that:

  • the earlier judgment involved the same cause of action and was between the same parties;
  • the earlier judgment was passed in the EU member state of enforcement or fulfils the conditions necessary for recognition in the EU member state of enforcement; and
  • irreconcilability was not and could not have been raised as an objection in the court proceedings in the EU member state of origin.

Any decision by a court of a state that is outside the EU and not party to the Lugano Convention must be formally recognised and declared enforceable by an Austrian court in order for enforcement proceedings to be permissible in Austria.

Proceedings

Non-EU Judgments

The creditor must request the declaration of recognition and enforceability from the Austrian court competent for enforcement proceedings. In addition, the creditor is required to enclose certified copies of all relevant documents with such request.

The creditor may combine the application for recognition/declaration of enforceability with the application for enforcement.

The court issues its decision without hearing the debtor. An appeal against the decision may be filed within four weeks (eight weeks if the debtor is domiciled outside of Austria and this is the first opportunity to participate in the proceedings) of service of the decision.

Once the declaration of recognition and enforceability has become effective, the foreign judgment is considered equal to domestic judgments. Accordingly, the ensuing enforcement proceedings are governed by the same laws applicable to enforcement of domestic judgments.

Debtor’s Defences

The declaration of enforceability may, inter alia, be refused if:

  • according to Austrian laws on jurisdiction, the foreign court could not, under any circumstances, have had jurisdiction over the matter;
  • the opposing party was not served with the document that initiated the foreign proceedings;
  • the opposing party could not properly participate in the foreign proceedings due to procedural irregularities; or
  • the foreign judgment violates the fundamental principles of Austrian law (ordre public).

An application for recognition and declaration of enforceability alone does not trigger court fees, unless it is combined with an application for enforcement, then the general rules apply (see above).

Enforcement of EU judgments (or judgments falling within the scope of the Lugano Convention) is standard procedure in Austrian courts and generally takes place without delay, comparable to the enforcement of domestic judgments.

Enforcement of other judgments, however, can be cumbersome and lengthy, depending on the origin of the judgment. The proceedings to obtain recognition and a declaration of enforceability may – with an appeal – last between two and six months.

As in all court proceedings, the duration also depends on the conduct of the debtor, who may file appeals and request a stay of proceedings, etc.

Objections to the recognition and declaration of enforceability of a judgment must be raised by the debtor, except for an ordre publicobjection; they are not reviewed ex officio.

In general, Austrian courts will not undertake a substantive review of a foreign judgment. However, in proceedings regarding the recognition and declaration of enforceability, certain grounds may result in a partial substantive review, in particular if there is any indication that the judgment contravenes Austria public policy (ordre public). On balance, Austrian courts take a rather liberal approach and will only refuse recognition and declaration of enforceability if this would manifestly violate fundamental principles of Austrian law.

The debtor may also challenge enforcement based on procedural irregularities. This includes defects in service. Under Brussels 1 recast, recognition and enforcement may be refused where the judgment was given in default of appearance, if the defendant was not served with the document that initiated the proceedings in sufficient time and in such a way as to enable it to arrange for its defence. A similar defence exists under Austrian law and takes into consideration procedural irregularities in the country of origin that made it impossible for the defendant to duly participate in the main proceedings.

Brussels 1 recast provides further bars to enforcement if the judgment is irreconcilable with an (earlier, recognisable) judgment involving the same cause of action and the same parties.

Certain procedural appeals can delay enforcement significantly. For example, decisions that are not final, but are enforceable in the country of origin – eg, if a non-suspensive appeal was raised or an application to set aside the judgment is pending – may be enforced in Austria. However, the debtor may request a stay of the enforcement proceedings until the main decision becomes final. In such cases, the creditor may apply for the court to order the debtor to post security, if it deems that the stay could endanger the successful enforcement of the claim.

If the application for enforcement has been approved, but the declaration of enforceability is not yet final and binding, assets may be seized/attached, but not realised until the declaration of enforceability becomes final and binding.

Austria is an arbitration-friendly jurisdiction. Accordingly, it is rare to encounter issues in proceedings to obtain recognition and enforcement of an arbitral award in Austria.

The relevant provisions pertaining to recognition and enforcement of an arbitral award are contained in the Austrian Code of Civil Procedure (Zivilprozessordnung, CCP) – which is based on the UNCITRAL Model Law – and the Austrian Enforcement Act (Exekutionsordnung, EA) as well as the relevant international treaties. In particular, Austria has ratified the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention), the European Convention on International Commercial Arbitration 1961 (European Convention), the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and a number of bilateral investment treaties (BITs). Therefore, international arbitration practitioners will find a familiar legal environment in Austria.

As concerns recognition and enforcement, Austrian law distinguishes between domestic (with seat of the arbitration in Austria) and foreign (with seat of the arbitration outside of Austria) arbitral awards.

Domestic arbitral awards are by law deemed to have the same effect as a final court judgment (Section 607 CCP). Based on this and pursuant to Section 1 paragraph 16 EA, domestic arbitral awards constitute an enforceable title under Austrian law.

Foreign awards must first be formally recognised and declared enforceable ('exequatur') by an Austrian court in order to constitute an enforceable title under Austrian law (see Section 406 EA et seq).

All arbitral awards that are final and binding are generally enforceable under Austrian law. This includes partial awards (disposing of part of the main claim), final awards, additional awards, and awards granting specific performance.

Both the finality of a decision and the fact that it deals with the merits of the case are generally considered prerequisites for an enforceable arbitral award. This applies under Austrian law as well as the New York Convention. Therefore, the enforcement of interim or interlocutory awards that are not final or deal only with procedural issues raise a number of questions. Since the amendment of the Austrian arbitration law (Section 577 CCP et seq) in 2006, these questions have been clarified to the extent that Section 592 CCP explicitly provides that a decision on the jurisdiction of the arbitral tribunal may be rendered in form of an (interim) award and Section 609 paragraph 4 CCP determines that the cost decision shall be rendered in form of an award. In both cases, such awards are subject to the same provisions that apply to arbitral awards in general – ie, they become final and binding, are subject to setting-aside proceedings and enforceable. Legal writing has taken this as an indication that interim awards are to be treated as final awards.

Interim measures issued by an arbitral tribunal are dealt with separately under Section 593 CCP. The relevant provision applies irrespective of the seat of arbitration (ie, it applies equally to domestic and international arbitrations).

Interim measures issued by an arbitral tribunal are enforceable under Austrian law, subject to the condition that the other party has been heard (ie, the interim measure was not rendered ex parte), the interim measure is issued in writing and is undersigned either by the sole arbitrator or the president of the arbitral tribunal, and there are no reasons to deny such enforcement. The list of grounds for refusal is limited and the competent district court (Bezirksgericht) may only refuse enforcement if:

  • the seat of arbitration is in Austria and the measure suffers from a defect which constitutes a ground for setting aside an arbitral award under Austrian law;
  • the seat of arbitration is not within Austria and the measure suffers from a defect which would constitute a grounds for refusal to recognise and enforce a foreign arbitral award;
  • the enforcement would be incompatible with a previous domestic or recognised foreign court measure;
  • the means of protection is unknown under Austrian law and no appropriate means as provided by Austrian law were requested.

Arbitral awards granting declaratory relief can only be recognised and relied upon. Under Austrian law such awards will be observed but cannot be the subject of enforcement proceedings.

Austrian law allows specific performance as relief and will recognise respectively enforce arbitral awards granting such relief. However, in such cases, the specific performance must be clearly described in order to also allow for effective enforcement.

Arbitral awards by consent are enforceable. Note that Austrian law also provides for mere record of a settlement between the parties by an arbitral tribunal (Schiedsvergleich,Section 605 CCP) which is not an arbitral award. Such a record of settlement constitutes an enforceable title under Austrian law but may not be enforceable internationally.

As agreement of the parties is a prerequisite for the issue of the arbitral award on agreed terms (or consent award), most of the grounds to refuse enforcement will not be applicable. However, consent awards may still be reviewed for violation of public policy.

Under Austrian law, if the respondent fails to participate in the proceedings (Section 600 CCP), the arbitral tribunal may not draw negative inferences from the fact of default, in particular it may not automatically assume that the contentions of the non-defaulting party are true. The claimant must still prove its case and the arbitral tribunal must respect the right to be heard also towards the defaulting party.

The enforcement of an award that was rendered without the participation of the respondent therefore depends on the condition the defaulting party was properly informed of the arbitration. In most cases, this will require proof that the request for arbitration was properly served on the respondent (see OGH 3 Ob 141/07t).

Domestic arbitral awards are by law deemed equivalent to a court judgment. They are considered final and binding upon service on the parties. All that is required in order to apply for enforcement is that the arbitral award must be confirmed as final, binding and enforceable by the sole arbitrator respectively the presiding arbitrator. This requires parties to revert to the arbitrators after service of the arbitral award.

For foreign arbitral awards a declaration of recognition and enforceability must be obtained from the Austrian courts in order to apply for enforcement. The prerequisites under Austrian domestic law (Section 406 EA) and the provisions of international treaties to which Austria is a party, in particular the New York Convention, are very much aligned. The competent courts are the district courts (Bezirksgericht), at which the award debtor has its seat, domicile or habitual residence or at the place at which the enforcement measure shall be implemented (see Section 409 EA).

In most cases, the formal requirements of an application for declaration of recognition and enforceability are those of the New York Convention, as – pursuant to Section 614 CCP – international treaties take precedent over Austrian national law. However, in deviation from Article IV paragraph 1 lit b New York Convention, Austrian law explicitly states that it is only necessary to provide the original or a certified copy of the arbitration agreement upon request by the court (see Section 614 CCP). Therefore, the most important prerequisite to be fulfilled is that the award creditor shall submit the “duly authenticated original award” or a “duly certified copy” thereof to the competent district court (Bezirksgericht) together with the application to recognise and enforce the award. In line with Austrian case law, this requirement is given, if the authenticity has been confirmed by either (i) an Austrian authority (see OGH 3 Ob 62/69), (ii) by an authority of the country the law of which governs the arbitration (see standing case law RS0109158), or (iii) by a representative of the administering arbitral institution if the rules of the institution expressly authorise the representative to do so (see OGH 3 Ob 65/11x). As an example, see Article 36 (4) of the Vienna Rules of Arbitration and Mediation 2018 (Vienna Rules) of the Vienna International Arbitral Centre (VIAC).

In practice, in the absence of a bilateral treaty, it is necessary to super-legalise (or obtain an apostille for) an authentication that was issued outside of Austria in order for it to be recognised and fulfil the formal requirements.

Furthermore, in case the arbitral award is not in the official court language of Austria (ie, German), it shall be translated and the translation in its turn shall be certified by an official or sworn translator or by a diplomatic or consular agent. In Austria, all translators listed as court sworn translators fulfil the requirement of ‘official or sworn translator’ under the New York Convention. Austrian courts require the translation of the entire award, in comparison to other countries where partial translations may be deemed sufficient (OGH 3 Ob 211/05h).

Once the application for declaration of recognition and enforceability of a foreign arbitral award is filed, the proceedings are conducted ex parte (ie, without a hearing). In practice, award creditors combine the application for declaration of recognition and enforceability with the application for the actual enforcement of the arbitral award, which is permissible under Section 412 paragraph 1 EA.

The actual enforcement proceedings are conducted in the same way as domestic proceedings by means of application to the competent district court (Bezirksgericht) – either where the award debtor has its seat, or where the object, asset, third-party debtor is registered or located.

An application for declaration of recognition and enforceability does not trigger court fees. For the application for enforcement, the general rules apply.

A declaration of recognition and enforceability can be obtained very quickly. Provided that all relevant documents have been submitted, the rendering of the ex parte decision may take no more than two to four weeks, but in complex cases it may take longer. Very often a relevant factor affecting the duration of proceedings is the service of the decision on the award debtor (which may take time regarding a foreign debtor outside the EU). Should the decision be appealed, the proceedings will on average take between four to ten months, and possibly longer in complex cases. In case of recourse to the Austrian Supreme Court, a further six months may be expected until a decision is rendered.

The award debtor has a right to appeal (Rekurs) against the decision within four weeks after being served the decision – respectively eight weeks, if the award debtor is seated or domiciled abroad. Under certain conditions – in particular, if the dispute hinges on a legal question of general significant importance which has not previously been dealt with in the case law of the Austrian Supreme Court or if the appeal court has deviated from existing case law of the Austrian Supreme Court – the appeal decision may also be appealed before the Austrian Supreme Court (Revisionsrekurs).

The general approach of the courts toward the recognition and enforcement of arbitration awards is pragmatic and the grounds to oppose recognition and enforcement as exhaustively listed in the applicable conventions are interpreted restrictively. The award debtor who opposes enforcement bears the burden of proof for the grounds it relies upon.

The options available to appeal enforcement of an award are identical to those generally available to appeal enforcement.

In practice, an arbitral award may be subject of setting aside proceedings. In this case, the court may suspend the proceedings upon application of the award debtor until a decision in the setting aside proceeding has been rendered. Further, to the extent enforcement measures shall continue, the court may order the award creditor to post security. This approach is both in line with Article VI New York Convention as well as Section 411 (paragraph 5) EA. In this context, the Austrian Supreme Court has held that Article VI New York Convention is only applicable regarding the proceedings relating to the declaration of recognition and enforceability, while the EA applies during the enforcement proceedings (3 Ob 248/11h).

If an arbitral award is successfully set aside, the award debtor can apply to the court of first instance that originally granted recognition and enforceability to lift (or amend) its decision; see Section 414 EA.

The Austrian Supreme Court has held that a foreign arbitral award is not to be recognised and enforced in Austria, if the underlying arbitration agreement foresees that the arbitral award may be appealed before another second instance arbitral tribunal (OGH 3 Ob 39/13a). In such cases, the arbitral award lacks binding force until either the period provided for such an appeal has expired unused or the review proceedings initiated by one of the parties have been terminated and have confirmed the arbitral award.

Public policy grounds are to be observed by the courts ex officio. The obligation to observe public policy is derived from Article V paragraph 2 lit b New York Convention as a ground to refuse the declaration of recognition and enforceability of foreign arbitral awards and from Section 613 in combination with Section 611 paragraph 2 No 8 CCP as a ground to refuse enforcement of domestic arbitral awards.

The restrictive approach regarding the public policy objection is reflected in the case law of the Austrian Supreme Court, which in a fairly recent decision (OGH 3 Ob 65/11x) has held (once more) that:

  • public policy concerns only the fundamental principles of Austrian law and may not lead to a factual or legal review of the award (ie, no révision au fond);
  • it is not decisive whether the foreign law contradicts the fundamental values of the Austrian legal system, but merely whether its concrete application by the arbitral tribunal leads to a result that is incompatible with fundamental values of the Austrian legal system;
  • the fundamental values of Austrian law include EU Regulations as well as national constitutional principles such as the protection of personal freedom, equal rights, the prohibition of discrimination, the prohibition of exploitation of the economically weaker party.

Moreover, it has been held that if a foreign arbitral award has no close relationship with Austria, Austrian public policy cannot be infringed. If, for example, parties to the arbitration proceedings were not Austrian and the only relationship to Austria constitutes in the location of an asset owned by one of the parties, the foreign arbitral award cannot infringe the Austrian ordre public because there is no close relationship to Austria at all (OGH 4 Ob 199/00v).

Where the European Convention is applicable, the successful setting aside of an arbitral award in the country of origin due to violation of public policy grounds, is itself not a ground for refusal of enforcement in Austria. The arbitral award must be incompatible with the Austrian ordre public, in order not to be enforceable in Austria (OGH 3 Ob 115/95).

Austrian law does not contain any specific procedural rules that impose time limitations during which an arbitral award shall be enforced. It does, however, provide for a statute of limitations of 30 years to enforce a final court decision (Judikatschuld) in its civil law (see Section 1479 Civil Code – Allgemeines Bürgerliches Gesetzbuch, CC).

The Austrian Supreme Court has held (OGH 3 Ob 172/00s) that the statute of limitations relating to a judgment or arbitral award is to be determined according to the substantive law governing the obligation that was decided upon.

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KNOETZL is Austria’s first large-scale dispute resolution powerhouse dedicated to high-profile and significant cases. KNOETZL's diverse expertise encompasses civil, commercial, sovereign, corporate and fraud litigation, focusing on liability claims, corporate – including M&A, financing and joint venture disputes – banking, insurance and financial derivatives cases, investor protection, business and political crime, asset-tracing and provisional measures, such as freeze orders and attachments, in domestic and international contexts, and in enforcement of foreign judgments and arbitral awards. The firm’s practice covers international commercial arbitration, investment protection and arbitration-related court proceedings, mediation and ADR. KNOETZL is well regarded for its disputes work at the intersection of civil and criminal matters. Distinguished international law firms, corporate decision-makers and general counsels frequently turn to KNOETZL to act as their Austrian disputes counsel.

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