Green Ltd: A Follow Up View from Tilburg

The CJEU judgment in TQ v Mr Green Limited (C‑198/24) follows an approach that the Court accustomed us to in relation to European uniform procedures requests for a preliminary ruling. In this area, over the years, the Court methodically adopted an autonomous and strict interpretation of the requirements that must be fulfilled for the creditor to obtain issuance of a European cross-border enforceable title. As we have previously seen in relation to another European uniform procedure, for example, the European Order for Payment (EOP), the Court rarely takes the opportunity to broaden the requirements set by the regulation for the issuance of a title for the creditor. An exemption in this sense is the judgment in Bondora (Joint Cases Cases C-453/18 and C-494/18) where the Court had to balance the exhaustive criteria set by the regulation for the issuance of an EOP with the rules of consumer protection regarding unfair commercial practices (these are discussed in earlier posts here and here). In this light, the CJEU’s approach in Mr Green should not come as a surprise. The Court is following the same approach also in relation to the European Account Preservation Order (EAPO). Thus, the Court did not take this opportunity to nuance the standard of interpretation of the periculum in mora for situations in which the creditor has already obtained an enforceable title, nor to consider the legislative actions of a third party, the Maltese state, preventing enforcement of foreign judgments against gambling companies as sufficient on its own to justicfy the issuance of a Preservation Order in the context of Article 7(1) (see comments by Carlos Santaló Goris and Denise Wiedemann in an earlier posts). Instead, the Court decided to follow closely the wording of Article 7(1) and Recital 14 of the EAPO Regulation.

The interpretation of Article 7(1) EAPO

As noted in earlier posts by Daryna Shykeriava, Emilia Sandri, Carlos Santaló Goris, and Denise Wiedemann, the judgment in Mr Green is important for several aspects related to the application of Article 7(1) EAPO. It:

• clarifies that the requirement of the ‘urgent need’ in light of a ‘real risk’ that enforcement will be impeded or made substantially more difficult represents a single prerequisite for establishing the existence of a periculum in mora (para 38);
• confirms the need for the creditor to provide ‘specific evidence capable of proving’ the periculum in mora (para 53), but without imposing a duty to prove direct intention to evade payment (para 52);
• requires the risk to exist at the time of requesting the Preservation Order (para 42 and 57);
• establishes that the elements listed in Recital 14 are exemplificative and not exhaustive in demonstrating an intentional conduct of the debtor towards dissipation, concealment, or destruction of assets in order to evade payment of the debt. Further, the risk has to stem from the debtor’s intentional action (para 45), as well as activities that may constitute an indication of such intentional conduct (para 51, 54, 56, and 58);
• opens up the possibility of considering third-party actions, such as relevant national legislation preventing the recognition and enforcement of foreign judgments, as a contextual element in assessing the debtor’s actions and whether, taken together with other elements, it points towards an intention of the debtor to avoid payment; and, last, but not least,
• proposes a flexible approach to the timeframe within which the debtor’s conduct remains relevant (para 56-57 and 62).

Although Mr Green judgment does not ease the burden of proof for the creditor, it can be seen as an overall positive outcome in the interpretation of Article 7(1) requirements, especially from the perspective of the developments it brings with regard to the temporal flexibility it recognises for the timeframe within which the conduct of the debtor is to be considered, and the possibility to consider additional contextual elements as relevant to assess the intention of the debtor. With regard to the first element, I share the views of Emilia Sandri and Denise Wiedemann.

The other development I particularly welcome is the recognition by the Court of the possibility of considering in the assessment of relevant circumstances also aspects that do not result from the debtor’s conduct – e.g. Article 56A of the Maltese Gaming Act. This can give national courts the freedom to consider also other relevant aspects. Such elements can be contextual in making the debtor’s actions of concealment to avoid payment easier to undertake, or together with other actions of the debtor could provide indications that the debtor is intending to avoid payment by, for example, concentrating his assets towards a jurisdiction that would make enforcement of a cross-border Preservation Order likely impossible or very difficult to undertake. Contrary to the view expressed by Daryna Shykeriava, I do not see it necessary that the Court had to indicate which facts are to be considered decisive and which not for the assessment. Flexibility has to be given to national courts to assess the circumstances on a case-by-case basis, given the variety of factual situations national courts can be presented with in practice.

The national courts’ driving role

The judgment in Mr Green underlines the key role national courts have to play in the overall assessment of the relevant circumstances – subjective and objective – that can indicate that there is a ‘real risk’ that enforcement could be impeded or made substantially more difficult without the issuance of a Payment Order. Thus, national courts should not consider debtor actions and the factual or legal context independently of each other, but should assess them together, taking into account the factual and legal context in which they occur. Third-party actions are not listed in the examples provided by Recital 14 and are not sufficient on their own to establish a periculum in mora, but they can valuably contribute towards an overall evaluation that indicates an existing situation or an ongoing action of concealment of assets by the debtor (see also comments by Denise Wiedemann in an earlier post). The judgment in Mr Green gives national courts an important signal that they can take into account in their assessment such additional circumstances and elements that are not directly undertaken by the debtor, but can facilitate the debtor’s actions towards avoiding payment and dissipation, concealment or destruction of assets.

Hopefully, the elements provided by the Court in Mr Green can offer the Austrian referral court, as well as other courts confronted with similar cases, a stronger legal basis on which to assess the overall facts and circumstances to establish whether there is a ‘real risk’ that justifies the issuance of a Preservation Order.

Will the preliminary ruling procedure before the CJEU require some adaptation?

The last interesting (and possibly unexpected) aspect of the Mr Green case relates to the interaction between the CJEU preliminary ruling procedure and the ex parte character of the EAPO. Although the CJEU did not pick up the procedural point raised in the Opinion of the Advocate General Emiliou, and this is understandable why, I agree with Denise Wiedemann that this can be a point that may require attention from the Court in the future.

When the preliminary reference procedure was designed, there were not yet plans to adopt uniform European procedures, let alone ex parte ones. Procedures such as the EAPO require the preservation of the surprise element for their effectiveness. Requests for preliminary rulings should not require doing away with such a benefit for the claimant. The surprise element is one of the characteristics that contributes to the EAPO success in facilitating debt recovery. An adapted solution for the preliminary ruling should be thought of and integrated into the procedural rules of the Court. Advocate General Emiliou proposes potential solutions in this regard. They are a valuable starting point to assess what could be a balanced solution in order to safeguard the interested parties’ procedural rights and guarantees under Article 47 of the Charter of Fundamental Rights while preserving the characteristics of the EAPO procedure and its effectiveness.