For U.S. companies doing business in Europe, the ability to enforce contracts and court judgments across borders is often just as important as the deals themselves. With operations, partners, and assets spread across multiple jurisdictions, businesses need to know that if a dispute arises, they can rely on a court’s decision being respected and enforced elsewhere. As rules and regulations change it remains critical to stay up to date. Some more recent changes to European recognition rules have important implications for American companies with interests in Germany and the wider EU. While currently hypothetical, if the United States decided to ratify, the changes would be imminent and worth exploring for businesses with transatlantic operations.
Recognition of Judgments in Europe
Within the European Union, recognition and enforcement of civil and commercial judgments has traditionally been governed by the Brussels I Regulation and, since 2015, the Brussels I Recast Regulation. These rules allow a judgment obtained in one EU member state to be automatically recognized and enforced in another with minimal procedural hurdles. For example, a German judgment could quickly be enforced in France or Italy without the need for lengthy local proceedings.
This system provided predictability and efficiency for cross-border litigation inside the EU. However, the situation is more complex when judgments come from outside the EU, such as the United States.
The EU has adopted new frameworks on international recognition and enforcement of judgments through the Hague Judgments Convention (2019). The Convention, which the EU signed in 2022, creates common rules for recognizing and enforcing court decisions between member states and other countries that ratify it. This came into force on September 1st 2023. This framework is expected to streamline the process for enforcing foreign judgments in the EU. Importantly, it will cover countries beyond Europe, potentially including the United States if it ratifies the Convention.
What About the United States?
The United States signed the Convention in March 2022, but it has not yet ratified it. Until that happens, U.S. court judgments are not covered by the new regime. For now, U.S. companies seeking to enforce a judgment in Germany or elsewhere in the EU still face the traditional patchwork of national laws.
Nonetheless, the U.S. signature signals interest in joining. If ratified, it would represent a breakthrough for U.S. businesses, placing American judgments on the same footing as European ones within the EU.
Why It Matters for U.S. Companies
Currently, a U.S. judgment does not automatically carry weight in Germany or other EU jurisdictions. Enforcing it often requires starting fresh proceedings or relying on local bilateral treaties. This creates delays and expenses, and sometimes outcomes that differ from what U.S. companies expect.
The new recognition rules would promise three major advantages:
- Predictability – Businesses will know in advance that judgments obtained in certain jurisdictions will be recognized across the EU.
- Efficiency – The process will avoid duplicative litigation and lower enforcement costs.
- Leverage in Negotiations – Knowing that a court decision will be enforceable makes settlement discussions more balanced and realistic.
Practical Steps for U.S. Businesses
While the United States has signed but not yet ratified the Hague Judgments Convention, companies should begin preparing now:
- Review Contracts – Pay attention to jurisdiction and choice-of-law clauses. Aligning these with the Convention’s framework will maximize enforceability.
- Consider Arbitration vs. Litigation – Arbitration remains a strong tool under the New York Convention, but the new rules, if ratified, could make litigation more attractive in some cases.
- Monitor Ratification – Stay informed on U.S. adoption and on how Germany and other EU states implement the rules.
The European recognition rules represent a step toward greater legal certainty in transatlantic business. For U.S. companies operating in Germany and the EU, they hold the promise of smoother dispute resolution and more reliable enforcement of court judgments should the US government decide to ratify the agreement. While full benefits will depend on U.S. ratification, the trend is clear: litigation between U.S. and European parties is becoming more predictable, and businesses that prepare now will be best positioned to take advantage.