On 27 June 2024, the UK formally ratified the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters ("the Convention") in a significant development towards the cross-border recognition of judgments between the UK and the EU post Brexit.
The Convention will come into force in England & Wales on 1 July 2025.
The Convention
The Convention provides a cohesive global framework to facilitate the resolution of cross-border disputes between contracting states (including all EU members states except Denmark), with the aim of promoting international trade and access to justice.
It establishes a multilateral uniform system requiring contracting states to recognise and enforce civil and commercial judgments within its scope, with the exclusion of revenue, customs or administrative matters. As detailed in the Explanatory Report, the Convention allows claimants to make informed choices about where to bring proceedings and ensures that successful parties are better able to obtain meaningful relief.
Article 5 provides bases for recognition and enforcement, known as "jurisdictional filters", between the state of origin and the request state. These include (non-exhaustively):
- The person against whom recognition and enforcement is sought was habitually resident in the state of origin at the time that person became a party to those proceedings (Article 5(1)(a));
- The person against whom recognition or enforcement is sought was the original claimant (Article 5(1)(c))
- The defendant had a branch, agency or establishment in the country of origin (without a separate legal personality) and the action arose out of the conduct of that branch, agency or establishment (Article 5(1)(d));
- The judgment was given by a court designated in a choice of court agreement other than an exclusive choice of court agreement (Article 5(1)(m));
What does this mean for parties domiciled in the UK?
The Convention's application will be limited for the time being to England & Wales only, with the option for later modification to allow Scotland and Northern Ireland to join at a later date by virtue of Articles 25 and 30.
Why does ratification of the Convention matter?
Since Brexit, the Brussels Recast Regulation which regulated the recognition and enforcement of judgments between EU member states no longer applies (except to proceedings started before the end of the transition period on 31 December 2020).
In addition to increased judicial cooperation, the Convention will help better facilitate the use of English jurisdiction clauses in commercial contracts with EU entities which fall outside the scope of the 2005 Hague Convention on Choice of Court Agreements.
This will permit UK parties to enter into contracts containing non-exclusive or asymmetric English jurisdiction clauses, safe in the knowledge that resulting English court judgments arising from those clauses will be enforceable.
The move is a welcome one, as the Convention's uniform framework will provide enhanced certainty for those advising individuals and businesses in the UK that judgments obtained in commercial and other civil disputes which fall within the scope of the Convention will be mutually recognised and enforced.
Finally, it is important to note that ratification and enforcement of judgments via the Convention will only be available to UK based parties where proceedings are commenced after the date upon which it comes into force (i.e. 1 July 2025).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.