From 1 July 2025 onwards, the UK will finally be stepping back into the dancefloor that is the private members club of cross-border dispute resolution.
The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019 (otherwise known as Hague 2019), purportedly allows its members the privilege of a more seamless approach to the recognition and enforcement of judgments. It is essentially a global handshake which aims to respect the court decisions of its respective member states.
Having been previously snubbed from rejoining the 2007 Lugano Convention on Jurisdiction and the Recognition and Enforcement of judgments in Civil and Commercial Matters (the Lugano Convention) by other EU member states, there was a sigh of relief when the UK ratified Hague 2019 on 27 June 2024. It comes into force for the UK next year, and with it, the hope for a more unified system for enforcement and recognition of judgments between the UK and other contracting countries wearing the same wristband. A sense of belonging and respect for English jurisdiction on the international stage perhaps, whose reputation had potentially been damaged post-Brexit.
Those already in the club include all EU member states (other than Denmark), Ukraine and (from 1 October 2024) Uruguay. Other states are expected to join in due course, including the USA and the Russian Federation (well they have at least said they’ll join having signed up to it; ratification is another hurdle), thereby expanding the guestlist even further.
However, is it really the answer to all the UK’s jurisdictional challenges?
What impact does Hague 2019 have?
Prior to the UK’s dramatic exit from the EU, English court judgments were recognised and enforced across EU members states and the European Free Trade Association states by way of the following instruments:
- the Recast Brussels Regulation which provided a framework for automatic recognition and enforcement of court judgments throughout the EU member states;
- the Lugano Convention which regulated jurisdiction, and recognition and enforcement of judgments between EU member states and Iceland, Norway and Switzerland; and
- the Convention on Choice of Court Agreements, of 30 June 2005 (Hague 2005) which provides that the courts of each subscribing state agree to recognise and uphold agreements containing exclusive jurisdiction clauses, provided that the designated court is one of those subscribing states. For the purposes of Hague 2005, asymmetric (or unilateral) jurisdiction clauses (e.g. where a clause provides that one party must bring proceedings in the courts of a specified jurisdiction, and the other party can choose which jurisdiction within which to bring proceedings) are not recognised as “exclusive” jurisdiction clauses.
After Brexit, things became more complicated, and the UK lost access to the Recast Brussels Regulation, and the Lugano Convention. Only Hague 2005 was left still standing, which particularly created issues in relation to contractual arrangements which contained asymmetric and non-exclusive jurisdiction clauses.
Hague 2019 aims to give greater certainty and reduce complexity and costs for litigants seeking to enforce foreign judgments in England and Wales by providing a uniform set of rules. Contracting states will not need to revert to domestic enforcement rules which can be complex and inconsistent. It also increases the attractiveness of the courts in the UK since it offers parties to cross-border commercial agreements a greater degree of freedom regarding their dispute resolution arrangements.
Most notably, Hague 2019 will recognise asymmetric jurisdiction clauses as being within its scope. This means that parties will be able to agree non-exclusive jurisdiction clauses safe in the knowledge that they will be enforceable under Hague 2019, thereby expanding the scope of enforcement and recognition internationally.
Does Hague 2019 go far enough?
Timing counts
Hague 2019 seems to be a step in the right direction. However, it does have limitations. Hague 2019 only applies to judgments given where proceedings are commenced after 1 July 2025 (note, the pivotal date is the date proceedings are issued, not the date of judgment). It may therefore be beneficial for some parties to consider whether to issue proceedings after this date to ensure that Hague 2019 applies.
Injunctions are still out
Another point to note, is that Hague 2019 applies to “judgments”. Interim measures of protection are specifically excluded from falling within the definition of a “judgment”. This can be problematic for certain parties (such as victims of fraud), where they need to act quickly, for example to enforce a freezing injunction or interim disclosure order in another country.
As are some other proceedings…
Furthermore, to be enforceable under Hague 2019, the judgment must be civil or commercial and must meet one of the 13 jurisdictional ‘bases’ set out in Article 5, which include for example:
- defendant’s habitual residence in the state of origin at the time proceedings were commenced (Article 5(a))
- the parties’ agreement to the jurisdiction of the courts of the state of origin (Article 5(m)).
- a court in the state of origin rules on a contractual obligation and the place of performance of that obligation was the state of origin (Article 5(g)).
- tort claims where the damage was caused in the state of origin (Article 5(j)); and
- the judgment concerns the validity, construction, effects, administration or variation of a trust created voluntarily and evidenced in writing (Article 5(k)).
Although the list is wide-ranging, certain subject matters are specifically excluded from the scope of Hague 2019, such as wills and success, insolvency, defamation, IP and competition matters (Article 2(1)). Hague 2019 also does not apply to arbitration proceedings (Article 2(3)).
The small print
There is also essentially an “opt out” mechanism. Pursuant to Article 29, a contracting state may decide that it does not want to establish relations with another state pursuant to Hague 2019. Furthermore, each contracting state has 12 months to decide whether or not the rules will apply as between it and a joining state. It is therefore plausible that other member states may decide not to apply Hague 2019 to the UK despite its ratification. Some may see this as a limitation. On the other hand, others view this discretion as a benefit not afforded by the Lugano Convention.
The door is still open
Therefore, whilst Hague 2019 will most likely help strengthen the position of England and Wales as a preferred forum for dispute resolution, it does not plug all the judicial gaps left in the wake of Brexit, and the Lugano Convention remains the preferred framework for the recognition and enforcement of judgments. Joining Hague 2019 does not prevent the UK from joining the Lugano Convention in the future, nor does it prevent existing law from applying with respect to recognition and enforcement of judgments when Hague 2019 doesn’t apply. Therefore, being part of the Hague 2019 club must only be a good thing. However, it is perhaps not, the full answer.
Catherine Penny