LEAD UP Spotlight #2
At Lead up, we are committed to providing our clients with the most innovative dispute resolution solutions to fit their specific industry contexts. To do that, we have to stay on top of the recent developments in our clients’ sectors, and analyse these developments in line with our clients’ needs. Every month, in “Lead up Spotlight”, we share with you – our colleagues, clients and prospective partners – our analysis on a recent development relating to dispute resolution in an industry that matters to us and to our clients.
This month’s Lead up Spotlight focuses on the UK‘s Accession to the HCCH 2019 Judgments Convention.
The United Kingdom recently announced its accession to the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “HCCH 2019 Judgments Convention”). This accession marks a pivotal step for the UK in clarifying the often intricate and convoluted procedures surrounding the recognition and enforcement of foreign judgments in civil or commercial matters post-Brexit.
The decision to join the HCCH 2019 Judgments Convention is more than welcome. With the UK’s departure from the European Union, there has been a palpable sense of uncertainty regarding the enforcement of international judgments in the UK as well as the enforcement of UK judgments outside the UK. The lack of a unified framework has left businesses and individuals navigating a maze of legal complexities, often leading to prolonged disputes and costly litigations.
Since Brexit, enforcement of judgments under the UE Regulations on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters and the Lugano Convention is no longer available when one of the involved parties is domiciled in the UK. While the UK has endeavoured to address this challenge by seeking to join the Lugano Convention, the EU Commission objected to the UK joining the Lugano regime contending that the Convention should only apply to States maintaining regulatory alignment with the EU.
Hence, parties engaged in litigation with a party or assets located in the UK, seeking to enforce a foreign judgment in the UK, face two distinct enforcement regimes:
Enforcement under the Hague Convention of 30 June 2005 on Choice of Court Agreements. This Convention only applies to cases where an exclusive choice of court agreement exists.
Enforcement under the Common Law regime. This regime is based on case law precedents and is not codified in a statute, making it potentially challenging for international parties to predict the recognition and enforcement of foreign judgments in the UK.
Additionally, parties seeking to enforce UK judgments abroad also encounter unpredictability due to the absence of a uniform applicable regime.
By acceding to the HCCH 2019 Judgments Convention, the UK aims to address these uncertainties head-on, providing a more transparent and efficient mechanism for the recognition and enforcement of foreign judgments. This move not only underscores the UK’s commitment to upholding the rule of law but also enhances its standing as a reliable hub for international dispute resolution.
One of the key advantages of the HCCH 2019 Judgments Convention lies in its comprehensive approach to jurisdictional issues and the recognition of judgments across borders. By establishing clear rules and procedures, the Convention facilitates greater legal certainty, thereby fostering international trade and investment.
The Convention will take effect 12 months after ratification and will apply to judgment in proceedings started after that day. The results of the UK joining the HCCH 2019 Judgments Convention are yet to be seen but it is a move to be noted.
The UK’s decision to join the HCCH 2019 Judgments Convention thus represents a significant milestone in its post-Brexit legal landscape.