UK Government ratifies Hague Judgments Convention: good news for enforcement of English judgments

Positive news for commercial parties: the UK Government has ratified the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague 2019) and it is due to come into force in the UK on 1 July 2025. 

Hague 2019 should make it easier for businesses to enforce certain court judgments overseas. It will provide greater certainty and confidence to parties who wish to contract to give jurisdiction to the English Courts that an English Court judgment will be able to be enforced, across the EU in particular, in a wider range of circumstances than is currently the case.

In this article, we consider the impact of Hague 2019 for commercial parties and highlight three key takeaways.

 

What is Hague 2019?

Hague 2019 is an international convention that offers a streamlined cross-border enforcement regime for court judgments across contracting states. It is currently in force across the EU¹ and the Ukraine (shortly to be joined by Uruguay) but has the scope to apply to many more jurisdictions in the future as more states sign and ratify it. 

When it comes into force for the UK next year, it will mean that the EU, Ukraine, Uruguay and UK should enforce each other’s court judgements (to which the convention applies) through a relatively simple registration process and without the need for a new action in the enforcing state. This is subject to any of those states notifying a refusal to establish convention relations with the UK beforehand.

Importantly for commercial parties, Hague 2019 offers the scope for parties to enforce the judgment of a court that took jurisdiction on the basis of an express choice of court agreement in their contract, other than an exclusive jurisdiction clause.

 

Why is this important?

Hague 2019 has been a talking point in the UK ever since Brexit. When the UK left the EU, it was no longer party to the Brussels regime², which had included a reciprocal arrangement across the EU and most of EFTA to enforce each other’s court judgments in a streamlined way. The effect was that commercial parties faced greater uncertainty and increased cost in enforcing judgments across borders.

The UK Government sought to fill this gap by acceding (in its own right, separate to its prior accession as member of the EU) to a different international convention, the Hague Convention on Choice of Court Agreements 2005 (Hague 2005). Whilst this was a welcome step, it was not a panacea, as Hague 2005 applies only to judgments based on exclusive jurisdiction clauses (see our article here). This has meant that, post Brexit, there is currently no streamlined enforcement process clearly available for a party that secures a judgment based on a different type of jurisdiction clause (eg an asymmetric jurisdiction clause), or where the underlying dispute is not related to a contract. 

In contrast, Hague 2019 will apply to a far wider range of judgments than Hague 2005 and, with respect to the EU, it will therefore be closer (although different in scope) to the arrangement from which the UK benefitted under the Brussels regime.   

The upshot is that between Hague 2005 and Hague 2019, a judgement of the English Courts will be enforceable in the EU (except Denmark³) under one of the two Hague regimes, whether the choice of court agreement is exclusive, non-exclusive, or asymmetric (provided it is within the scope of the relevant convention more generally).

The effect should be threefold for commercial parties:

• They will have greater certainty in relation to the enforceability of judgments across contracting states.
• They will face a shorter and less costly process than is currently available in enforcing those judgments in circumstances where Hague 2019 applies.
• There are more contractual options available to businesses who wish to be able to enforce across a range of jurisdictions.

 

Three key takeaways

1. “Hague 2019 is not about jurisdiction” – Hague 2019 (unlike Hague 2005) does not include any rules that aim to protect the parties’ choice of jurisdiction at the pre-judgment stage. Hague 2019 refers to different heads of jurisdiction only as a basis to determine which judgments are within its scope. Commercial parties will not be able to rely on it to establish where a claim should be heard – only that a resulting judgment should be enforced in a particular state and through a streamlined process. 
2. “It should apply to judgments arising from asymmetric jurisdiction clauses” – a party that has secured a judgment based on an asymmetric jurisdiction clause should be able to rely on the procedure under Hague 2019 to enforce that judgment in another contracting state (provided it is within scope of the convention). Commercial parties should therefore feel more optimistic about enforcement when choosing an asymmetric jurisdiction clause at the contracting stage, provided the counterparty has assets in a state in which Hague 2019 is in force. This is in contrast to the existing regime applicable to the UK under Hague 2005, which is unlikely to be applied by English or EU courts to the enforcement of a judgment arising from an asymmetric clause.
3. “Hague 2019 is coming soon to the UK – but not yet” – Hague 2019 will enter into force on 1 July 2025 and will apply only to proceedings commenced after that date. Contracts entered into before 1 July 2025 will still benefit from Hague 2019 provided that court proceedings relating to it are commenced after that date. This means the impact should be felt, at contracting stage, before 1 July 2025, as businesses welcome the certainty heralded by this latest development in cross border rules of judicial co-operation. 

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¹ Except Denmark.
² ie Regulation (EU) No.1215/2012 (Recast) (known as Brussels (Recast)) and the 2007 Lugano Convention.
³ Denmark has acceded to Hague 2005, but not Hague 2019.