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Cross-Border Enforcement of Judgments in The
Cross-Border Enforcement of Judgments in The
Cross-Border Enforcement of Judgments in The
KEY POINTS
There are good reasons for the UK to ratify Hague 2019. Feature
If the UK was to ratify Hague 2019 in 2023, the convention would only apply to
judgments arising out of proceedings initiated a year later, ie at some point in 2024
(and assuming the convention also applies in the enforcing state).
If the UK does ratify Hague 2019, then commercial parties that may have switched to
include exclusive English jurisdiction clauses in their contracts post-Brexit, in order to
ensure that they fall under Hague 2005, may consider switching back to asymmetric
clauses in due course (subject to considerations as to whether such clauses may be contrary
to public policy in particular jurisdictions such as France).
Feature
awards under the New York Convention on time it became a party to the proceedings in 2019 might prove to be a useful route to
the Recognition and Enforcement of Arbitral the court of origin (Arts 5(a) and (b)) or the enforcing their judgments.
Awards 1958. Under that highly successful defendant had a branch or agency or “other
Convention, on paper at least, 170 contracting establishment without separate legal personality” DECLARATIONS AND RESERVATIONS
states recognise and enforce arbitral awards in the state of origin at the time a party became Hague 2019 provides scope for contracting
issued by tribunals in other contracting states a party to the proceedings in the state of origin states to limit its application in a number
subject only to limited exceptions. Although and the claim arises out of the activities of that of circumstances, including by applying
currently only ratified by the EU and Ukraine, branch, agency or establishment (Art 5(d)). state-to-state exclusions, bespoke subject
there is an argument that by offering potentially However, there are some differences and matter exclusions, and exclusions for
wide-ranging enforcement opportunities for novelties from the Brussels Recast and Lugano judgments arising under proceedings where
court judgments globally, Hague 2019 will, 2007 regimes, and practitioners will need to a contracting state is itself a party.
over time, encourage commercial parties back consider these threshold issues carefully. Under Art 17 of Hague 2019, a contracting
into national courts to resolve their disputes state may declare that its courts can refuse to
and away from private arbitration processes. SUBJECT MATTER EXCLUSIONS recognise or enforce a judgment given by a
Taking this argument a stage further, it has Hague 2019 excludes a number of areas from its court of another contracting state if the relevant
been suggested that such a development would scope, including some areas that are within scope parties were resident in the requested state (ie the
promote open justice and the development of of Lugano 2007, such as family law matters, enforcing state), and the relationship of the parties
the law in jurisdictions where (as in England) probate matters, insolvency, defamation and and all other elements relevant to the dispute,
court decisions create binding legal precedent. privacy, intellectual property, anti-trust matters other than the location of the court of origin,
and sovereign debt restructuring. There are were connected only with the requested state.
CORE ELEMENTS different reasons for these exclusions. For Under Art 18, contracting states also have
Hague 2019 requires contracting states to example, insolvency is excluded because cross- the power to declare that Hague 2019 will not
recognise and enforce judgments given in other border recognition already largely exists via the apply to specific subject matters, in addition to
contracting states in civil or commercial matters, implementation of the UNCITRAL Model those already excluded under the convention.
subject to certain limited exceptions (Art 4(1)). Law on Cross-Border Insolvency, which was The result of a contracting state making such
Enforcement under Hague 2019 does not given effect in the UK by the Cross-Border a declaration is two-fold: (i) its own courts
involve a review of the merits of the judgment Insolvency Regulations 2006 (SI 2006/1030) need not apply Hague 2019 in relation to that
in the requested state (Art 4(2)). The only (CBIR 2006). Defamation and privacy specific subject matter; and (ii) the courts of
consideration of the merits permitted is claims were excluded because they involve other contracting states need not apply Hague
“as is necessary for the application of this constitutional rights like freedom of expression, 2019 in relation to judgments concerning the
convention”. This presumably may arise when, and because these were considered areas of law in specific subject matter emanating from the
for example, the enforcing court is assessing a state of flux across the contracting states.3 contracting state that made the declaration.
whether the judgment given by the court Certain excluded areas, such as intellectual Finally, under Art 19, contracting states
of origin complies with the jurisdictional property (IP), were initially intended to be may also declare that their courts shall not
thresholds at Art 5 (see below). included. Under one version of the text, it was apply Hague 2019 to judgments arising
Although Hague 2019 is a treaty dealing proposed that IP judgments would be capable from proceedings involving the contracting
with the enforcement of judgments, it is of being recognised under Hague 2019 if they state in question, its government agencies, or
noteworthy that by Art 5, it sets out a list of were given in a contracting state where the persons acting on behalf of that state or its
“requirements” for any judgment to be “eligible” IP right was registered. Judgments that ruled government agencies.
for recognition and enforcement under this on validity would also have been subject to an When negotiating dispute resolution clauses
instrument. These “requirements” consist exclusive jurisdictional filter, and judgments on or considering routes to enforcement, parties
of a list of jurisdictional bases upon which infringement would only have been eligible for will need to bear in mind the possibility that
the court of origin took jurisdiction in the recognition if the court ruled on an infringement contracting states may have made declarations
first place. The bases are in some instances in its own territory. Despite the relatively limited and reservations that will limit the scope to
familiar and echo those found in European nature of these proposals, however, the inclusion enforce judgments in certain scenarios, and
instruments. For example, a judgment will be of IP judgments proved too contentious and they tailor their approaches accordingly.
eligible for enforcement under Hague 2019 if were ultimately excluded in their entirety. Given
the subject matter of the dispute was located in the Unified Patents Court initiative, it may be GROUNDS FOR RESISTING
the jurisdiction of the court of origin (see that EU negotiators considered intellectual ENFORCEMENT
Art 5(h)) or the defendant was “habitually property matters less of a priority. Article 7(1) of Hague 2019 sets out the specific
resident” or had its “principal place of business” Parties will need to be alive to these circumstances under which the courts of a
in the jurisdiction of the court of origin at the exclusions when assessing whether Hague contracting state may refuse to recognise and
enforce a judgment from another contracting sought. In practice, therefore, enforcement that is a core driver for advocating for the UK
state. These circumstances include: (a) if the may take longer in some jurisdictions than to ratify Hague 2019.
document that instituted the proceedings in others and will likely be slower than However, Hague 2019 is still not as
leading to the judgment was not notified to the enforcement under the Brussels Recast regime. comprehensive an instrument as Lugano
defendant in sufficient time for them to arrange In addition, if there is a pending appeal, or 2007 or the Brussels Recast. First and
their defence or was notified to them in a way if the time limit for a potential appeal is still foremost, the European instruments
that is incompatible with the principle of service running, then the enforcing state can refuse cover jurisdictional allocation as well as
in the state being asked to enforce the judgment; enforcement on that basis (although that enforcement, and therefore significantly
(b) if the judgment was obtained by fraud; (c) if would not prevent a subsequent application for reduce the risk of parallel proceedings.
recognition/enforcement would be manifestly recognition or enforcement). This will mean As discussed further below, there are no
incompatible with the public policy of the that anyone seeking to enforce a judgment equivalent provisions in Hague 2019. Second,
enforcing state; (d) if the initial proceedings under Hague 2019 may need to wait until after unlike the Brussels Recast and Lugano 2007,
were contrary to a jurisdiction clause in favour any potential appeals have been resolved. Hague 2019 provides no mechanism for the
of the courts of another state; (e) if the judgment enforcement of interim measures. Third,
is inconsistent with a judgment concerning the DOES HAGUE 2019 FILL THE GAPS Hague 2019 also excludes a broader number
same dispute between the same parties given LEFT BY THE BRUSSELS RECAST AND of key areas from its scope, albeit there are
in the state being asked to enforce; and (f), if LUGANO 2007? sensible reasons behind such exclusions.
the judgment is inconsistent with an earlier A key benefit of the Brussels Recast and Fourth, there are more grounds on which
judgment given by a court of another state Lugano 2007 regimes was that they simplified enforcement may be refused under Hague
between the same parties on the same subject cross-border enforcement of English 2019 than under the other regimes.
matter. In addition, Art 7(2) also provides that judgments in the EU, and most EFTA states. As noted above, Hague 2019 deals
recognition and enforcement may be refused if These instruments covered various types with enforcement and not jurisdiction.
proceedings between the same parties on the of judgments (not just money claims) and Notwithstanding the “requirements” relating
same subject matter are pending before a court permitted enforcement with relative ease to “eligible” judgments at Art 5, there are no
of the state being asked to enforce, and (i) the in any enforcing state. Since Brexit, English provisions that dictate in which national courts
courts of the state being asked to enforce was judgments can now only be enforced across an issue should be heard or when a court should
the court first seized; and (ii) there is a close the EU and EFTA states on a reciprocal treaty stay proceedings or decline jurisdiction in
connection between the dispute and the state basis in quite limited circumstances, namely favour of another court. Under Lugano 2007
being asked to enforce. if they relate to agreements that contain and the Brussels Recast, the lis pendens rule
These grounds are broadly similar to those exclusive choice of court clauses favouring applies such that courts that are not first seized
under Brussels Recast and Lugano 2007.4 England, pursuant to Hague 2005. There has of a dispute must generally stay proceedings
When considering routes to enforcement, also been a lengthy, and largely inconclusive, unless the first seized court determines whether
parties will need to be aware of these debate about whether enforcement may it has jurisdiction. Only when the first seized
potential arguments that judgment debtors also be permissible in certain member states court determines it has no jurisdiction may other
may avail themselves of in an attempt to under various bilateral treaties6 that predated courts hear the dispute. Hague 2005 contains
hinder enforcement. the EU regime. Commercial parties have a similar rule, although because Hague 2005
had to incur time and costs investigating the applies only to disputes arising under agreements
PRACTICALITIES OF ENFORCEMENT enforcement position in relevant jurisdictions that contain exclusive jurisdiction clauses, this is
Hague 2019 will not necessarily change under national law. not sufficient to prevent parallel proceedings in
the UK’s position in relation to exequatur. For many commercial parties that include other areas. Article 7(2) of Hague 2019 is as close
Under Brussels Recast, judgments were more exclusive English jurisdiction clauses in their as the instrument gets to a lis pendens mechanic,
or less automatically enforceable in other contracts, Hague 2005 has essentially “filled but it is by no means as comprehensive as the
member states. Irrespective of their domestic the enforcement gap” left as a result of the provisions under the Brussels Recast and Lugano
law, member states could not require that a Brussels Recast and Lugano 2007 ceasing 2007 aimed at preventing parallel proceedings.
judgment creditor go through an exequatur to apply. Assuming that the UK does sign As a result, even if the UK signs up to Hague
process before enforcement. However, under up to Hague 2019, this will lead to a much 2019 in addition to Hague 2005, there remains
Hague 2019, once a judgment creditor has more streamlined and predictable cross- a risk of UK disputes being subject to parallel
provided a certified judgment, evidence that border enforcement process for other English proceedings in other states. This risk might be
it is enforceable in the state of origin, and a judgments in most EU and EFTA states. neutralised in cases covered by Hague 2005 by
translation if required,5 the procedure for Hague 2019 should also largely resolve the issuance of an anti-suit injunction by the
recognition and enforcement is governed by concerns about fragmentation. For many English court, but this remedy is unlikely to be
the law of the state in which enforcement is practitioners and commercial parties it is this available to many litigants.