The European Parliament Think Tank recently published a briefing on the UK’s possible re-joining of the 2007 Lugano Convention (Briefing). Following the expiry of the Brexit implementation period, the UK is no longer a party to Regulation (EU) 1215/2012 (Brussels Recast) or the 2007 Lugano Convention (Lugano Convention). This has implications for the free movement of judgments in civil cases between Member States and the UK.
As explained in our previous article, The Lugano Clock Has Stalled: What Now For Dispute Resolution Clauses?, the UK applied for accession to the Lugano Convention (Lugano) in April 2020, but the unanimous consent of all contracting parties was not forthcoming.
The Briefing gives no further insight into whether the EU will ultimately allow the UK to accede to Lugano in its own right. It recaps on the decision of the European Commission (Commission) to withhold consent to invite the UK to accede to Lugano, which it communicated to the Swiss Federal Council (as Depositary of Lugano) in June 2021. That decision was rooted in the Commission’s view that Lugano is an integral part of the internal market. Post-Brexit, the UK, is a third country without any special link to the internal market.
In the absence of any imminent movement towards the UK’s accession to Lugano, where disputes arise between Irish and UK parties, jurisdiction, and the recognition and enforcement of judgments will be governed under either the 2005 Hague Choice of Court Convention (2005 Convention) or the rules of private international law. The 2005 Convention applies only to exclusive jurisdiction agreements, and the common law rules are quite cumbersome.
2019 Hague Judgments Convention
The Briefing refers to the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments (Judgments Convention), and is worthy of comment. In July 2019, the Judgments Convention was adopted by the Hague Conference on Private International Law. To date, only five states have signed the Judgments Convention (Costa Rica, Israel, Russia, Ukraine and Uruguay). It has not yet been ratified by any state. It will enter into force upon ratification by two states.
In July 2021, the European Commission adopted a proposal for a Council Decision that would enable the EU to accede to the Judgments Convention. The European Parliament must now give its consent to the EU’s accession.
The Judgments Convention applies to the recognition and enforcement of judgments in civil or commercial matters. A number of matters are excluded from its scope, including family law, wills, insolvency, defamation, intellectual property, and anti-trust matters. It does not apply to arbitration or interim matters.
Article 4 provides that a judgment given by a court of a contracting state shall be recognised and enforced in another contracting state and can only be refused on certain specific grounds such as fraud or public policy.
Specific grounds need to be established before a judgment is eligible for recognition in a contracting state. These are set out in Article 5, and include the requirement for the defendant’s connection with the state in which judgment was issued. Under Article 13, exequatur proceedings for the recognition and enforcement of a judgment are maintained. As noted by the European Parliament Think Tank:
“the degree of legal integration provided for by the Convention is far lower than the quasi-automatic system of recognition provided for by the Lugano Convention or the automatic one of the Brussels I-bis Regulation”.
It remains to be seen when and if the EU and the UK will accede to the Judgments Convention. It is unlikely to be in the immediate future. Even if both accede, the Judgments Convention is limited to the recognition and enforcement of judgments. It does not address the jurisdiction of a court to hear a case. Whilst it may assist in facilitating the free movements of judgments between Member States, including Ireland and the UK, it will not ease issues around jurisdiction in cross border disputes.
We will continue to monitor the progress of the EU and UK’s accession to the Judgments Convention and the UK’s accession to Lugano and keep you apprised of important developments.
Contributed by Gail Nohilly