Following a period of consultation, the UK Government has indicated its intention to accede to the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague 2019).
Hague 2019 is designed to provide a global framework of common rules to facilitate the recognition and enforcement of judgments from one jurisdiction to another. The UK Government says that that the Convention, “aims to contribute to a positive national and international environment for multilateral trade, investment and mobility by reducing transactional costs for parties in cross-border matters as well as enhancing access to justice”. Notably, the EU has already acceded to Hague 2019.
Since Brexit, the UK has experienced an unfortunate lacuna in its legal framework regarding the transportability of judgments. Although this lacuna isn’t as big as might be thought, given the existence of the New York Convention[1] and Hague 2005[2], which require the Courts of signatory countries to uphold the jurisdiction agreed by the parties to a choice of court agreement[3], the framework has been far from complete. While many international business disputes arise in the context of written contracts which include either an agreement to arbitrate or a valid jurisdiction clause, thus bringing them within the scope of one of these conventions, many do not.
Uncertainty about the recognition and enforcement of judgments between contracting parties undermines international business. It is far less attractive for UK exporters to sell their goods and services overseas if there is uncertainty as to whether they will ultimately be paid, and when they may be left without effective recourse against their customers. Accordingly, this is a forward-looking and business-friendly step, aimed at supporting UK businesses in their dealings with overseas entities.
[1] The Convention on the Recognition and Enforcement of Foreign Arbitral Awards made at New York in 1958
[2] The Hague Convention of 30 June 2005 on Choice of Court Agreements
[3] There appears to be a disagreement between the UK and the EU as to whether choice of court agreements entered into between 1 October 2015 (when Hague 2005 entered into force in the EU) and 1 February 2021 (when the UK acceded to Hague 2005 in its own right) fall within the scope of Hague 2005. The UK says that they do; the EU Commission says that they do not.
