Litigation Bulletin | Spring Edition, March 2021
POST-BREXIT ROADMAP TO ENFORCING EU JUDGMENTS IN THE UK COURTS | Calum Cheyne & Lucy Noble
At 11 p.m. on the 31st of December 2020 (GMT), the 11-month transition period following the UK’s formal exit from the EU lapsed, prompting the inauguration of a new era of UK and EU relations.
Broadly, the new order is defined by an overarching governance framework concluded in the EU-UK Trade and Cooperation Agreement (the “Withdrawal Agreement”). While the Withdrawal Agreement brings much-needed finality and clarity to previously unresolved questions of trade, movement of persons and general economic cooperation, it was never intended to set out conclusive guidance on each and every aspect of the new relationship.
One such area with no conclusive guidance is the enforcement of civil EU Judgments in the UK Courts. The implication is that what was once a clear and certain path from judgment to enforcement is now a more complex process requiring detailed care and attention.
Pre-Brexit UK Position:
Before the Withdrawal Agreement, enforcing a Judgment from an EU state was relatively straight-forward.
The Recast Brussels Regulation, since 2015 in its current form, creates a mechanism of reciprocal enforcement between EU Member States. The regime provides for a summary procedure whereby a party, after receiving a judgement from the court of one EU Member State, does not need to commence additional proceedings before the court of another EU Member State for enforcement.
Following the Withdrawal Agreement, the Civil Jurisdiction and Judgements (Amendment) (EU Exit) Regulations 2019 (the “Regulations”) are in force. The Regulations effectively
revoke the Brussels Regulation and its precursors and all other EU-specific enforcement mechanisms – but what is left in their place?
THE HAGUE CONVENTION?
Where the proceedings were commenced pursuant to an exclusive jurisdiction provision, the 2005 Hague Convention on Choice of Court Agreements (“Hague Convention”)
will apply. The EU is a member of the Hague Convention, a membership that applies without interruption to the UK since the UK has acceded in its own right. The Hague Convention generally requires courts of the acceding states to enforce judgments in a manner not dissimilar to the Brussels Regulation.
Two issues arise with respect to the Hauge Conventions:
1. So called “asymmetric” jurisdiction provisions, which require one party to commence proceedings in a particular state, but which leave the other party open to commence in one of many jurisdictions. It is not clear whether such jurisdiction provisions are captured by the Hague Convention, and accordingly whether a successful claimant can benefit from the enforcement regime of the Hague Convention in circumstances where the underlying dispute was commenced pursuant to such a provision.
2. The Hague Convention does not apply to “interim” orders. Importantly, this means that a party cannot rely on the Hague Convention for the enforcement of interim injunctions and freezing orders.
Aside from the issues expressed above, the Hauge Convention provides the best starting place for a successful claimant in an EU Court, looking to enforce in the UK in this
new-age of EU/UK relations.
For the enforcement of judgements outside the scope of the Hague Convention, the path becomes more uncertain.
The first question is whether there is any bilateral treaty in place between the specific EU Member State and the UK with respect to enforcement. Typically these bilateral treaties pre-date the sweeping EU wide reciprocity regimes. Now that those regimes have been undone, they come back into play pursuant to the Foreign Judgments (Reciprocal Enforcement) Act 1933 (the “FJA”).
The key EU states to which this may apply are: Austria, Belgium, France, Germany, Italy, and The Netherlands, each of which has a pre-existing bilateral treaty with the UK. Do not
expect this list to grow – any future agreement for reciprocity of enforcement is likely to be agreed at a pan-EU level, rather than state by state.
If the Hague Rules do not apply, and if there is no bilateral treaty, the fallback position is that a successful claimant in a foreign court can sue under the foreign judgment in the
Effectively, the foreign judgment is not directly enforceable, but is recognised as giving rise to a debt in favour of the successful claimant. The English Court may then find for the
claimant, provided that the foreign judgment is final and conclusive.
Often this process can be dealt with by way of summary judgment. However, the English Court will not simply “rubber stamp” the foreign court’s decision. Issues can be tried
relating to the jurisdiction of the foreign court, issues of UK public policy in enforcing the foreign judgment, whether the foreign judgment was obtained by fraud or whether there
are any issues of natural justice.
A NOTE OF CAUTION
A note of caution here: if the FJA applies, then pursuant to Section 6 of the FJA the foreign judgment is to be registered in the UK. Critically, registration is the only mechanism by
which to enforce a judgment. Any other attempt to claim in respect of a foreign judgment (e.g., under common law) is impermissible.
A similar regime exists in relation to the Hague Rules. The Hague Rules were incorporated into English law pursuant to the Civil Jurisdiction and Judgments Act 1982 (the “CJJA”).
Pursuant to the CJJA, the only proceedings that can be commenced in England in relation to a foreign judgment that is enforceable in England are proceedings for registration of
the foreign judgment.
Therefore, if the foreign judgment falls into the “bilateral treaty” camp, or the “Hague Rules” camp, the only appropriate method for enforcement is registration under the relevant Act. The question of what to do in a situation (as set out above) is left open as to where the Hague Rules may or may not apply. The CJJA says that if the Hague Rules apply, then registration is the only permissible approach. However, if the Hague Rules do not apply, then nor does the CJJA and the claimant must look to the common law.
A Claimant may choose to back one of these “horses” or alternatively to commence both registration proceedings and a claim on the foreign judgment at common law. Until the
Courts resolve the issues surrounding the applicability of the Hague Rules, the position is unsatisfactorily uncertain.
Brexit leaves a number of lacunas in the UK’s legal structures. The pathways for UK enforcement of foreign judgments are one such example. Old legislation is being dusted off to
deal with circumstances that, until recently, were dealt with quickly by EU-wide reciprocity regimes.
In some circumstances, parties are back to the ‘square one’ of enforcement at common law. In others, conflicting legislation provides a situation where a party may be required to
commence dual proceedings, with the certainty that one set of proceedings will be wrongly commenced, but with commensurate uncertainty as to which set of proceedings will
be right and which will be wrong.
This will inevitably impact the costs and time of enforcing in the UK a judgment obtained in an EU court. The analysis may not be straightforward, and the steps that must be
taken to enforce any judgment should be analysed before parties embark on the initial litigation.
Meanwhile, a quick word for the world of arbitration, where the New York Convention continues to apply and arbitral awards are enforceable exactly as they would have been in
pre-Brexit times. Simplicity, as they say, is the ultimate sophistication.