In our sixth Brexit Blog, we will focus on the recognition and enforcement of judgments in civil and commercial matters rendered by courts in member states of the European Union (EU) and the United Kingdom (UK) after Brexit. Currently, the Recast Brussels I Regulation[1] regulates the subject matters of jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. Pursuant to this regulation, a judgment rendered by a court in an EU member state is enforceable in the other EU member states, without special procedure or declaration of enforceability being necessary. After Brexit, the UK will no longer be bound by the Recast Brussels l Regulation, prompting the question how ‘EU’ and ‘UK’ judgments will be recognized and enforced in, respectively, the UK and the remaining EU member states (the ‘EU27’).
We will highlight several post-Brexit scenarios as regards to the recognition and enforcement of judgments in civil and commercial matters, rendered by courts in the EU27 and the UK. First, we will discuss a ‘hard’ Brexit scenario. In such scenario, the UK will leave the EU without any arrangement regarding its withdrawal and the future relationship between the EU27 and the UK. Second, we will discuss a ‘soft’ Brexit scenario. In such scenario, the EU27 and the UK will have made arrangements about the UK’s withdrawal and their future relationship.
Switzerland, one of Loyens & Loeff’s home markets, is not an EU member state and therefore not bound by the Recast Brussels I Regulation. We will hereafter also highlight how judgments in civil and commercial matters will be recognized and enforced between Switzerland and the UK after Brexit.
In this Brexit Blog, we will only identify possible legal regimes concerning the recognition and enforcement of judgments in civil and commercial matters that might become relevant in the EU27 and the UK after Brexit, and will not outline the structure and content of such possible alternative regimes. Once the contours of the post-Brexit legal regime on recognition and enforcement of judgments in civil and commercial matters have become more clear, a new Brexit Blog will be published on that topic.
A hard Brexit scenario and possible consequences
A first option is that the UK re-joins the Lugano Convention. Like the Recast Brussels I Regulation, the Lugano Convention regulates the subject matters of jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, between the EU member states and the European Free Trade Association countries other than Liechtenstein (namely Switzerland, Norway and Iceland). The UK is currently bound by this treaty by virtue of its membership of the EU, but not as an individual party, which means that the UK will no longer be bound by this treaty after Brexit. The UK has, however, indicated that it wishes to re-join the Lugano Convention after Brexit.
Furthermore, on 28 December 2018 the UK conditionally ratified the Hague Convention on Choice of Court Agreements of 2005, a convention that currently also applies in the UK by virtue of the UK’s membership of the EU. This convention will come into force in the UK on 1 April 2019 in case no withdrawal agreement has been concluded between the EU27 and the UK. The Hague Convention on Choice of Court Agreements of 2005 regulates the subject matters of jurisdiction and the recognition and enforcement of judgments between the parties to this convention in the event parties have made an exclusive jurisdiction clause in favour of the courts of one of the contracting states, concluded after the convention entered into force in the state where the chosen court is located. In case of a hard Brexit, this convention would apply between the UK and the other contracting parties (which includes the EU) as of 1 April 2019.
Another possibility is that the Brussels Convention of 1968 ‘revives’ between the contracting parties to that convention (among which are the UK, the Netherlands, France, Belgium and Luxembourg). This convention regulates the subject matters of jurisdiction and the recognition and enforcement of judgments and has largely been superseded by the Brussels I Regulation and the Recast Brussels I Regulation, but still applies to certain dependent territories of EU member states. In legal literature there is some discussion as to whether this convention can ‘revive’ between the contracting states.
Finally, in case of a hard Brexit parties could possibly rely on a bilateral treaty regarding the recognition and enforcement of judgements that was concluded between the Netherlands and the UK in 1967. The scope of this treaty is however limited, since this treaty only applies to monetary judgments.[2] Also between Belgium and the UK there is a bilateral treaty on the recognition and enforcement of judgments of 1936 which could be applied, but which is equally limited to monetary judgments.[3]
If no agreement is reached between the EU27 and the UK and no alternative regime is put in place, enforcement and recognition of judgments after Brexit will become a matter of domestic law of the state in which recognition and enforcement are sought. It will most probably still be possible to enforce English judgments in the Netherlands and Dutch judgments in the UK, but it could be more costly and time consuming to do so. For example it will be necessary to initiate new legal proceedings in the Netherlands, in which the seized court will be requested to ‘adopt’ the order that is laid down in the judgment of the UK court. In Belgium, on the other hand, the rules of private international law are very generous. Under the condition that the judgment is final, (provisionally) enforceable in its country of origin and does not violate one of the grounds for refusal of recognition under Belgian law, it is automatically recognised and given full legal effect in Belgium. It can also be easily enforced through ex parte proceedings. From a Luxembourg perspective, in the case of a hard Brexit and in the event that no alternative regime is put in place between the UK and Luxembourg in order for a foreign judgment to be enforceable, such judgment must be rendered enforceable by way of an enforcement procedure according to Luxembourg domestic law provisions.
The European Commission has recently announced in a memorandum dated 18 January 2019 that the EU27 will only apply the Brussels I Regulation post-Brexit to judgments rendered by judges in the UK that have been declared enforceable prior to exit day. According to the European Commission, it will not be sufficient that enforcement proceedings were commenced prior to exit day, or even that the UK judgment was rendered prior to exit day.[4] In the words of the European Commission, the UK judgment must have been “exequatured in the EU-27 before the withdrawal date”. However, one might wonder how this relates to the principle of full and automatic recognition and direct enforceability of judgments under the Recast Brussels I Regulation.
The UK government on the other hand has declared that in the event of a hard Brexit it will implement domestic legislation to the effect that any judgments handed down by EU27 courts in proceedings commenced prior to exit day will automatically continue to be recognised and enforced pursuant to the ‘relevant instruments’ (i.e. the Brussels I Regulation and the Recast Brussels I Regulation).[5]
A Swiss perspective
As Switzerland is not an EU member state, it is not bound by the Recast Brussels I Regulation. Switzerland is also no contracting party to the abovementioned Brussels Convention of 1968. Furthermore, Switzerland and the UK have no bilateral recognition and enforcement treaty in place.
Switzerland is a party to the Lugano Convention. However, as mentioned above, in the event of a hard Brexit the Lugano Convention will cease to apply to the UK. In the event that the UK does not re-join the Lugano Convention, this means that UK judgements would after a hard Brexit be treated in Switzerland like judgements of any other third party state. The enforcement procedure and requirements are in these cases governed by Swiss domestic law.
Transition period and a soft Brexit scenario
There is now a withdrawal agreement on the table between the EU27 and the UK, which seeks to regulate the UK’s exit from the EU. This withdrawal agreement provides for a transition period until 31 December 2020, which period can be extended up to two years. During this transition period, the Recast Brussels I Regulation will remain in force in the UK. The withdrawal agreement provides that the Recast Brussels I Regulation will continue to apply to the recognition and enforcement of judgments given in legal proceedings instituted in the EU27 before the end of the transition period. Recently, the House of Commons of the UK rejected the withdrawal agreement. As of now, it is unclear whether this withdrawal agreement will come into force before exit day (which is set on 30 March 2019 00:00 CET).
The future relationship between the EU27 and the UK is still being negotiated. There is a possibility that the EU27 and the UK will agree on a continued civil judicial co-operation on the basis of which judgments rendered by courts in the EU27 and the UK will be mutually recognized and enforced on a reciprocal basis. Such agreement would be beneficial for commercial parties, as this means that the status quo will be maintained. The UK government has indicated that it will seek an arrangement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis.
Concluding remarks
The UK’s long-standing membership of the EU (since 1973) has resulted in a close and extensive legal relationship between the UK and the EU27, including the field of recognition and enforcement of judgments in civil and commercial matters. It is against this background that the UK’s envisaged exit from the EU prompts the question as to the possible legal fall back scenario’s after Brexit. As outlined in this Brexit Blog, a variety of options are potentially available, and as and when the exact shape of the post-Brexit legal landscape between the EU27 and the UK will crystallize, the regime on recognition and enforcement of judgments rendered by courts in the EU27 and the UK will become apparent.
If you have questions about the consequences of Brexit on the recognition and enforcement of judgments in civil and commercial matters, please feel free to contact Jonathan Ruff or Abdel Attaïbi.
[1] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
[2] Convention between the Kingdom of the Netherlands and the United Kingdom of Great Britain and Northern Ireland providing for the Reciprocal Recognition and Enforcement of Judgments in Civil Matters.
[3] Convention between the Kingdom of Belgium and the United Kingdom of Great Britain and Northern Ireland providing for the Reciprocal Enforcement of Judgments in Civil and Commercial Matters.
[4] Please see:
[5] Please see:
http://www.legislation.gov.uk/ukdsi/2019/9780111176726/regulation/92
