UK Ministry of Justice consults on Hague Convention on Recognition and Enforcement of Foreign Judgments

Other author       Malcolm Wu, Trainee Solicitor

The UK Ministry of Justice ("MOJ") has recently launched a consultation on whether the UK should join the Hague Convention of 2 July 2019 on the Recognition of Foreign Judgments in Civil or Commercial Matters (the "Hague Judgments Convention 2019").

This update provides a high-level summary of how English civil and commercial judgments are currently being recognised and enforced abroad, how foreign civil and commercial judgments are currently being recognised and enforced in the UK, how such recognition and enforcement will be further facilitated if the UK joins the Hague Judgments Convention 2019 and key questions included in the MOJ's consultation.

Post-Brexit framework

The cross-border enforcement of judgments in civil and commercial matters is an area of UK and European private international law that has been in flux since Brexit. The pre-existing framework within Europe for the enforcement of foreign judgments under the Lugano Convention 2007¹, the Brussels (Recast) Regulation² and the 2005 Hague Convention on Choice  Court Agreements (the "2005 Hague Convention") largely ceased to apply in the UK on 1 January 2021. So far, the UK has only been able to retain / reinstate its membership of the 2005 Hague Convention, with its application to re-join Lugano pending, after the European Commission rejected it.

The 2005 Hague Convention is only engaged where parties to proceedings have entered into an exclusive choice of court agreement. Once the 2005 Hague Convention has been engaged, the contracting states to the convention will honour the parties' choice of court such that the designated court shall have jurisdiction to decide on a dispute to which the jurisdiction agreement applies. A judgment given by the designated court in the relevant contracting state in accordance with the parties' jurisdiction agreement shall then be recognised and enforced in other contracting states. This provides a useful mechanism for the mutual recognition and enforcement of judgments pertaining to arrangements that contain exclusive choice of court agreements in favour of the courts of contracting states. When the 2005 Hague Convention is not engaged, such as when judgments relate to non-contractual disputes or disputes in relation to contracts that are not subject to an exclusive choice of court agreement, or the choice of court is not within a 2005 Hague Convention contracting state, parties wishing to enforce English judgments abroad, or bring proceedings or enforce judgments in England may instead rely on the common law or the relevant local law enforcement regimes respectively.

Against that backdrop, the MOJ's consultation on the Hague Judgments Convention 2019 seeks to understand the extent to which participants feel that membership of the convention would provide (i) a useful framework for the recognition and enforcement of judgments which do not engage the 2005 Hague Convention, as an alternative to the common and local law regimes which presently exist, and (ii) a satisfactory alternative to the mechanism under Lugano Convention 2007 which is currently unavailable to the UK.

Under the Hague Judgments Convention 2019

The Hague Judgments Convention 2019 will apply to judgments in the courts of contracting states such that judgments given by a contracting state will be recognised and enforced by other contracting states. It applies to merits judgments pertaining to civil and commercial matters, including tortious claims, but excluding interim measures. The Hague Judgments Convention 2019 is designed to dovetail with the 2005 Hague Convention and therefore excludes judgments covered by that convention. Similarly, it does not apply to enforcement of arbitral awards, which is already covered by the New York Convention³, and which is in force in some 170 contracting states. It also will not apply to matters pertaining to family law, inheritance, intellectual property, insolvency, defamation and privacy, anti-trust, sovereign debt restructuring and administrative law.

The objective of the Hague Judgments Convention 2019 set out in its recitals is to create a "uniform set of core rules on recognition and enforcement of foreign judgments in civil and commercial matters" to promote effective access to justice for all and facilitate rule-based multilateral trade and investment through judicial cooperation. If the UK does decide to join the Hague Judgments Convention 2019, it should (in principle) lead to greater certainty and a more streamlined enforcement framework for the enforcement of English judgments in other contracting states and vice versa, where they are not already covered by existing arrangements.

Ratifying parties

The Hague Judgments Convention 2019 has at the time of writing been signed by seven parties: Israel, Costa Rica, Ukraine, Uruguay, the Russian Federation, the United States and the European Union.

Of the seven parties, only the EU and Ukraine have ratified the Convention and did so in August 2022. Accordingly, the Hague Judgments Convention 2019 is set to enter into force between the EU and Ukraine in September 2023. Should the UK ratify the Convention, this regime will apply between the UK, the EU and Ukraine 12 months after the UK's ratification and subsequently with future ratifying parties.

If the UK does accede to the Lugano Convention 2007 in the future, the Lugano Convention rules would supersede that of the Hague Judgments Convention 2019 as between the UK, EU member states and EFTA states. If so, the Hague Judgments Convention 2019 would continue to regulate the recognition and enforcement of judgments between the UK and the other contracting states.

Participation in the Consultation

The MOJ's consultation opened on 15 December 2022 and will close on 09 February 2023. It is intended to gather expert views from practitioners, academics, businesses, and any other persons with an interest in or who may be affected by cross-border civil and commercial litigation in the UK. In addition to analysing responses to this consultation, officials will engage with relevant experts, including the Lord Chancellor’s Advisory Committee on Private International Law, prior to publishing the results. The MOJ presently envisages publishing their response to the consultation in Spring 2023.

Based on the overall analysis, the government will make a final decision on signing and ratifying and any declarations to be made.

The questions put to participants of the consultation include whether participants think the UK should accede to the Hague Convention 2019, and what they consider the likely impacts (positive and negative) of accession would be for UK parties dealing in international civil and commercial disputes. It asks participants whether the UK should make a reservation under the Hague Judgments Convention 2019 against applying the convention with Russia, in view of Russia’s "unprovoked, premeditated attack on Ukraine". It also asks what drawbacks, if any, participants foresee if the UK were to "apply only Hague 2019 [and not Lugano Convention 2007] with EU/EFTA States, given its narrower scope and lack of jurisdiction rules".

Should you have any questions regarding the recognition and enforcement of foreign judgments in the UK or the recognition and enforcement of UK judgments elsewhere, please feel free to contact any of the authors.