CROSS-BORDER ENFORCEMENT OF JUDGMENTS IN THE POST-BREXIT AGE: A GLIMMER OF LIGHT ON THE HORIZON?

KEY POINTS
– There are good reasons for the UK to ratify Hague 2019. Feature
– If the UK was to ratify Hague 2019 in 2023, the convention would only apply to
judgments arising out of proceedings initiated a year later, ie at some point in 2024
(and assuming the convention also applies in the enforcing state).
– If the UK does ratify Hague 2019, then commercial parties that may have switched to
include exclusive English jurisdiction clauses in their contracts post-Brexit, in order to
ensure that they fall under Hague 2005, may consider switching back to asymmetric
clauses in due course (subject to considerations as to whether such clauses may be contrary
to public policy in particular jurisdictions such as France).

Author Sarah Garvey

Cross-border enforcement of judgments

in the post-Brexit age: a glimmer of light
on the horizon?
This article considers whether Hague 2019 represents an attractive additional enforcement of foreign judgments in civil and
international convention for UK commercial litigants in cross-border disputes. commercial matters” to promote effective
It assesses the benefits and potential downsides – and the extent to which the access to justice for all and facilitate rule-based
convention will reverse the effects of Brexit in the civil justice sphere. multilateral trade and investment through
judicial co-operation. This is a commendable
objective and certainly anecdotal evidence

n The cross-border enforcement of

judgments in civil and commercial
matters is an area of private international law
that has seen significant and (it sometimes feels
like) constant change over the last five years.
Following the end of the Brexit transition
period on 31 December 2020, the long-
established European framework for allocation
of jurisdiction and enforcement of judgments
ceased to apply in the UK,1 save in legacy
matters. Although the UK promptly re-joined
the 2005 Hague Convention on Choice of
Court Agreements (Hague 2005), which covers
the enforcement of judgments issued pursuant
to exclusive jurisdiction clauses in many
commercial contracts, for all other matters,
litigants wishing to bring proceedings in
England or enforce judgments in England have
had to revert to the common law, whilst those
looking to enforce English judgments overseas
are having to consider the local law enforcement
regime in each relevant jurisdiction.
The UK’s application to re-join Lugano
2007 remains pending. However, in recent
months, another international convention on
the cross-border enforcement of judgments
has entered the spotlight: the 2019 Hague
Convention on Recognition and Enforcement of
Judgments (Hague 2019). This increased focus
is likely to be the result of two factors. First,
when the EU Commission lodged an objection
to the UK’s application to re-join Lugano 2007,
it argued that the appropriate instrument2 for
the UK to join in order to promote cross-border
co-operation between the UK and the EU was
Hague 2019. Second, Hague 2019 has been
ratified by the EU and Ukraine, meaning it now
has sufficient ratifications to enter into force and
will do so between those states in September
2023. The question commercial parties and
practitioners have therefore raised is: will the
UK now follow suit? It is widely anticipated that
the Ministry of Justice will consult stakeholders
on whether the UK should ratify Hague 2019
in the near future.
This article considers whether Hague
2019 represents an attractive additional
international convention for UK commercial
litigants in cross-border disputes. It focuses
primarily on judgments issued in contractual
disputes. It assesses the benefits of the UK
signing up to such a treaty and, in particular,
whether it provides a workable solution to
residual concerns about the recognition and
enforcement of English judgments in Europe
following Brexit. It also considers the potential
downsides and some of the practicalities of
enforcing judgments under Hague 2019.
OBJECTIVES OF HAGUE 2019
The policy backdrop to Hague 2019 is clearly
recorded in the recitals to the instrument.
These refer to the objective of creating a
“uniform set of core rules on recognition and
suggests that the inability to ensure easy
and efficient cross-border enforcement of
judgments can deter business. In the broadest
sense, it hampers confidence if parties consider
they will struggle to recover any unpaid debts
or there is no effective means to enforce a
counterparty’s contractual obligation. A
commercial party may reconsider the forum
selection identified in its contract or change
the structure of a deal to improve enforcement
prospects and, in finance contracts, if
enforcement is unlikely to be straightforward,
guarantees or other comfort may be more
likely to be sought from the borrower, which
may add to the costs and complexity of a deal.
Hague 2019 is intended to dovetail with
Hague 2005, which, as noted above, provides
that contracting states must give effect to
exclusive choice of court agreements in favour
of contracting states, and recognise and
enforce any resulting judgments. Hague 2019
covers a wide range of judgments, including
those issued pursuant to asymmetric
jurisdiction clauses and judgments arising
from tortious claims (and excludes judgments
covered by Hague 2005).
Over time, its proponents say, the
widespread ratification of Hague 2019 could
promote the cross-border enforcement of
judgments globally and, ultimately, lead to
a position equivalent to that relating to the
recognition and enforcement of arbitral

Butterworths Journal of International Banking and Financial Law January 2023 15

CROSS-BORDER ENFORCEMENT OF JUDGMENTS IN THE POST-BREXIT AGE: A GLIMMER OF LIGHT ON THE HORIZON?
Feature
awards under the New York Convention on
the Recognition and Enforcement of Arbitral
Awards 1958. Under that highly successful
Convention, on paper at least, 170 contracting
states recognise and enforce arbitral awards
issued by tribunals in other contracting states
subject only to limited exceptions. Although
currently only ratified by the EU and Ukraine,
there is an argument that by offering potentially
wide-ranging enforcement opportunities for
court judgments globally, Hague 2019 will,
over time, encourage commercial parties back
into national courts to resolve their disputes
and away from private arbitration processes.
Taking this argument a stage further, it has
been suggested that such a development would
promote open justice and the development of
the law in jurisdictions where (as in England)
court decisions create binding legal precedent.
CORE ELEMENTS
Hague 2019 requires contracting states to
recognise and enforce judgments given in other
contracting states in civil or commercial matters,
subject to certain limited exceptions (Art 4(1)).
Enforcement under Hague 2019 does not
involve a review of the merits of the judgment
in the requested state (Art 4(2)). The only
consideration of the merits permitted is
“as is necessary for the application of this
convention”. This presumably may arise when,
for example, the enforcing court is assessing
whether the judgment given by the court
of origin complies with the jurisdictional
thresholds at Art 5 (see below).
Although Hague 2019 is a treaty dealing
with the enforcement of judgments, it is
noteworthy that by Art 5, it sets out a list of
“requirements” for any judgment to be “eligible”
for recognition and enforcement under this
instrument. These “requirements” consist
of a list of jurisdictional bases upon which
the court of origin took jurisdiction in the
first place. The bases are in some instances
familiar and echo those found in European
instruments. For example, a judgment will be
eligible for enforcement under Hague 2019 if
the subject matter of the dispute was located in
the jurisdiction of the court of origin (see
Art 5(h)) or the defendant was “habitually
resident” or had its “principal place of business”
in the jurisdiction of the court of origin at the
16 January 2023
time it became a party to the proceedings in
the court of origin (Arts 5(a) and (b)) or the
defendant had a branch or agency or “other
establishment without separate legal personality”
in the state of origin at the time a party became
a party to the proceedings in the state of origin
and the claim arises out of the activities of that
branch, agency or establishment (Art 5(d)).
However, there are some differences and
novelties from the Brussels Recast and Lugano
2007 regimes, and practitioners will need to
consider these threshold issues carefully.
SUBJECT MATTER EXCLUSIONS
Hague 2019 excludes a number of areas from its
scope, including some areas that are within scope
of Lugano 2007, such as family law matters,
probate matters, insolvency, defamation and
privacy, intellectual property, anti-trust matters
and sovereign debt restructuring. There are
different reasons for these exclusions. For
example, insolvency is excluded because cross-
border recognition already largely exists via the
implementation of the UNCITRAL Model
Law on Cross-Border Insolvency, which was
given effect in the UK by the Cross-Border
Insolvency Regulations 2006 (SI 2006/1030)
(CBIR 2006). Defamation and privacy
claims were excluded because they involve
constitutional rights like freedom of expression,
and because these were considered areas of law in
a state of flux across the contracting states.3
Certain excluded areas, such as intellectual
property (IP), were initially intended to be
included. Under one version of the text, it was
proposed that IP judgments would be capable
of being recognised under Hague 2019 if they
were given in a contracting state where the
IP right was registered. Judgments that ruled
on validity would also have been subject to an
exclusive jurisdictional filter, and judgments on
infringement would only have been eligible for
recognition if the court ruled on an infringement
in its own territory. Despite the relatively limited
nature of these proposals, however, the inclusion
of IP judgments proved too contentious and they
were ultimately excluded in their entirety. Given
the Unified Patents Court initiative, it may be
that EU negotiators considered intellectual
property matters less of a priority.
Parties will need to be alive to these
exclusions when assessing whether Hague
Butterworths Journal of International Banking and Financial Law
2019 might prove to be a useful route to
enforcing their judgments.
DECLARATIONS AND RESERVATIONS
Hague 2019 provides scope for contracting
states to limit its application in a number
of circumstances, including by applying
state-to-state exclusions, bespoke subject
matter exclusions, and exclusions for
judgments arising under proceedings where
a contracting state is itself a party.
Under Art 17 of Hague 2019, a contracting
state may declare that its courts can refuse to
recognise or enforce a judgment given by a
court of another contracting state if the relevant
parties were resident in the requested state (ie the
enforcing state), and the relationship of the parties
and all other elements relevant to the dispute,
other than the location of the court of origin,
were connected only with the requested state.
Under Art 18, contracting states also have
the power to declare that Hague 2019 will not
apply to specific subject matters, in addition to
those already excluded under the convention.
The result of a contracting state making such
a declaration is two-fold: (i) its own courts
need not apply Hague 2019 in relation to that
specific subject matter; and (ii) the courts of
other contracting states need not apply Hague
2019 in relation to judgments concerning the
specific subject matter emanating from the
contracting state that made the declaration.
Finally, under Art 19, contracting states
may also declare that their courts shall not
apply Hague 2019 to judgments arising
from proceedings involving the contracting
state in question, its government agencies, or
persons acting on behalf of that state or its
government agencies.
When negotiating dispute resolution clauses
or considering routes to enforcement, parties
will need to bear in mind the possibility that
contracting states may have made declarations
and reservations that will limit the scope to
enforce judgments in certain scenarios, and
tailor their approaches accordingly.
GROUNDS FOR RESISTING
ENFORCEMENT
Article 7(1) of Hague 2019 sets out the specific
circumstances under which the courts of a
contracting state may refuse to recognise and

enforce a judgment from another contracting
state. These circumstances include: (a) if the
document that instituted the proceedings
leading to the judgment was not notified to the
defendant in sufficient time for them to arrange
their defence or was notified to them in a way
that is incompatible with the principle of service
in the state being asked to enforce the judgment;
(b) if the judgment was obtained by fraud; (c) if
recognition/enforcement would be manifestly
incompatible with the public policy of the
enforcing state; (d) if the initial proceedings
were contrary to a jurisdiction clause in favour
of the courts of another state; (e) if the judgment
is inconsistent with a judgment concerning the
same dispute between the same parties given
in the state being asked to enforce; and (f), if
the judgment is inconsistent with an earlier
judgment given by a court of another state
between the same parties on the same subject
matter. In addition, Art 7(2) also provides that
recognition and enforcement may be refused if
proceedings between the same parties on the
same subject matter are pending before a court
of the state being asked to enforce, and (i) the
courts of the state being asked to enforce was
the court first seized; and (ii) there is a close
connection between the dispute and the state
being asked to enforce.
These grounds are broadly similar to those
under Brussels Recast and Lugano 2007.4
When considering routes to enforcement,
parties will need to be aware of these
potential arguments that judgment debtors
may avail themselves of in an attempt to
hinder enforcement.
PRACTICALITIES OF ENFORCEMENT
Hague 2019 will not necessarily change
the UK’s position in relation to exequatur.
Under Brussels Recast, judgments were more
or less automatically enforceable in other
member states. Irrespective of their domestic
law, member states could not require that a
judgment creditor go through an exequatur
process before enforcement. However, under
Hague 2019, once a judgment creditor has
provided a certified judgment, evidence that
it is enforceable in the state of origin, and a
translation if required,5 the procedure for
recognition and enforcement is governed by
the law of the state in which enforcement is
Butterworths Journal of International Banking and Financial Law
sought. In practice, therefore, enforcement
may take longer in some jurisdictions than
in others and will likely be slower than
enforcement under the Brussels Recast regime.
In addition, if there is a pending appeal, or
if the time limit for a potential appeal is still
running, then the enforcing state can refuse
enforcement on that basis (although that
would not prevent a subsequent application for
recognition or enforcement). This will mean
that anyone seeking to enforce a judgment
under Hague 2019 may need to wait until after
any potential appeals have been resolved.
DOES HAGUE 2019 FILL THE GAPS
LEFT BY THE BRUSSELS RECAST AND
LUGANO 2007?
A key benefit of the Brussels Recast and
Lugano 2007 regimes was that they simplified
cross-border enforcement of English
judgments in the EU, and most EFTA states.
These instruments covered various types
of judgments (not just money claims) and
permitted enforcement with relative ease
in any enforcing state. Since Brexit, English
judgments can now only be enforced across
the EU and EFTA states on a reciprocal treaty
basis in quite limited circumstances, namely
if they relate to agreements that contain
exclusive choice of court clauses favouring
England, pursuant to Hague 2005. There has
also been a lengthy, and largely inconclusive,
debate about whether enforcement may
also be permissible in certain member states
under various bilateral treaties6 that predated
the EU regime. Commercial parties have
had to incur time and costs investigating the
enforcement position in relevant jurisdictions
under national law.
For many commercial parties that include
exclusive English jurisdiction clauses in their
contracts, Hague 2005 has essentially “filled
the enforcement gap” left as a result of the
Brussels Recast and Lugano 2007 ceasing
to apply. Assuming that the UK does sign
up to Hague 2019, this will lead to a much
more streamlined and predictable cross-
border enforcement process for other English
judgments in most EU and EFTA states.
Hague 2019 should also largely resolve
concerns about fragmentation. For many
practitioners and commercial parties it is this
CROSS-BORDER ENFORCEMENT OF JUDGMENTS IN THE POST-BREXIT AGE: A GLIMMER OF LIGHT ON THE HORIZON?
Feature
that is a core driver for advocating for the UK
to ratify Hague 2019.
However, Hague 2019 is still not as
comprehensive an instrument as Lugano
2007 or the Brussels Recast. First and
foremost, the European instruments
cover jurisdictional allocation as well as
enforcement, and therefore significantly
reduce the risk of parallel proceedings.
As discussed further below, there are no
equivalent provisions in Hague 2019. Second,
unlike the Brussels Recast and Lugano 2007,
Hague 2019 provides no mechanism for the
enforcement of interim measures. Third,
Hague 2019 also excludes a broader number
of key areas from its scope, albeit there are
sensible reasons behind such exclusions.
Fourth, there are more grounds on which
enforcement may be refused under Hague
2019 than under the other regimes.
As noted above, Hague 2019 deals
with enforcement and not jurisdiction.
Notwithstanding the “requirements” relating
to “eligible” judgments at Art 5, there are no
provisions that dictate in which national courts
an issue should be heard or when a court should
stay proceedings or decline jurisdiction in
favour of another court. Under Lugano 2007
and the Brussels Recast, the lis pendens rule
applies such that courts that are not first seized
of a dispute must generally stay proceedings
unless the first seized court determines whether
it has jurisdiction. Only when the first seized
court determines it has no jurisdiction may other
courts hear the dispute. Hague 2005 contains
a similar rule, although because Hague 2005
applies only to disputes arising under agreements
that contain exclusive jurisdiction clauses, this is
not sufficient to prevent parallel proceedings in
other areas. Article 7(2) of Hague 2019 is as close
as the instrument gets to a lis pendens mechanic,
but it is by no means as comprehensive as the
provisions under the Brussels Recast and Lugano
2007 aimed at preventing parallel proceedings.
As a result, even if the UK signs up to Hague
2019 in addition to Hague 2005, there remains
a risk of UK disputes being subject to parallel
proceedings in other states. This risk might be
neutralised in cases covered by Hague 2005 by
the issuance of an anti-suit injunction by the
English court, but this remedy is unlikely to be
available to many litigants.
January 2023 17
CROSS-BORDER ENFORCEMENT OF JUDGMENTS IN THE POST-BREXIT AGE: A GLIMMER OF LIGHT ON THE HORIZON?
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Timing
In terms of timing, Hague 2019 will only
apply to a judgment if the convention was in
force for both the state of origin and the state
of enforcement when the proceedings leading
to the judgment commenced. Even if the
convention was in force when the judgment
was given, that is not sufficient for Hague 2019
to apply. In addition to this, once a country
ratifies Hague 2019, there is a 12-month time
lag before it enters into force in relation to that
country. This is because upon ratification,
other states will have a 12-month period
in which they may serve a notice declaring
that Hague 2019 will not apply as between
themselves and the acceding state. If the UK
was to ratify Hague 2019 in 2023, therefore, it
would only apply to judgments in proceedings
initiated a year later, ie at some point in 2024.
A note on judgments issued
pursuant to asymmetric7
jurisdiction clauses
Of particular interest for commercial
parties will be the possibility of enforcement
of judgments pursuant to asymmetric
jurisdiction clauses under Hague 2019 where
there is a selection in favour of a contracting
state court. Such asymmetric jurisdiction
clauses have historically been popular in the
financial and other market documentation.8
They are not within the remit of Hague 2005.
It seems that judgments given pursuant to
asymmetric jurisdiction clauses (and indeed
non-exclusive jurisdiction clauses) will be
within the scope of Hague 2019 (whereas
those given pursuant to exclusive jurisdiction
clauses are expressly out of scope (Art 1(m)),
so as to preserve the role of Hague 2005. If the
UK does ratify Hague 2019, then commercial
parties that may have switched to include
exclusive English jurisdiction clauses in their
contracts post-Brexit, in order to ensure that
they fall under Hague 2005, may consider
switching back to asymmetric clauses in due
course. However, there remain doubts in some
jurisdictions (such as France) as to whether
such clauses are contrary to public policy and
this consideration may, in turn, give rise to
enforcement concerns in relation to judgments
issued pursuant to such clauses in such
jurisdictions.
18 January 2023
Biog box
Sarah Garvey is Counsel at Allen & Overy LLP. Sarah is an experienced litigator, focusing
on cross-border commercial disputes. Sarah is a member of the Lord Chancellor’s Advisory
Committee on Private International Law. Email: sarah.garvey@allenovery.com
RISK OF DIVERGENCE?
Of course, unlike the Brussels Recast where
the CJEU is the final arbiter of the instrument,
with its decisions being enforceable across
member states, under Hague 2019 there is
no single court offering definitive rulings on
interpretation and application. Despite Art 20
which provides that when interpreting Hague
2019 “regard shall be had to its international
character and to the need to promote
uniformity in its application” there is a risk of
potentially diverging interpretations on, for
example, the application of the jurisdictional
filters at Art 5, or the scope of the exceptions
at Art 7. However, Hague 2019 will be in the
same position as the New York Convention
in this sense and this has not prevented
the widespread uptake of this instrument.
Furthermore, it is likely that advances in
information sharing will allow for greater
visibility of decisions on Hague 2019 than
previously.
CONCLUSIONS
There are good reasons for the UK to ratify
Hague 2019. Ratification would significantly
streamline the process of cross-border
enforcement for commercial parties who
obtain English judgments in their favour.
Hague 2019 may herald a return
to asymmetric jurisdiction clauses by
finance parties transacting under English
law contracts. There has been a move to
exclusivity in recent years so as to bring any
resulting judgments within Hague 2005.
For UK commercial litigators facing
cross-border enforcement issues, the
combination of Hague 2019 and Hague 2005
will go some way towards reversing the effects
of Brexit and extending the circumstances in
which reciprocal treaty-based enforcement
of English judgments can take place across
the EU and EFTA states. Such a scenario
will, in the broadest sense, help promote
international trade and may contribute to the
continued popularity of the English courts
for the resolution of cross-border disputes. n
1 (i) 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
Butterworths Journal of International Banking and Financial Law
and commercial matters (recast) (Brussels Recast);
and (ii) the Convention on jurisdiction and the
recognition and enforcement of judgments in
civil and commercial matters (Lugano 2007).
2 The European Commission’s assessment on
the application of the United Kingdom of
Great Britain and Northern Ireland to accede
to the 2007 Lugano Convention, dated 4 May
2021: “Though the Convention is, in principle,
open to accession of ‘any other State’ upon
invitation from the Depositary upon unanimous
agreement of the Contracting Parties (see
above), it is not the appropriate general
framework for judicial cooperation with any
given third country … The EU’s long-standing
approach is that the appropriate framework for
cooperation with third countries in the field
of civil judicial cooperation is provided by the
multilateral Hague Conventions, i.e. the 2005
Hague Choice of Court Convention and the
2019 Hague Judgments Convention”.
3 See Explanatory Notes to Hague 2019.
4 See Art 45 (Refusal of recognition) of Brussels
Recast, and Art 34 Lugano 2007.
5 Article 12, Hague 2019
6 Prior to the 1970s, the UK had entered into
bilateral treaties in relation to the recognition
and enforcement of judgments with France
(1934), Germany (1961), Austria (1962), Italy
(1964) and the Netherlands (1969). These
conventions still exist and were incorporated
into English law under the Foreign Judgments
(Reciprocal Enforcement) Act 1933 and the
Administration of Justice Act 1920.
7 Also known as hybrid, unilateral or one-way
jurisdiction clauses.
8 ‘Hybrid Jurisdiction clauses: time for a
rethink?’ (2016) 1 JIBFL 6, by Sarah Garvey.
Further Reading:
Brexit and dispute resolution clauses:
–
the options for finance parties (2021)
2 JIBFL 109.
How easy is it to enforce English
–
judgments in the EU post-Brexit? A
look at the procedures in Italy, Germany
and Spain (2021) 5 JIBFL 354.
LexisPSL: Banking & Finance:
–
Practice Note: Hague Convention
on Choice of Court Agreements –
Jurisdiction.