On 1 July 2025 the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters ("Hague 2019" or the "Convention") will come into force for England and Wales1, having been ratified by the UK Government on 27 June 2024. It will be applicable to judgments arising out of proceedings issued on or after that date.
In this article we take a look at how Hague 2019 will change the enforcement landscape and, in particular, how this might affect a commercial party's decision on what sort of jurisdiction clause to include in its agreements.
The current position (1): Judgments from the EU
Prior to Brexit, judgments from EU Member States could be enforced with relative ease in this jurisdiction (and vice versa) under Regulation (EU) No 1215/2012 ("Brussels Recast"). The 2007 Lugano Convention ("Lugano") provided a similar framework between the EU and the EFTA States of Switzerland, Norway and Iceland. Save in the case of proceedings issued prior to the end of the Brexit implementation period (i.e. prior to 11pm on 31 December 2020), both Brussels Recast and Lugano ceased to apply in the UK from that date and the UK's efforts to accede to Lugano in its own right have so far been unsuccessful.
In the post-Brexit era, and prior to the Hague 2019 coming into force, judgments from EU Member States are enforceable in England either under the 2005 Hague Convention2, where a qualifying exclusive jurisdiction clause exists or, where it does not, under the Administration of Justice Act 1920 ("AJA 1920") (for judgments from Cyprus or Malta), the Foreign Judgments (Reciprocal Enforcement) Act 1933 ("FJA 1933") (for judgments from Austria, Belgium, France, Germany and the Netherlands) or in all other cases by action on the judgment at common law, providing the conditions applicable to each of these regimes are met. Where an English judgment is to be enforced in an EU Member State local law advice will need to be sought in each case. Will Hague 2019 bring back some of the certainty, and uniformity, that existed prior to the UK's departure from the EU?
The current position (2): Judgments from the rest of the world
The above regimes are also applicable to the enforcement of judgments from outside the EU. For example, judgments from Mexico, Singapore, Montenegro and Switzerland may be enforceable under Hague 2005 providing a qualifying jurisdiction clause exists. Judgments from certain Commonwealth States and British Overseas Territories (including Barbados, Belize, Bermuda, the BVI, the Cayman Islands, New Zealand) may be enforceable under the AJA 1920. Judgments from countries with whom the UK has a bilateral enforcement treaty (such as Australia, most Canadian provinces, Guernsey, Jersey, India, Isle of Man) may be enforceable under the FJA 1933. Judgments from other countries must be enforced by action on the judgment at common law. This includes, for example, judgments from the US, with whom the UK currently has no bilateral enforcement treaty.
Whereas both monetary and non-monetary judgments were enforceable under Brussels Recast and Lugano, and are enforceable under Hague 2005, only monetary judgments are enforceable under the AJA 1920, FJA 1920 and at common law. Injunctions, for example, are not enforceable under any of these regimes.
Where does Hague 2019 apply?
To date Hague 2019 has been ratified by the UK, EU (excluding Denmark), Uruguay and Ukraine. It has been signed, but not yet ratified, by other states including the US and Russia. It is therefore expected that its territorial scope will expand in future. Once a state has ratified Hague 2019 it enters into force for that state on the first day of the month following a period of 12 months from the date of ratification.
Unlike Lugano, it is not necessary for contracting states to consent to the accession of a new state to Hague 2019. However, in the 12-month period following a state's ratification of the Convention, a contracting state may declare that it will not apply as between itself and the acceding state. If, for example, Russia were to ratify Hague 2019 any contracting state concerned about the prospect of having to enforce Russian judgments in its territory could opt out of applying the Convention to judgments from Russia.
What is the effect of Hague 2019 and what types of judgment are covered?
Like Brussels Recast and Lugano, Hague 2019 applies to the recognition and enforcement of judgments in civil or commercial matters. It does not extend to revenue, customs or administrative matters. Certain matters are expressly excluded from its scope, including family law matters, wills and succession, insolvency, the carriage of passengers and goods, defamation and intellectual property3. It does not apply to arbitration or related matters.
Unlike the AJA 1920, FJA 1933 and the common law regimes, Hague 2019 applies to both monetary and non-monetary judgments, although interim measures (such as an interim injunction) are expressly not "judgments" within the meaning of the Convention and are therefore not covered.
Unlike Brussels Recast, Lugano and, to a more limited extent, Hague 2005, Hague 2019 does not contain rules to determine which contracting state has jurisdiction to determine a dispute in the first place (also known as rules of "direct jurisdiction"). It does not, for example, contain any mechanism for preventing parallel proceedings. Instead, courts of contracting states apply their own domestic rules to determine whether or not they have jurisdiction to determine a given dispute, and other contracting states are required to enforce a judgment arising out of that dispute providing the proceedings in question are sufficiently connected with the State of origin4. The proceedings will be deemed sufficiently connected providing one of the eligibility criteria (also known as "jurisdictional filters" and "indirect bases of jurisdiction") are met (see further below).
What are the eligibility criteria for a judgment to be enforceable?
Article 5 of the Convention sets out a number of bases for recognition and enforcement. These are the so-called "jurisdictional filters" referred to above. Providing at least one of these applies, a judgment from one contracting state will prima facie be eligible for recognition and enforcement in another contracting state. The bases will be familiar to those acquainted with the existing European regimes for recognition and enforcement and include the following scenarios:
• the person against whom enforcement is sought was habitually resident in the State of origin at the time that person became a party to the proceedings in the court of origin (or the person had their principal place of business in the state of origin at that time providing the dispute concerned the activities of that business);
• the person against whom enforcement is sought was the claimant in the court of origin;
• the defendant maintained a branch, agency or other establishment in the State of origin at the time it became party to the proceedings in the court of origin and the dispute concerned the activities of that branch, agency or establishment;
• the defendant expressly consented or submitted to the jurisdiction of the court of origin;
• the judgment concerned a contractual obligation and was given by a court of the State in which that obligation was or should have been performed;
• the judgment concerned a tenancy and was given by a court of the State in which the property was situated;
• the judgment concerned a tort giving rise to death, physical injury, damage to or loss of tangible property and the act or omission directly causing that harm occurred in the State of origin (irrespective of where the harm occurred);
• the judgment concerned a counterclaim providing (if in favour of the counterclaimant) it arose out of the same transaction or occurrence as the claim or (if against the counterclaimant) the law of the State of origin did not require the counterclaim to be filed in order to avoid preclusion5;
• the parties had agreed (in writing) to the jurisdiction of the court of origin other than by way of exclusive jurisdiction clause (see further below).
Article 5 needs to be read subject to Article 6, which provides that a judgment concerning rights in rem in immovable property shall only be recognised and enforced if the property is situated in the State of origin. Even if a judgment meets one of the Article 5 criteria it will therefore not be recognised or enforced under Hague 2019 if it concerns rights in rem in immovable property and the property was not situated in the State of origin. This is the only exclusive basis for recognition and enforcement provided for in the Convention.
It is worth noting that a judgment from one contracting State may still be enforceable in another contracting State even if none of the Hague 2019 criteria are met, providing the judgment would be enforceable under the domestic laws of that State. The exception to this is where recognition or enforcement would constitute a breach of the exclusive jurisdiction provided for in Article 6.
How are jurisdiction clauses treated?
As set out above, a judgment will prima facie be enforceable under Hague 2019 if it was given by the courts of a State which the parties had agreed should have jurisdiction, i.e. there was a jurisdiction clause in favour of those courts. However, Hague 2019 expressly does not extend to exclusive jurisdiction clauses. This is in order to minimise overlap with Hague 2005, which only applies to exclusive jurisdiction clauses6. Hague 2019 will therefore apply to asymmetric jurisdiction clauses7, which are not considered to be "exclusive" for the purposes of Hague 2005.
There is also a key temporal difference between Hague 2005 and Hague 2019. One of the limitations of the former is that it only applies to exclusive jurisdiction clauses concluded after the 2005 Convention came into force for the State whose courts have been chosen by the parties. This means that clauses conferring exclusive jurisdiction on the courts of England and Wales are only covered by Hague 2005 where the agreement was entered into on or after 1 October 20158. Hague 2019, on the other hand, does not contain any such temporal restriction; it will apply regardless of when the clause was entered into, providing the proceedings are issued on or after the date the Convention came into force for the State in question.
An exclusive jurisdiction clause in favour of the English courts entered into prior to 1 October 2015 will therefore fall outside the scope of both Hague 2005 and Hague 2019 and, somewhat unusually, once Hague 2019 comes into force a party to a non-exclusive (or asymmetric) jurisdiction clause may (at least from an enforcement perspective) be in a stronger position than a party to an exclusive jurisdiction clause if that exclusive clause was concluded prior to 1 October 2015.
It will therefore be important for parties to establish whether their jurisdiction clauses are covered by Hague 2005 or Hague 2019 (if indeed either). However, it is worth remembering that a judgment may still be enforceable under Hague 2019, notwithstanding the presence of an exclusive jurisdiction clause, if at least one of the other "jurisdictional filters" applies.
When will recognition and enforcement be refused?
As one would expect, the Convention provides for a number of situations in which recognition or enforcement of a judgment may9 be refused. Again, these will be familiar to those acquainted with the various European cross-border enforcement regimes and include the following scenarios:
• the defendant was not given sufficient notice of the proceedings in order to arrange for a defence (save where the defendant entered an appearance without contesting the notification of the proceedings where it would have been possible to do so);
• the judgment was obtained by fraud;
• recognition or enforcement would be contrary to public policy;
• the proceedings giving rise to the judgment were in breach of a jurisdiction agreement;
• the judgment is inconsistent with a prior judgment of a court of the requested State in a dispute between the same parties, or with a prior judgment of a court of another State between the same parties concerning the same subject matter providing such judgment is capable of recognition in the requested State.
Practical considerations
Whilst it provides for enforcement of judgments in a far wider range of scenarios than Hague 2005, Hague 2019 deals only with the recognition and enforcement of judgments in civil and commercial matters and does not directly allocate jurisdiction between contracting States. Nevertheless, in this post-Brexit era, it represents a significant step towards a uniform framework for the recognition and enforcement of foreign judgments.
Looking ahead to the future, it is expected that further States will ratify the Convention in the coming years, such that the importance of Hague 2019 will continue to increase. It also remains to be seen whether the UK will ever accede to Lugano. If that were to happen, the significance of Hague 2019 would likely diminish, at least between the UK and the EU, given Lugano would supersede Hague 2019. A rigid framework along the lines of Lugano may not be what the UK really needs, however; it would likely spell (again) the end of anti-suit injunctions in the European context and reintroduce the "Italian torpedo" problem that Brussels Recast only partially solved. For now Hague 2019 represents a good balance between flexibility and certainty.
Parties to commercial contracts should review their existing agreements and think carefully about any new agreements they enter into. It is equally important to assess the implications of existing jurisdiction agreements as it is to decide which would be most appropriate going forward.
Footnotes:
1 The UK has declared that Hague 2019 will only enter into force in England and Wales, although it may be extended to Scotland and Northern Ireland in future.
2 Convention of 30 June 2005 on Choice of Court Agreements
3 The complete list of matters expressly excluded is contained at Article 2(1) of Hague 2019.
4 The Convention refers to the state in which the proceedings giving rise to the judgment are brought as the "State of origin" and the court that issued the judgment as the "court of origin". The State in which enforcement is sought is referred to as the "requested State".
5 If the counterclaimant would have lost the right to bring the claim if not brought as a counterclaim in those proceedings, the counterclaimant cannot be said to have voluntarily submitted to the jurisdiction of the court of origin on the basis of the counterclaim alone.
6 This is, at least, the default position. Article 22 of Hague 2005 permits a contracting State to declare that it will also apply the 2005 Convention to non-exclusive jurisdiction clauses. In January 2005, Switzerland acceded to the 2005 Convention and made a declaration to this effect.
7 An asymmetric jurisdiction clause provides that one party (usually the borrower) may only sue in the courts of the chosen State whereas the other party (usually the lender) has a choice of where to sue. Such clauses are very common in financial documents.
8 This is the date that the EU acceded to Hague 2015, at which time the UK was still a member. The UK considers that the 2005 Convention has continued to apply to the UK uninterrupted since that date. The EU Commission has previously expressed the view that the 2005 Convention only entered into force as between the UK and the EU when the UK became a member in its own right, i.e. on 1 January 2021. This gives rise to a degree of uncertainty.
9 Note the use of the permissive "may" rather than the mandatory "shall" or "will".
