2019 Hague Convention ratified by the UK

Back in June 2021, so six months after Brexit, we published our article ‟How to enforce civil and commercial judgments after Brexit?” which explained and concluded that the United Kingdom (‟UK”) had, basically, no solid legal framework in place, to efficiently recognise and enforce civil and commercial judgments handed down in a European Union (‟EU”) member-state. The opposite was true too, whereby UK civil and commercial judgments became difficult to recognise and enforce in any EU member-state, post Brexit. So, without the 2007 Lugano convention – which the UK has still not joined – the default position, after the Brexit transition date of 1 January 2021, was that jurisdiction and enforcement of judgments for new cases issued in the UK would be determined by the domestic law of each UK jurisdiction (i.e. the common law of England & Wales, Scotland and Northern Ireland, respectively), supplemented by the Hague Convention dated 30 June 2005 on choice of court agreements. Quite a dreadful ‟tableau”, if you ask me, not at all conducive to efficient and smooth enforcement of EU judgments in the UK, and of UK judgments in the EU. However, a ray of hope is now shining on the whole area of enforcement of cross-border judgments because the UK recently ratified the 2019 Hague convention. So what changes? And when? And how?

1. 2019 Hague convention: a short history and rationale for its adoption

With ever-increasing globalisation and the growth of cross-border interactions of all kinds between civil and commercial parties, disputes are an inevitable occurrence.

In the 1990s, the Hague conference on private international law (‟HCCH”) recognised that an effective and smooth regime for international transactions would require tools that enable swift and uncomplicated recognition and enforcement of foreign judgments.

In the sphere of arbitration, the quintessential instrument that facilitates the recognition and enforcement of foreign arbitral awards is the 1958 New York convention (the ‟NY convention”). The HCCH’s initial aim in the 1990s was to create a counterpart to the NY convention that would enable straightforward recognition and enforcement of foreign judgments.

However, the endeavour proved rather unsuccessful initially due to a lack of consensus on an array of divisive issues.

Consequently, the HCCH’s ambition had to be curtailed, so that the HCCH temporarily settled to adopt the Hague convention dated 30 June 2005 on choice of court agreements (the ‟2005 Hague convention”). The aim of the 2005 Hague convention is to ensure the effectiveness of choice of court agreements by commercial parties as well as to facilitate recognition and enforcement of judgments rendered under such agreements.

The HCCH hence viewed the 2005 Hague convention as an important achievement, but one that required additional building blocks.

In 2011, the HCCH opted again to look into the possibility of drafting ‟a global instrument on matters relating to jurisdiction and the recognition and enforcement of judgments in civil and commercial matters”. Eventually, the lack of consensus on divisive matters was overcome, and the much-needed additional building blocks were finally added in the form of the convention dated 2 July 2019 on the recognition and enforcement of foreign judgments in civil or commercial matters (the ‟2019 Hague convention”).

The number of ratifications of both the 2005 Hague convention and the 2019 Hague convention remains low. Indeed, the former boasts nine ratifications (Albania, the EU – covering the European territory of all member-states except Denmark, Denmark, Mexico, Moldova, Montenegro, Singapore, Ukraine and the UK), while the latter has only been ratified by four parties (the EU – except Denmark, Ukraine, the UK and Uruguay). That being said, both Hague conventions have been ratified by the EU, which inflates the number of countries (as there are 27 EU member-states) in which these two instruments apply.

2. What just happened? The 2019 Hague convention got ratified by the UK, that’s what!

On 27 June 2024, the UK ratified the 2019 Hague convention, with 1 July 2025 being the expected date of its entry into force.

This is a significant development, and major improvement, for cross-border litigation, from and to, the UK. While part of the EU, the judgments of the UK courts benefited from the Brussels I regulation regime. More precisely, article 36(1) of the Brussels I regulation provides that ‟a judgment given in an EU member-state shall be recognised in the other member-states without any special procedure being required”. However, the application of the Brussels I Regulation in relation to the UK stopped on 1 January 2021, upon Brexit. What that meant, in practice, was that from that date onwards, the recognition and enforcement of the judgments of the UK courts in the EU would be way more challenging, and depended on the laws of each EU member-state. Given that English courts have historically enjoyed the status of preferred dispute resolution forum for commercial parties across all four corners of the globe, the sudden impossibility to recognise and enforce judgments of the English courts in the EU posed a very serious threat to this status.

The UK’s response was to join the 2005 Hague convention on 1 January 2021, and then the 2019 Hague convention on 27 June 2024.

Indeed, when applicable, the 2019 Hague convention will streamline, and widen the scope of, the process of recognition and enforcement of UK judgments in the EU (except Denmark, which is not bound by the 2019 Hague convention), and vice versa, alongside the 2005 Hague convention which the UK acceded in its own right on 1 January 2021.

As abundantly explained in our article ‟How to enforce civil and commercial judgments after Brexit”, the 2005 Hague convention presents many weaknesses and idiosyncrasies which are not conducive to the smooth and efficient recognition and enforcement of all cross-border judgments in the UK and the EU.

For example, the 2005 Hague convention applies to final decisions on the merits, but not to interim, provisional or protective relief orders (article 7), while article 8(3) of the 2005 Hague convention allows an English court to postpone or refuse recognition if the foreign judgment is subject to appeal in the country of origin.

Also, there are two major contentious issues with regard to the material and temporal scope of the 2005 Hague convention, and the EU’s and UK’s positions differ on those issues.

The first area of contention relates to the material scope of the 2005 Hague convention and, more specifically, revolves around what is an ‟exclusive choice of court agreement”. In particular, the UK thinks that asymmetric or unilateral choice of court agreements, such as the Loan Market Association standard forms of English law-governed finance documents, which give one contracting party (the lender) the choice of a range of courts in which to sue, while limiting the other party (the borrower) to the courts of a single jurisdiction (usually, the lender’s home state), should be regarded as exclusive, within the scope of the 2005 Hague convention. But EU case law, in EU member-states, as well as academic commentary, all suggest the opposite (i.e. that asymmetric or unilateral choice of court agreements are not exclusive and therefore outside the scope of the 2005 Hague convention).

The second area of contention relates to the temporal scope of the 2005 Hague convention: when did the 2005 Hague convention ‟enter into force” in the UK? Pursuant to article 16 of the 2005 Hague convention, such convention applies to exclusive choice of court agreements concluded ‟after its entry into force, for the State of the chosen court”. There is a difference of opinion as to the application of the 2005 Hague convention to exclusive jurisdiction clauses in favour of UK courts entered into between 1 October 2015 and 1 January 2021, when the UK was a party to the 2005 Hague convention by virtue of its EU membership. Indeed, the EU states that the 2005 Hague convention only applied between the EU and the UK to exclusive choice of court agreements ‟concluded after the convention enters into force in the UK as a party in its own right to the convention” (i.e. from 1 January 2021). However, the UK ministry of justice guidance set out that the 2005 Hague convention ‟will continue to apply to the UK (without interruption) from its original entry into force date of 1 October 2015”, which is when the EU became a signatory to the 2005 Hague convention, at which time the convention also entered into force in the UK by virtue of the UK being an EU member-state.

So how can the 2019 Hague convention iron out those differences in views, between the UK and the EU, and ensure that most, if not all, cross-border civil and commercial judgments can be recognised and enforced on both sides of the Channel without any hiccups?

3. Geographic scope of the 2019 Hague convention in the UK and beyond

The UK’s ratification of the 2019 Hague convention extends only to judgments of the courts of England & Wales (i.e. not Scotland and Northern Ireland, for now).

However, transcripts of UK parliamentary discussions on 21 May 2024 suggest that ratification is going to be extended further, since the Northern Irish and Scottish Administrations appear to support the 2019 Hague convention.

Under the 2019 Hague convention, a judgment which is handed down in one Contracting State, provided certain conditions are met (and specific exclusions not met), can be recognised and enforced in another Contracting State without the courts of this other Contracting State reviewing the merits of the case (article 4(2)), unless it is ‟manifestly incompatible” with the public policy of this other Contracting State.

So, if a party issues a claim in the courts of England & Wales after 1 July 2025, under an agreement that contains a non-exclusive or asymmetric jurisdiction clause, then the judgment will be enforceable in the EU subject to the provisions of the 2019 Hague convention.

The 2019 Hague convention will apply to judgments in civil and commercial proceedings, for example where the Contracting State in which the judgment is handed down is also the place of performance of contractual obligations or the place of administration of a trust.

For states such as Switzerland, Norway and Iceland, that have not ratified the 2019 Hague convention, domestic private international law rules will continue to apply to the cross-border recognition and enforcement of judgments from the English courts.

4. Key provisions of the 2019 Hague convention

Article 1 of the 2019 Hague convention provides that ‟this convention shall apply to the recognition and enforcement of judgments in civil or commercial matters”. While the terms ‟civil” and ‟commercial” are not defined in the 2019 Hague convention, they will have to be approached from an autonomous perspective, given that article 20 requires that the convention be interpreted by observing its international character and the need to promote its uniform application. Article 1(2) makes clear that the convention ‟shall apply to the recognition and enforcement in one Contracting State (the Requested State) of a judgement given by a court of another Contracting State (the State of Origin)”.

The broad scope of application established in article 1 of the 2019 Hague convention is then narrowed down by the specific exclusions listed in article 2: among other things, the convention will not apply to ‟(a) the status and legal capacity of natural persons; (b) maintenance obligations; (c) other family law matters (…); (d) wills and succession; (e) insolvency, composition (…); (f) the carriage of passengers and goods; (…); (k) defamation; (l) privacy; (m) intellectual property”, etc. Interim measures are also explicitly carved out from the definition of ‟judgment”, meaning that the 2019 Hague convention cannot be used to enforce interim injunctions (for example, freezing orders).

Once the judgment is found to be within the scope of the 2019 Hague convention, article 4 comes into play by providing that the judgment rendered by a court of one Contracting State ‟shall be recognised and enforced in another Contracting State”, with the court in the latter Contracting State not being allowed to review this judgment on merits beyond what is necessary to apply the convention.

Article 5 of the 2019 Hague convention puts forth an exhaustive list of ‟jurisdictional filters”, or eligibility criteria, such as the habitual residence of a person against whom the recognition and enforcement of a judgment is sought. If the person in question was habitually resident in the Contracting State at the time at which they became a party to the proceedings before a court of that Contracting State (the State of Origin), then this factual scenario will serve as a jurisdictional filter that triggers the obligation on the part of other Contracting States to recognise the ensuing judgment. Indeed, these ‟jurisdictional filters” (such as the defendant’s habitual residence, principal place of business, or branch, agency or other establishment) can be described as connecting points that tie the case and the judgment to the Contracting State from which the judgment originated in a way to trigger the obligation on the part of another Contracting State to recognise it.

Article 7 of the 2019 Hague convention provides for grounds to refuse or postpone the recognition and enforcement of judgments even though they fall within the scope of the convention and have a relevant ‟jurisdictional filter”. Indeed, article 7(1) allows, but does not make it compulsory for, a court to refuse recognition and enforcement of a judgment obtained by fraud, or which contravenes public policy of the court’s Requested State, or which is not enforceable in the State of Origin, for example. Meanwhile, article 7(2) of the convention provides that a court may refuse or postpone recognition and enforcement of a judgment in a parallel litigation case that is also pending before the courts of the recognising Contracting State (i.e. international ‟lis pendens”).

Documents and procedural rules: the party seeking recognition or enforcement must provide a certified copy of the judgment and a certificate from the court in the State of Origin confirming the judgment’s enforceability. Translations into the language of the Requested State may also be required. The 2019 Hague convention provides that the procedure for recognition and enforcement is governed by the law of the Requested State, but that the court of the Requested State must act ‟expeditiously”. In England and Wales, the procedure for recognition and enforcement is set out in rule 74 of the Civil Procedure Rules. This rule 74 was recently amended to facilitate the implementation of the 2019 Hague convention and the amendments will take effect on 1 July 2025.

To conclude, the ratification of the 2019 Hague convention by the UK is definitely a step in the right direction, to restore English courts as some of the most efficient in the world, and to simplify and expedite the process of recognition and enforcement of judgments between the Contracting States. But this ratification of the 2019 Hague convention only partially addresses the enforcement gap left by the UK’s departure from the EU. In particular, the ending of the applicability of the 2007 Lugano convention, applicable to the states from the ‟European Free Trade Association” (‟EFTA”), i.e. Iceland, Liechtenstein, Norway and Switzerland, remains unaddressed at least for as long as these EFTA states are outside the Hague framework.

So, which dispute resolution process will have the upper hand when the 2019 Hague convention enters into force in England & Wales, between arbitration and litigation? With the adoption of the 2019 Hague convention, and now that the UK and France will both be covered by the convention (two Contracting States whose capital cities, London and Paris, are the two powerhouses of international arbitration), can the application of the 2019 Hague convention have a direct or indirect impact on international arbitration cases? No, since article 2(3) of the 2019 Hague convention provides that ‟this convention shall not apply to arbitration and related proceedings”. But can the 2019 Hague convention be a game-changer in the sense of increasing the attractiveness of litigation at the expense of arbitration in the domain of international commercial disputes? Not really because arbitral awards are still easier to enforce, thanks to the NY Convention, and since commercial parties also value the possibility, afforded by arbitration only, for the parties to choose their own decision-maker. Arbitration also gets higher levels of privacy and confidentiality, allows for a higher-degree of flexibility and can often times be less expensive and time-consuming than going to court. Even if and when the 2019 Hague convention reaches the same number of Contracting States than the NY convention, arbitration would still hold sway over litigation due to these comparative advantages. Moreover, while the 2019 Hague convention does make the movement of court judgments across borders significantly less cumbersome, it is still a far cry from the liberal regime created by the NY convention. Given the 2019 Hague convention’s reliance on ‟jurisdictional filters” to amplify the conditions required for a judgment to be recognised and enforced, there will always be a higher likelihood on average that a court judgment will narrowly fail to satisfy the requirements of the 2019 Hague convention, than it will be for an arbitral award not to successfully pass the enforceability test that is the NY Convention.