Guest post by Natalie Todd, partner at Cooke Young & Keidan and a committee member of the London Solicitors Litigation Association, and Tulsi Bhatia, associate at Cooke Young & Keidan
The UK government has announced that it will join the 2019 Hague Convention on the recognition and enforcement of foreign judgments in civil or commercial matters.
This will provide a framework of uniform rules for the recognition and enforcement of a wide range of judgments between the UK and other contracting parties, which currently include the EU, Ukraine and Uruguay.
It requires contracting parties to recognise and enforce civil and commercial judgments within its scope.
The UK’s accession to the convention will provide predictability, while the procedure to enforce foreign judgments in the UK or UK judgments in other contracting states will become more streamlined and cost-effective. It will provide more certainty, which in turn will foster greater multilateral trade, investment and access to justice.
Parties involved in cross-border transactions will also have more choices when electing dispute resolution provisions in their contracts, since convention applies to judgments arising from asymmetric and non-exclusive ‘choice of court’ agreements.
This can be contrasted with the 2005 Hague Convention, which is restricted to judgments arising from exclusive ‘choice of court’ agreements. Hague 2019 is also wider in scope than the 2005 convention, applying to employment and consumer contracts, for example.
There is scepticism among many who doubt that the convention will become a global enforcement framework for court judgments, similar to the New York Convention, which has over 170 signatories and facilitates recognition and enforcement of arbitral awards.
However, other signatories already include the United States, Israel, Costa Rica, Russia, Montenegro and North Macedonia. If these states were to proceed to ratify the convention as well, that would make UK’s accession even more advantageous for parties involved in cross-border transactions.
Despite joining the convention, parties will still be able to rely on existing domestic law for recognition and enforcements of judgments that don’t fall within its scope. A key provision of Hague 2019 is that the UK can decline to apply the terms of the convention with another contracting state if it were considered to contravene UK policy.
Given that the Lugano Convention provides rules for determining jurisdiction between the UK and EU/EFTA states and Hague 2019 does not contain direct jurisdiction rules, it is important for the UK to continue its efforts to re-join the Lugano Convention.
There are also more grounds to refuse enforcement of judgments under the Hague Convention than under the Lugano Convention, which could mean that enforcement of judgments would be less certain or streamlined under the former.
In contrast, Hague 2019 provides the UK courts with the discretion to refuse a judgment that was made contrary to a ‘choice of court’ agreement between the parties, which the Lugano Convention does not. The uncertainty as to whether the UK will be able to re-join Lugano is further reason for the UK to join Hague 2019 and the UK government has confirmed it will do so as soon as possible.
The convention will enter into force for the UK 12 months after the date it deposits its instrument of ratification, which will take place once all of the necessary implementing legislation and rules have been put in place to facilitate the Hague Convention’s smooth operation in the UK.