EU: let the negotiations begin
All cross-border civil legal matters started before Brexit should continue to operate under EU law after the UK leaves the union, the European Commission has proposed.
However, it has left the question of what should happen to matters that post-date Brexit up for negotiation.
The commission last week published a position paper outlining its essential principles on ongoing judicial cooperation in civil and commercial matters that will be presented to the UK as part of the article 50 negotiations.
It began: “The withdrawal agreement should ensure that the relevant provisions of union law on jurisdiction, recognition and enforcement applicable on the withdrawal date continue to govern judicial proceedings and procedures in civil and commercial matters pending on the withdrawal date.
“The relevant provisions of union law applicable on the withdrawal date should continue to apply to choices of forum and choices of law made prior the withdrawal date.
“Judicial cooperation procedures that are ongoing on the withdrawal date should continue to be governed by the relevant provisions of union law applicable on the withdrawal date.”
A commentary published by City firm Herbert Smith Freehills said commercial parties would be “comforted by the EU’s apparent willingness to continue to give effect to jurisdiction clauses in contracts entered into pre-Brexit – which would mean (assuming these matters are agreed) that the EU27 would, post-Brexit, continue to respect an exclusive English jurisdiction clause entered into pre-Brexit (and vice versa)”.
But it pointed out that the fact an English jurisdiction clause would continue to be respected did not mean that an English judgment given pursuant to that agreement would necessarily continue to be enforced across the EU post-Brexit.
“Under the EU’s position paper, that would not be guaranteed where the judgment was given after the withdrawal date (even if the contract was entered into and proceedings were started before that date).”
In relation to applicable law, HSF said the proposals sought to impose an obligation on UK courts to continue to apply Rome I and Rome II – the conventions which resolve conflicts of laws governing contractual and non-contractual obligations – where that would not otherwise be the case.
“That isn’t likely to be a particularly controversial concession for the UK government to make, but the fact a concession would be involved is not transparent from the proposals.”
“The position paper is silent as to the EU’s position on what, if any, agreement should be reached in respect of choice of law, jurisdiction and enforcement of judgments once the current provisions cease to apply – so, for example, whether English judgments given after the withdrawal date should continue to be enforced by the EU27 on similar terms to the current provisions. That will also be a matter for negotiation.”
HSF said that regardless of whether an agreement was reached with the EU on future arrangements, the UK could choose to accede in its own right to the Hague Convention on Choice of Court Agreements – to which it is currently a party by virtue of EU membership – “and it seems likely that it will do so”.
This would mean that judgments given pursuant to an exclusive English jurisdiction clause will be enforced in the EU, “though the procedure may be more cumbersome than at present”.
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