UK ratification of cross-border enforcement treaty gives businesses greater certainty

On 27 June, the UK government ratified the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, known as Hague 2019. The government signed Hague 2019 in January, having announced its intention to do so in November 2023. The convention will come into force for the UK on 1 July 2025.

Richard Dickman, commercial disputes expert at Pinsent Masons, said: “The UK’s ratification of Hague 2019 is a very welcome development. When businesses are choosing where to resolve their disputes, they want as much predictability as possible about the enforceability of any resulting judgment. Businesses which wish to use the English courts, but may still harbour concerns about enforcement in the EU after Brexit, will be able to feel more confident once Hague 2019 is in force between the UK and EU.”

Hague 2019 is an international treaty which aims to provide a uniform framework for recognition and enforcement of judgments between contracting states. It requires contracting parties to the convention to recognise and enforce civil and commercial judgments which fall within its scope, according to a set of common rules.

Currently, the UK, in ratifying the convention, has declared that it will extend only to England and Wales. However, this may be amended so as to include other parts of the UK at any time.

The contracting states at present are the EU member states (excluding Denmark) and Ukraine, for whom the convention came into force on 1 September 2023, and Uruguay, for whom it will come into force on 1 October. Several other countries have signed the convention but have not yet ratified it, including the US and Russia.

For the UK, Hague 2019 is particularly significant in light of Brexit. Post-Brexit, some well-established regimes for the cross-border enforcement of judgments between the UK and EU member states, and certain other countries, no longer apply to the UK. A party wishing to enforce a UK judgment in an EU member state under the post-Brexit regime will currently have to navigate that member state’s national laws on the enforcement of foreign judgments, unless it can rely on the Hague Convention of 30 June 2005 on Choice of Court Agreements (Hague 2005). 

However, Hague 2005 has a number of limitations. For instance, it only applies where the court which has given the judgment had been specified by the parties in an exclusive jurisdiction clause. 

Hague 2019 is wider in scope and aims to dovetail with the existing Hague 2005 regime to plug some of the gaps in relation to cross-border enforcement. In particular, Hague 2019 sets out a number of bases on which a court giving a judgment will be regarded as having had jurisdiction over the dispute, so as to make the judgment potentially enforceable under the convention. These include criteria based on the residence of the parties, the subject matter of the proceedings or submission to jurisdiction, as well as non-exclusive jurisdiction clauses.

However, parties will have to wait a little longer before the benefits will be felt in practice. Even once Hague 2019 comes into force for the UK on 1 July 2025, it will only apply to judgments given in proceedings which are commenced at a time when the convention is in force for both the state in which the judgment is given and the state for enforcement. So, for example, a judgment given by an English court will only be potentially enforceable in an EU member state under Hague 2019 where the underlying proceedings are commenced after 1 July 2025.

It is therefore likely to be some years before English judgments are enforced under this regime. 

In addition, once a new state, such as the UK, has ratified Hague 2019, other contracting states have 12 months in which they can give notice that they will not apply the Convention as between themselves and the new state. 

“It is therefore possible that the EU could, during the next 12 months, opt out of applying Hague 2019 in respect of the UK. This would seem surprising, but it will be important to watch for developments in this area,” said Emilie Jones, commercial litigation expert at Pinsent Masons. 

Hague 2019 is also subject to a number of limitations in scope, caveats and exclusions, including a list of grounds on the basis of which recognition or enforcement of a judgment may be refused. 

“It is also important to remember that its remit is limited to enforcement: it does not address the often-related issue of which court has jurisdiction to hear a dispute, which is another area in which there are some uncertainties post-Brexit,” Jones added. 

“The position is not therefore straightforward, and it will be important for businesses to take advice before making any decisions based on Hague 2019 applying. For example, some parties with existing disputes which have not yet become formal litigation may consider waiting until July 2025 to commence proceedings in England, given the potential enforcement benefits. However, such a decision should only be taken after full consideration of, and legal advice on, all the risks, including any limitation issues.  It also remains important to obtain appropriate advice about jurisdiction agreements or other dispute resolution clauses in contracts.” 

It remains to be seen how widespread adoption of Hague 2019 will be globally.