EU clarifies negotiating position on choice of law, jurisdiction and enforcement of judgments post-Brexit

Yesterday (29 June) the European Commission published its Position Paper on Judicial Cooperation in Civil and Commercial Matters which outlines its position on the extent to which current EU rules on choice of law, jurisdiction and enforcement of judgments should continue to apply as between the UK and the EU27 post-Brexit. In broad summary, the key points are that:

  • Choices of law and jurisdiction in contracts entered into before the withdrawal date should continue to be given effect in accordance with current rules.
  • Current provisions on jurisdiction (ie those which apply in the absence, or regardless, of contractual choice) should continue to apply to all proceedings instituted before the withdrawal date.
  • Current provisions on the law applicable to contractual and non-contractual obligations (ie those which apply in the absence, or regardless, of contractual choice) should continue to apply to contracts concluded before the withdrawal date, and (regarding non-contractual liability) to events which occurred before the withdrawal date.
  • Current provisions on recognition and enforcement of judgments should continue to govern all judicial decisions given before the withdrawal date.

Commercial parties will 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).

Of course, the fact that an English jurisdiction clause would continue to be respected does not mean that an English judgment given pursuant to the relevant 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). 

So far as the proposals in respect of applicable law are concerned, they in fact give no advantage to the UK. The courts in the EU27 states will be obliged to apply the Rome I and Rome II Regulations post-Brexit to determine the law applicable to any dispute and those Regulations do not distinguish between EU and non EU countries. The effect of the proposals is therefore to seek to impose an obligation on UK courts to continue to apply Rome I and Rome II where that wouldn't 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.

Regardless of whether an agreement is reached with the EU on future arrangements, the UK can choose to accede in its own right to the Hague Convention on Choice of Court Agreements (to which it is already a party by virtue of its EU membership), and it seems likely that it will do so. In that eventuality, judgments given pursuant to an exclusive English jurisdiction clause will be enforced in the E27 (and other Convention states). Even if there is no convention or agreement on these matters, it is likely that English money judgments, at least, will continue to be enforced in the EU27, though the procedure may be more cumbersome than at present.

 

Anna Pertoldi
Anna Pertoldi
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Maura McIntosh
Maura McIntosh
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