Choice of law, jurisdiction and enforcement of judgments post-Brexit: No surprises in EU’s draft withdrawal agreement

So far as choice of law, jurisdiction and enforcement of judgments are concerned, the EU’s draft withdrawal agreement, published last week, is largely consistent with its previously declared negotiating position, as set out in its June 2017 position paper outlined here. (The relevant provisions of the draft withdrawal agreement are summarised at the end of this post.)

An important distinction, however, is that references to the date of the UK’s withdrawal from the EU have been replaced with references to the end of the transition period following the UK’s withdrawal. So, if arrangements for a transition period can be agreed more generally, the existing arrangements relating to choice of law, jurisdiction and enforcement of judgments will continue at least until the end of that period, and beyond in some respects as outlined below.

The draft withdrawal agreement does not reflect the more ambitious terms proposed in the UK’s August 2017 position paper (outlined here) regarding continuation of the current arrangements for enforcement of judgments. Under the EU’s proposals, current enforcement rules would apply only to judgments given before the relevant date (ie the UK’s withdrawal or the end of the transition period); under the UK’s proposals, those rules would apply so long as the proceedings were commenced before the relevant date or the jurisdiction agreement underlying the judgment was entered into before the relevant date. The UK’s proposals would therefore give a much longer tail to the current enforcement rules.

Nor does the draft withdrawal agreement address the question of the future relationship between the UK and the EU in these areas, and the EU’s position on this question remains opaque. Prime Minister Theresa May touched on this question briefly in her speech on Friday (2 March 2018) regarding the UK’s future economic partnership with the European Union, saying the UK would want the agreement to cover civil judicial cooperation, “where the EU has already shown that it can reach agreement with non-member states, such as through the Lugano Convention, although we would want a broader agreement that reflects our unique starting point”.

The UK government’s August 2017 position paper outlined its intentions for the future relationship in a bit more detail, indicating that, in addition to a bespoke agreement with the EU which “closely reflects” current principles, the UK would seek to join the Lugano Convention (which applies between EU member states, Norway, Iceland and Switzerland) and would also participate in the Hague Convention on Choice of Court Agreements 2005 (which currently applies between EU member states, Mexico and Singapore where there is an exclusive choice of court agreement). To join Lugano, the UK would require unanimous agreement of the other contracting states (including the EU), but it can accede to the Hague Convention without any need for consent.

The provisions relating to choice of law, jurisdiction and enforcement of judgments in the EU’s draft withdrawal agreement are, in summary, as follows:

  • Jurisdiction: Current provisions under the Recast Brussels Regulation would continue to apply where proceedings were commenced, or (where jurisdiction is based on the parties’ agreement) the jurisdiction agreement was entered into, before the end of the transition period.
  • Enforcement: As noted above, current provisions under the Recast Brussels Regulation would continue to apply where judgment was given before the end of the transition period.
  • Choice of law: Current provisions under Rome I (for contractual obligations) and Rome II (for non-contractual obligations) would continue to apply to contracts concluded before the end of the transition period (for Rome I) or events giving rise to damage which occurred before the end of the transition period (for Rome II). This is somewhat academic, in any event, given that the UK government intends to incorporate the Rome I and Rome II rules into UK domestic law, and courts in the remaining EU member states will continue to apply these rules (as currently) regardless of whether the applicable law indicated by the rules is that of an EU or non-EU country. It is unclear why the EU has to date not acknowledged (and welcomed) the government’s intention.

Disclaimer

Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.

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