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. Continue reading

Cross-Border Litigation – international perspectives

We are pleased to publish the second issue of our periodic publication “Cross-Border Litigation”, designed to highlight legal and practical issues specific to litigation with an international aspect.

Tapping into the expertise of the firm’s leading commercial litigators across the globe, the publication gives readers the benefit of their hands-on experience and flags key developments that should be on commercial parties’ radars.

The topics covered in this issue include:

  • Highlights of recent developments from across the globe
  • The Singapore International Commercial Court
    Has it lived up to the hype?
  • Cross-border litigation and Brexit
    What we know so far
  • Partner Spotlight on Helmut Görling
    His journey from a police detective to head of our corporate crime team in Frankfurt
  • Using disclosed documents for multiple proceedings
    Recent judgments suggesting a restrictive approach
  • Jurisdiction disputes
    When will the English courts take into account politics, corruption and other obstacles to justice in foreign jurisdictions?
  • India related commercial contracts
    Getting your dispute resolution and governing law clauses right

To download the publication, click here.

To read the previous Issue 1 (March 2017), click here

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

On Tuesday 22 August, the UK Government published a paper 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. The paper, Providing a cross-border civil judicial cooperation framework, responds to the Position Paper on Judicial Cooperation in Civil and Commercial Matters published by the European Commission on 29 June (see our post).

Broadly, other than seeking wider enforcement of judgments, the Government agrees with the Commission’s proposals on the terms of separation, if no agreement on a future relationship can be reached. More interesting, however, are the comments on what that future relationship might look like.

Commercial parties will be pleased to see the Government has taken on board the importance of agreeing reciprocal rules, closely mirroring the current EU system, which will support cross-border trade after Brexit.

Read more of this post on our Brexit notes blog.

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.

For more information see this post on our Brexit Notes blog.

Brexit Blog launches with Brexit Q&A

As formal Brexit negotiations have now started, Herbert Smith Freehills is pleased to announce the launch of its new Brexit Notes blog, where you will find articles and updates on the latest Brexit developments.

As well as reporting on new developments going forward, Brexit Notes has been pre-populated with a selection of articles and posts. You can subscribe to the blog to receive notifications by e-mail as soon as items are posted, or you can visit the site whenever you choose. Continue reading

Financial Markets Test Case pilot scheme to be extended for three years and expanded

The Financial Markets Test Case pilot scheme, which was due to end in September this year, is to be extended for a further three years. The scheme will also be expanded so that it applies to any Financial List claims which raise issues of general importance in relation to which immediately relevant authoritative English law guidance is needed. It will no longer be necessary for claims to raise issues of general importance to the financial markets specifically.

Continue reading

Article published – Choice of law and jurisdiction post-Brexit: business as usual so far?

Recent reports from Parliament have identified the problems and risks that could arise post-Brexit if the current rules on choice of law and jurisdiction no longer apply, and there are no acceptable replacements negotiated. But are clients turning away from English choice of law and jurisdiction clauses as a result?

Anna Pertoldi has published a post on Practical Law’s Dispute Resolution blog which outlines her impression that Brexit has not, to date, led to a general move away from English choice of law and jurisdiction clauses, and considers why that might be the case. Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).

Supreme Court rules approval of Parliament needed to trigger Article 50

In a landmark constitutional law ruling, the Supreme Court today held (by a majority of 8 to 3) that the UK Government cannot trigger Article 50 of the Treaty on the European Union without an Act of Parliament authorising it to do so: R (Miller) v Secretary of State for Exiting the EU [2017] UKSC 5.

The ruling confirms the victory of the claimants, who had been successful last November before a Divisional Court of the High Court. The case was appealed directly to the Supreme Court by the Government, leapfrogging the Court of Appeal, and was heard over four days in December 2016. The constitutional importance of the issue and today’s judgment is accentuated by the fact the appeal was heard by the full bench of eleven Justices. For more information, please see our Brexit e-bulletin published today.

Government loses round one of Brexit legal challenge as High Court rules that the approval of Parliament is required to trigger Article 50

In a landmark constitutional law ruling, the High Court yesterday ruled that the UK Government cannot trigger Article 50 without the approval of Parliament: R (Miller) v Secretary of State for Exiting the EU [2016] EWHC 2768 (Admin).

The ruling is a victory for the claimants who brought the case against the Government’s position that it would trigger Article 50 through the use of the Royal Prerogative. A leapfrog appeal is expected to be heard by the Supreme Court on 7 and 8 December 2016, before a full court in view of the constitutional importance of the issue. For more information on the decision, see our Brexit e-bulletin published yesterday.

For a short practical guide on how Brexit may affect your commercial contracts, see English law contracts post-Brexit: What changes should commercial parties expect? Or for more of the firm’s latest thinking in relation to Brexit, see our Brexit hub page.

Upcoming webinar – International Litigation Update

On Tuesday 18 October (12noon – 1.00pm UK time) we will present the first in a new series of webinars for Herbert Smith Freehills clients and contacts, focussing on the issues that arise in litigating cross border disputes. In this webinar:

  • Larry Shore, a disputes partner in our New York office, will consider ways of obtaining evidence in the US for proceedings in England. Very broad disclosure is potentially available under 28 USC s1782 and Larry will discuss the opportunities and challenges this brings.
  • Gitta Satryani, a disputes senior associate in our Singapore office, will consider the impact made by the Singapore International Commercial Court, launched in January 2015. She will also discuss changes in the rules for enforcement of Singapore judgments since the Hague Convention on Choice of Court Agreements 2005 came into effect on 1 October 2016.
  • Anna Pertoldi, a disputes partner in our London office, will look at  choice of law and jurisdiction post Brexit and the different options available to the UK government in its negotiations with the EU.

The webinar is part of our series of “Soundbite” webinars, which are designed to update clients and contacts on the latest developments without having to leave their desks. The webinars can be accessed “live”, with a facility to send in questions by e-mail, or the archived version can be accessed after the event. If you would like to register for a webinar, or to obtain a link to the archived version, please contact Jane Webber.