UK Ratifies 2019 Hague Convention

UK Ratifies 2019 Hague Convention

July 15, 2024, Covington Alert

The UK has now ratified the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters ("Hague 2019" or the "Convention"). This is a welcome step towards the cross-border recognition of judgments between the UK and EU member states (amongst other jurisdictions).

What is Hague 2019 and why does it matter?

Hague 2019 provides a uniform framework of common rules that facilitate the recognition and enforcement of judgments in civil and commercial matters between one Contracting State (the 'State of origin') and another Contracting State (the 'requested State'). It therefore has broad reach, although it does exclude, amongst other matters, insolvency, most antitrust claims and arbitration. Contracting States currently include all EU member states (except Denmark) and Ukraine. The USA, Israel, Costa Rica, Russia, Montenegro and North Macedonia have all signed up to the Convention but are yet to ratify it. The Convention is due to enter into force in Uruguay in October 2024.

Under Hague 2019, there are several bases for a judgment to be eligible for recognition and enforcement including: (i) the defendant was habitually resident or had their principal place of business or a branch relevant to the claim in the State of origin at the time proceedings were commenced; (ii) the defendant expressly consented to the jurisdiction of the courts of the State of origin or argued on the merits without contesting jurisdiction; (iii) there is a nexus between the claim and the State of origin (e.g., the agreed place of performance of the contract, applicable law of the contract, the place where the harm occurred in tort or immovable property situated in that Contracting State); and (iv) an agreed choice of Court, other than an exclusive choice of Court (which would be covered by a separate convention - see below)

Importantly, a judgment given in the State of origin will be recognised and enforced in the requested State without a determination of the judgment's merits (subject to limited exceptions such as lack of opportunity for the defendant to defend itself, breach of an exclusive choice of court agreement, fraud or public policy). Exemplary and punitive damages will not be enforced.

What does UK ratification mean and when does Hague 2019 come into force in the UK?

Having signed up to Hague 2019 in January 2024, ratification is the final step before the Convention can come into force within the UK, once twelve months have passed from ratification.

Hague 2019 will come into force in the UK on 1 July 2025. However, the UK government has declared that Hague 2019 shall only enter into force in England and Wales - with the option to include Scotland and Northen Ireland at a later date.

Hague 2019 will only apply to proceedings commenced after the Convention has come into force between the State of origin and the requested State - so proceedings commenced after 1 July 2025 at the earliest for the UK.

What does this mean for you?

The ratification of Hague 2019 is a welcome step towards fluid cross-border recognition of judgments for the UK, and in particular between the UK and EU member states.

The Brussels Recast Regulation regulates the recognition and enforcement of judgments between EU member states. However, since Brexit, this does not apply between the UK and the EU (except to proceedings started before 31 December 2020).

The 2005 Hague Convention does apply between the UK and the EU, but is limited to the enforcement of judgments arising from exclusive choice of court agreements. The wider range of judgments that Hague 2019 applies to will, in particular, be welcomed by those contracting subject to English Court agreements, now including non-exclusive or asymmetrical agreements and others choosing to litigate before the English courts in proceedings involving EU parties.

Once in force, Hague 2019 should simplify the recognition and enforcement of English judgments in other contracting States, reducing costs, increasing predictability and enabling efficient enforcement proceedings internationally.

There are safeguards in place for Contracting States to opt-out of the application of Hague 2019 to other Contracting States. This is most likely to apply to Russia, if it were to ratify the Convention. It would be possible, in principle, though for the EU to declare that Hague 2019 should not apply between EU member states and the UK.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Commercial Litigation practice.

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