The accession and successful implementation of the Hague Convention of 2 July 2019 on the Recognition and Enforcement of foreign judgments in civil or commercial matters (the Hague Convention 2019 or the Convention) between the European Union member states (excluding Denmark) and Ukraine on 1 September 2023, signals the commencement of the establishment of a potentially international framework on the cross-border recognition and enforcement of court judgments as other states embark on the same direction.
Introduction
The aim of the Hague Convention 2019 is to generate a common legal outline about the reciprocated recognition and enforceability of foreign judgements in civil and commercial matters between the contracting states where judicial cooperation and legal certainty in cross-border commercial relations will be stimulated.
The Convention is currently fully effective between the EU Member States (excluding Denmark), Ukraine and Uruguay and will come into force in the UK as well, on 1 July 2025. Other countries, among which are the Russian Federation, USA, and Israel, have signed but not ratified the international treaty yet.
Background
Plethora of bilateral and multilateral international treaties regulates and navigates the enforcement and recognition of judgements between the contracting states. Prominent instruments are the Lugano Convention 2007 and the Recast Brussels I Regulation 2012, both of which provide an extensive regulatory framework for the recognition and enforcement of civil and commercial judgments between the EU member states, Denmark and the European Free Trade Association (EFTA) states and the EU member states and Denmark respectively. Nevertheless, both are established and enforced within geographically and geopolitically limited borderlines.
The longstanding efforts of the Hague Judgments Project intended to create a world-wide mechanism of transborder recognition and enforcement of foreign court rulings in civil and commercial matters. The adoption of the 2005 Hague Choice of Court Convention (the Hague Convention 2005) indicated the primary step towards that goal. However, the scope of the Hague Convention 2005 is only effective to an exclusive choice of court agreements. Hence, the objective of the Hague Convention 2019 is to compliment the Hague Convention 2005 and fill some of the gaps providing a wider scope in the cross-border enforcement.
Scope of the Hague Convention 2019
In the absence of other international treaties, the enforcement of a foreign judgment is subject to the provisions of the national law of the jurisdiction of foreign state requested to recognise the ruling; a procedure often vague, time-consuming with unpredictable outcomes. The Hague Convention 2019 endeavours to limit that uncertainty.
Primarily, the convention is applicable exclusively to judgments on the merits given in civil and commercial matters, including relevant judicial settlements whilst specific matters are defined restrictively as exclusions from its scope. For instance, matters relevant to intellectual property, anti-trust and arbitration proceedings as well as interim measures are omitted. Particularly, the requested state cannot review the merits of the judgment sought to be recognised however it reserves the right to refuse the enforcement of a foreign judgment on the grounds that, inter alia, the judgment was obtained by fraud, or the enforcement of such judgment could violate the public policy of the requested state. Moreover, a civil or commercial judgment, to be eligible for recognition and enforcement, needs to be evaluated based on the criteria mentioned in the treaty, among which are, inter alia, the residency of the person, against whom the judgment is sought to be enforced, to be in the state of origin at the material time of the proceedings and the defendant’s expressed consent to the jurisdiction of the court of origin.
The Convention lays specific grounds on which the courts of the requested states could deny recognition of a judgment held by court of a contracting state. For instance, the court of the requested state might refuse or postpone the recognition on the grounds that the judgment is subject to review in the state or origin or the limitation time has not yet been expired. In addition, it is noteworthy that a foreign judgment can only be enforced if it has effect in the state of origin and it is enforceable in the requested state.
As the treaty aims to be ratified by diverse legal systems, it offers some power to contracting parties to declare limitations to its scope of application. The contracting states can limit its scope by excluding certain matters, as the EU has already done by limiting the enforceability of the convention’s scope to exclude non-residential leases (tenancies) of immovable property situated in the EU.
Furthermore, all the contracting states, which have acceded to the Convention, once they are notified that a new state has issued instruments of ratifications of the treaty, reserve the right to declare that they do not wish to establish relations with the new contracting state pursuant to the Convention within 12 months of the date of the aforementioned notification.
UK’s ratification of the Hague Convention 2019
The UK’s exit for the EU resulted to the lack of legal framework with regards to the enforcement of judgments specifically between to the member states of EU and UK, especially since the Lugano Convention 2007 and the Brussels
The UK’s exit for the EU resulted to the lack of legal framework with regards to the enforcement of judgments specifically between to the member states of EU and UK, especially since the Lugano Convention 2007 and the Brussels Recast I are no longer effective between these states. Currently, the only in-force multilateral international treaty between the UK and the member states of EU is the Hague Convention 2005 which has very limited scope. Therefore, in case the Convention is not applicable, parties wishing to enforce a UK court ruling in an EU member state and vice versa need to navigate through the national legislation on the enforcement of foreign judgements of that state.
The Hague Convention 2019 will enter into force on 1 July 2025 in the UK narrowing the gap created post-Brexit. Nonetheless, the provisions of the Convention are only applicable to proceedings that are commenced after the convention comes into force to both states, the requested state and the state of origin. Thus, businesses and parties who intend to enforce eventually a UK judgment to an EU member state should choose the appropriate legal basis on which they could proceed with the enforcement of the foreign judgment as the material time of the proceedings is of crucial importance. It should not be forgotten though, that EU member states as well as other contracting states could opt-out of applying the Hague Convention 2019 in respect of the UK.
Conclusion
The aspiration of the Hague Convention 2019 is to facilitate a universal reciprocated recognition and enforcement process of civil and commercial judgments. A predictable, reliable and regulated enforcement mechanism will boost international trade and world-wide business relations forming an international framework of reassurance and certainty to businesses and parties wishing to enforce court rulings to the jurisdictions of the contracting states. All in all, the treaty has great advantages, however its magnitude depends strictly on the number of its contracting states as the convention needs to be widely adopted and ratified to fulfil its purpose.
By Antrea Drousiotou
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