Mind the gap: United Kingdom ratifies Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters for England and Wales

Hague 2019 was adopted in The Hague on 2 July 2019. The European Union was its first contracting party. It entered into force in all EU Member States except Denmark on 1 September 2023. Ukraine, Montenegro, Albania and, recently, the UK have also ratified Hague 2019. Several other countries, including the United States, Russia and Israel, have signed Hague 2019 but have not yet ratified it.

Until now, Hague 2019 had limited practical significance (see here). Within the EU, the recognition and enforcement of judgments between EU Member States are primarily governed by the Brussels I Recast Regulation (Regulation [EU] 1215/2012), which simplifies the process for enforcing civil and commercial judgments across EU borders. As a result, the Hague 2019 will not affect the Brussels I Recast Regulation.

Describing Hague 2019 as serious competition for the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards would be presumptuous. Currently, 172 contracting parties have ratified the New York Convention, making arbitral awards (almost) globally enforceable. It remains to be seen whether Hague 2019 catches up a 61-year head start.

Why do we need Hague 2019?

Hague 2019 aims to facilitate the worldwide recognition and enforcement of judgments made by state courts in civil and commercial matters. It allows EU businesses and citizens to have rulings by a court in the EU recognised and enforced in non-EU countries that are also party to the convention. By providing a minimum standard for the circulation of foreign judgments in civil and commercial matters among the countries that are party to the convention, the convention promotes access to justice and facilitates international trade, investment and mobility by reducing the risks and costs of cross-border litigation.

The procedure for recognition and enforcement follows the laws of the requested state. For example, if a judgment is enforceable in the state of origin, it can also be automatically enforced in the requested state if certain criteria are met. The judgment will not to be reviewed in the requested state, as it is automatically recognised if it is valid in the state of origin.

However, certain areas of civil law are excluded from the scope, such as family law, insolvency law, intellectual property disputes and parts of competition law. These exclusions are mainly because the listed matters are already covered by other international instruments, particularly other Hague Conventions.

How does it affect businesses?

Hague 2019 will likely have a significant impact on businesses engaged in international trade and investment. Due to the streamlined process of the Judgments Convention businesses can now more easily enforce judgments obtained in one contracting state in another, thereby reducing the time and costs associated with cross-border litigation.

By creating a consistent framework, the Judgments Convention also minimises legal uncertainty for businesses, as it ensures that companies can be more confident their legal rights will be upheld in foreign jurisdictions.

Why is the UK's ratification important for EU Member States?

After signing its accession for England and Wales last year, the UK has now officially ratified Hague 2019. It enters into force between the UK and any currently contracting states, like the EU, on 1 July 2025. It is important to note that it only applies to proceedings commenced on this date and not to judgments rendered from this date. This marks a significant development in international legal relations post Brexit between the UK and individual EU Member States, including Austria.

The final withdrawal, including new trade and immigration rules, took full effect on 1 January 2021. As a result of Brexit, the Brussels I Regulation no longer applies to the UK. This made enforcing English judgments more challenging in many countries. The Hague Convention of 2005 on Choice of Court Agreements, with its narrow scope of application, was the only international treaty available.

Since Brexit, the recognition and enforcement of judgments between the UK and EU Member States have often been governed by bilateral agreements, such as the 1961 Bilateral Agreement between the UK and Austria. However, this treaty is again limited in scope. For instance, it only applies to the recognition of judgments from "superior courts" and is limited to monetary claims. The various bilateral agreements often led to complexity, legal uncertainty and additional costs for businesses and individuals involved in cross-border disputes.

With the UK's ratification of Hague 2019 for England and Wales, this situation is set to change fundamentally. Companies and the key dispute hub of London will once again benefit from a more streamlined and standardised process for the recognition and enforcement of judgments – an essential development in the post-Brexit legal landscape. This ratification reduces reliance on bilateral agreements and helps mitigate the complexities and uncertainties that arose after Brexit.

Overall, Hague 2019 enhances the legal framework for international business operations, providing greater predictability, efficiency and protection for businesses involved in cross-border court proceedings for all proceedings that commenced after its entry into force.

authors: Sara Khalil, Charlotte Quistorp