Hague Judgments Convention to enter into force from 1 September 2023

Speed Read 

The Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (concluded 2 July 2019) (the Hague Judgments Convention / HJC) will come into force on 1 September 2023. The HJC will provide greater legal certainty in ensuring the enforcement of judgments between contracting states. At present, the contracting states are the European Union (except Denmark1) (EU) and Ukraine. 

The HJC is an international treaty, which establishes a uniform set of rules for all contracting states on the recognition and enforcement of foreign judgments in civil and commercial matters. It is intended to complement and expand upon the 2005 Hague Convention on Choice of Court Agreements (the 2005 Hague Convention). 

Background

On 29 August 2022, Ukraine ratified the HJC. On the same date, the EU also deposited its instrument of accession, thus triggering the HJC coming into force. 

In July 2022, the European Council consented to the accession of the EU to the HJC. Accession became effective when the EU deposited its instrument of accession to the HJC on 29 August. 

Overview of the HJC

A broad range of judgments rendered in one contracting state will be enforceable in another contracting state, without a review of the merits of the judgment2.  Through this judicial co-operation, it is hoped that the HJC will provide greater legal certainty and predictability to businesses involved in international trade.

In order to recognise and enforce a judgment, a court in a contracting state must be satisfied of one of the jurisdictional requirements laid out in Article 5 of the HJC, for example:-

i.    that the person against whom recognition or enforcement is sought was habitually resident in the State of origin at the time that person became a party to the proceedings in the court of origin; or 
ii.    the defendant expressly consented to the jurisdiction of the court of origin in the course of the proceedings in which the judgment was given.

However, while a contracting state is required to recognise and enforce a judgment that is enforceable on its face under the HJC, under Article 7 of the HJC the scope of judgments covered by the HJC is limited by the exclusions contained within Articles 1 and 23 .  In addition, a court can refuse to recognise or enforce a judgment for the following reasons:- 

  1. lack of due process;
  2. the judgment is contrary to public policy;
  3. the judgment is obtained by fraud; and 
  4. inconsistent judgments. 

Awaiting the UK's next move

A number of legal issues arise when EU citizens and businesses seek to enforce a national judgment in a non-EU country. In particular, the withdrawal of the UK from the EU resulting in the cessation of the application of the Brussels Recast Regulations and the Lugano Convention has created a vacuum as to the rules that govern the recognition and enforcement of English judgments in the EU and vice versa. The UK maintains the benefit of the 2005 Hague Convention where appropriate, however, this is limited to judgments based on exclusive jurisdiction clauses in favour of a contracting state. 

The HJC significantly expands the scope of the 2005 Hague Convention and has the potential to substitute the complicated dynamics that emerged post-Brexit with what is hoped to be a more straightforward mechanism for enforcing English judgments. 

The EU Commission has stated that 'the Hague Conventions should provide the framework for future cooperation between the EU and the UK in the field of civil judicial cooperation'. It is therefore anticipated that the UK might accede to the HJC in order to simplify the process of mutual judgment enforcement between the UK and EU, thus, assigning the HJC a significant role in facilitating mutual enforcement of judgments in the longer term. 

Ripple effect?

The HJC has been signed by five other states, namely, Costa Rica, Israel, Russia, the United States and Uruguay, however, the HJC is subject to their ratification before these states also become contracting states. It will be interesting to see whether Ukraine's recent move emboldens any new joiners before the HJC takes force on 1 September 2023. In particular, given that the United States signed the HJC in March 2022, should they follow in Ukraine's footsteps and ratify the HJC, this will likely influence other countries' decisions to sign and ratify the HJC. 

Effectiveness in achieving goals

It is worth bearing in mind however, that any new joiner must wait 12 months after acceding to or ratifying the HJC before it takes force. As it stands, the level of buy-in from non-contracting states remains to be seen and even if states commit, the output will not be seen for a number of years. Furthermore, Article 16 provides for a transitional period whereby the HJC applies only if 'at the time the proceedings were instituted in the State of origin, the HJC had effect between that State and the requested State'. It might therefore be some time before the real impact of the HJC can be seen. However, it is worth noting that the 2005 Hague Convention took ten years to enter into force, in contrast with which the HJC has already progressed significantly faster and brings with it optimism for substantial engagement with non EU contracting states. 

Key takeaways

  • The HJC will come into force on 1 September 2023 and will establish a set of uniform rules for all contracting states on the recognition and enforcement of foreign judgments. At the moment, this will regulate the relationship between the EU and Ukraine only.
     
  • A number of states, including the United States have signed the HJC but have yet to  accede to or ratify it;
     
  • The UK are yet to sign or ratify the HJC. Should this happen, it is hoped that it would be a significant step towards developing judicial cooperation between the UK and the EU in the post-Brexit environment.

 

Thanks to Darragh Muldoon, Emma Murray and Eve O'Sullivan for their assistance in preparing this piece.

For more information, please contact Sarah Murphy, partner, Linda Collins, associate, Orla Clayton, Knowledge lawyer or your usual A&L Goodbody Disputes and Investigations team contact.

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  1. [1] Denmark does not partake in measures relating to freedom, movement and justice.
  2. [2] Article 4 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.
  3. [3] The HJC excludes revenue, customs and administrative matters encroach on more specialised subject areas such as family law , defamation and anti-trust, nor does it apply to arbitration or interim matters.

Date published: 25 October 2022