The Convention on Recognition and Enforcement of Judgments 2019 reintroduces protection for non-exclusive jurisdiction clauses in English law documents, allowing court judgments for disputes from 1 July 2025 to be recognised and enforced in its contracting states.
A non-exclusive jurisdiction clause gives flexibility to the parties to an agreement to choose the most appropriate court to start proceedings when a dispute arises. Hague 2019 will allow recognition and enforcement of judgments without re-examination of the merits under a non-exclusive jurisdiction clause in the EU and its members states (except Denmark), Ukraine, Uruguay, and from 1 July 2025 in the UK (England, Wales, Scotland and Northern Ireland), followed by Albania, Andorra and Montenegro in 2026.
Since the end of the Brexit transition period on 1 January 2021, finance and industry documents have tended to be drafted with an exclusive jurisdiction clause, where the parties choose which court should hear any disputes. This intended to allow enforcement of judgments between in the courts of the UK, EU member states, and certain other contracting states, under the Hague Convention on Choice of Court Agreements 2005 (Hague 2005). However, this does not give lenders and finance parties the same flexibility as a non-exclusive jurisdiction clause would.
Hague 2019 covers civil and commercial matters only, not criminal and administrative or revenue disputes. It also excludes judgments in some areas including insolvency, carriage of passengers and goods, intellectual property, anti-trust and competition, sovereign debt restructuring, as well as family and personal matters, defamation, privacy and arbitration.
There are a few situations where a court in another jurisdiction can refuse enforcement or suspend proceedings, eg, due to public policy, fraud and procedural unfairness, or where proceedings have been started in a court contrary to the terms of an agreement on choice of court.
Lenders and finance parties have often favoured "asymmetric jurisdiction" clauses, allowing the parties to choose the court for disputes, agreeing it is a convenient forum, yet still allowing the lender and finance parties access to another court with jurisdiction. Hague 2019 will bring back more flexibility to English law financial markets documentation, and we may see a return to asymmetric jurisdiction clauses as the norm again where parties or assets in contracting states are involved.
If you’d like to discuss Hague 2019 in more detail or have any questions, please contact Jacqueline Cook or Mark Davison.
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