The Brussels I Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, has been recast and the recast version will apply to court proceedings issued in the EU on or after 10 January 2015.
What's the issue?
The Brussels I Regulation sets out the rules which apply on jurisdiction of courts in disputes involving links to more than one EU Member State. It was introduced in 2001 but was felt to be in need of updating and reform. Changes were finalised in 2012, and have now come into force.
What's the development?
The Brussels I Regulation has been recast (the Recast Regulation), bringing in some significant changes to the previous regime which will apply to court proceedings issued in the EU on or after 10 January 2015. The Recast Regulation applies to determine jurisdiction between the courts in Member States. The general default position is unchanged in that a defendant should be sued in his country of domicile, subject to exceptions and alternative grounds on which the court can take jurisdiction.
There have, however, been changes to the enforceability of jurisdiction clauses, relations with courts in third states and to arbitration. Key changes include:
- Member State courts will now also have jurisdiction under the Recast Regulation if nominated in a jurisdiction agreement, even if none of the parties is domiciled in the EU. In this situation, provided the jurisdiction clause is valid under Member State law (and if it is non-exclusive, that proceedings have not been issued elsewhere), there will be no requirement to apply for permission to serve outside the jurisdiction. Previously, the position was that at least one of the parties to the dispute had to be EU domiciled;
- proceedings may also be served outside the jurisdiction without permission where:
- an employer defendant is domiciled outside the EU but the employee claimant habitually works in a Member State, even if the employer has no branch or establishment in it;
- proceedings are against a non-EU domiciled counterparty to a consumer contract who pursues or directs commercial or professional activities to the Member State of the consumer's domicile, even if there is no branch, agency or other establishment;
- an EU court nominated by the parties will have priority over another EU court where proceedings have been issued first in breach of that agreement;
- EU courts have a discretion, in certain circumstances, to stay proceedings, where identical or related actions have been brought first in a non-EU court;
- the enforcement and recognition of judgments of Member State courts in other Member States has been simplified; and
- efforts have been made to strengthen and clarify the arbitration exclusion, although uncertainties still exist.
What does this mean for you?
Despite the need for further clarification in some areas, overall, the Recast Regulation does much to ensure that valid jurisdiction clauses, both exclusive and non-exclusive, will be given due effect in EU courts.