Jurisdiction agreements and enforcement of judgments
The EU has submitted to the global regime on jurisdiction and enforcement contained in the2005 Hague Convention on Choice of Court Agreements (the "2005 Hague Convention"). Like every other EU Member State, except Denmark, the UK is currently subject to the 2005 Hague Convention by virtue of its membership of the EU. When the UK comes to leave the EU, it will undoubtedly accede to the 2005 Hague Convention as an independent contracting state. The UK's ability to do so is not dependent on the consent or cooperation of the EU.
The 2005 Hague Convention should guarantee that exclusive jurisdiction clauses in favour of UK courts will continue to be respected in the EU in most civil or commercial disputes of an international nature, and that UK judgments can be enforced in the EU with relative ease, whatever the outcome of the negotiations with the EU (Articles 5 and 6). However, this will depend in practice on the approach of courts in the EU to the interrelation between Hague, EU and national jurisdiction rules. The 2005 Hague Convention is untested in this respect.
It is also worth bearing in mind that both EU and Hague rules on jurisdiction agreements and the enforcement of judgments are subject to exceptions and have a defined scope. The EU rules are, for example, unclear as to the validity of asymmetric (i.e. one-sided) jurisdiction clauses and the 2005 Hague Convention does not generally support them. The EU rules do not recognise all jurisdiction agreements entered into in employment, consumer or insurance contracts. These are mostly outside the scope of the 2005 Hague Convention as it operates in the EU.
Both EU and Hague rules are limited to disputes in civil and commercial matters, with a number of specific exceptions in addition to those just mentioned. The Hague rules are also limited to jurisdiction agreements concluded on or after the 2005 Hague Convention came into force in the country where the chosen court is located (Article 16(1)). Therefore, if the UK is no longer subject to any EU rules at all following Brexit, it may be appropriate, depending on the circumstances and in the interests of greater certainty, to revisit jurisdiction agreements which pre-date Brexit. We can advise on whether, and when, this should be done.
In most cases the question of service is likely to be a non-issue. In English commercial contracts, parties often allow for service on an agent within the jurisdiction (CPR 6.11). Where it is necessary to serve proceedings across national borders within the EU, theService Regulation (EC 1393/2007)currently has to be used, but it does not make service particularly quick or easy. In future, parties' legal representatives will use the 1965 Hague Service Convention instead, following broadly similar procedures.
It is, of course, worth noting that a London-seated arbitration agreement will continue to be subject to not only the supervision of the English courts but also the enforcement regime under the 1958 New York Convention. As all EU Member States are parties to the 1958 Convention, London-seated awards would continue to be recognised and enforced across the EU, regardless of Brexit.
Further, the choice of London as the seat of arbitration often goes hand in hand with the choice of English law as the governing law. For many commercial parties, choice of English law, and in particular, English contract law, will be largely unaffected by the prospect of Brexit. There is therefore no reason why London should not continue to be a premier arbitration destination outside of the EU in the same way as other premier arbitration markets such as Zurich, Hong Kong and Singapore.