Speed Read

In a welcome development for commercial parties engaged in cross-border civil litigation, the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the Hague Judgments Convention / HJC) entered into force on 1 September 2023.

In short, the HJC expands upon the 2005 Hague Convention – whereas the latter deals with choice of court agreements, the HJC now provides a much more predictable set of rules for the enforcement of foreign judgments in the absence of exclusive jurisdiction clauses. By providing greater transparency as to where a specific judgment will be recognised and enforced, the HJC should allow litigants to make more informed decisions on where to initiate proceedings. In brief, the HJC provides that courts of contracting states can only refuse to recognise or enforce a judgment on the limited grounds expressly set out in the HJC, such as where the judgment was obtained by fraud or is contrary to public policy. As a result, it should provide greater legal certainty and predictability to parties engaging in cross-borders transactions and disputes. See our previous briefing here. The entry into force of the HJC comes one year after its ratification by the European Union[1] (EU) and Ukraine. While its practical benefits remain somewhat limited for now, we provide a short update in this briefing on how the HJC has been now implemented in Ireland; who else has signed up to date; and some signals that the UK may perhaps be one of the next signatories.

Irish implementation

The HJC has been given Irish law effect from 1 September 2023 through the European Union (Hague Judgments Convention) Regulations 2023 (S.I. No. 434/2023) (the Regulations). According to the explanatory note accompanying the Regulations, their purpose is to ensure that the HJC “has an appropriate “fit” in the Irish system” as it is recognised that the HJC “seeks to provide predictability and certainty in relation to the global circulation of foreign judgments, and is complementary to the [2005 Hague Convention].” Most notably, the Regulations grant exclusive jurisdiction to the Master of the Irish High Court in assessing applications under the HJC for the recognition or enforcement of relevant judgments in Ireland.

Who else has signed up?

Alongside the EU and Ukraine, the HJC has to date been signed by 7 other countries – i.e. the United States, Israel, Russia, Costa Rica, Uruguay, Montenegro and North Macedonia. However, the only other country which has taking the further step of ratifying it is Uruguay, where it will enter into force from 1 October 2024.

It remains to be seen how many non-EU contracting states will sign and ratify the HJC. It is hoped that both the commencement of the HJC and Uruguay’s recent ratification of it will encourage states which have already signed it to take the next step and ratify it as well as embolden other states to contract to it.

What’s happening in the UK?

Enforcing foreign judgments has become notably more complex for the UK since its departure from the EU and its application to re-join the Lugano Convention was rejected by the European Commission.

Since 1 January 2021, the UK has not been able to rely on private international law instruments such as Brussels 1 Recast Regulation (Brussels Recast), or the Lugano Convention and has solely depended on its membership of the 2005 Hague Convention. However, the types of cases the 2005 Hague Convention applies to are narrower than those covered by Brussels Recast and the Lugano Convention. It also does not permit the enforcement of judgments which lack exclusive jurisdiction clauses in the same way that the HJC would.

Realising the need for a simplified and expansive process for mutual recognition and enforcement of judgments, the UK government initiated an open consultation on 15 December 2022 on the merits of acceding to the HJC. The consultation closed on 9 February 2023, and it is expected that the UK Ministry of Justice will publish its recommendations later this year. The consultation primarily focused on whether the HJC would provide (i) a useful framework for the recognition and enforcement of judgments which do not engage the 2005 Hague Convention and (ii) a satisfactory alternative to the mechanism under the Lugano Convention 2007 which is currently unavailable to the UK.

It is generally recognised that the HJC will not be a perfect substitute for pre-existing regimes such as Brussels Recast and the Lugano Convention. Nevertheless, if the UK government were to accede to the HJC and implement it into domestic law, it would go some way to alleviating the uncertainty that has arisen since Brexit in relation to the recognition and enforcement of civil and commercial UK judgments in foreign jurisdictions, and in turn foreign civil and commercial judgments in the UK.

If the UK commits to signing and ratifying the HJC, its impact won’t be seen immediately. It would only enter into force twelve months after the UK deposits its instrument of ratification. Nevertheless, it would in time address a number of legal issues that arise when EU citizens and businesses seek to enforce a national judgment in the UK.

Key takeaways

  • The HJC entered into force on 1 September 2023. It provides a set of uniform rules for all contracting states for the recognition and enforcement of civil and commercial foreign judgments. Its effect will be particularly visible where contractual disputes lack exclusive jurisdiction clauses.
  • At present, the HJC only applies between the EU and Ukraine. On 1 September 2023, Uruguay deposited its instrument of ratification. Accordingly, the HJC will enter into force for Uruguay on 1 October 2024. A number of other states have signed the HJC but haven’t yet ratified it.
  • In Ireland, the HJC has been given legal effect by the European Union (Hague Judgments Convention) Regulations 2023. The Regulations grant exclusive jurisdiction to the Master of the Irish High Court in assessing applications under the HJC for the recognition or enforcement of relevant judgments in Ireland.
  • The UK launched a two-month consultation on whether the UK should join the HJC. The consultation has now ended and a decision from the UK government on signing up is expected later this year.

Thanks to Coilin Flynn for his assistance in preparing this piece.

For more information, please contact Katie O’Connor, Partner, Linda Collins, Associate, Darragh Muldoon, Solicitor, Rachel Kemp, Knowledge Lawyer or your usual A&L Goodbody Disputes and Investigations team contact.

[1] Denmark does not partake in measures relating to freedom, security and justice.