This note considers:
- enforcing English court money judgments in Ireland post-Brexit under the Hague Convention on Choice of Court Agreements or under Irish common law; and
- how to frame jurisdiction clauses in finance documents to promote enforcement of your English court money judgment in Ireland.
After the UK's exit from the EU became fully effective on 31 December 2020, English court money judgments are no longer enforceable in Ireland under the EU-wide Recast Brussels Regulation regime. Instead, those judgments are now only enforceable in Ireland under a treaty to which both the EU (including Ireland) and the UK are party, namely the Hague Convention on Choice of Court Agreements (the Hague Convention) or under Irish common law.
The Hague Convention
The main benefit to a creditor of enforcing a judgment in Ireland under the Hague Convention is that the Irish courts will, subject to exceptions, enforce that judgment through a cost-efficient and speedy process and without re-examining the underlying dispute.
The Hague Convention is in force in all EU member states, the UK, Mexico and Singapore. In order for the Hague Convention to apply:
- the jurisdiction clause must be exclusive (this means mutually exclusive for all parties – which rules out "asymmetric" jurisdiction clauses of the type discussed further below);
- the jurisdiction clause must be in an agreement entered after the Hague Convention came into force for the UK. There is a debate whether this happened on 1 October 2015, when the EU's ratification of the Hague Convention brought it into force "for" the UK, or whether this happened on 1 January 2021 when the UK's post-Brexit solo ratification for the UK of the Hague Convention took effect. The EU Commission's view is that it is 1 January 2021 – and the Irish courts may take that view as well; and
- the judgment of the relevant court must be final. Interim measures (e.g. pre-trial asset-freezing orders) are outside the Hague Convention.
Irish common law
If the Hague Convention does not apply, the enforceability of an English judgment will be determined under Irish common law. This involves the making of an application to the Irish court for summary judgment. The application is not a retrial of the merits of the case, but a new procedural application and therefore a more lengthy process than Hague Convention enforcement. In order for a foreign judgment to be enforceable under Irish common law, it must be:
- for a definite sum;
- final and conclusive; and
- given by a court of competent jurisdiction under Irish conflict of law rules. For this purpose, in contrast to the Hague Convention, Irish common law will (other factors being equal) recognise the English courts as having jurisdiction over an Irish obligor even if the English courts took jurisdiction under an asymmetric jurisdiction clause of the type explained further below.
The Irish courts can also refuse to enforce English judgments under Irish common law if the application was not brought within the Irish limitation period (typically six years), or if the judgment:
- was procured by fraud;
- is contrary to Irish public policy; or
- is inconsistent with an earlier judgment in respect of the same cause of action.
Asymmetric jurisdiction clauses in English law transactions with Irish obligors
Asymmetric jurisdiction clauses are common in international finance transactions. In this context, the parties agree the courts of one jurisdiction (e.g. the English courts) will have exclusive jurisdiction to settle all disputes related to the finance documents. However, they also agree that the financiers can instead bring proceedings against the obligors in the courts of any other state that has jurisdiction. This is distinct from a mutual exclusive jurisdiction clause, which binds all parties without exception to the exclusive jurisdiction of the courts of a single jurisdiction.
Post-Brexit, parties to English law financings with Irish obligors need to consider carefully whether to use asymmetric or mutual exclusive jurisdiction clauses.
While a mutual exclusive jurisdiction clause can give the parties the benefits of a relatively simple and rapid enforcement procedure in Ireland under the Hague Convention, for some transactions this should be balanced against the flexibility afforded by asymmetric clauses.
It may be more beneficial, for example, to include an asymmetric jurisdiction clause in a finance lease into Ireland of a movable asset. This may enable the lessor to apply for pre-trial/interim orders in the jurisdiction where the asset is located from time to time to ground or immobilise the asset – something which is not possible under the Hague Convention, which does not apply to pre-trial/interim orders.
In contrast, where all the obligors are located in Ireland, it may be preferable to include a mutual exclusive jurisdiction clause in an LMA-style loan agreement with an embedded guarantee. This would mean that money judgments against the Irish obligors could be obtained in the English courts and enforced relatively rapidly in Ireland under the Hague Convention.