On 5 April 2011, the Ministry of Justice confirmed the Government's decision to opt into the European Commission's proposals for the reform of the Brussels Regulations.
The Commission's proposals (published in December 2010) are wide-ranging and potentially hugely significant:
- abolition of 'exequatur', the process by which an enforcing party must have its judgment declared enforceable or registered in the enforcing state, for all but defamation and collective redress cases.
- extension of the grounds on which Member States can assert jurisdiction over non-EU domiciled defendants.
- greater recognition for choice of court agreements, specifically by giving the chosen court authority to decide on its jurisdiction (regardless of whether the Court is first or second seised).
- improvement of the interface between the Regulation and arbitrations, to be achieved primarily with the introduction of a rule that requires court proceedings to be stayed in the event that the proceedings are contested on the grounds that there is an arbitration agreement and an arbitral tribunal has been seised of the case.
While the respondents to the consultation carried out by the Government were overwhelmingly in favour of the Government opting in, concerns were raised in respect of the proposals:
- the abolition of exequatur (particularly in public policy cases) may see an infringement of defendants' rights.
- the extension of jurisdiction under the Brussels Regulations may actually limit the Courts' current ability to assert jurisdiction of defendants not domiciled in a Member State under Part 6 of the CPRs.
- the proposals in respect of carving out arbitration may not go far enough to overcome the problems created by the decision in Allianz SpA v West Tankers Inc (for full details of this decision please Click Here), and still more may need to be done to protect arbitration clauses.
The Ministry has indicated that the Government is fully alive to these issues and will be seeking to refine the proposals.
The Commission has indicated a likely timetable of two to three years to final approval.