Choice Of Law And Enforcement Of Judgments In Northern Ireland: Post Brexit

• Published date: 24 March 2021
• Subject Matter: Government, Public Sector, International Law, Constitutional & Administrative Law, International Trade & Investment
• Law Firm: Cleaver Fulton Rankin
• Author: Mr Peter Moorhead

Following the UK's withdrawal from the European Union (EU) in late January 2020, the UK Government and the EU Commission finally agreed the Trade and Co-operation Agreement (the "TCA") on 24 December 2020.

The TCA is designed to govern the UK -EU trading relationship and it encompasses wide-ranging areas from trade in goods and in services to social security coordination, energy and fisheries. However, the TCA has not addressed the areas of jurisdiction and enforcement of judgments.

As such, the Recast Brussels Regulation which regulates jurisdiction and the recognition and enforcement of judgments between EU member states no longer applies. In addition, the European Enforcement Order Regulation has also fallen away and we must look beyond the TCA for a solution. Fortunately, the UK has acceded to The Hague Convention 2005 (the "2005 Convention") on Choice of Court Agreements from 1 January 2021, which the EU originally acceded to in 2015. This presents a solution to the uncertainty arising from the TCA's failure to address this area.

Exclusive Choice of Court Agreements

Where parties wish to contract they may consider giving effect to an exclusive choice of court agreement. In summary, the 2005 Hague Convention requires a court which is not the chosen court to suspend or dismiss proceedings to which an exclusive choice of court agreement applies. Furthermore, a judgment obtained in a state that has acceded to the 2005 Convention will be recognised and enforced in other states that have acceded to the Convention.

Nevertheless, the difficulty will still arise for parties as the Convention only applies to exclusive choice of court agreements. Whilst there is much discussion on this topic, prospective contracting parties should avoid confusion in this area by appointing only one court with exclusive jurisdiction.

This is a significant departure from the norm for Lenders, who usually rely on the asymmetric jurisdiction clause which provides the Lender with the possibility of taking proceedings in any jurisdiction. However, as per the Explanatory Report on the Hague Convention 2005, such asymmetric jurisdiction clauses are not regarded as exclusive for the purposes of the 2005 Convention.¹

In the absence of further action by the UK government to address this uncertainty, such institutions should consider the standard exclusive choice of court clauses.

Enforcement of Judgments Orders (EEO)

As already highlighted, the EEO Regulation has fallen away for the UK...