Good news for those seeking to enforce foreign judgments – the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments has been ratified by the UK.
In July 2019, the Hague Convention adopted the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “Judgments Convention”).
The aim of the Judgments Convention is to create a more simplified framework for the recognition and enforcement of civil and commercial court judgments in other contracting states and in doing so reduce costs and increase certainty for litigants. The Judgments Convention was ratified by the UK on 27 June 2024 and comes into force on 1 July 2025.
The enactment of the Judgments Convention will not only enhance the ability of litigants to enforce judgments of the courts of England and Wales in other contracting states, but will also aid those looking to enforce foreign judgments against parties located here.
What is the scope of the Judgments Convention?
The Judgments Convention applies to most, but not all, civil and commercial matters. Certain matters are excluded, including intellectual property disputes, privacy and defamation, and insolvency matters.
Furthermore, the Judgments Convention does not apply to awards made in arbitration proceedings. Parties will need to continue to rely on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 or, in a more limited number of cases, the Geneva Convention on the Execution of Foreign Arbitral Awards 1927.
The Judgments Convention applies to both money and non-money judgments.
Recognition of a foreign judgment in another contracting state will not be automatic. The Judgments Convention contains a number of factors that will be taken into account by the court of the Requested State (i.e. the country in which the party is seeking to enforce the foreign judgment) to determine if the judgment is eligible for recognition and enforcement.
These include whether the defendant was habitually resident in the State of Origin (i.e. the country where the judgment was entered) at the time that person became a party to the proceedings and the defendant expressly consented to the jurisdiction of the court of the State of Origin.
Even if the Judgments Convention does apply, it remains open to the court of the Requested State to refuse to recognise and enforce the judgment of the State of Origin.
For example, if the defendant did not receive proper notice of the proceedings, the judgment was obtained by fraud, or on public policy grounds.
The Judgments Convention does not state that the court of the Requested State must decline recognition or enforcement on these grounds, merely that the court may do so. Ultimately, it is a decision for the judge sitting in the court of the Requested State.
That said, the grounds for declining or refusing recognition and enforcement are limited and unless one of those grounds is made out, the Judgments Convention provides that a judgment given by a court in the State of Origin must be recognised and enforced in the Requested State.
What is the Procedure for the Judgments Convention?
The procedure to be followed will be determined by the law of the Requested State. There will therefore still be a need to obtain appropriate advice from a legal expert based in the Requested State.
Recognition of the judgment is the pre-cursor to enforcement. It will not be possible to enforce a judgment in another contracting state under the Judgments Convention until it has been recognised. Enforcement involves taking a positive procedural step to give effect to the judgment.
For example, if a defendant is ordered to pay a sum of money to the claimant and fails to do so, there are various steps that could be taken, including applying for a charging order over the defendant’s property or seizing the defendant’s assets to satisfy the judgment debt.
What are the potential benefits for litigants?
Once the Judgments Convention becomes part of UK law in 2025, it opens up a number of potential benefits to parties involving in cross-border litigation:
- It is likely to make English judgments would widely enforceable internationally, albeit it remains dependant on other countries ratifying the Judgments Convention. The Judgments Convention will only apply as between contracting states. It is also important to note that even once ratified, it will generally only come into force after approximately a year and even then, it will only apply to proceedings commenced after the date on which it came into force in both contracting states.
- The Judgments Convention applies to a wider range of matters than The Hague Convention on Choice of Court Agreements (the “2005 Convention”). We return to the 2005 Convention below.
- The Civil Procedure Rules, which govern civil and commercial litigation in England and Wales, will need to be amended to reflect the coming into force of the Judgments Convention, but it should mean that the enforcement of foreign judgments in this country will be streamlined and raise fewer barriers to enforcement.
Are there other options for enforcing foreign judgments?
The Judgments Convention is not the only option for enforcing foreign judgments in England and Wales, but the options have become more limited following the UK’s exit from the European Union.
Judgments from Scotland and Northern Ireland
There is a specific regime for the enforcement of judgments obtained in Scotland and Northern Ireland in England and Wales (the “UK Regime”), which applies to both money and non-money judgments.
The relevant rules are set out in the Civil Jurisdiction and Judgments Act 1982 and Part 74 of the Civil Procedure Rules. The UK Regime applies to most, but not all, civil claims.
Judgments from EU and EFTA member states
The UK-EU transition period ended on 31 December 2020. As a result, the Recast Brussels Regulation and the Lugano Convention both ceased to apply in the UK, save for enforcing judgments given in proceedings commenced prior to that date.
The Recast Brussels Regulation allowed for the enforcement in England and Wales of judgments obtained in other EU member states. The Regulation applied to both money and non-money judgments, including injunctions, and in some circumstances, interim orders of the court.
The Lugano Convention allowed for the enforcement of judgments in England and Wales of judgments obtained from courts in Iceland, Norway and Switzerland.
The UK was not a member of the Lugano Convention in its own right, so it ceased to apply following Brexit. The UK has sought accession to the Lugano Convention, but to date this has been unsuccessful.
The Judgments Convention will to some extent address some of the issues resulting from the UK’s exit from the European Union
The 2005 Convention
The UK is a signatory to the 2005 Convention in its own right and therefore this regime was not impacted by Brexit.
The 2005 Convention applies to all EU member states, Mexico, Singapore, Montenegro, Ukraine and the UK. The USA, China and North Macedonia have intimated an interest in becoming parties to the 2005 Convention, but have not yet done so.
The 2005 Convention is however very limited in scope. It only applies to judgments given by a court in a contracting state that has been designated by the parties as having exclusive jurisdiction to resolve that dispute.
It only applies to civil and commercial disputes and does not extend, amongst other matters, to employment disputes, intellectual property matters and company law.
Common law
Where a party is unable to benefit from one of the existing regimes, the fall back position is the common law regime.
This regime only applies to final judgments and judgments which are for a sum of money. Non-money judgments cannot be enforced under the common law regime.
How can Morr & Co help?
The Commercial Disputes Resolution team at Morr & Co have extensive experience of enforcing foreign judgments in England and Wales. In addition, if you are looking to enforce a judgment of the courts of England and Wales abroad, we routinely work with advisors in other jurisdictions to assist with enforcement.
Please call our Dispute Resolution team on 01737 854500 or email [email protected] and a member of our expert team will get back to you.