New Hague Judgments Convention adopted - a ‘gamechanger’ for cross-border disputes?

United Kingdom

On 2 July 2019, the Hague Conference on Private International Law adopted the long-awaited Judgments Convention (officially titled the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters) during a ceremony in The Hague.

The Secretary General of the Hague Conference, Dr Christophe Bernasconi, described the Judgments Convention as a ‘gamechanger for cross-border dispute settlement’. It provides an international legal framework for the mutual recognition and enforcement of judgments across borders and, provided it achieves widespread ratification, will therefore offer those operating internationally increased certainty and clarity of process when seeking relief from a judgment debtor overseas. The framework aims to reduce legal costs and timeframes, both key drivers for the efficient resolution of claims involving an international element.

Key provisions

The Judgments Convention will apply to judgments in civil and commercial matters, with certain specified exceptions. These include revenue and customs, family, insolvency and intellectual property, defamation and privacy matters. Arbitration and related proceedings are also excluded from its scope, to avoid interference with the provisions of the New York Convention, which governs the international enforcement of arbitral awards.

The judgments covered will include any court decision on the merits of a case, including determinations on costs, but not interim measures of protection. Court-approved settlements may also be enforced under its terms. It covers both money and non-money judgments, so long as one of a list of specified requirements connects the judgment to the state of origin. These include grounds based upon the habitual residence or place of business of the judgment debtor, the nature of the judgment, or simply that the judgment debtor did not contest jurisdiction when arguing on the merits.

A judgment creditor is required to produce specified documents when applying for enforcement under the Judgments Convention, but the procedure is governed by the law of the requested state. The Judgments Convention stipulates that the court of the requested state 'shall act expeditiously' and that no review of the merits of a judgment is permitted. However, it is open to the requested state to refuse to enforce the judgment based on certain express grounds, such as a lack of proper service of the proceedings, potential inconsistencies with previous judgments involving the same parties, the existence of a jurisdiction clause in favour of the requested court, parallel proceedings, as well as fraud and public policy.

Relationship with other international instruments

The Judgments Convention follows the 2015 Hague Convention on Choice of Court Agreements, which was similarly aimed at achieving better access to justice through enhanced judicial cooperation. However, the 2015 Convention is limited to the enforcement of judgments which are based upon an exclusive jurisdiction clause. The Judgments Convention applies even in the absence of such a clause and covers judgments relating to a broader range of matters, including employment and consumer contracts, which are excluded from the 2015 Convention.

The Judgments Convention expressly states that it is to be interpreted to be compatible with other treaties and, where necessary, it will give way to any earlier treaties or rules. This should rule out any conflict with the terms of the 2015 Convention. In addition, the Recast Brussels Regulation (EU/1215/2012) governs both jurisdiction and enforcement as between EU member states. The 2007 Lugano Convention (L339/3) similarly governs jurisdiction and enforcement between EU member states and certain members of the European Free Trade Association (namely Iceland, Switzerland and Norway). Currently, therefore, the Judgments Convention would only prevail where the Recast Brussels Regulation or Lugano Convention did not apply, for example where enforcement is required in a contracting state which is not an EU or European Free Trade Association state.

The Recast Brussels Regulation is of broader scope than the Judgments Convention, not least because it covers enforcement of provisional, including protective, measures. In addition, the Recast Brussels Regulation provides a more consistent and streamlined procedure for the enforcement of judgments. As enforcement under the Judgments Convention is governed by the law of the requested state, this brings with it increased scope for variation between differing states. As matters currently stand however, following Brexit the recast Brussels Regulation and Lugano Convention will no longer apply to the UK and therefore the Judgments Convention may well become increasingly significant.

Next steps

The focus now shifts to when and by which states the Judgments Convention will be ratified, as its practical effectiveness is clearly dependent upon the number of countries that formally become contracting states. Uruguay became the first state to sign the Judgments Convention as part of the ceremony; this needs to be followed by formal ratification. The Judgments Convention will not enter into force until two states have ratified, as well as the expiry of a twelve month within which the first state may object to relations being established with the second state. As such, it is likely to be some time before it can be utilised by parties as an instrument for the swift resolution of international disputes, although the European Commission has already confirmed that it will begin the process to prepare for EU accession.