The Hague 2019 Judgments Convention: Bolstering the UK's position as a jurisdiction of choice for international dispute resolution

The UK government yesterday (27 June) ratified the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters ("Hague 2019"). That means it will come into force for the UK on 1 July 2025, and it will then provide a uniform framework for the recognition and enforcement of judgments between the UK and the other contracting states, including all EU member states except Denmark.

In this blog post we consider the impact of the UK's membership of Hague 2019 under the following headings:

1. Why does Hague 2019 matter?
2. When will Hague 2019 apply?
3. What judgments are eligible for enforcement?
4. When can enforcement be refused?
5. What does the future hold?

You can also listen to this special edition of our commercial litigation update podcast in which we discuss Hague 2019 and its implications.

Our podcast is available on iTunes, Spotify and SoundCloud and can be accessed on all devices. 

We have also published a new quick reference guide to help determine whether an English court judgment may be enforced in another country – click on the link below to access it:

DECISION TREE: Will an English judgment be enforceable abroad? 

1. Why does Hague 2019 matter?

The UK's ratification of Hague 2019 will facilitate the enforcement of English judgments abroad and help to reinforce the UK's standing as a forum for the resolution of cross-border disputes. This is particularly important post-Brexit, since the broad EU-wide regimes for the recognition and enforcement of judgments no longer apply to the UK.

Although English judgments are currently enforceable under the Hague 2005 Convention on Choice of Court Agreements ("Hague 2005"), which includes all EU member states, that Convention only applies where there is an exclusive English jurisdiction clause which was agreed after Hague 2005 came into force for the UK (a point on which there is some uncertainty, at least from the perspective of EU member states). Otherwise, the question of enforceability depends on whether there is a reciprocal arrangement for the enforcement of judgments between the UK and the relevant state, such as via a relevant bilateral treaty, or (failing that) the relevant state's national rules on the enforcement of foreign judgments.

Against that background, Hague 2019 will bring much-needed clarity and consistency to the enforcement of English judgments in EU member states, and is likely to enhance their enforceability in a much wider range of jurisdictions in due course. Although to date the only Hague 2019 contracting states (apart from the UK and the EU member states) are Ukraine and Uruguay, the Convention can be expected, in time, to gain increased acceptance internationally and attract further state signatories.

2. When will Hague 2019 apply?

Hague 2019 will apply to the recognition and enforcement of English judgments only where the proceedings leading to the judgment were commenced after the Convention came into force for both the UK and the state of enforcement – ie from 1 July 2025 for enforcement in the EU (apart from Denmark), Ukraine and Uruguay. To emphasise, it is the date proceedings are commenced, and not the date judgment is given, that is relevant. Parties with potential claims may therefore wish to consider whether it is worth waiting until July next year to issue proceedings, in order to gain the benefits of enforcement under Hague 2019 – though obviously that would have to be weighed against other considerations including any limitation issues.

Hague 2019 allows a much broader range of judgments to be enforced than under Hague 2005, as it is not limited to judgments given pursuant to exclusive jurisdiction clauses. Significantly, in contrast to Hague 2005, it will provide for the enforcement of a judgment where the dispute falls within a non-exclusive or asymmetric jurisdiction clause in favour of the English court – ie a clause of the sort common in finance agreements, which requires one or more parties (typically the borrowers) to bring any proceedings in a named jurisdiction but gives others (typically the finance parties) a choice of where to sue – as well as in a broad range of scenarios where there is no applicable jurisdiction clause.

Certain matters fall outside the scope of Hague 2019, for example insolvency, defamation, privacy, intellectual property, and certain competition matters. And even where the subject matter is within scope, not all English judgments will be eligible for enforcement under Hague 2019 as explained below.

Where Hague 2019 applies, enforcement is mandatory, subject to limited grounds of refusal as outlined below. However, Hague 2019 is not exclusive in terms of a contracting state's ability to enforcement judgments from other contracting states: if a judgment is not eligible for enforcement under Hague 2019, it may still be enforceable under the national rules of enforcement in the relevant state.

3. What judgments are eligible for enforcement?

For a judgment to be eligible for enforcement under Hague 2019, at least one of a number of requirements must be met. These are set out in article 5 of Hague 2019 and include the factors listed below. They are sometimes referred to as "jurisdictional filters", although they do not affect the basis on which the courts of contracting states can exercise jurisdiction to hear and determine a dispute, and the basis on which the judgment court actually took jurisdiction over the dispute in question is irrelevant so long as one of the article 5 requirements is met.

Jurisdiction clause in favour of the English courts: A judgment will be eligible for enforcement if it was given by a court designated in an agreement between the parties, other than an exclusive choice of court agreement. In other words, this jurisdictional filter will be met where the dispute falls within a non-exclusive or asymmetric jurisdiction clause in favour of the English courts (apart from in consumer and employment disputes, where this jurisdictional filter does not apply). The intention is to avoid overlap with Hague 2005 by excluding from scope exclusive jurisdiction clauses. However, a judgment may be enforceable under both Hague 2019 and Hague 2005 where there is an exclusive English jurisdiction clause and some other Hague 2019 jurisdictional filter also applies. Equally, a judgment may fall outside both Hague 2019 and Hague 2005 – in particular where the jurisdiction clause is exclusive but does not fall within Hague 2005 as it was concluded before Hague 2005 entered into force for the UK.

Defendant's habitual residence, principal place of business or branch / agency / establishment in the UK: There are several jurisdictional filters based on connections between the defendant and the judgment court. So, an English judgment will be eligible for enforcement if the defendant was "habitually resident" in the UK when they became a party to the proceedings. This is defined for a corporate entity to include statutory seat, law of incorporation, place of central administration or principal place of business. There is no definition for an individual, but there is a separate jurisdictional filter that will be met if an individual defendant's principal place of business was in the UK (even if they were not resident here) and the claim arose out of the activities of that business. There is also a jurisdictional filter that will apply if the claim arose out of the activities of a branch, agency or other establishment that the defendant maintained in the UK.

Defendant consented or submitted to the court's jurisdiction: An English judgment will be eligible for enforcement if the defendant expressly consented to the English court's jurisdiction in the course of the proceedings. A separate jurisdictional filter will be met where there was implied consent – ie where the defendant argued on the merits without contesting jurisdiction, often referred to as "submitting" to the jurisdiction (though this is subject to a carve-out where it is clear that a challenge to the court's jurisdiction would not have succeeded). Note that in consumer and employment disputes, the jurisdictional filter based on express consent will only apply if the consent was addressed to the court, and the jurisdictional filter based on implied consent does not apply.

Claimants and counterclaims: An English judgment will be eligible for enforcement if it was given against the claimant in the proceedings, for example if it is a judgment requiring the losing claimant to pay the defendant's costs. There is a separate jurisdictional filter relating to judgments on counterclaims. This will be met where the judgment is in favour of the counterclaimant, so long as the counterclaim arose out of the same transaction or occurrence as the claim, or to the extent that it is against the counterclaimant, unless the counterclaim was compulsory in the sense that the law of the judgment state required the counterclaim to be filed to avoid losing the right to bring the claim embodied in it.

Contractual obligation to be performed in the UK: An English judgment ruling on a contractual obligation will be eligible for enforcement if the place of performance was in the UK. There is, however, a carve-out if the defendant's activities in relation to the transaction "clearly did not constitute a purposeful and substantial connection to" the UK. Further, this jurisdictional filter does not apply to judgments given in consumer and employment disputes.

Tort committed in the UK: This jurisdictional filter will be met for tort claims causing death, physical injury, or damage to or loss of tangible property, where the act or omission directly causing the harm occurred in the UK. It is significantly narrower than the common law jurisdictional gateway that allows the English court to take jurisdiction (subject to considerations of "forum conveniens", ie whether it is the most appropriate forum to determine the dispute) over a tort claim against a defendant who is not within the court's jurisdiction. First, the Hague 2019 jurisdictional filter only applies to tort claims that cause death or physical injury or, alternatively, that affect tangible property – ie it does not apply to tort claims for pure economic loss (such as arising from a negligent misstatement). And secondly, it only applies where the act or omission directly causing the harm occurred in the UK. Unlike the common law gateway, it is not sufficient that harm was suffered in the UK, if the act or omission did not occur here.

Land in the UK or a UK trust: There are also jurisdictional filters for judgments ruling on property rights in land or tenancies situated in the UK, or on certain matters relating to trusts which designated the UK as their principal place of administration or the UK courts as the forum for the determination of disputes relating to the trust.

Note also that a judgment for the purposes of Hague 2019 does not include an interim measure of protection, such as a freezing order, interim injunction or interim payment order.

4. When can enforcement be refused?

The courts of a contracting state can refuse recognition or enforcement of an eligible judgment from another contracting state only on the grounds specified in Hague 2019.

A judgment will only be recognised if it has effect in the state of origin, and will only be enforced if it is enforceable in that state. The party seeking recognition or enforcement must submit any documents necessary to establish this.

The judgment cannot be reviewed on the merits, but the enforcing court can consider the judgment to the extent necessary to determine whether any of the jurisdictional filters apply, and can require the party seeking recognition or enforcement to submit any further documents necessary for that purpose.

Recognition or enforcement may be postponed or refused if the judgment is subject to appeal, or the time limit for appealing has not expired, or there are prior parallel proceedings pending before a court of the state of enforcement. Where recognition or enforcement is refused on any of these grounds, a party may re-apply subsequently.

Recognition or enforcement can be refused, in summary, where: the defendant did not receive proper notice of the proceedings; the judgment was obtained by fraud; recognition or enforcement would be manifestly incompatible with public policy in the enforcement state; the proceedings were contrary to a jurisdiction agreement; or the judgment is inconsistent with a judgment between the same parties, being either a judgment by the court of the enforcement state or an earlier judgment by another court that could be recognised in the enforcement state. It can also be refused to the extent that a judgment awards damages that do not compensate a party for actual loss or harm suffered (eg exemplary or punitive damages).

5. The future

As noted above, the current contracting states to Hague 2019 are: the UK; all EU member states apart from Denmark; Ukraine; and Uruguay. Other states can, however, be expected to join in due course and, assuming that happens, the impact of the Convention, including for the streamlined enforcement of English judgments abroad, will expand commensurately.

Where a new state joins, it may give notice that it will not apply Hague 2019 as between itself and any of the other contracting states. Conversely, each of the other contracting states has 12 months to give notice that it will not apply Hague 2019 as between itself and the new state – so essentially there is an "opt-out" on a state-by-state basis. The Convention will only come into effect for the new state once the opt-out period has expired. That is why Hague 2019 will not take effect for the UK until 1 July 2025, despite ratification having taken place on 27 June 2024.

States that have already signed, but not ratified, Hague 2019 include the US and Russia. If the US were to join, that would obviously be a significant development, and would likely provide a further incentive for other states to join. However, with the US presidential election due to take place in November, there is currently considerable uncertainty. If Russia were to join, that would be significant in a different way, and the UK (and other contracting states) would no doubt give careful thought to whether or not they wish trigger the opt-out.

Another key question for the future enforcement of English judgments is whether the UK will ultimately accede to the Lugano Convention, which governs questions of both jurisdiction and the recognition and enforcement of judgments between all EU member states and Iceland, Norway and Switzerland. The UK applied to re-join Lugano from the end of the Brexit transition period, but this requires the unanimous consent of the current contracting states. To date the EU has not been prepared to consent, saying that as the UK is a "third country" without a special link to the internal market, the Hague Conventions (rather than the Lugano Convention) should provide the appropriate framework for cooperation between the EU and the UK in the field of civil justice. 

If the UK were to re-join Lugano, it would effectively supersede Hague 2019 in terms of the enforcement of English judgments in EU member states. That would provide for a broader range of English judgments to be enforceable, since enforcement under Lugano is not subject to eligibility requirements in the same way as under Hague 2019. However, accession to Lugano would come with certain downsides from the English courts' perspective, as there would once again be restrictions on:

• the circumstances in which the English courts can exercise jurisdiction over defendants domiciled in EU member states (and other Lugano contracting states);
• the English courts' ability to decline to exercise jurisdiction over such defendants on the basis that England is not the appropriate forum; and
• their ability to issue anti-suit injunctions to constrain claimants from pursuing proceedings in other contracting states.

Accession to Lugano would also re-introduce the risk of so-called "torpedo" actions, by which a party can seek to delay proceedings in the parties' chosen court by commencing proceedings in another contracting state. Under Lugano, any court other than the court in which proceedings are issued first (the "first seised court") must stay its proceedings while the first seised court determines whether it has jurisdiction. That rule was amended in the recast Brussels Regulation to include a carve-out where the proceedings in the first seised court were brought in breach of an exclusive jurisdiction clause, but there is no such carve-out under Lugano.

Despite these issues, the UK's position has to date remained that it wishes to re-join Lugano, in addition to becoming party to Hague 2019. Whether that will ultimately happen remains to be seen.