Following on from our guide to Brexit and Contracts here, Julie Murphy O'Connor, Karen Reynolds and Gearóid Carey take a look at how Brexit will affect cross border disputes, in particular the enforcement of judgments obtained in such disputes.
How will Brexit impact on cross border enforcement of civil and commercial judgments?
If a counterparty against which judgment may be obtained has assets or enterprises in other jurisdictions against which enforcement may be required, enforceability can be a significant factor when it comes to choosing governing law and jurisdiction in contracts. Parties need to be confident that they will be able to enforce their contractual obligations in a straightforward manner. The rules relating to the recognition and enforcement of judgments in EU/EFTA Member States are currently set out in:
the Brussels Regulation (Regulation (EC) No 44/2001) (for proceedings commenced before 10 January 2015) and Brussels Regulation (Regulation (EU) No 1215/2012) (the "Brussels Recast Regulation") (for proceedings commenced on or after 10 January 2015) for disputes between parties domiciled in EU Member States (together the "Brussels Regime"); the Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters 2007 for disputes involving parties domiciled in the EU and Norway, Switzerland and Iceland (being EFTA Member States) (the "Lugano Convention"); the Hague Convention on Choice of Court Agreements of 2005 (the "Hague Convention") for disputes involving parties domiciled in EU Member States, Mexico, Singapore and Montenegro; and the common law for all other disputes. There is uncertainty as to the extent to which non EU/EFTA judgments will be recognised and enforced across the EU, and they may require separate applications subject to differing domestic rules in each EU Member State. Enforcement proceedings are regularly subject to jurisdictional challenge and the judgments tend to have to be final and conclusive, as well as merit based. All of this contributes to rendering the enforcement process less certain, less effective, more time-consuming, more cumbersome and more expensive.
For judgments covered by the Brussels Regime and the Lugano Convention (for EU and EFTA Member States), what constitutes a judgment under those instruments is broadly defined and includes orders or judgments in the nature of injunctions and costs determinations as well as interim orders (but...