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Bucharest
October 1, 2020
EDITORIAL

Enforcement of the judgments delivered in the UK in the context of Brexit

Alin Grapa
Alin Grapa

By Alin Grapa and Razvan Ionescu

The United Kingdom’s exit from the European Union on 29 March, which was decided by the referendum of 23 June 2016, is a reality which produces not only political, economic and other consequences, but also significant repercussions that will affect the legal relationships. Indeed, until then, the United Kingdom will form part of the European Union, which confers upon it the legal capacity of Member State, thus generating all consequences laid down both in the international treaties and conventions operating the notion of Member State of the European Union, as well as the consequences laid down in all European Union’s legal acts addressing such notion.

Razvan Ionescu
Razvan Ionescu

The provisions regarding the effects that a judgment delivered by a court of law of a Member State will produce in the other Member States are thus illustrative. These matters are currently regulated and fall within the scope of Regulation (EU) no. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Regulation”). Until the time of the exit from the European Union, according to provisions 36 and 39 of the Regulation, such judgment shall be recognised in the other Member States without the need for a special procedure and, respectively, shall be enforceable without the need for a declaration of enforceability.

Under these circumstances, the problems that will arise in practice in relation to such provisions after United Kingdom’s exit from the European Union concern the effects of an enforceable judgment delivered in the United Kingdom before Brexit, when the United Kingdom was a Member State, but which is intended to be enforced thereafter, at a time when the United Kingdom will be considered a non-Member State.

Indeed, a post-Brexit agreement is likely to exist between the United Kingdom and the European Union, which provides that the Regulation shall be further applicable in the relationship between the United Kingdom and the rest of the Member States. However, if this is not the case or if no other agreement that will, in principle, produce effects similar to those of this Regulation, the distinctions below shall apply. In fact, it will be very unlikely that the provisions of the Regulation will further remain applicable, as previously, when the United Kindom was a Member State.

How can the judgments in the United Kingdom be enforced after Brexit?

Therefore, the effects of a judgment delivered in the United Kingdom at the time when the United Kingdom was Member State of the European Union, i.e. both at the time of the conclusion of the agreement and of the delivery of the judgment, are of interest. The question is therefore whether its recognition and enforcement will fall within the scope of the Regulation or, on the contrary, whether its recognition and declaration of enforcement by the national court of law, as in the case in Romania, for example, in case one of the courts of law of our country is seized, will be required. The time to which we must refer in this case is the time when the enforcement of a judgment delivered by a court of law of the United Kingdom is sought. If at that time the United Kingdom is no longer Member State of the European Union, such judgment will no longer be recognised and enforceable in the Member State in which its enforcement is sought.

In other words, the issue is whether or not, after Brexit, the enforceability will remain an attribute of that judgment in the rest of the Member States of the European Union, except for the State in which the judgment was delivered. The argument for the affirmative answer lies in the fact that, at the time of its delivery, that judgment belonged to a Member State. The argument for the negative answer is that at the time when enforcement is sought, the seized court of the Member State will be required to enforce a judgment from a non-Member State.

In our opinion, the second argument will prevail, since, according to the Regulation, the procedural provisions applicable in this case are those of the seized Member State. Or, according, for example, to the Romanian Civil Procedure Code, enforcement is a new process to which the procedural provisions shall apply starting the time when the enforcement is initiated. Therefore, starting that time, the judgment previously delivered in the United Kingdom shall no longer be enforceable as of right in Romania, according to the national law (Regulation (EU) no. 1215/2012 being an integral part of national law), without any procedure being necessary.

However, there are other international instruments that might fill the gap created by the Regulation, although not an identical legal system, but a similar one. This is the example of the 2005 Hague Convention on choice of court agreements. To the extent that the United Kingdom signs the Hague Convention[1], so that it becomes applicable as of the time of the exit by the United Kingdom from the European Union or immediately thereafter, then all effects previously generated by the Regulation will in the future be produced through the Convention. However, this is correct only in the case of the clauses regarding the exclusive choice of jurisdiction in favour of the courts of law of the United Kingdom, the judgment being thus delivered based on such clause, since that is the scope of the Convention.

For the Hague Convention to be applicable, the United Kingdom will have to accede to this Convention, since the European Union is currently a member thereof. Indeed, although this Convention is applicable also to the United Kingdom, which is now a Member State to this Convention, after Brexit, with the loss of its status as a Member State of the European Union, the United Kingdom will have lost also its status as a party to the Convention. However, in order to accede to this Convention, there is no need for approval by the other states (apart from the European Union, the parties to the Convention are Mexico and Singapore).

However, this solution is not protected against any risks regarding its applicability, either. Therefore, according to Art. 16 par. (1) of the Convention, this convention shall apply to the exclusive choice of courts agreements concluded after its entry into force for the State of the chosen court and, according to par. (2) of the same article, this convention shall not apply to proceedings instituted before its entry into force for the State of the court seized. However, it can be considered that the provisions of the Convention have already entered into force in the United Kingdom, given that the European Union has ratified it, although the United Kingdom is not itself a signatory of the Convention.

There are also other international conventions with similar effects, but their applicability is questionable. Therefore, the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, to which the United Kingdom acceded when it became a Member State of the European Economic Community, may be applicable. The 2007 Lugano Convention could also be applicable, but for this to be possible, the United Kingdom must formally accede to the Convention, which requires the unanimous agreement of the other Member States, according to Art. 72 par. (3) of the Convention. However, this result can also be achieved by other means, i.e. the United Kingdom may re-enter the European Free Trade Association which is a party to this Convention.

However, it is very likely that an agreement exists in this respect between the United Kingdom and the European Union, if they reach a common understanding. In this regard, the EU Council published on 22 May 2017 the Directives for the negotiation of an agreement between the United Kingdom and the European Union, setting out the arrangements for its withdrawal from European Union[2]. With regard to the issue under analysis, it is stipulated that the Agreement between the United Kingdom and the European Union should provide that the judgments delivered before Brexit should further fall within the scope of the relevant provisions of EU law existing before Brexit. If the United Kingdom agrees with these proposals, the Agreement to be concluded will contain such provisions.

The previous paragraph conforms the solution proposed in this article, in the sense that after Brexit, in principle, a judgment delivered by a court of law of the United Kingdom will not be recognized and cannot be enforced without any prior formality in the rest of the Member States, since the United Kingdom will no longer be a Member State at that time. If that were not the case, such provisions of the agreement that is likely to be concluded between the United Kingdom and the European Union, setting outs such effects, would be unnecessary.

In conclusion, if a judgment delivered in the United Kingdom at a time when the United Kingdom was Member State of the European Union is to be enforced, but the enforcement takes place after Brexit, the United Kingdom must be considered a non-Member State by reference to the time of initiation of the enforcement. Therefore, the provisions of the Civil Procedure Code regarding the recognition and enforcement of foreign judgments shall become applicable, the provisions of Regulation no. 1215/2012 being excluded from application, but only when the enforcement is sought in Romania. This is not the case if an Agreement to the contrary is concluded between the United Kingdom and the European Union or if the United Kingdom accedes to other international instruments producing similar effects: the Brussels Convention, Hague Convention, Lugano Convention.

 

Razvan Ionescu is senior associate at PeliFilip Law Firm;

Alin Grapa is associate at PeliFilip Law Firm

[1] The United Kingdom has already given assurances in this respect. Please see: https://www.lexology.com/library/detail.aspx?g=e44f57ce-9e2c-4440-b1d2-fffccbd3a865;

[2] This document is accessible via: https://www.consilium.europa.eu/media/21766/directives-for-the-negotiation-xt21016-ad01re02en17.pdf;

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