Jurisdiction Agreements from 1 January 2021

Jurisdiction Agreements from 1 January 2021

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On 30 September 2020, the Ministry of Justice published its guidance on “Cross-border civil and commercial legal cases: guidance for legal professionals from 1 January 2021” (see here).

What is instantly noticeable is the pending clash between the courts in UK and EU Member States over the operation of the Hague Choice of Court Convention (2005), a convention which gives effect to exclusive jurisdiction agreements that have selected the courts of a Contracting State and recognises and enforces resulting judgments.

The EU acceded to the Hague Convention on 1 October 2015, and from that date, the UK has been bound by the terms of the Convention by virtue of its EU membership. However, in the intervening 5-year period the 2005 Convention has not applied as between EU Member States. This is because of the operation of Article 26 (6), which declares the Convention shall not affect the application of the rules of a Regional Economic Integration Organisation (i.e. the EU), whether adopted before or after this Convention- (a) where none of the parties is resident in a Contracting State that is not a Member State of the Regional Economic Integration Organisation, and (b) as concerns the recognition or enforcement of judgments as between Member States of the Regional Economic Integration Organisation. Accordingly, for cases involving parties from EU Member States, the Hague Convention did not affect the application of the rules on exclusive jurisdiction agreements and recognition and enforcement of judgments that are now found in the provisions of the Brussels I (Recast) Regulation (1215/2012).

The UK intends to accede to the Hague Convention in its own right from 1 January 2021, and has lodged an instrument of accession on the 28 September 2020.

However, when does the Hague Convention apply to an exclusive jurisdiction agreement?

The Ministry of Justice’s guidance claims that it applies to exclusive choice of court agreements entered into from 1 October 2015 (i.e. the date of the EU accession to the Convention) in which the chosen court is established in a contracting party to that Convention. Indeed, the UK has lodged a declaration at the Hague that says:

“With the intention of ensuring continuity of application of the 2005 Hague Convention, the United Kingdom has submitted the Instrument of Accession in accordance with Article 27(4) of the 2005 Hague Convention. Whilst acknowledging that the Instrument of Accession takes effect at 00:00 CET on 1 January 2021, the United Kingdom considers that the 2005 Hague Convention entered into force for the United Kingdom on 1 October 2015 and that the United Kingdom is a Contracting State without interruption from that date.”

However, the European Commission disagrees, as can be seen from their recent revisions to their “Notice to Stakeholders on the Withdrawal of the United Kingdom and EU rules in the field of Civil Justice and Private International Law” (27 August 2020) (see here).

The Commission believes that the Convention will only apply to exclusive choice of court agreements concluded after the Hague Convention enters into force in the UK “as a party in its own right”, i.e. no earlier than 1 January 2021. In the eyes of the Commission, English exclusive jurisdiction agreements entered into between 1 October 2015 and 31 December 2020 would not be subject to the rules of the Convention, and the Courts of EU Member States would be free to disregard the Convention’s rules in such cases.

Future battle lines are clearly being drawn.

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