BREXIT. QUO VADIS?

Posted on 20 Nov 2019, by Dr. Michael Carbone

Today, a ‘No Deal Brexit on 31 January 2020 remains a real possibility.  Put simply, a ‘No Deal Brexit’ means that the UK leaves the EU without having reached an agreement on the terms of its departure and the future relationship. This article looks at the effect of No Deal Brexit on the enforcement of UK judgments in the EU and vice versa.

Current Situation – UK as a member of the EU

The Brussels Regime - Brussels I and Brussels Recast Regulation

Whilst the UK is still a Member of the EU, the Brussels I convention and Brussels Recast Regulation apply to commercial and civil legal disputes. The general rule under this regime, subject to certain exceptions, is that in such disputes, jurisdiction lies with the Court in which the defendant is domiciled. In addition, recognition of intra-EU judgments and their enforcement is simple and affordable.

A major achievement of this regime is the eradication of the need for intermediate proceedings - the exequatur, which required a local Judge to ‘rubber stamp’ an existing judgment.

Lugano Convention

The Lugano Convention operates in tandem with the Brussels regime and, also provides for the recognition and enforcement of a wide range of judgments. The UK government intends to re-join the Lugano Convention as an independent party post-Brexit. However, this cannot be done unilaterally; the UK will need to be invited to join by one of the countries who already participates in the Convention.

Hague Convention on the Choice of Court Agreements

In an effort to protect English Jurisdiction clauses post-Brexit and to preserve as much of the status quo as possible, the UK acceded to the Convention as an independent party (as opposed to a Member of the EU). This accession will only be necessary in the event of a ‘No Deal’ Brexit.

The Convention, which is more limited than the Brussels regime, provides for recognition and enforcement of judgments only where the parties chose the exclusive jurisdiction in their agreement.

‘No Deal’ Brexit – The UK perspective

As discussed above, a possible scenario is that the UK will re-join the Lugano Convention as an independent party and accede to the Hague Convention. With regards to the Hague Convention this will only come into effect the day after the UK withdraws from the EU and only if another agreement has not been reached.   

Another possibility is that a partially dormant Convention dating back to 1968, the Brussels Convention, is revived. This Convention regulates matters of jurisdiction and, recognition and enforcement of judgments. It has been rendered dormant by the Brussels I regulation and the Brussels Recast, but it still applies to certain dependent territories of EU Member States.    

If no agreement is reached, enforcement and recognition of judgments after Brexit will be a matter of domestic law of the state in which recognition and enforcement are sought. The UK will be treated as a third country and the Exequatur will be a requirement for enforcement of a judgment.

The UK has declared that, in the event of a ‘No Deal’ Brexit, it will implement domestic legislation to continue to recognise and enforce judgments of EU27 Courts for proceedings commenced before Brexit day (i.e. the Brussels regime).

‘No Deal’ Brexit – The EU perspective

In its note on the impact of a ‘No Deal’ Brexit on jurisdiction and enforcement of UK judgments in EU27 countries, the European Commission states that the EU rules will no longer apply and it outlines the broad principles that will apply to the cross-border enforcement of judgments in a ‘No Deal’ Brexit.

‘No Deal’ Brexit – A Maltese Perspective

Malta applies the relevant EU statutes in matters of jurisdiction, and recognition and enforcement of judgments in Malta. Enforcement of UK judgments in Malta in a ‘No Deal’ Brexit scenario, will rely on 2 other pieces of legislation. Firstly, the Code of Civil Procedure (COCP) and secondly, the British Judgments (Reciprocal Enforcement) Act (BJREA).

  • Code of Organisation and Civil Procedure

The general rule is that, for the purposes of recognition and enforcement, foreign judgments in Malta which fall outside the scope of EU and bilateral treaties are dealt with by the COCP. The COCP requires that It is important the foreign judgment (i) has been delivered by a competent Court outside Malta and (ii) is final and not open to appeal.

To enforce a foreign judgment, the judgment creditor (party seeking enforcement) must issue enforcement proceedings in the Maltese Courts. The judgment debtor will have the opportunity to challenge the application based on the various grounds set out in the COCP. 

  • The British Judgments (Reciprocal Enforcement) Act

In a No Deal Brexit scenario, a UK judgment creditor may be able to rely on the provisions of the BJREA, to enforce a money judgment obtained before a superior Court in the UK

Under the BJREA, the judgment creditor must apply before the Court of Appeal, within strict time limits, for a determination on whether or not the judgment should be enforced in Malta. The judgment debtor may challenge the application based on the various grounds set out in the BJREA.

The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Michael Carbone, Associate, Michael Kyprianou Advocates and Legal Consultants at Michael.carbone@kyprianou.com