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An A to Z of cross-border disputes, post Brexit

Posted: 20/12/2016

Article 50 - it should be business as usual for cross border disputes until Article 50 has been triggered, but the picture is less clear after that.

Brussels (Recast) - this Regulation regulates jurisdiction and the recognition and enforcement of judgments between EU member states.

Conventions - Geneva, Hague, Lugano, Rome…Almost an alphabet of their own!

Disclosure - not all jurisdictions have the same extensive disclosure requirements as the UK courts: would minimal or extensive disclosure work better for you? 

European Enforcement Orders - uncontested claims from an EU member state court can be enforced in another member state using this streamlined procedure.

First seised - under EU law, the courts of the member state where the claim was issued first in time decide the question of jurisdiction. But see J, L and P below…

Governing law clause - which substantive law do you want to apply to identify and interpret the parties’ rights and obligations under the agreement? 

Hague Convention on Choice of Court Agreements - a possible, if more restricted, replacement for Brussels (Recast): it only governs the validity and effectiveness of exclusive jurisdiction agreements in civil and commercial matters.

Italian torpedo - where parties deliberately issue proceedings in a slow moving or procedurally complicated jurisdiction as a strategic or tactical move. Currently prohibited by Brussels (Recast). 

Jurisdiction - which court has the right to resolve the dispute? Something to consider carefully when signing or suing on a contract containing an exclusive jurisdiction clause.

Keep moving - try to avoid stays and delays in any ongoing litigation, to ensure you make the most of the existing reciprocal arrangements.

Lugano Convention - the front runner to replace Brussels (Recast),Lugano also prohibits parallel proceedings, but does not give precedence to exclusive jurisdiction clauses. The Italian torpedo will be re-armed. 

Mediation - don’t forget mediation! For example, cross-border mediations within the EU are governed by the EU Mediation Directive. 

New York Convention - parties to arbitration can still benefit from the settled and effective enforcement regime embodied in the New York Convention. 

Obtaining evidence - a party to litigation in one jurisdiction can obtain evidence from a witness in another jurisdiction utilising the letter of request procedure (letters rogatory in the US). Used globally. 

Parallel proceedings - where contractual parties are based in different countries, proceedings concerning the same dispute may be commenced in multiple courts simultaneously. An expensive and time consuming process. 

Quick! Issue those proceedings and enforce any outstanding judgments against an EU defendant while we are still able to benefit from the streamlined methods of recognition and enforcement under Brussels (Recast). 

Rome I (or its predecessor, the Rome Convention) governs the law which applies to the parties’ contractual obligations and any ensuing dispute where the parties are within the EU. Rome II covers non-contractual disputes (mostly tortious claims). 

Service out of the jurisdiction - a technically knotty area. Is the court’s permission required? Which (if any) service Convention or Treaty applies? The EU Service Regulation? The Hague Service Convention?

Traditional or common law rules - we may see more of the common law rules on jurisdiction and choice of law post Brexit/Brussels (Recast)/Rome, depending on what, if any, international agreements are entered into.

Uncertainty - there’s a lot of it about. For example, if post-Brexit, the UK does not accede to Lugano or something equivalent, there will be no prohibition on parallel proceedings.

Victory - winning your claim may be a pyrrhic victory if enforcement is difficult and costly in the defendant’s jurisdiction, particularly without Brussels (Recast) in the EU. Costs will only rise if we are reliant on the Lugano or Hague Conventions, reciprocal arrangements or local law.

West Tankers - this European Court ruling prohibits parties from issuing anti-suit injunctions in respect of proceedings commenced in EU member state courts in breach of an arbitration clause. Post Brexit, these injunctions may be restored to the arbitration users’ arsenal.

eXclusive jurisdiction clause - under Brussels (Recast),the courts of a member state named in an exclusive jurisdiction clause can determine the question of their jurisdiction even if parallel proceedings have already commenced in another EU member state.

whY litigate? Arbitration should remain unaffected by Brexit, in the main. Perhaps consider an arbitration clause, or a tiered (mediation then arbitration) dispute resolution clause?

Zzzzz… How many sleeps till Article 50 is triggered? Answers on a postcard please!

This article was published in New Law Journal in December 2016.

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