Hague - more delay?

On 28 December 2018, the UK Government lodged an Instrument of Accession with the Ministry of Foreign Affairs of the Kingdom of the Netherlands to bring the Hague Convention on Choice of Court Agreements (Hague) into effect for the UK from  the scheduled Exit Date.

The accession aims to ensure the continuity of the UK’s membership of Hague, to which it has previously been a party through its EU membership, in the event of a “No-Deal Brexit”. Courts of countries which are a signatory to Hague should recognise and enforce a contractual choice of exclusive jurisdiction of the courts in another signatory state. In view of the extension of the time for the UK to exit the EU to 31 January 2020, the UK’s accession will remain suspended until 1 February 2020.

The UK’s “suspension” of its accession to Hague

On 28 March 2019, the UK issued a declaration in view of the extension of the period for its withdrawal from the EU.

The UK’s “accession” to Hague was initially suspended until 13 April 2019. In view of the subsequent further extension to the period for the UK’s withdrawal from the EU, to 31 October 2019, a further declaration dated 12 April 2019 stated that the UK’s accession was suspended until 01 November 2019 and then, on 30 October 2019 a further declaration suspended the UK's accession until 1 February 2020.

Practically, this means that the principal international instruments currently governing the recognition and enforcement of jurisdiction clauses and judgments within the EU (ie the EU Regulation 1215/2012, or Brussels Recast, and, as between EU Member States and EFTA states, the Lugano Convention 2007) remain in place until 1 February at which point they will cease to have effect save as set out in the applicable transition provisions legislated for by the UK government (see our article here). In the absence of any further agreement, following this date the UK will only be able to rely on the applicability of Hague.

Further gaps left by Hague

We consider that the UK’s declaration, as extended, to suspend its accession to the Convention raises further uncertainty, despite the UK Government’s objective to ensure “the seamless continuity of the application of the Agreement to the United Kingdom.”

The most important limitation of the Hague Convention is it applies only to those agreements entered into after the UK acceded to it. As an EU Member State, the UK originally acceded to the Convention on 1 October 2015. However, there is uncertainty as to whether clauses in contracts signed pre-Brexit will continue to fall under the Hague Convention, given that the UK will have ceased to be a signatory and then become one again. A statutory instrument in the UK states that the UK’s membership will be considered to have been continuous, but more important will be the decisions of courts in remaining EU Member States. The European Commission has already indicated, in a document published in April 2019, that it does not believe that the Hague Convention will apply to agreements entered into before the UK rejoins as a member in its own right. The issue will be decided by courts in each Member State as cases arise, but may ultimately be referred to the CJEU to decide.