Future for jurisdiction clauses post-Brexit
The Hague Choice of Court Agreements Convention could be an effective means of ensuring the enforcement of exclusive jurisdiction clauses after the UK exits the EU.
If or when the United Kingdom does exit the EU, it will no longer be bound by or apply the Brussels Recast Regulation, which currently regulates issues of civil jurisdiction and enforcement across the EU. This will throw doubt on whether EU Member State courts will continue to enforce jurisdiction clauses in favour of the English courts.
However, there is an argument that upon exit from the EU, the (old) Brussels Convention will revive and be applicable between the remaining Member States and the UK in relation to jurisdiction.
The problem with this is the so-called “Italian Torpedo”; the Brussels Convention gave priority to the court first seised of a dispute. If that was not the contractually chosen court, then that chosen court could not assume jurisdiction until (or if) the court first seised decided it had no jurisdiction. In jurisdictions such as Italy, this could take years.
This problem was remedied in the Brussels Recast Regulation, which permitted the contractually-chosen court to assume jurisdiction notwithstanding the fact that proceedings had already been commenced in the courts of another Member State.
How, then, to avoid the return of the Italian Torpedo following a Brexit? The answer may lie in the Hague Choice of Court Agreements Convention. The EU has already signed up to this, as have Mexico and Singapore. The UK could sign and ratify this upon exit from the EU.
The Hague Convention gives effect to exclusive choice of court agreements. More to the point, pursuant to Article 6 of that Convention, a court of a Contracting State other than the contractually chosen court must suspend or dismiss proceedings in that court to which an exclusive choice of court applies except in very limited circumstances. This should prevent the Italian Torpedo being utilised.
While the Hague Convention is by no means as complete a code as to jurisdiction as the Brussels Recast Regulation, if the UK signs it after a Brexit it will be effective to ensure the enforcement of exclusive jurisdiction clauses in the courts of Contracting States.
