Transitioning to the Hague Convention on Choice of Court Agreements

When the UK exits the EU, one practical option to ensure the continued enforcement of jurisdiction clauses between the UK and the EU Member States would be for the UK to sign and ratify the Hague Convention on Choice of Court Agreements, which the EU has already ratified on behalf of the existing EU Member States (including the UK) and which is in force.

One practical problem may be the transitional provisions. If exclusive choice of court agreements in favour of England made while the Convention is in force in the UK through the medium of the EU do not also continue to qualify as enforceable agreements when the UK signs up to the Convention in its own right, then this will, for a few years at least, greatly reduce the effectiveness of the Convention.

Article 16 of the Convention states that it applies only to exclusive choice of court agreements concluded after its entry into force in the State of the chosen court. Article 30(2) of the Convention states that where a “Regional Economic Integration Organisation” (such as the EU) enters into the Convention on behalf of its member states, references to a “Contracting State” or “State” shall apply equally to such member states. The Convention, therefore, now applies to exclusive choice of court agreements in favour of the English courts entered into since 01 October 2015, when the Convention came into force in the EU.

Should the position be any different because the UK ceases to be bound by the Convention as an EU Member State but then ratifies the Convention in its own right? Or, indeed, if it does not subsequently ratify the Convention?

The Convention does not expressly give an answer to this question and indeed it was probably not considered to be a practical problem. In practice, though, this will be an important point. On a literal reading of the Convention, an exclusive choice of court agreement entered into after 01 October 2015, but before the UK exits the EU, would continue to qualify as a Convention agreement pursuant to Article 16(1) notwithstanding that by the time it comes to be enforced the UK will have left the EU (whether or not the UK had itself ratified the Convention). The clause in question would still be an agreement concluded after the entry into force of the Convention in the state of the chosen court (eg UK) pursuant to Article 16(1). The fact that, in the meantime, the UK had ceased to be bound by the Convention as an EU Member State and/or had instead ratified it itself would not affect the applicability of the Convention to qualifying agreements.

If that is right, then in agreeing jurisdiction clauses now, parties can take comfort from the fact that the Convention will continue to apply once the UK exits the EU. However the fact that the Convention only applies to arrangements entered into after 01 October 2015 means that, if the Convention becomes the sole basis of jurisdictional recognition in the EU post-Brexit, it will be necessary to review contractual arrangements entered into before that date. It may be sensible to re-execute key agreements, or their jurisdiction provisions at least, to ensure the parties’ choice of court is upheld.