On 24 April 2023, the Council of the European Union agreed to establish treaty relations with Ukraine in the framework of the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. This decision paves the way for a more streamlined recognition and enforcement process of EU and Ukrainian judgments in civil and commercial matters, promoting international trade and cooperation between the two jurisdictions.
The Hague Judgments Convention, which was concluded in 2019, is an international treaty that commits contracting states to recognise and enforce judgments in civil or commercial matters from other states party to it. The Judgments Convention covers the recognition and enforcement of both monetary and non-monetary judgments, as well as decisions on costs. It does not, however, extend to administrative, revenue, anti-trust, insolvency, intellectual property, and certain other matters.
For a judgement to be eligible for recognition or enforcement under the Judgments Convention, it must meet one of the following criteria as per Article 5:
- The defendant expressly consented to the jurisdiction of the court or filed to the court objections regarding the substance of the claim, while not challenging the jurisdiction of the court;
- The judgment ruled on a contractual obligation and was given by a court of the state where the obligation's performance took place or should have taken place;
- The person against whom recognition or enforcement is sought is the person that brought the claim;
- The person against whom recognition or enforcement is sought had permanent residence or carried out business activities in the state where the court that considered the case is located.
The court will consider a request for recognition or enforcement of a judgment under the Judgments Convention without any review of its merits. Refusal to recognise or enforce judgments can only occur in limited instances, such as violation of the procedure for notification of the defendant, obtaining a judgment by fraud, incompatibility of the judgment with the state's public policy, etc., as per Article 7 of the Convention.
Overall, the Judgments Convention's key objective is to simplify and standardise the recognition and enforcement process of state court judgments and enhance transparency across different jurisdictions.
The EU Council's decision to establish treaty relations with Ukraine marks a significant milestone in EU-Ukraine cooperation. EU member states have determined that there are no fundamental obstacles, such as issues related to the independence and efficiency of the judiciary, the fight against corruption, or the respect of fundamental rights, that could prevent the EU from entering into such treaty relations.
This development will facilitate the recognition and enforcement of judgments in civil and commercial matters between the two jurisdictions, supporting international trade and further fostering legal certainty for businesses and individuals engaging in cross-border transactions.
The Convention comes into effect on 1 September 2023. Hence, businesses operating in the EU and Ukraine should be prepared to adapt to the new legal landscape and capitalise on the benefits it brings.
For more information on dispute resolution and enforcement procedures in Ukraine, contact your regular CMS advisors or our local experts: Olga Shenk, Roman Hryshyn-Hryshchuk, Maria Orlyk, Oleksandr Protsiuk.
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