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UK's Accession to the 2019 Hague Convention to ensure enforcement of UK court judgments

Hungary
13/05/2024
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In January 2024, the UK acceded to the 2019 Hague Convention, which unequivocally permits the enforcement of UK court judgments, regardless of whether a jurisdiction clause is exclusive/symmetrical.

The UK’s accession to the 2019 Hague Convention brings clarity and certainty regarding certain types of jurisdiction clauses and the enforcement of UK court judgments in other countries in the aftermath of the UK’s departure from the EU in 2020.

As a reminder, prior to BREXIT on 31 December 2020, the UK through its EU membership was party to the Lugano Convention, which facilitated the enforcement of the judgments of English courts outside of the UK. The Lugano Convention ceased to apply to the UK in December 2020, and since that time parties seeking to enforce a UK court's judgment in another country had to rely on bilateral treaties (where available) or the 2005 Hague Convention.

There is no bilateral treaty between the UK and Hungary, which would regulate this matter. This raised certain issues given that the relevant provisions of the 2005 Hague Convention only apply if the jurisdiction clause in the contract in question is an exclusive one. Parties were therefore discouraged from including non-exclusive or asymmetrical jurisdiction clauses in their English law contracts, even though these clauses were the market practice in certain template agreements, such as those published by the Loan Markets Association.

The UK’s recent accession to the 2019 Hague Convention is a remedy for this given that the convention permits the enforcement of UK judgments no matter if the jurisdiction clause is exclusive/symmetrical.

Hague 2019 has now been signed by the UK, but still needs to be ratified by the UK Parliament through implementing legislation. When ratified, the UK’s accession will then enter into force within 12 months (most likely, in 2025 or early 2026) and will provide much needed certainty for English law-governed international contracts.

For more information on the 2019 Hague Convention and concluding international contracts under English law, contact your CMS client partner or these CMS experts.

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