Update Volume 2019/7 Brexit and the enforceability of judgements
Presently any judgement by an English court is enforceable in the whole of the EU pursuant to the Brussels I Regulation and visa-versa. In the event of a hard-Brexit, however, and subject to any deal agreed for the departure of the United Kingdom, judgements issued by British courts will no longer be automatically enforceable within the EU and judgments from a EU country will no longer be automatically enforceable in Britain. As there is no other international treaty or arrangement which presently facilitates such enforcement, a legal void will be created on 31 March 2019 in so far as court judgements are concerned.
It is important to note the position is different with regard to arbitration awards which are subject to the Treaty of New York (formally: “The New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958”). In effect, this means that an arbitrational award issued in one of the contracting states, is recognized by the other contracting states and a clear framework is in place to ease the enforcement of the award in the other contracting states. The United Kingdom has been a contracting state since 1975, and regardless of Brexit will remain so. There is, in other words, no reason to assume that Brexit will have a significant impact on the enforcement of arbitration awards in other contracting states.
We therefore recommend that members avoid the jurisdiction of the English courts in their law and jurisdiction clauses going forward. The same is true for the jurisdiction of any EU court when dealing with an English counterpart. The standard BIMCO clause and most recommended Arbitration Clauses already facilitate this option.
The Club is at Member’s disposal to provide further guidance.