As previously mentioned in our briefing, in the event of a hard Brexit on 29 March 2019, the current EU-wide rules concerning recognition and enforcement of judgments in commercial cases will cease to apply to the UK.
If that happens, the English courts will no longer automatically be obliged to recognise and enforce the judgments of their r.EU counterparts, and courts of the r.EU will no longer automatically be required to recognise and enforce judgments of the English courts. Instead, both the English and r.EU courts will apply either their own individual domestic rules in order to determine whether a judgment should be recognised and enforced, or any other international convention that may apply in their place (such as the 2005 Hague Convention on Choice of Court Agreements, albeit that this will only catch judgments arising from exclusive jurisdiction clauses concluded in favour of either the UK or a r.EU state on or after 1 April 2019). Depending on the r.EU state(s) in question, this could mean that having an English judgment recognised and enforced in the r.EU will become a lengthier and more expensive process.
The UK government has now said that in the event of a hard Brexit it will implement domestic legislation to the effect that any judgments handed down by r.EU courts in proceedings commenced prior to exit day will continue automatically to be recognised and enforced. Any party considering commencing proceedings in the r.EU which may result in a judgment that would need to be enforced in the UK should therefore consider at this stage whether it is worth getting those proceedings underway by no later than 28 March 2019.
It had been hoped that the r.EU would reciprocate with similar grandfathering provisions in respect of the current rules. However, the European Commission has recently announced that r.EU states will only apply the current rules to English court judgments that have been declared enforceable prior to exit day. It will not be enough that the relevant English proceedings were commenced prior to exit day, or even that the relevant English judgment was handed down prior to exit day. As a result, any party currently holding an English court judgment which it intends to enforce in a r.EU state should consider seeking an "exequatur" (declaration of enforceability) from the courts of that state as soon as possible, ensuring that it is in hand by no later than 28 March 2019.For further information, please contact your usual Travers Smith contact or a member of our Corporate & Commercial Litigation team.