Brexit and Private International Law (Part 2 of 2)

Since 1 January 2021, EU regulations simplifying cross-border litigation no longer apply in relation to the UK and – in most cases – to parties based in the UK. While some may have expected the way ahead to have cleared by now, the opposite is in fact true: at the time of writing this blog, neither the EU and UK nor the Netherlands and the UK have agreed on any framework to replace the EU legislation no longer applicable to the UK.

This two-part blog explores the implications of Brexit on litigation against UK parties in Dutch courts. We give an overview of the status quo and uncertainties on four key areas of private international law (“PIL”). In Part 1, we focussed on (i) service of judicial documents and (ii) jurisdiction of Dutch courts. In this Part 2, we focus on (iii) enforcement of UK court judgments in the Netherlands and (iv) applicable law. We will also give a brief overview of other EU PIL instruments that have ceased to apply to the UK from 1 January 2021.

We will take a Netherlands-centred view and focus only on civil and commercial matters. We note that the UK government opted for a clean-cut approach, terminating the application of any EU PIL in the UK after 1 January 2021.

III. Enforcement of UK judgments

Judgments of the courts of a Member State are directly recognised and enforceable in other Member States under the framework of Brussels Regulation (recast) no. (EU) 1215/2012 (“Regulation 1215/2012”), simply by using one of the standard forms. Parties are not required to initiate new proceedings or to petition a local court to obtain leave to enforce a judgment obtained in another Member State. Similar rules apply to debts recorded in authentic instruments, such as notarial deeds, and court settlements. Under the transitional regime, this practical framework will continue to apply to UK judgments issued in proceedings that were initiated before 1 January 2021. For enforcement in the Netherlands of UK judgments handed down in proceedings initiated on or after that date, the claimant will be dependent on national PIL rules, or exceptions in other PIL instruments.

Dutch PIL

When there are no international PIL instruments to fall back on, Dutch PIL determines whether a UK judgment can be recognised and enforced in the Netherlands. The claimant may request a Dutch court to render a judgment against the defendant that contains the same orders as the UK judgment in de facto exequatur proceedings. This gateway is only available once all of the so-called Gazprombank criteria are met (set by the Dutch Supreme Court in Gazprombank v. Bensadon, ECLI:NL:HR:2014:2838):

• The jurisdiction of the UK court that handed down the judgment is based on a head of jurisdiction that is generally accepted under international standards;
• The proper administration of justice was safeguarded in the UK proceedings;
• The recognition of the UK judgment is not contrary to Dutch public policy; and
• The UK judgment is not irreconcilable with a Dutch judgment between the same parties or a prior judgment between the same parties concerning the same facts of another foreign court if that prior judgment can be recognised in the Netherlands.

If the court were to rule that in the case of a specific UK judgments, these conditions are not fulfilled, the UK judgment cannot be enforced and the claimant will have to re-litigate the case on the merits in the Netherlands.

A safe haven: The Hague Choice of Court Convention 2005

The Hague Choice of Court Convention stipulates that if a court has jurisdiction on the basis of an exclusive choice of court agreement, the judgment given in those proceedings is enforceable in all contracting states. On this basis, a UK judgment following litigation in the UK on the basis of an exclusive choice for UK courts is readily enforceable in the Netherlands without further (substantive) litigation.

We note that, as is the case with the jurisdictional issues, discussed in Part 1 of this blog, a potential temporal uncertainty exists: it is unclear whether the Convention applies to judgments resulting from choice of court agreements for UK courts concluded before 1 January 2021. The Hague Choice of Court Convention furthermore excludes judgments concerning interim measures from its scope for enforcement.

Revival of 1967 Anglo-Dutch Bilateral Treaty?

There is the (rather obscure) 1967 Convention between the Kingdom of the Netherlands and the United Kingdom of Great Britain and Northern Ireland on the Reciprocal Recognition and Enforcement of Judgments in Civil Matters ("1967 Bilateral Convention"). The 1967 Bilateral Convention governs the enforcement of judgments between the UK and the Netherlands, but applies only to judgments awarding monetary claims. While the 1968 Brussels Convention superseded the 1967 Bilateral Convention, which thus never gained traction, the latter formally continued to apply between (i) the UK and the Netherlands Antilles and (ii) the Netherlands and the Channel Islands and the Isle of Man. Similar to the 1968 Brussels Convention, the question is whether the 1967 Bilateral Convention has ‘revived’ between the Netherlands and the UK after Brexit, since it was never formally terminated. Again, this is a matter of public international law; the current status of the 1967 Bilateral Convention is unclear, though there is at least one Dutch precedent in 

which the post-Brexit applicability has been accepted (see the Overijssel District Court in Global Foods Network v. RM-Support, ECLI:NL:RBOVE:2018:4365).

Other possible solutions: the Brussels Convention, Lugano Convention and Hague Judgments Convention

The 1968 Brussels Convention covers rules of enforcement as well as jurisdictional matters. We discussed in Part 1 of this blog whether this Convention remains applicable or not, which is the topic of heated scholarly debate. The practical value of this debate within the context of enforcement is evident, as the Convention would significantly simplify recognition and enforcement, simply by providing a comprehensive framework lacking under Dutch PIL.

The Lugano Convention also offers a comprehensive framework for enforcement of court judgments between its contracting states (currently: the EU, Switzerland, Norway and Iceland). If the UK were to accede to the Lugano Convention this Convention would facilitate a convenient enforcement regime for UK judgments in the Netherlands (and vice versa). However, this seems unlikely after the European Commission expressed its intention to reject the UK’s application (see Part 1 of this blog).

In the future, the The Hague Judgments Convention of 2019 may become relevant for the enforcement of UK judgments in the Netherlands. This newly adopted Convention facilitates recognition and enforcement of judgments between contracting states. At present, the The Hague Judgments Convention has not yet entered into force, and neither the Netherlands nor the UK are parties. In its Communication on the UK’s application to the Lugano Convention, the European Commission expressed that it is planning to propose EU membership to the The Hague Judgments Convention “in the near future”.

IV. Applicable law

Contractual choices for English law will be upheld by Dutch courts, regardless of Brexit.

Brexit has generally not changed how Dutch courts determine the applicable law to disputes involving UK parties. The relevant EU instruments (EU Regulations 593/2008 (Rome I) and 864/2007 (Rome II)) have a universal scope of application: they designate the applicable law regardless of the place of residence of the parties, and regardless of which legal system is designated by the regulation or has been chosen by the parties.

V. Other EU PIL instruments no longer in force

Following Brexit, the following EU PIL instruments no longer apply in the UK:

1. Insolvency Regulation (Recast) (Regulation (EU) 2015/848);
2. European Account Preservation Order Regulation (Regulation (EU) 655/2014);
3. European Small Claims Procedure Regulation (Regulation (EU) 861/2007);
4. European order for payment procedure Regulation (Regulation (EC) 1896/2006);
5. European Enforcement Order for uncontested claims Regulation (Regulation (EC) 805/2004); and
6. Regulation on taking of evidence (Regulation (EC) 1206/2001), though the The Hague Convention on the Taking of Evidence of 1970 remains applicable.