Cross-Border Commercial Disputes: Navigating Jurisdiction After Brexit
The end of the Brexit transition period fundamentally altered the legal framework governing jurisdiction and the enforcement of judgments between the United Kingdom and the European Union. The loss of the Brussels Recast Regulation has created significant practical challenges for businesses engaged in cross-border commerce, requiring careful attention to jurisdiction clauses and enforcement strategies.
Prior to Brexit, the Brussels Recast Regulation provided a comprehensive and predictable framework for determining jurisdiction in civil and commercial matters across EU member states and the UK. Exclusive jurisdiction clauses in favour of UK courts were recognised and enforced throughout the EU, and UK judgments could be enforced in EU member states through a streamlined, largely automatic procedure.
Following Brexit, the UK is no longer part of the Brussels regime. The UK applied to accede to the Lugano Convention, which would have maintained a similar framework, but this application was blocked by the European Commission. The UK has acceded to the 2005 Hague Choice of Court Convention, which provides for the recognition and enforcement of exclusive jurisdiction agreements, but this offers significantly narrower coverage than the Brussels regime.
For businesses, the practical implications are significant. Jurisdiction clauses must be drafted with particular care. Exclusive jurisdiction clauses in favour of English courts will generally be respected under Hague, but non-exclusive or asymmetric jurisdiction clauses may not benefit from the Convention's protections. Where parties wish to retain flexibility, arbitration clauses offer a robust alternative, as arbitral awards benefit from the enforcement framework of the New York Convention regardless of Brexit.
The enforcement of English court judgments in EU member states now depends on the domestic law of each individual EU member state. In many EU jurisdictions, this involves commencing fresh proceedings to obtain a declaration of enforceability, which can be costly and time-consuming. Conversely, the enforcement of EU member state judgments in England is governed by common law rules, which require the judgment creditor to bring a fresh action.
At Masl Legal, our Dispute Resolution team advises businesses on structuring their contractual arrangements to manage jurisdictional risk in the post-Brexit landscape. We help clients choose the most effective dispute resolution mechanisms for their cross-border transactions.
Businesses should review their existing contracts to assess whether jurisdiction and governing law clauses remain fit for purpose in the post-Brexit environment. A proactive review can avoid costly complications if disputes arise.
