The Effect of Jurisdiction and Enforcement of Judgments on the UK and Gibraltar: A Post-Brexit Analysis

The starting point is to consider the Withdrawal Agreement between the UK and the EU as part of exiting the Union (entered into on 24 January 2020 and took effect from 1 February 2020) (the “BWA”). Article 67 of the BWA states that any legal proceedings initiated before the transition period would be governed by EC Regulation 1215/2012 on jurisdiction, recognition and enforcement of judgments (the “Brussels Recast”). The transition period ends on 30 December 2020 (Article 126, BWA).

Therefore, if a civil and commercial case commenced before the “transition period”, the rules on jurisdiction and enforcement of judgments would be caught by the Brussels Recast (assuming the case falls within the ambit of that Regulation). The UK and Gibraltar have adopted very different positions post the “transition period” (ie, after 1 January 2021): the UK abolished the application of the Brussels Recast, therefore determining any issues of jurisdiction, recognition and enforcement of judgments in accordance with its “traditional common law rules”, whereas Gibraltar has, so far, retained the Brussels Recast (and other EU legislation) as part of its domestic laws.

As for the UK, any issues of ascertaining jurisdiction, would generally be determined by applying the principles of forum conveniens or forum non conveniens. For example, with the former, the English courts generally consider if the UK is the most suitable jurisdiction to determine the dispute. For instance, if a claimant resides outside the UK, the defendant will typically apply to serve proceedings outside the jurisdiction and, in doing so, the court will consider whether the English court is the most appropriate forum – ie, forum conveniens, to determine the case, taking into account the interests of all the parties and the ends of justice. 

Importantly, within the Brussels Recast, it was not possible for English courts to issue anti-suit injunctions. If, for instance, a case commenced in France and parties brought parallel proceedings in the UK, the UK was prevented from issuing anti-suit injunction refraining the French proceedings from proceeding even if the forum conveniens favoured the UK. The lis pendens provisions within the Brussels Recast (Articles 29 to 34) would override the common law injunctive relief. If a case commences after 1 January 2021 within the European Union, it is theoretically possible for the UK courts to issue anti-suit injunctions if the English courts are the forum conveniens for that dispute. The rules on recognition and enforcement of judgments would typically fall under rules of “comity”: the doctrine under which courts recognise each other’s rulings/sentences as a matter of courtesy, or based on the need of reciprocity.

Gibraltar takes a starkly different approach to the UK: it continues to apply the Brussels Recast by virtue of Section 6(1) of the European Union (Withdrawal) Act 2019 (the “EUA 2019”) which states that: “Direct EU legislation, so far as operative immediately the IP completion date, forms part of Domestic law on and after IP completion day”. The Act defines “direct EU legislation” as, inter alia, any EU regulation. The “IP completion day” is defined under section 3(1) of European Union (Withdrawal Agreement) Act 2020 (“EUA 2020”) as “midnight on 31 December 2020”. Therefore the “IP completion day” applies the same date as the “transition period” under Article 67 of the BWA.

The position adopted by Gibraltar vis-à-vis the Brussels Recast produces an incongruent result from a legal standpoint: Gibraltar continues to give effect to the Brussels Recast, so a judgment issued in, for instance, Austria, for a case commenced after 1 January 2021, would be given effect in Gibraltar (unless challenged on grounds of public policy) by Section 6(1) of the EUA 2019 and section 3(1) of the EUA 2020; however, a judgment issued in Gibraltar for a case commenced post the “transition period” may not have the same treatment in Austria. It is assumed that the Austrian courts would have to consider whether they give effect to the Gibraltar judgment in accordance with its national law rules when applying private international law. Further, the rules on lis pendens could lead to irreconcilable judgments: if Gibraltar is “first seized” of a claim, the courts “second seized” (for instance, Austrian or French courts) are not obliged to apply the lis pendens rules in favour of the Gibraltar claim, leading to potential conflicting scenarios: first, the court “second seized” continues with its case irrespective of whether and/or how the Gibraltar case continues; and/or secondly, that the court “second seized” could issue an anti-suit injunction if that injunctive relief is available in the state where the court “second seized” is based.

It remains to be seen if Gibraltar will continue to apply the Brussels Recast (and other EU laws) as jurisprudence develops under the EUA 2019 and 2020.

Business operations post the “transition period” between the UK, Gibraltar and any EU States (as well as other territories), could benefit by adopting appropriate Governing Law and Jurisdiction clauses under the Hague Convention on Choice of Court Agreements 2005 (“HC”). The HC aims to promote international trade and investment by adopting uniform rules on jurisdiction and enforcement of judgments. As with the Brussels Recast, the HC applies to civil and commercial matters and excludes certain matters, such as maintenance obligations and insolvency cases. The HC provides certainty as Article 5 states that “The court of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that state” (eg, if a State considers a judgment to be against public policy). Until such time as the UK and the EU negotiate a legislative framework on jurisdiction and enforcement of judgments (eg, the UK’s accession to the Lugano Convention), business operations within EU States and the UK and/or Gibraltar could adopt the HC framework into contracts as suitable alternative protective mechanisms akin to that of the Brussels Recast.