Out-Law News | 12 Nov 2020 | 4:44 pm | 3 min. read
The agreement between the two countries (7-page / 457KB PDF) extends and updates the 1961 Convention for the Reciprocal Recognition and Enforcement of Judgments in Civil Matters between the UK and Norway, so that it will apply to the extent that, and during any period that, the 2007 Lugano Convention between EU member states and Iceland, Norway and Switzerland does not apply to the UK.
The UK applied to accede to the Lugano Convention as an independent contracting party in April 2020. However, accession requires the consent of all contracting parties including the EU and, even if the UK's application is accepted, it is now too late for the convention to re-enter into force before the end of the Brexit transition period on 31 December 2020, as a three-month time-lag applies between agreement and entry into force.
Commercial litigation experts at Pinsent Masons, the law firm behind Out-Law, said that the agreement underlined the continued uncertainty around cross-border dispute resolution as transitional arrangements between the UK and EU come to an end.
Richard Dickman said: "It is now increasingly likely that the UK will not have in place, by the end of the Brexit transition period, a replacement agreement with the EU taking the place of the current Brussels 1 Recast Regulation regime on cross-border enforcement of judgments – such an agreement does not seem to form part of the current Brexit negotiations".
"In addition, it is now too late for the UK to re-join in its own right the 2007 Lugano Convention by 1 January 2021. As a result, it now appears likely that there will be at least a period of time after the end of the Brexit transition period when the only regimes in place for enforcement of judgments as between the UK and EU member states or non-EU Lugano states will be countries' national laws, the Hague Convention on Choice of Court Agreements - which applies to certain situations involving exclusive jurisdiction clauses - and any bilateral agreements with specific countries which may apply," he said.
"Against this backdrop, it is very welcome that the UK and Norway have agreed that their pre-existing Convention on the reciprocal enforcement of judgments between the two countries should revive for as long as the Lugano Convention no longer applies. This is particularly important for businesses who may litigate disputes in the UK but need to enforce the resulting judgments in Norway, as under Norwegian law it is not possible to enforce a foreign judgment unless there is a binding international agreement of this nature in place. As ever, the devil will be in the detail of the UK-Norway Convention in terms of how good a substitute it is for the ongoing application of the Lugano Convention in the circumstances of a particular case, but this is certainly a positive step forward," he said.
Norway is just one jurisdiction, and there remains uncertainty about the cross-border enforcement of judgments, after 31 December 2020, in the EU and in the other non-EU Lugano states.
The 2007 Lugano Convention governs jurisdiction and the enforcement of judgments in civil and commercial matters between EU member states and Iceland, Norway and Switzerland. It is widely regarded as the 'next best option' for the UK with regards to enforcement of judgments between it and EU member states when the Brussels 1 Recast Regulation, which applies between EU member states only, ceases to apply. Re-joining it will also be necessary to preserve current arrangements for recognition and enforcement of judgments between the UK and the non-EU Lugano states.
Emilie Jones of Pinsent Masons said that the agreement between the UK and Norway could potentially "serve as a precedent for similar agreements between the UK and other countries, such as Switzerland".
"However, Norway is just one jurisdiction, and there remains uncertainty about the cross-border enforcement of judgments, after 31 December 2020, in the EU and in the other non-EU Lugano states," she said. "There is also continuing uncertainty about the allocation of jurisdiction between different countries' courts in cross-border disputes, which is also impacted by the UK ceasing to be a member of the Brussels 1 Recast Regulation and Lugano Convention – a point not covered by the UK-Norway agreement."
"It therefore remains important for businesses to seek advice on dispute resolution provisions when entering into new cross-border contracts; consider reviewing their existing dispute resolution provisions; and take advice on whether litigation should be commenced in any existing disputes before the end of the year in order to take advantage of the transitional provisions under the UK-EU Withdrawal Agreement for proceedings commenced before that date," she said.
30 Sep 2020