Recognition and enforcement of judgments after Brexit
Following Brexit there has been uncertainty concerning the enforcement of judgments between the UK and Iceland, as the UK is no longer a party to the Lugano Convention. Recently, BBA//Fjeldco has been advising its clients on this issue in relation to commercial agreements and enforcement and consequently brought this to the attention of the Icelandic Ministry of Justice with proposed solutions. As a result, the Ministry is now considering putting in place a bilateral agreement between the UK and Iceland in relation to the reciprocal enforcement of judgments.
An article written by Gunnar Thor Thorinsson and Hafliði K. Lárusson on recognition and enforcement of judgement after Brexit was published in Morgunblaðið and can be found here on Morgunblaðið webside.
See English version of the article here below
Recognition and Enforcement of Judgments after Brexit – A Solution is Needed
One of the consequences of Brexit is that there currently exists considerable uncertainty regarding the reciprocal recognition and enforcement of judgments between the UK and Iceland. This uncertainty has caught some by surprise and it may lead to difficulties for Icelandic companies involved in international business.
The Lugano Convention
Before Brexit, both the UK (as an EU Member State) and Iceland (as an EEA Member State) were parties to the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. After Brexit, the UK is no longer a party to the Lugano Convention, which means that currently there exists considerable uncertainty as to whether Icelandic courts will recognise and enforce UK judgments, and vice versa.
Current Uncertainty
This uncertainty is damaging in light of the large volume of business between the UK and Iceland and also having in mind the large number of commercial and finance agreements between Icelandic and international parties and where the parties have agreed to the jurisdiction of the English courts.
As matters currently stand, it is difficult to predict how Icelandic courts would deal with questions regarding the enforcement of English judgments, but it can be concluded with certainty that nothing in Icelandic law or on the basis of international treaties means that Icelandic courts are obligated to grant English judgments recognition and enforcement in the same way as under the Lugano Convention regarding judgments originating from other EEA countries and Switzerland.
Potential Solutions
There may be a number of solutions to the current position. First, the UK has applied to accede to the Lugano Convention, but until now (as part of the continuing negotiations between the EU and the UK) the EU has been reluctant to agree to such accession by the UK.
In some instances, the UK and individual EU/EEA Member States may be able rely on earlier bilateral treaties regarding the recognition and enforcement of judgments and which were entered into prior to the UK’s entry into the EU. To give an example, the UK and Norway have recently “revitalised” such bilateral treaty from 1961 between the two countries. However, no such treaty exists between Iceland and the UK.
In this context, it is also worth noting that both the EU and the UK (now individually after Brexit) are parties to the 2005 Hague Convention on choice of court agreements, which sets out reciprocal recognition and enforcement of judgments where the underlying agreement contains an exclusive jurisdiction clause. However, Iceland is not a party to the Hague Convention, which means that it does not apply between the UK and Iceland.
A Permanent Solution for Iceland?
In order to avoid the current uncertainty, the only permanent solution would be for Iceland and the UK to enter into a bilateral treaty regarding the mutual recognition and enforcement of judgments. Such mutual recognition and enforcement was in place between the two countries under the Lugano Convention between 1994 (when Iceland became a EEA Member State) and until 31 December 2020 (when the UK left the EU). Therefore, the effects of such bilateral treaty would not present a material change but rather be a continuation of an arrangement which has been in place between the two countries for almost three decades and which is independent of the common EEA regulatory framework as such, as there is no common EEA contract law, law of sale of goods and services or law of obligations and, therefore, the substantive governing law of the agreement is question is rarely some common EEA law in any event. Further, such bilateral treaty could follow the wording of the Lugano Convention or, e.g., of the 1961 treaty between the UK and Norway, along with any appropriate amendments.
By entering into a bilateral treaty regarding the recognition and enforcement of judgments, Iceland and the UK would resolve the current uncertainty in a straight-forward manner and also strengthen the relationship between the two countries in the post-Brexit era.
Following Brexit there has been uncertainty concerning the enforcement of judgments between the UK and Iceland, as the UK is no longer a party to the Lugano Convention. Recently, BBA//Fjeldco has been advising its clients on this issue in relation to commercial agreements and enforcement and consequently brought this to the attention of the Icelandic Ministry of Justice with proposed solutions. As a result, the Ministry is now considering putting in place a bilateral agreement between the UK and Iceland in relation to the reciprocal enforcement of judgments.
An article written by Gunnar Thor Thorinsson and Hafliði K. Lárusson on recognition and enforcement of judgement after Brexit was published in Morgunblaðið and can be found here on Morgunblaðið webside.
See English version of the article here below
Recognition and Enforcement of Judgments after Brexit – A Solution is Needed
One of the consequences of Brexit is that there currently exists considerable uncertainty regarding the reciprocal recognition and enforcement of judgments between the UK and Iceland. This uncertainty has caught some by surprise and it may lead to difficulties for Icelandic companies involved in international business.
The Lugano Convention
Before Brexit, both the UK (as an EU Member State) and Iceland (as an EEA Member State) were parties to the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. After Brexit, the UK is no longer a party to the Lugano Convention, which means that currently there exists considerable uncertainty as to whether Icelandic courts will recognise and enforce UK judgments, and vice versa.
Current Uncertainty
This uncertainty is damaging in light of the large volume of business between the UK and Iceland and also having in mind the large number of commercial and finance agreements between Icelandic and international parties and where the parties have agreed to the jurisdiction of the English courts.
As matters currently stand, it is difficult to predict how Icelandic courts would deal with questions regarding the enforcement of English judgments, but it can be concluded with certainty that nothing in Icelandic law or on the basis of international treaties means that Icelandic courts are obligated to grant English judgments recognition and enforcement in the same way as under the Lugano Convention regarding judgments originating from other EEA countries and Switzerland.
Potential Solutions
There may be a number of solutions to the current position. First, the UK has applied to accede to the Lugano Convention, but until now (as part of the continuing negotiations between the EU and the UK) the EU has been reluctant to agree to such accession by the UK.
In some instances, the UK and individual EU/EEA Member States may be able rely on earlier bilateral treaties regarding the recognition and enforcement of judgments and which were entered into prior to the UK’s entry into the EU. To give an example, the UK and Norway have recently “revitalised” such bilateral treaty from 1961 between the two countries. However, no such treaty exists between Iceland and the UK.
In this context, it is also worth noting that both the EU and the UK (now individually after Brexit) are parties to the 2005 Hague Convention on choice of court agreements, which sets out reciprocal recognition and enforcement of judgments where the underlying agreement contains an exclusive jurisdiction clause. However, Iceland is not a party to the Hague Convention, which means that it does not apply between the UK and Iceland.
A Permanent Solution for Iceland?
In order to avoid the current uncertainty, the only permanent solution would be for Iceland and the UK to enter into a bilateral treaty regarding the mutual recognition and enforcement of judgments. Such mutual recognition and enforcement was in place between the two countries under the Lugano Convention between 1994 (when Iceland became a EEA Member State) and until 31 December 2020 (when the UK left the EU). Therefore, the effects of such bilateral treaty would not present a material change but rather be a continuation of an arrangement which has been in place between the two countries for almost three decades and which is independent of the common EEA regulatory framework as such, as there is no common EEA contract law, law of sale of goods and services or law of obligations and, therefore, the substantive governing law of the agreement is question is rarely some common EEA law in any event. Further, such bilateral treaty could follow the wording of the Lugano Convention or, e.g., of the 1961 treaty between the UK and Norway, along with any appropriate amendments.
By entering into a bilateral treaty regarding the recognition and enforcement of judgments, Iceland and the UK would resolve the current uncertainty in a straight-forward manner and also strengthen the relationship between the two countries in the post-Brexit era.
Following Brexit there has been uncertainty concerning the enforcement of judgments between the UK and Iceland, as the UK is no longer a party to the Lugano Convention. Recently, BBA//Fjeldco has been advising its clients on this issue in relation to commercial agreements and enforcement and consequently brought this to the attention of the Icelandic Ministry of Justice with proposed solutions. As a result, the Ministry is now considering putting in place a bilateral agreement between the UK and Iceland in relation to the reciprocal enforcement of judgments.
An article written by Gunnar Thor Thorinsson and Hafliði K. Lárusson on recognition and enforcement of judgement after Brexit was published in Morgunblaðið and can be found here on Morgunblaðið webside.
See English version of the article here below
Recognition and Enforcement of Judgments after Brexit – A Solution is Needed
One of the consequences of Brexit is that there currently exists considerable uncertainty regarding the reciprocal recognition and enforcement of judgments between the UK and Iceland. This uncertainty has caught some by surprise and it may lead to difficulties for Icelandic companies involved in international business.
The Lugano Convention
Before Brexit, both the UK (as an EU Member State) and Iceland (as an EEA Member State) were parties to the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. After Brexit, the UK is no longer a party to the Lugano Convention, which means that currently there exists considerable uncertainty as to whether Icelandic courts will recognise and enforce UK judgments, and vice versa.
Current Uncertainty
This uncertainty is damaging in light of the large volume of business between the UK and Iceland and also having in mind the large number of commercial and finance agreements between Icelandic and international parties and where the parties have agreed to the jurisdiction of the English courts.
As matters currently stand, it is difficult to predict how Icelandic courts would deal with questions regarding the enforcement of English judgments, but it can be concluded with certainty that nothing in Icelandic law or on the basis of international treaties means that Icelandic courts are obligated to grant English judgments recognition and enforcement in the same way as under the Lugano Convention regarding judgments originating from other EEA countries and Switzerland.
Potential Solutions
There may be a number of solutions to the current position. First, the UK has applied to accede to the Lugano Convention, but until now (as part of the continuing negotiations between the EU and the UK) the EU has been reluctant to agree to such accession by the UK.
In some instances, the UK and individual EU/EEA Member States may be able rely on earlier bilateral treaties regarding the recognition and enforcement of judgments and which were entered into prior to the UK’s entry into the EU. To give an example, the UK and Norway have recently “revitalised” such bilateral treaty from 1961 between the two countries. However, no such treaty exists between Iceland and the UK.
In this context, it is also worth noting that both the EU and the UK (now individually after Brexit) are parties to the 2005 Hague Convention on choice of court agreements, which sets out reciprocal recognition and enforcement of judgments where the underlying agreement contains an exclusive jurisdiction clause. However, Iceland is not a party to the Hague Convention, which means that it does not apply between the UK and Iceland.
A Permanent Solution for Iceland?
In order to avoid the current uncertainty, the only permanent solution would be for Iceland and the UK to enter into a bilateral treaty regarding the mutual recognition and enforcement of judgments. Such mutual recognition and enforcement was in place between the two countries under the Lugano Convention between 1994 (when Iceland became a EEA Member State) and until 31 December 2020 (when the UK left the EU). Therefore, the effects of such bilateral treaty would not present a material change but rather be a continuation of an arrangement which has been in place between the two countries for almost three decades and which is independent of the common EEA regulatory framework as such, as there is no common EEA contract law, law of sale of goods and services or law of obligations and, therefore, the substantive governing law of the agreement is question is rarely some common EEA law in any event. Further, such bilateral treaty could follow the wording of the Lugano Convention or, e.g., of the 1961 treaty between the UK and Norway, along with any appropriate amendments.
By entering into a bilateral treaty regarding the recognition and enforcement of judgments, Iceland and the UK would resolve the current uncertainty in a straight-forward manner and also strengthen the relationship between the two countries in the post-Brexit era.