The Hague Judgments Convention – Should the European Union Join?

HCCH LogoLast week, the European Commission started a consultation process on the question whether the EU should join the Hague Judgments Convention (Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters). Here is the Commission’s summary:

“This initiative proposes that the EU signs the 2019 Hague Judgments Convention. This convention makes it easier for rulings in civil or commercial cases to be recognised and enforced in foreign jurisdictions. This should ensure that:

  • rulings in favour of EU businesses/citizens by a court in the EU are enforced in countries and territories outside the bloc
  • rulings affecting EU businesses/citizens that are made outside the EU can be enforced here only if they comply with EU law.”

In a first step, the Commission is looking for feed-back from the stakeholders until 9 March 2020. The Commission’s impact assessment can be found here. It sets out the following policy options:

“Option 0: Baseline scenario: no policy change. The Union will thus not accede to the Judgments Convention and the current status quo will continue. However, given the EU’s active involvement in these negotiations and the fact that its results reflect EU’s policy interests, this scenario is taken into account mainly as a benchmark in order to assess the other options.

Option 1a: The Union will accede to the Judgments Convention without making any declaration.

Option 1b: The Union will accede to the Judgments Convention, excluding:

  • Certain matters reflecting the EU’s policy objective of protecting weaker parties, such as consumers, employees or, in matters relating to insurance, the policyholder, the insured or the beneficiary; or/and
  • Certain matters falling under the exclusive jurisdiction of EU courts, for instance with regard to disputes relating to tenancies or commercial lease of immovable property.

Option 1c: The Union will accede to the Judgments Convention excluding State entities from the application of the Convention.

Option 1d: A combination of options 1b and 1c.”

The European Parliament’s JURI Committee commissioned a study into the Judgments Convention when is was still at a draft stage. This paper, authored by Pedro de Miguel Asensio (Madrid), Gilles Cuniberti (Luxembourg), Pietro Franzina (Ferrara), Christian Heinze (Hannover) and Marta Requejo Isidoro (Luxembourg) is a useful starting point for a discussion of the potential of the Judgment Convention within the EU’s policy framework.

As of today, Uruguay remains the only signatory to the Judgments Convention. To be attractive and relevant to EU citizens, a significant number of non-EU signatories would be required. The study referred to above was rather sceptical. It concluded:

“[W]hether the Draft Convention would be worth signing and ratifying poses some doubts. Its potential to foster uniformity at international and EU (regarding third country judgments) level has to be balanced with the drawbacks of creating an additional layer of complexity. Joining the Convention would entail that a new system, which for obvious reasons is not aligned with the EU Regulations, is added to the latter and to the existing national and international rules. Solutions which would at first sight be deemed coincident with those of the EU instruments may actually diverge under the Convention, and hence risks of misapplication arise. The potential of the Draft Convention to achieve its goals is undermined by its limited scope, particularly if IP disputes are finally excluded and ratification prospects by third States are not much higher than in previous instruments (such as the Choice of Forum Convention) [i.e. the Convention of 30 June 2005 on Choice of Court Agreements, referred to below as the Choice of Court Convention].”

To follow up on this assessment made at the draft stage:

First, on the scope of the Judgments Convention, IP disputes were indeed excluded in the final version of the Judgments Convention (see Article 2 para. 1 lit. m).

Secondly, the ratification process of the Choice of Court Convention did remains low and difficult: Today, the Choice of Court Convention has been signed by only seven non-EU countries (including, for the time being, the United Kingdom amongst the EU countries, for the reasons set out here), and is in force only in three of them, namely in Mexico, Montenegro and Singapore. China, North Macedonia, Ukraine and the United States have signed the Choice of Court Convention, but have not ratified it. In particular with respect to the United States, whose ratification would be a big breakthrough, there is no sign of it moving towards ratification – nothing appears to have changed since Ted Folkman’s guest post here in 2017.

As the European Parliament’s study on the Judgments Convention pointed out, prioritising the inclusion of the United States as the European Union’s largest outside trading partner meant accommodating narrow US standards of jurisdiction and hence making the Judgments Convention less attractive, while still facing the risk that the United States would not join:

“It must be underscored, however, that the strong involvement of US negotiators in The Hague is no guarantee that the US will eventually ratify the Convention, even if it successfully imposed its jurisdictional standards.”

As Ted Folkman had put it:

“[I]t’s unreasonable to think the US would ratify or even sign an eventual judgments convention if it cannot even ratify [the Choice of Court Convention] which is much less ambitious than a judgments convention.”

So where does this leave us? For the time being, I have come to the conclusion that the European Union signing the Judgments Convention is nice to have, but in the short to medium term will not result in the Judgments Convention becoming a “game changer“. But I am open to persuasion.

Leave a Reply

Your e-mail address will not be published. Required fields are marked *


three − = 0

This site uses Akismet to reduce spam. Learn how your comment data is processed.