EU signs treaty to recognize and enforce Civil/ Commercial rulings

The European Union on Tuesday signed up to a new international treaty for recognising and enforcing civil and commercial court rulings among its signatories to reduce costly cross-border litigation.

"It will allow EU citizens and businesses to have rulings by a court in the EU recognised and enforced in non-EU participating countries," a statement from EU states said on Tuesday.

"It will also ensure that third country judgements are recognised and enforced in the EU only where fundamental principles of EU law are respected."

The EU will be the first party to accede to the Hague Convention, which requires ratification by another jurisdiction to come into force.

Lawyers said it should partly compensate Britain, when it accedes, for being excluded by the bloc since Brexit from the separate Lugano treaty on cross-border legal cooperation in Europe. 

The EU has said the Hague Convention should provide the basis for future civil judicial cooperation with Britain.

"The EU and UK's stated intention to accede to the 2019 Hague Convention is welcome news, but it will not provide a complete solution to the gaps left by the Lugano Convention," said Elizabeth Williams, a partner at Simmons & Simmons law firm.

Disputes involving anti-trust, defamation, privacy and sovereign debt restructuring are excluded, Williams said.

A party deliberately starting proceedings in a slow moving jurisdiction to block proceedings in a court designated by a contract is not barred by the Hague Convention.

"The risk of parallel proceedings will remain, so practices of old, such as races to judgment and forum-shopping, are likely to resurface," Williams said.

The City of London Law Society said re-entry to Lugano would be preferable to the Hague Convention.

"Nonetheless it does offer a potential partial solution on enforcement and would certainly be better than no solution at all. We encourage the UK Government to expedite its own deliberations on accession," it said.

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