The 2019 Hague Convention: a ‘solid foundation’ for recognition and enforcement of foreign court judgments in construction disputes?

The Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “2019 Hague Convention”) was ratified by the UK Government on 27 June 2024 and is due to come into force in summer 2025.

Once in force, the 2019 Hague Convention is set to reshape the regime for cross-border enforcement of court judgments, offering businesses engaged in litigation in Scotland or England a more reliable route to enforcing judgments across the globe.

Broader scope for enforcement of court judgments

The 2019 Hague Convention seeks to establish a streamlined, global system for the recognition and enforcement of civil and commercial court judgments. Under the 2019 Hague Convention, a judgment from one contracting state can be recognised and enforced in another without the need to relitigate the underlying issues.

The UK’s exit from the European Union significantly shifted the landscape for enforcing foreign judgments. Previously, the UK benefitted from the EU’s regime for reciprocal enforcement of court judgments between member states. Post-Brexit, the UK’s only framework for reciprocal enforcement of court judgments is the 2005 Hague Convention on Choice of Court Agreements (the “2005 Hague Convention”), under which reciprocal enforcement is limited to judgments arising from exclusive jurisdiction clauses within commercial contracts. While the 2005 Hague Convention is helpful in cases where parties have agreed to a specific court’s jurisdiction, its utility is limited by this focus.

The 2019 Hague Convention will therefore fill an important gap in the UK’s current legislative framework in relation to cross-border disputes. The 2019 Hague Convention applies to a much broader range of judgments, including those that arise in the absence of an exclusive choice of court agreement. This wider application is key for businesses engaged in complex construction contracts which often span multiple jurisdictions, and which may not always include a clear jurisdiction clause.

Global reach and key markets

Although the EU and UK are both signatories to the 2005 Hague Convention (a welcome development post Brexit), important markets such as the US and China are not. This compares with a much more extensive regime for reciprocal enforcement of arbitration awards under the New York Convention.

The 2019 Hague Convention’s signatories (and potential signatories) include a far broader range of states than the 2005 Hague Convention. Notably, the US signed (but has not yet ratified) the 2019 Hague Convention in March 2024. If ratified, this would greatly increase the 2019 Hague Convention’s utility for businesses that regularly engage in cross-border trade with US counterparts. China has also expressed interest in the 2019 Hague Convention and participated in its negotiation but is not yet a signatory.

The 2019 Hague Convention’s broader geographic reach should therefore provide UK businesses with easier enforcement routes in major markets beyond Europe, including the US and other key global economies.

Building the case for litigation?

For many years, arbitration has been the preferred dispute resolution method in international contracts, largely because arbitral awards are enforceable in over 160 countries under the New York Convention. Arbitration also offers the benefit of confidentiality, which can be crucial for businesses looking to avoid public litigation, and a greater degree of flexibility and party control (for example, over which arbitral rules to adopt and the identity of the arbitrator). However, those privileges tend to come at a cost and arbitration is generally more expensive than court proceedings.

With its proposed global reach, the certainty of reciprocal enforcement offered by the 2019 Hague Convention could make resolution through the courts a more attractive option for businesses entering cross-border contracts or finding themselves in a dispute.

Nevertheless, the cloak of confidentiality offered by arbitration will undoubtedly continue to be a significant advantage for many businesses, especially where reputational concerns are paramount. 

The 2019 Hague Convention promises to create a solid foundation for recognition and enforcement of court judgments internationally and may see the courtroom gain appeal as the forum for international disputes.

For businesses in the UK construction sector who regularly navigate both the court and arbitration processes, the 2019 Hague Convention could offer a new strategic advantage, particularly where cost savings are a priority.

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