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Corporate news
17.12.2021
On Monday 13 December 2021, the Dutch government provided some helpful guidance on the applicable post-Brexit regime on cross-border recognition and enforcement of court judgments in civil and commercial matters between the UK and the Netherlands.

With the exit of the UK from the EU, the Brussels I Regulation Recast no longer applies between the UK and the Netherlands in respect of cross-border recognition and enforcement of court judgments rendered in proceedings initiated after 1 January 2021. At the same time, the UK also lost its membership of the 2007 Lugano Convention. This has left legal practitioners, academics and politicians to ponder the question which recognition and enforcement regime would presently apply between the UK and the Netherlands, absent an exclusive forum clause covered by the Hague Choice of Forum Convention.

1967 Convention

In this debate, reference was made to an old bilateral treaty between the UK and the Kingdom of the Netherlands, i.e. the Convention dated 17 November 1967 on the reciprocal recognition and enforcement of judgments in civil matters (the "1967 Convention") (Dutch and English version). To this day, the 1967 Convention remains in force and effect, albeit only in respect of the Isle of Man, Guernsey and Jersey, as well as the Caribbean part of the Kingdom of the Netherlands (i.e. Aruba, Curacao, St Martin, Bonaire, Saba, and St Eustace). For the European part of the Kingdom of the Netherlands, the 1967 Convention lost it relevance, however, when it was replaced by the 1968 Brussels Convention to which the UK acceded on 1 January 1987. The 1968 Brussels Convention was later replaced (and thereby terminated) by the Brussels I Regulation, and subsequently by the Brussels I Regulation Recast.

With the Brussels I Regulation Recast no longer applicable to the UK, and UK's bid to accede as a third party state to the 2007 Lugano Convention blocked by the EU, the question whether the 1967 Convention would still – or again – be applicable between the UK and the Netherlands became even more relevant. In Dutch legal writing (see for example T.H.D. Struycken, 'Gerechtelijke procedures en faillissementsprocedures sinds Brexit', Bb 2021/38 and Coen E. Drion, 'Brexit', NJB 2018/1579), there is no consensus on this issue. In addition, one Dutch District Court considered the 1967 Convention to still apply post-Brexit (ECLI:NL:RBOVE:2018:4365). Last month, also Dutch members of parliament raised questions as to the applicability of the 1967 Convention. On Monday 13 December 2021, the Dutch Minister for Legal Protection responded to these questions, and thereby provided guidance on recognition and enforcement of judgments between the UK and the Netherlands.

In short, the Minister confirmed that the 1967 Convention no longer applies to recognition and enforcement of judgments between the UK and (the European part of the Kingdom of) the Netherlands, as it was replaced by the 1968 Brussels Convention. The Dutch government appears to consider the 1967 Convention terminated in respect of (the European part of the Kingdom of) the Netherlands as a result of such replacement, as is in line with Article 59 of the 1969 Vienna Convention on the Law of Treaties. Whether this position is correct in every respect remains for the academics to debate, but for practical purposes the 1967 Convention can be ruled out as a basis for recognition and enforcement of a UK judgment in (the European part of the Kingdom of) the Netherlands.

Alternative grounds for recognition and enforcement of UK judgments in the Netherlands

This does not leave a UK judgment creditor empty-handed, however. A UK judgment may still be enforced and/or recognised in (the European part of) the Netherlands pursuant to the following rules and regulations.

First, the 2005 Hague Convention on Choice of Court Agreements applies between the UK and the Netherlands. The Convention provides a framework for cross-border recognition and enforcement of judgment rendered on exclusive choice of court agreements. This limits the Convention's formal scope of application to cases in which parties have agreed on exclusive contractual jurisdiction. Choice of court agreements or forum clauses with asymmetrical jurisdictional clauses – as commonly seen in financial documents – do not fall within the scope of the Convention. There is also some debate about the temporal scope of application. For EU members the Convention entered into force on 1 October 2015, including the UK at that time. After the Brexit, the UK rejoined as a member in its own right. The question now is whether the Convention continued to apply without interruption (as argued by the UK), or whether the Convention only applies to choice of court agreements concluded after the Convention entered into force for the UK, i.e. on 1 January 2021 (which viewpoint is adopted by the European Commission).

Second, Dutch domestic law allows for the possibility on the recognition of a UK judgment in new, substantive proceedings before a Dutch Court (actio iudicati). We refer to Article 431(2) of the Dutch Code of Civil Procedure. This provision permits the Dutch Courts to rehear the case if a foreign judgment cannot be enforced on the basis of a treaty or international regulation. On the basis of standing case law of the Dutch Supreme Court, however, the Dutch Courts may adopt a foreign court’s factual and legal decisions as its own, provided that the foreign judgment meets a four-prong test for recognition (i.e. jurisdiction, due process, no conflict with Dutch public policy, and no inconsistent judgments). In such case, the Dutch Court will effectively incorporate the foreign judgment into a new Dutch judgment, which can subsequently be enforcement in the Netherlands. Generally, Dutch Courts are receptive to the recognition and enforcement of foreign judgments, and we expect this applies even more so in respect of UK court judgments, which have been automatically recognized and enforced in the Netherlands without exequatur for so many years. For all practical purposes, an actio iudicati pursuant to Article 431(2) may still prove an effective and efficient method for the recognition (and indirect enforcement) of UK judgment in the Netherlands.

In the future, also the 2019 Hague Judgment Convention may become of relevance. This Convention is not yet in force, as it has only been signed – but not yet ratified – by Costa Rica, Israel, the Russian Federation, Ukraine and Uruguay. Neither the UK nor the EU (including the Netherlands) is presently a party to the Hague Judgment Convention, but both consider to accede in the future. If they do so, this would further improve the present gap in mutual recognition and enforcement between the UK and the Netherlands.

In other words, even if the 1967 Convention indeed no longer applies to the recognition and enforcement of UK judgments in (the European part of) the Netherlands – as has now been confirmed by the Dutch government – this does not leave judgment creditors without effective redress.

For further assistance in cross-border recognition and enforcement matters please do not hesitate to contact Kasper Krzeminski (Kasper.Krzeminski@nautadutilh.com) or Teun Struycken (Teun.Struycken@nautadutilh.com).

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