The day after judgement day - Ireland

With increased cross-border commerce and with it the increased potential for disputes between parties based in different countries, the recognition and enforcement of foreign legal judgements is coming under greater scrutiny.

It is widely accepted that a recognised framework for the enforcement of foreign judgement is necessary to ensure clarity and predictability and reduce costs which would assist in facilitating international commerce and investment generally. However, this has proved to be challenging and has been compounded by the UK’s exit from the EU and with it from the application of the Brussels 1 Regulations and Lugano Convention.

The Hague 2019 Judgements Convention on the recognition and enforcement of foreign judgements in civil and commercial matters has been adopted by the EU with the exception of Denmark on 29 August 2022. This Convention shall be enforceable within the EU, including Ireland as and from 1 September 2023. The express intention of the EU in accession to The Hague 2019 Judgements Convention is for that Convention to be complimentary to 2005 Hague Convention on a choice of court.

In brief, the following Regulations and Conventions apply to the enforcement of foreign judgements in Ireland:

The 2005 Hague Convention on Choice of Court

This Convention applies to contracts which contain exclusive jurisdiction clauses. For the purpose of the Convention, unless the parties have provided otherwise, the selection of a specific court to have jurisdiction of disputes is exclusive, binding and enforceable. The UK remains a party to this Convention and therefore enforcement of judgements which fall within the scope of the choice of court Convention is still possible between Ireland and the UK.

Brussels 1 and Recast Regulations

This applies to all proceedings in EU countries from 2015 onwards. A judgement issued in another member state is enforceable in Ireland and has the same effect as a judgement given by an Irish court. Judgement is defined broadly and includes any judgement given by a court or tribunal of a member state inclusive of decrees, orders, decisions or writ of execution as well as any determination on costs or expenses. A judgement given in default of appearance by any alleged judgement debtor can be challenged but generally enforcement procedures are straightforward.

Lugano Convention

The Lugano Convention applies to both EU and EFTA countries (which includes Switzerland, Norway and Iceland) and regulates both the competence of a court to hear a cross border case and the recognition of enforcement of a judgement. Default judgements are also capable of challenge under the Convention. The Lugano Convention is a very similar framework to the Brussels Recast Regulations.

The 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgements

The new Convention also deals with cross border enforcement of judgements in civil and commercial matters. It goes beyond the 2005 Hague Convention in that a judgement does not have to be based on an exclusive jurisdiction clause but this Convention expressly excludes family, insolvency, probate, defamation, intellectual property and enforcement of arbitral awards. Judgements will only be enforced in cases involving immovable property if the immovable property is situated in a country where a judgement was obtained.

The 2019 Hague Convention does not address the initial jurisdiction of a court to hear a dispute in the first place and therefore leaves open the possibility of a challenge or parallel proceedings arising from the same matter in two or more countries. While the 2019 Hague Convention does not provide for a review on the merits of a judgement in the enforcing State, there are additional potential grounds for refusal for the recognition of a foreign judgement such as public policy or fraud. The Convention also allows for declarations by contracting states to not apply the Convention to another contracting State or to a specific matter.

The process for enforcing a judgement under the Hague 2019 Judgement Convention is likely to be very similar to procedures under the Lugano Convention and Brussels Recast Regulations and under the 2019 Hague Convention. As the Convention will not come into force in Ireland until 2023 the necessary amendments to the Rules of the Superior Courts have not yet been made. Documents which are almost certain to be required include a complete and certified copy of the judgment and any documents necessary to establish that the judgement has effect or, where applicable, is enforceable in the state of origin.

As at the date of writing, the UK is not a party to the 2019 Hague Convention. Costa Rica, Israel, the Russian Federation and USA have contracted to the Convention but have not yet ratified or acceded to it. However, Ukraine has done so.

Given the volume of commerce between Ireland and the UK, the exit of the UK from the EU and with it the cessation of the application of the Brussels Recast Regulations and Lugano Convention have created ongoing uncertainty and difficulty in the enforcement of judgements obtained in Ireland or the UK in the other country. The 2005 Hague Convention on the Choice of Court will still apply in appropriate cases to judgements obtained in Ireland and the UK and subject to the appropriate criteria may be enforced in either jurisdiction.

In the absence of an applicable Regulation or Convention, the common law will continue to apply, and it is a matter for the court’s discretion as to whether to recognise and enforce a foreign judgement. In general terms once a judgement is for a definitive sum of money and is final and conclusive and given by a court of competent jurisdiction, the Irish courts will normally enforce such a foreign judgement against any entity based in Ireland. Any application for recognition of a foreign judgment may be subject to specific defences such as being contrary to public policy, obtained by fraud or where the jurisdiction of the foreign court to make any such judgement is contested. As a general rule the defendant must have assets within Ireland against which to enforce such a judgement rather than seeking a litigation advantage through forum shopping.

If the UK was to accede to the Lugano Convention and to the Hague 2019 Judgements Convention, this would create greater certainty in terms of enforcement of UK judgements in Ireland and Irish judgements in the UK but ultimately while political issues arising from the UK’s exit from the EU continue, enforcement of UK judgements and judgements in the UK are likely to be more complex and costly.