Brexit - impact on governing law and dispute resolution. Jef Swinnen Rachid El Abr 1

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1 Brexit - impact on governing law and dispute resolution Jef Swinnen Rachid El Abr 1

2 In short Scope Legal instruments Major impact in practice? Applicable law EU Rome I and Rome II Regulations LIMITED Arbitration 1958 New York Convention LIMITED Jurisdiction EU: Brussels I Recast Regulation EFTA: 2007 Lugano convention

3 Applicable law: EU Rome I and Rome II Regulations Rome I: start: 1980: Rome Convention key: choice of law by the parties protects: consumer employees insurance policy holders rules that determine the applicable law if parties did not make a choice of law Rome II: start: 2009 sophisticated set of rules in relation to noncontractual obligations / tort law

4 Applicable law: EU Rome I and Rome II Regulations EU27 UK universal application: apply regardless whether parties chose the law of an EU Member State or a non-eu Member State - e.g. China, Japan, US, Russia or post-brexit UK incorporate in domestic law: 26 June 2018: European Union (Withdrawal) Act 2018 draft: statutory instrument on the Law Applicable to Contractual Obligations and Non- Contractual Obligations (Amendment) (EU Exit) Regulations 2018 future: Withdrawal Agreement: transitory period to end 2020 Rome I: not circumvent EU protective rules by chosing law of England & Wales, Scotland, Northern Ireland to apply to purely EU situations upcoming decades: adapt to changing society (e.g. globalisation and digitalisation): may result in a further departure between the EU-27 and UK applicable rules

5 Arbitration: 1958 New York Convention recognition and enforcement of foreign arbitral awards UN Conference on International Trade Law (UNCITRAL) ratified by more than 150 States

6 Jurisdiction: Brussels I Recast and 2007 Lugano Convention Brussels I Recast: start: 1968: Brussels Convention 2002: regulation 2012: recast abolished exequatur efficient recognition and enforcement of judgements throughout EU Lugano: start: 1988 Iceland, Norway and Switzerland

7 Jurisdiction: Brussels I Recast and 2007 Lugano Convention EU27/EFTA UK UK judgement in BE: national law of each EU/EEA state determines whether a UK judgment can be recognised and enforced in that jurisdiction exequatur before the Court of First Instance art. 25 Code of PIL: liberal: will recognise in the absence of 1 of 9 grounds for refusal BE judgement in UK: High Court of England and Wales Court of Session in Scotland High Court of Northern Ireland refusal: where the BE court lacked jurisdiction according to the relevant UK conflict of laws rules where the BE judgement was obtained by fraud where the BE judgement is contrary to public policy where natural justice requires to do so

8 Jurisdiction: Brussels I Recast and 2007 Lugano Convention future: Withdrawal Agreement: transitory period and specific arrangements to end Hague Choice of Court Convention ratified by EU, Singapore, Denmark and Montenegro signed but not yet ratified by US, China, and Ukraine however: exclusive jurisdiction only only in relation to jurisdiction clauses concluded after the UK s ratification in 2019 art 9: grounds for refusing enforcement of a judgement: wider than Brussels I Recast 1935 bilateral treaty between Belgium and the UK exequatur is required probably: UK courts will revive their anti-suit injunctions order issued by UK court that prevents opposing party from commencing or continuing a proceeding in an EU/EEA member state (civil fines; imprisonment) 2004: CJEU: Turner case

9 Post-2020 relationship: uncertainty The Law Society of England and Wales The General Council of the Bar of England and Wales March 2018: Mansion House speech July 2018: White Paper: a new bilateral agreement with the EU, which would cover a coherent package of rules on jurisdiction, choice of jurisdiction, applicable law, and recognition and enforcement of judgments in civil, commercial, insolvency and family matters Iceland, Norway, Switzerland: Lugano Convention

10 Post-2020 relationship: uncertainty 25 Nov 2018: Political Declaration 26 pages no reference to applicable law / jurisdiction framework

11 UK Courts and Tribunal Judiciary, English Law, UK Courts and UK Legal Services after Brexit. The View beyond 2019 English Law is and will remain the gold standard The UK s judges are and will remain of the highest calibre London will continue to provide unrivalled access to high quality legal advice, contract drafting and dispute resolution services The UK is and will remain a Global Arbitration and ADR centre The Law Society of England and Wales, England & Wales Global Legal Center, Nov

12 Frankfurt Chamber for International Commercial Disputes of the Landgericht Frankfurt am Main operational: Jan 2018 Germany offers one of the best court systems in the world committed to due process and the rule of law allows English speaking parties to benefit from Germany s reliable and expeditious public dispute resolution mechanisms and highly efficient enforcement mechanisms I

13 Paris the International Commercial Courts of Paris (ICCP) - les Chambres Commerciales Internationales de Paris (CCIP) the International Chamber of the Paris Commercial Court the International Chamber of the Paris Court of Appeals operational: April 2018 Why choose Paris? Decisions will be enforceable in all countries of the EU

14 Amsterdam the Netherlands Commercial Court the Netherlands Commercial Court of Appeal operational: 2019 (?) allows parties to avoid expensive forums such as London or US Dutch procedural law is recognised for being efficient, pragmatic and cost-effective u amongst the most widely enforceable judgments worldwide easily enforceable in the entire EU and 5 outside the EU in addition generally enforceable in the US (most states), Canada, Singapore, Hong Kong, Australia and New Zealand

15 Brussels Brussels International Business Court operational: 2020 (?)

16 Best practices continued uncertainty uncertainty: be prepared for the worst and hope for the best existing contracts: know your material contracts know the potential issues if required: consider if feasible to re-negotiate future contract negotiations: financial sector: legislation imposing that certain disputes can only be heard by EU courts or EU-seated arbitral tribunals: art. 45(6) MiFIR: third-country firms services a client in EU - offer to submit any disputes relating to those services to the jurisdiction of a court or arbitral tribunal in a Member State typically: aim for allignment between governing law and dispute resolution

17 Best practices reflect on appropriate governing law and dispute resolution mechanism: case-by-case: language: English as international business language instruments developed in a specific jurisdiction - e.g. trust strength of the legal system strength of the legal industry contracting parties: home advantage for one party? familiarity with the legal system enforceability of dispute resolution decisions cost when opt for English law: if one opts for arbitration, one benefits from 1958 New York Convention when opt for English jurisdiction: consider to opt for an exclusive jurisdiction clause (2005 Hague Convention)

18 Upcoming Revue Droit Bancaire et Financier / Tijdschrift Bank- en Financieel Recht 2019: special publication on Brexit The impact of Brexit on governing law and dispute resolution clauses in international commercial contracts Guillaume Croisant, Rachid El Abr and Jef Swinnen