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The United Kingdom and Ireland enjoy a close trading relationship. The UK is one of the most important export partners for the Irish economy, with approximately 15% of Irish goods and services destined for the UK.
In addition, two-thirds of Irish exporters make use of the UK land bridge to access continental markets. Consequently, it is no surprise that commercial disputes can arise where UK and Irish business is concerned, particularly within the manufacturing industry.
Following Brexit, however, there is a concern for parties (and most pertinently creditors) involved in cross-border litigation within the European Union (to which Ireland, unlike the UK, still is a member state) in relation to whether the UK and the EU will cooperate on the enforcement of court judgments. This is an even greater concern for Ireland, given the close ties it maintains with the UK.
Enforcing UK Judgments in Ireland
Lugano Convention
The Lugano convention would be a practical solution to enforce UK judgments in Ireland. It is a treaty between EU member states and specific European Free Trade Association members. It contains several provisions also located in the Brussels Recast and would enable UK judgments to be enforced in Ireland. However, the UK has applied to join the convention as a non-EU Country, but to date, this application is yet to be approved.
Hague Convention
One instrument available to a party looking to enforce a UK judgment in Ireland is the Hague Convention, which the UK acceded to on 1 January 2021. This convention enables the enforcement of a judgment in another jurisdiction.
However, the Hague Convention is only available where the parties have included an exclusive jurisdiction clause within a commercial contract. It does also not provide for the enforcement of certain protective measures such as freezing orders or interim injunctions.
Nevertheless, there is a broad range of judgments which can be enforced under the Hague Convention, and where the enforcement of a UK judgment is sought in Ireland, an application to Court paves the way in which to do so. The application can be made without notice to the other party, and there are limited grounds on which such an application can be refused.
General position on the enforcement of EU Judgments
The enforcement of judgments amongst EU member states is governed by the Brussels Regulation (1215/2012) (Brussels Recast). This regulation provides that in the majority of instances, a judgment in one member state will be automatically recognised in another. The benefit of this is that it provides clarity and vastly reduces the cost and complexity of cross-border enforcement.
The position on enforcement post Brexit
The UK left the EU on 31 January 2020, although the transition period lasted until 31 December 2020. During the transition period, EU law continued to apply to enforcement on all judgments obtained in proceedings which commenced prior to 31 December 2020. Consequently, if proceedings were commenced prior to 11pm on 31 December 2020, enforcement can be dealt with under the Brussels Recast as normal.
However, if proceedings were commenced after this time, the Brussels Recast will no longer apply to the enforcement of UK judgments in Ireland. This is a potential problem for UK manufacturers or suppliers looking to conduct business in Ireland because if there are any issues over commercial contracts, then they could prove complex, costly and cumbersome to resolve. Alternative options must therefore be assessed.
Comment
In light of Brexit, there are added complexities to enforcing a UK court judgment in Ireland. Manufacturers or suppliers in the UK must be mindful, therefore, when contracting with Irish companies, of the issues that could present should any problems with a contract arise.
UK parties to an agreement would be wise to include exclusive jurisdiction clauses in any contracts entered into, or indeed to insert such clauses into existing contracts made pre-2021, to benefit from the procedures which may permit enforcement within the Hague Convention.