The Impact of Brexit on Litigation: An Update

Nino Sievi
Nino Sievi
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Since 1 February 2020, the UK is no longer a member of the EU. This has implications for the Lugano Convention, which regulates the jurisdiction of courts and the enforcement of foreign judgments between the UK and Switzerland. The UK has never itself ratified the Lugano Convention; it was only bound by it due to its EU membership. Various questions arise now as to how the Lugano Convention is to be applied during and after the transition period.

Continued application of the Lugano Convention during the transition period?

The Federal Office of Justice (FOJ) has recently argued for the continued application of the Lugano Convention during the transition period, which will last until 31 December 2020 (https://www.bj.admin.ch/bj/en/home/wirtschaft/privatrecht/lugue-2007/brexit-auswirkungen.html). It stated the following:

"If the UK leaves the EU having agreed a withdrawal deal (agreement on a transition period), then the Lugano Convention will continue to apply to the UK during the transition period, and the UK will continue to be treated as a state bound by the Convention until the end of this period. This follows from the withdrawal agreement between the EU and the UK."

However, the argumentation of the FOJ is not entirely convincing. The Lugano Convention is to be interpreted autonomously, i.e. independently of national law and bilateral treaties (such as the EU-UK Withdrawal Agreement). Accordingly, the wording of the provisions of the Lugano Convention is paramount.

With regard to the scope of application of the Lugano Convention Article 1 (3) must be consulted:

"In this Convention, the term 'State bound by this Convention' shall mean any State that is a Contracting Party to this Convention or a Member State of the European Community. It may also mean the European Community."

The wording clearly refers to "Member State of the European Community". The UK is no longer a Member State; the Withdrawal Agreement with the EU does not change this. One could only try to argue against the wording by referring to the comparative legal interpretation method. If all parties to the Lugano Convention were to continue to treat the UK as a Member State, this might be a starting point. But even then, the clear wording of Art. 1(3) Lugano Convention would probably prevail. 

It remains to be seen how the Swiss courts will decide this interesting question of interpretation.

However, it could still take quite a while before courts get the opportunity to decide on the question. This is because the enforcement of judgments that have been rendered before 31 January 2020 is governed by the Lugano Convention, independently of this question of interpretation. The Lugano Convention continues to apply to the enforcement of all judgments rendered before the UK’s exit from the Lugano Convention (whether that is on 31 January or 31 December 2020), even if the application for enforcement is made after this date.

The FOJ even goes one step further: The Lugano Convention is also to be applied to the enforcement of judgments which, although rendered after the UK has exited the Lugano Convention, are based on proceedings that were pending before that date. However, it is questionable on which legal basis the FOJ intends to place this continued application of the Lugano Convention.

The UK reaffirms its intention to reaccede to the Lugano Convention and receives support from Switzerland

As early as August 2017, the UK announced that it was interested in reacceding to the Lugano Convention after leaving the EU. However, thereafter no concrete measure were announced, and there were more and more voices that doubted whether the UK should really strive to reaccede to the Lugano Convention.

On 20 January 2020, the UK now reaffirmed its intention to reaccede to the Lugano Convention (https://www.gov.uk/government/news/support-for-the-uks-intent-to-accede-to-the-lugano-convention-2007):

"The UK welcomes the statements of support it is has received from its EFTA partners on its intention to accede in its own right to the Lugano Convention 2007 at the end of the transition period."

It has received assurances of support from various contracting parties (Norway, Iceland and Switzerland). Switzerland is quoted as follows:

"Switzerland welcomes the intent of the UK (UK) to accede to the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the 'Lugano Convention 2007') and will support a request for accession from the UK."

The way seems open for the UK to begin the process of reacceding to the Lugano Convention. However, it seems the UK intends to start this process only after the end of the transition period.

 

 

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