Will the UK join the 2007 Lugano Agreement?

an introduction

In the past few days, conflicting reports have emerged about whether the EU will accept the UK’s application to join the 2007 Lugano Agreement, the UK’s preferred jurisdiction system and enforcement of sentences with EU member states after Brexit. This post briefly describes what the 2007 Lugano Agreement is and why the UK wants to join it, and provides an update on the accession process.

Previous articles in this series discuss in more detail the 2007 Lugano Agreement (Part 1: Here(And explain the rules now governing jurisdiction and enforcement of judgments in the UK after the Brexit transition period of 31 December 2020.) Parts 2-4: Hereand the Here, and the Here).

What is the Lugano Agreement 2007?

The 2007 Lugano Agreement regulates the jurisdiction and enforcement of judgments between the European Union and the three member states of the European Free Trade Association (EFTA) – Switzerland, Iceland and Norway (but not Liechtenstein). Brussels Rework Regulation (Regulation 1215/2012) (Brussels Restructuring), which applies to jurisdiction and enforcement of judgments between the UK and EU Member States prior to the end of the Brexit transition period on 31 December 2020, redundancy tightening The UK was a former member of the EU Lugano for the year 2007 through its membership in the European Union.

Why does the UK want to join?

Accession to the 2007 Lugano Agreement will allow for direct cross-border enforcement of judgments between the UK and EU member states and provide legal certainty and predictability to the parties by allowing them to decide which courts they can bring cases before.

From the UK’s point of view, it is also significant that the 2007 Lugano Agreement includes a relatively weak obligation to “repay the account owed” under the case law of the European Court of Justice (ECJ) which may allow further variation by the UK under the redrafted Brussels Regulation .

What is the joining process?

The UK unanimously asked the existing parties to the 2007 Lugano Agreement, the three countries of the European Free Trade Association and the European Union (including Denmark, a separate country) for their consent. According to Article 27(3) of the 2007 Lugano Convention, Contracting States must “seek” to give their consent within one year. The deadline was April 14, 2021. While the three member states of the European Free Trade Association have expressed their support, the European Union has not yet made a formal decision.

On 12 April 2021, reports emerged that the European Commission had recommended that the EU reject the UK’s application.[i] The Commission reportedly believes that the 2007 Lugano Agreement should be restricted to members of the European Free Trade Association and the European Economic Area (EEA).

However, the committee will not have the final say. This falls on the shoulders of the European Council, to which the heads of state and government of the European Union belong. The council is reportedly not expected to make a decision within weeks.

conclusion

The EU may continue to approve the UK’s accession to the 2007 Lugano Agreement in due course. In the meantime, the parties must remain confident that applicable English law and jurisdiction clauses will be incorporated into their agreements, which they will continue to uphold and enforce by the English courts. As stated in our previous publications, your choice of law, jurisdiction and English arbitration clauses may result in certain benefits.

[i] Financial Times, “Brussels rejects UK’s offer to enter into legal agreement and partition EU countries”, 12 April 2021 (https://www.ft.com/content/7aad8362-ef75-4578-81eb-38b5d2c51223).