The development is a welcome one for those who do business in and with Ukraine as it ensures that:
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if parties to cross-border contracts opt for the Ukrainian courts to resolve disputes between them, that choice will be respected in all other Contracting States.
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similarly, if parties have chosen the courts of another Contracting State, they can rest assured that if the matter comes before the Ukrainian courts, the Ukrainian courts will refuse to hear the dispute.
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a qualifying Ukrainian court judgment will be recognised and enforced in other Contracting States – and vice versa.
Ultimately, the Hague Convention engenders confidence in doing business in Contracting States by facilitating the efficient resolution of disputes between private parties.
About the Choice of Court Convention
The Choice of Court Convention, which came into force on 1 October 2015, gives effect to exclusive jurisdiction agreements in favour of the courts of a Contracting State in certain civil and commercial matters. As such (subject to certain exceptions):
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The chosen court is obliged to hear the case.
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Any other court in a Contracting State must refuse to hear the case.
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The judgment of the chosen court will be recognised and enforced in other Contracting States.
An exclusive jurisdiction agreement is an agreement between two or more parties which records that a particular Contracting State’s court shall hear any disputes that arise between the parties.
The Choice of Court Convention only applies to exclusive jurisdiction agreements concluded after its entry into force for the State of the chosen court (which, for Ukraine, is 1 August 2023), and does not apply to proceedings instituted in a State before its entry into force for that State.
The procedure for recognition and enforcement of qualifying court judgments is governed by the law of the State where the judgment is to be enforced - however, there is an obligation on all Contracting States to “act expeditiously” when enforcing judgments of other Contracting States’ courts.
A word on the Hague Judgments Convention
We also note that, on 1 September 2023, the Hague Judgments Convention (the “Judgments Convention”) entered into force between the EU (except Denmark) and Ukraine. The Judgments Convention also provides for the recognition and enforcement of judgments in civil and commercial matters between Contracting States and, again, the procedure is governed by the law of the enforcing State, but it is wider in scope than the Choice of Court Convention. The Judgments Convention is not limited to judgments given by courts specified in exclusive jurisdiction agreements, and it applies to a wider range of disputes (including, for example, consumer and employment matters, and tortious matters where the act or omission causing harm occurred in the State of origin).
The Judgments Convention may therefore provide a further option for parties seeking to enforce a Ukrainian judgment in the EU – or vice versa - although we note that the proceedings that led to the judgment to be enforced must have been instituted at a time when the Judgments Convention was in force for both the State of origin and the State where the judgment is to be enforced.
The UK Government has consulted on whether the UK should ratify the Judgments Convention. The consultation closed in February 2023 and a decision is awaited. In February 2023, the Law Society of England and Wales published its response to the consultation. Its view was that the UK should accede to the Convention as soon as possible.
If you have any questions relating to the issues raised by this article, please get in touch with either of the contacts listed, who would be happy to assist.
Authored by Daniela Vella, Louis Biggs, and Alex Sciannaca.
