The EU legislature has issued a new regulation governing jurisdiction and the recognition and enforcement of judgements in the European Union. Michala K Meiselles, a solicitor, author and speaker for Management Forum Ltd considers this development in light of her experiences working in the field of private international law both as a contentious and non-contentious lawyer.
Revision of the Brussels Regulation
January 2015 - A landmark date
The forthcoming revision of the Brussels Regulation which comes into play in January 2015 represents a substantial procedural change for those of us dealing with cross-border contracts. Not only will it affect the way that we plan, negotiate and draft international contracts, but it will also impact upon the way we handle pan-European litigation.
The same three questions typically confront contentious and non-contentious lawyers dealing with cross-border transactions. Whether you are drafting an international contract or handling cross-border litigation, you will usually give due consideration to the question of jurisdiction, the issue of choice of law and finally concerns with regards to the recognition and enforcement of foreign judgements.
In order to facilitate the resolution of cross-jurisdictional disputes, some harmonisation has occurred at the international and European levels.
At the European level, the legislature has implemented two sets of instruments that address European-based cross-jurisdictional concerns. The first category of instruments governs EU-based jurisdictional concerns and the recognition and enforcement of EU-based judgements whilst the second governs choice of law matters in the EU context.
At the present time, the Brussels Regulation 2000 (Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters) governs jurisdictional matters in the EU, however from January 2015 this situation will change with the coming into force of the Brussels Regulation 2012 (Regulation 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters).
The way forward under the Brussels Regulation 2012
This new Regulation which was concluded on 12 December 2012 will apply not only to all proceedings commenced on or after 10 January 2015 but also to court settlements approved or concluded on or after this cut-off date.
The eight chapters that make up the Brussels Regulation 2012 address not only jurisdiction and the recognition and enforcement of judgements (the focus of the Brussels Regulation 2000), but also other supplementary issues. Moreover the chapters addressing jurisdiction and the recognition and enforcement of judgements are wider in scope addressing issues that were not hitherto addressed within the Brussels Regulation 2000.
Subject to certain exceptions, the Brussels Regulations set out the general rules on jurisdiction applicable in civil and commercial cases in the EU whatever the nature of the court or tribunal.
The cases falling outside the scope of the Brussels Regulation 2012 fall into two broad categories. Category one largely includes those matters which by their nature are of a national interest whereas category two encompasses those topics falling within the purview of national law rather than under the competence of the Union.
Akin to its predecessor, the Brussels Regulation 2012 will not extend to cases involving revenue, customs or administrative matters or to disputes involving actions against the State for acts and omissions by the State in the exercise of its authority. Furthermore, the Regulation will not apply to cases involving bankruptcy and winding-up proceedings.
Perhaps the most important exception in the commercial context is the exclusion of arbitrations from the scope of the Regulations. This exclusion which is intended to extend to proceedings involving inter alia procedural matters and the enforcement of arbitral awards will not however prevent a court or tribunal from referring the parties who have entered into an arbitration agreement to arbitration, from staying or dismissing the proceedings before it, or from examining the validity of the arbitration agreement concluded between the parties. (see Recital 12, Brussels Regulation 2012)
The basic rule governing jurisdiction in EU based actions states that jurisdiction is to be exercised by the courts of the Member State in which the defendant is domiciled, regardless of that person's nationality.
This basic rule is displaceable in a number of circumstances. It is displaced:
- Where a valid agreement on jurisdiction exists. In the event that the parties have concluded a qualifying agreement on jurisdiction, the agreement made will generally be upheld;
- By the special rules on jurisdiction; and
- Where the rules on exclusive jurisdiction govern the case at hand.
Pursuant to the special jurisdictional rules, set out in the Brussels Regulations, a defendant who is domiciled in a Member State may be sued in the courts of a Member State other than its own in circumstances where a contract is being performed by the defendant, it has satellite operations throughout the EU, it has appointed agents to represent its pan-European interests or it engages in a sales of goods or a supply of services operation in one or more other Member States.
In cases where the courts have exclusive jurisdiction pursuant to the provisions of the Brussels Regulation 2012, such courts will have jurisdiction regardless of the domicile of the parties to the action. This will occur in cases involving property rights or interests, corporate litigation, patents, trademarks and the enforcement of judgements.
Art 1, Brussels Regulation 2000; Art 1, Brussels Regulation 2012.
Art 1(1), Brussels Regulation 2012.
Art 2, Brussels Regulation 2000; Art 4, Brussels Regulation 2012.
Art 23, Brussels Regulation 2000; Art 25, Brussels Regulation 2012.
Set out in Article 5, Brussels Regulation 2000 and Article 7, Brussels Regulation 2012.
Section 6, Chapter 2, Brussels Regulation 2012.
® Michala K Meiselles