On 31 December 2020 the Brexit transition period ended and the United Kingdom ceased being a party to the Lugano Convention 2007, which governs issues of jurisdiction and the enforcement of judgments between its signatories (the EU member states as well as Norway, Iceland and Switzerland).
On 8 April 2020 the government applied for the United Kingdom to rejoin the Lugano Convention as an independent contracting state. However, before accession can take place, the contracting parties must agree to the United Kingdom joining the convention. In late 2020, it was unclear whether the European Union would support the United Kingdom's accession to the convention.
Accordingly, on 13 October 2020 the United Kingdom signed a separate agreement with Norway to ensure the continued recognition and enforcement of civil judgments between the two countries. Pursuant to this agreement, the bilateral convention between the United Kingdom and Norway of 12 June 1961 regarding reciprocal enforcement of judgments will continue to apply with certain amendments. Since the entry into force of the previous Lugano Convention 1988, the 1961 convention has had limited application as both Lugano Conventions took precedence within their scope. The 1961 convention has now been revitalised with effect from 1 January 2021 and will ensure that civil judgments can be recognised and enforced between the two countries.(1)
However, the United Kingdom has not made a separate agreement with Norway on jurisdiction, meaning that this will now be governed by national law.
Implications for shipping disputes
Due to the inherent multi-jurisdictional nature of shipping disputes, the reciprocal recognition and enforcement of judgments can be crucial. Judgments often require enforcement over assets which are located in another jurisdiction. The Lugano Convention made this possible with regard to the enforcement of UK judgments in signatory states and vice versa.
Disputes in the shipping sector are generally governed by arbitration clauses. In addition, in most cases, the contracting parties will agree to be governed by the laws of England and Wales and London arbitration because of factors such as familiarity within the international maritime community and experience of arbitrators. The United Kingdom is a contracting party to the New York Convention, along with all current EU members and the European Free Trade Association states. This convention governs and ensures the enforcement of international arbitration awards.
The United Kingdom's conclusion of the bilateral agreement with Norway will hopefully encourage the European Union to consent to its accession to the Lugano Convention. However, in the meantime, there may be hurdles to overcome in the enforcement of court or tribunal judgments between the United Kingdom and Norway. Commercial parties which operate in the shipping and offshore sector should pay careful attention to the new bilateral agreement and ensure that their contracts are governed by the most beneficial jurisdiction.
Endnotes
(1) Further information is available here.
