The effect of Brexit on incorporation of dispute resolution clauses

Many scholars have written about the possible effect of Brexit in relation to jurisdiction agreements contained in charterparties and B/Ls. The status quo forms the acquis commu-nautaire and, therefore, the Brussels I Regulation (recast) is still applicable by UK courts. It is unclear at the time of writing whether there will be an extension of the transition period after 31 December 2020 or a new Trade Agreement accompanied by new rules on international jurisdiction. The UK formally applied to become a party to the Lugano Convention on 8 April 2020. However, the European Commission does not seem inclined to accept the accession of the UK to that treaty, as it would allow the UK to apply an ‘almost perfect copy of the old Brussels I Regulation’,^[1] and ‘the UK is determined to leave the single market after the transition expires’.

The choice of jurisdiction in favour of an EU Member State prescribed by Article 23(1) of the Brussels I Regulation 44/2001 has a narrower scope in comparison with Article 25 of the Brussels I Regulation (recast), requiring one of the parties to be domiciled in an EU Member State. The lis alibi pendens rules of Articles 33 and 34, as well as Recital 24 of the Brussels I Regulation (recast), apply when proceedings or an action are pending in non-EU courts and the foreign court is first seised or there is an exclusive jurisdiction agreement in favour of that third state. These rules have no equivalent in the Lugano Convention or the earlier Brussels regime. EU courts may find jurisdiction according to other provisions of the Brussels I Regulation (recast), and the jurisdictional and procedural standards of the non-EU courts may differ from those in the EU. However, the 2005 Hague Choice of Court Convention excludes B/Ls and voyage charterparties from its scope, although it does apply to time charterparties, demise charterparties and marine insurance.

It is noteworthy that the still-not-in-force Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters,^[2] in line with the Hague Choice of Court Convention, excludes from its scope of application the carriage of passengers and goods, as well as pollution, limitation of liability for maritime claims and general average. This new Convention reflects the same restrictions on party autonomy as the Hague Choice of Court Convention, recognising any cargo claim judgment of another jurisdiction where this instrument has been ratified.

It is clear that in the absence of any temporary or permanent arrangement it would be plausible for the UK to ratify both instruments, covering not all but some maritime-related claims. The UK will continue to recognise and enforce any English or foreign choice of court agreement, binding any ‘third party such as a consignee, B/L holder, assignee or subrogated insurer (in relation to third party matters, ie assignment or direct actions)’, after the expiry of the transition period. Furthermore, if there are no other arrangements in place between the UK and the EU, it is expected that there will be a revival of the bilateral agreements that existed prior to the accession of the UK to the European Communities in 1973 on jurisdiction and enforcement of judgments on civil and commercial matters.

Arbitral proceedings by way of exclusive arbitration clause should not be affected if a new trade agreement is not struck by the UK and the EU. Arbitration agreements are subject to the New York Convention, which was ratified by all the EU Member States and the UK. No substantial changes on arbitral proceedings - in the UK or an EU Member State - are foreseen. However, the UK may be able to issue anti-suit injunctions restraining the parties from commencing proceedings in EU Member States in breach of an English jurisdiction or arbitration clause. There remain many uncertainties regarding the future if the UK and EU reach a new agreement on the recognition and validity of jurisdiction agreements.

• [1] 2 10S Quim Fomer-Delaygua, ‘Changes to jurisdiction based on exclusive jurisdiction agreements under the Brussels I Regulation Recast’ (2015) 11(3) Journal of Private International Law 379, 281-282. 3 Jim Brunsden and others, ‘Britain risks losmg access to valuable European legal pact’ Financial Times (London 20 April 2020). 4 Pietro Franzina, ‘Lis Pendens Involving a Third Country under the Brussels I-bis Regulation: an Overview’ (2014) Rivista di dmtto intemazionale private e processuale 23; Fomer-Delaygua (n 108). 5 The UK would be able to uphold choice of court agreements in the case of direct actions against marine insurers without following the CJEU’s judgment in C-368/16 Assens Havn v. Navigators Management (UK) Ltd EU:C:2017:546, that restricted the enforcement of an English law and jurisdiction clause in a direct action against the insurer in contravention of the P&I Club’s insurance policy terms; Jonatan Echebama Fernández, ‘Limitations
• [2] The Convention was drafted by the Hague Conference on Private International Law and it is known as the Jtidgments Convention. 2 For more mformation on the Judgments Convention’s scope of application see Peter Amt Nielsen, ‘The Hague 2019 Judgments Convention - From Failure to Success?’ (2020) Journal of Private International Law 1; Francisco Garcimartin Alférez, ‘The Judgments Convention: Some Open Qtiestions’ (2020) 67(1) Netherlands International Law Review 19. 3 Yvonne Baatz, ‘Choice of jurisdiction m bills of lading and cargo insurance’ in Jason Chuah (ed), Research Handbook on Maritime Law and Regulation (Edward Elgar Publishing 2019) 342. 4 As ascertained from the judgment of the Dutch Court of Appeal lOApnl 1987, Schip & Schade (19SS) a 5.