The draft Withdrawal Agreement: governing law, jurisdiction and enforcement
The draft Withdrawal Agreement takes a generous approach to continuing cooperation in governing law, jurisdiction and enforcement. Commercial parties will not see any change until 2021 and, in many cases, not even then.
The Rome Regulations, which contain the rules on determination of governing law, will continue to apply to all contracts concluded before 1 January 2021 and to all events occurring before 1 January 2021. The UK Government has, in any case, previously stated that it will apply similar rules after that date.
The Brussels Regulation, which contains the rules on determination of jurisdiction and reciprocal enforcement of judgments, will apply to all legal proceedings started before 1 January 2021. Jurisdiction will be determined in those cases according to the Brussels Regulation – even to the extent that proceedings started after 1 January 2021 that relate to earlier proceedings may be stayed in favour of those proceedings according to the Brussels Regulation rules. That is, the UK courts might be obliged to stay a claim brought in the UK courts in 2021 or later in favour of a claim in a foreign court that was instituted before 1 January 2021. In addition, enforcement of foreign judgments in accordance with the Brussels Regulation will continue to be available even where the judgment is given after 1 January 2021, provided that the proceedings were originally started before 1 January 2021.
This arrangement means that, in practice, a replacement regime will only start to apply where the dispute itself arises after 1 January 2021. This gives the maximum time to negotiators to agree that new regime.