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26 June 2018 at 12:46 BST

Brexit poses questions for London's litigation and arbitration marketplace

Despite serious questions hanging over litigation and arbitration decisions in London, Helen Conybeare William urges caution when selecting other jurisdictions.

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London has long been positioned as a leading global centre for international commercial litigation and arbitration, along with English law as the preferred choice of law for cross-border commercial (and financial) transactions.  Recently competitor jurisdictions in the EU have taken steps to offer alternative specialist international commercial courts, notably in Paris where parties can litigate cross-border English law disputes, and the use of English and certain common law procedures is permitted, with the certainty that judgments will be freely enforceable across the EU. As the terms of the UK’s withdrawal from the EU are still being negotiated, the regime for the enforceability of English judgments within the EU in future is at present uncertain.

The new specialist International Chambers of the Paris Courts

On 7 February 2018, the Paris Court of Appeal, the Tribunal de Commerce and the Paris Bar signed two Protocols defining procedures applicable to all new cases brought after 1 March 2018 before the re-named International Chamber of the Paris Commercial Court , as well as a new specialist International Chamber within the Paris Court of Appeal (CICAP), which constitute a two-tier specialist international commercial division within the Paris Courts. The chambers are competent to determine cross-border commercial disputes under French law or applicable foreign law, notably relating to international commercial contracts and their termination, the carriage of goods, unfair competition, anti-competitive practices, financial instruments and securities, as well as those where parties have agreed on the jurisdiction of the Paris Courts. The CICAP is competent to determine appeals of international commercial disputes decided at first instance, as well as actions against international arbitral awards and registration procedures of international arbitral awards.

More flexibility

The following key features are intended to offer parties more flexibility: Procedural documents are to be in French but documentary evidence may be submitted in English without translation. Oral pleadings are to be in French, but parties, counsel, witnesses and experts may be heard in English (or another foreign language). Common law procedures such as cross-examination of witnesses and experts at the hearing and limited document requests are permitted. A strict procedural timetable up to and including the issue date of judgment is intended to promote timely resolution of disputes. Judgments will be published in French together with a sworn translation in English.

Enforceability of English judgments post-Brexit

The current EU regime of automatic enforcement of any EU judgment as between Member States (under the Recast Brussels Convention) will no longer benefit English judgments, unless an equivalent arrangement is agreed as part of the withdrawal agreement, which is a solution favoured by the UK Government,  so enforceability may vary depending on national laws and any existing reciprocal arrangements which may not be as favourable. The UK currently derives its rights to the other main conventions on jurisdiction and enforcement of judgments, namely the 2005 Hague Choice of Court Convention   as well as the 2007 Lugano Convention as between EU Member States and EFTA States, through its membership of the EU. The UK Government has indicated its intention to join these conventions in its own name, which should be relatively straightforward. However, it is not clear what regime would apply to jurisdiction clauses agreed prior to the UK’s departure from the EU, as these would presumably not be covered by this solution. The position will no doubt become clearer in the coming months. 

The future of the London international arbitration market 

Concerns have been voiced in the London arbitration market about some of the negative perceptions and inaccurate information regarding the future of London arbitration, as other fora seek to capitalise on the forthcoming departure of the UK from the EU. In short, however, the outlook for London arbitration after Brexit remains positive. Users of London arbitration typically come from many jurisdictions, and the UK’s withdrawal from the EU is unlikely to impact on the choice of London as place of arbitration by non-UK parties which is influenced by numerous factors: The English law on arbitration, the 1996 Arbitration Act, which gives wide discretion to tribunals to conduct the arbitration, subject to parties’ freedom to agree, will continue in force after Brexit. English Courts are considered to be generally supportive of arbitration and non-interventionist as regards challenges to awards  (and English anti-suit injunctions in support of London arbitration, previously held incompatible with EU law, may be available post-Brexit).

Awards

Brexit will not impact on the enforcement of English arbitral awards within the EU, since they will continue to be enforceable under the 1958 New York Convention. The presence in London of reputed arbitral bodies such as the London Court of International Arbitration, the London Maritime Arbitration Association and Chartered Institute of Arbitrators will continue to have a role in promoting London arbitration, but many parties also select London arbitration administered by other arbitral institutions such as the International Chamber of Commerce or ad hoc London arbitrations and for the reasons mentioned this is unlikely to change. London arbitration is expected to remain attractive to users for the resolution of disputes in all sectors including the financial services sector where there is a recent trend towards the use of international arbitration, albeit parties have greater choices these days with the development of regional arbitral centres such as Singapore and Hong Kong, as well as the courts and international arbitration centres within regional financial free zones in the MENA region and Kasakhstan. 

Considerations going forward for parties deciding where to litigate their disputes

A significant consideration for parties contemplating where to litigate their disputes in English law transactions will be where a judgment would need to be enforced. Parties may wish to consider some form of protective jurisdiction provision such as arbitration in London to mitigate the risks related to recognition and enforcement of judgments in the event that the UK withdraws from the EU on a “no-deal” basis, although the uncertainty may well be largely resolved as mentioned above. However, selecting foreign courts applying English law as a potential solution to the current uncertainty surrounding the enforcement issue should be approached with caution. The outcomes may be less predictable than litigation in the English courts as the depth of expertise to decide English law cases will not be available in such competitor jurisdictions. Other considerations (such as availability of interim relief and summary judgment applications, especially in finance disputes) will remain important factors for parties selecting the jurisdiction of English courts.

Helen Conybeare Williams is counsel at Haynes and Boone

 
   
 
 
 

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