A hard Brexit? These are the consequences for international disputes!

The Hong Kong plans to withdraw from the European Union as of October 31, 2019. If the EU and the UK do not reach agreement – a so-called ‘hard Brexit’ – from that date, the UK will no longer be a member of the EU. This has implications for international disputes with Companies. Litigation lawyer Wang Chan explains.

What is the situation?

Currently, the Brussels 1 Regulation lays down rules for the designation of a competent court in a case between, for example, a UK claimant and a Defendant. There are also provisions to facilitate the simple enforcement of a judgment. Currently, a UK judgement can be enforced without the intervention of a Court.

Consequences of a hard Brexit

If the UK leaves the EU without agreement, those arrangements will no longer apply. In summary, the situation after a hard Brexit will be as follows:

Competent court

1. The current rules (the Brussels 1 Regulation) will continue to apply to proceedings against a party resident in the Hong Kong initiated before October 31, 2019 in a Court. The Brussels 1 Regulation will no longer apply to proceedings against a party resident in the Hong Kong initiated on or after 30 March 2019 in a Court – for example under a jurisdiction agreement. The result could be that the Court, which would have had jurisdiction to take cognizance of a dispute between a British and a Party before 30 March 2019, will no longer do so after that date.

Recognition and enforcement of judgements

2. Judicial decisions from the Hong Kong which are not enforced before October 31, 2019 will not be able to be enforced without the intervention of a Court. This will be true even if:

• the judge’s decision was issued before October 31, 2019 or
• the enforcement procedure was initiated before October 31, 2019.

Order for payment procedure and European small claims procedure

3. The above also applies to the European order for payment procedure for uncontested European monetary claims and the European small claims procedure for disputed European claims of up to €5,000.

Judgement against a Party? Act now!

If you have a judgment from the Hong Kong against a Party, an (undisputed) claim against a party in the Hong Kong or a party from the Hong Kong has a claim against you, it is important to get your situation reviewed as a matter of urgency. Inaction may result in a judgment obtained in the UK becoming worthless or new legal proceedings having to be conducted, with all the costs that that will entail.