As the Brexit negotiations between the EU and the UK continue fitfully, with the outcome remaining uncertain, the jurisdiction and dispute resolution mechanism provisions of English law loan agreements should be carefully considered. English law and English courts have been a popular choice in cross-border finance transactions for many reasons, including the considerable experience of English courts in commercial matters, those courts’ judicial independence, and the contract certainty afforded by English law. None of the reasons that made English law and English courts a good choice before Brexit should be affected by Brexit itself, but to ensure that the benefits of those choices continue in the case of a no-deal Brexit or a Brexit that does not otherwise provide for the continuation of the status quo as regards enforcement of judgments, lenders should discuss the available options with their legal advisors to ensure they make the best decision possible in the circumstances. In Central and Eastern Europe, when arbitration is not used, we usually see the LMA style jurisdiction provisions, commonly referred to as asymmetric or “one-sided” exclusive jurisdiction clauses. Pursuant to such clauses, the obligors may bring proceedings against the lender only in the English courts, whereas the lenders may bring proceedings in any court of competent jurisdiction, thereby preserving their options until a dispute actually occurs. Under the European laws currently in place, which have continued to apply during the Brexit transition period, the choice of English law and English courts, as well as the enforcement of English court judgments throughout the EU, has been assured through application of the Rome I and Rome II Regulations (Regulation (EC) No 593/2008 and Regulation (EC) No 864/2007 respectively) as well as the Brussels Regulation (Recast) (Regulation (EU) No 1215/2012).
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