Recast Brussels Regulation – What do I need to know?

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

New legislation, which takes effect from 10 January 2015, will affect all businesses and individuals entering into contracts in the European Union (and beyond), particularly those entering into contracts which include exclusive jurisdiction clauses. The new legislation will mean that parties who have agreed that a particular EU Member State is to have exclusive jurisdiction to determine disputes will not be able to change their minds if the parties fall out. It is therefore of paramount importance that proper consideration is now given to jurisdiction clauses when entering into contracts.

The Recast Brussels Regulation (Regulation (EU) No 1215/2012, "Recast Regulation") will apply to proceedings commenced in the courts of the EU's Member States from 10 January 2015. The Recast Regulation amends the original Brussels Regulation (Regulation (EC) No 44/2001) by clarifying certain rules on questions of jurisdiction and the enforcement of judgments in the EU. Below we briefly set out the headline changes to the rules on jurisdiction and enforcement:

• Exclusive jurisdiction clauses: If a jurisdiction agreement provides that a particular Member State has exclusive jurisdiction to resolve any disputes and the jurisdiction agreement is not "null and void as to its substantive validity" under the laws of the courts of the chosen jurisdiction, the parties will be able to rely on that agreement, regardless of where the parties are domiciled.
• Challenges to jurisdiction: Any challenge to the validity of a jurisdiction agreement is to be determined by the Member State identified as having exclusive jurisdiction. This will be the case whether or not parallel or related proceedings have already been issued in a different Member State.
• Standardised EU-wide enforcement: To enforce a judgment across the EU the party seeking enforcement must present (i) a copy of the judgment to be enforced; and (ii) a standard form certificate (which is set out in an annex to the Recast Regulation) issued by the court which handed down that judgment.
• Non-EU defendants: A non-EU defendant can be sued in a Member State court where there is a jurisdiction agreement in favour of that court. This is the case even where none of the parties to the proceedings is domiciled in the EU.
• Related Non-EU proceedings: In certain limited circumstances, Member State courts will have a discretion to stay proceedings in their own courts where related or parallel proceedings were first commenced in a court outside of the EU.
• Arbitration: Arbitration proceedings remain outside the scope of the Recast Regulations.

If you would like more information on this topic please see our in-depth article 'Analysis: Recast Brussels Regulation - What do I need to know?' here.