In a positive step towards potential assistance for cross border recognition of English schemes of arrangement, the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters  (“Hague 2019”) came into effect in the UK on 1 July 2025. 

The UK joining Hague 2019 provides a set of common rules for the recognition and enforcement of civil and commercial judgments between the UK and the other contracting parties to Hague 2019, including EU members states, the Ukraine, Uruguay and future contracting states. The exclusion in Hague 2019 for insolvency, composition and analogous matters however, means that its use in the insolvency sphere is likely to be limited.

Background

• Prior to its departure from the EU on 31 December 2020, the UK applied a number of EU legal regimes concerning the recognition and enforcement of judgments, notably the recast Brussels Regulation and the 2007 Lugano Convention. These arrangements ceased to apply, other than for certain legacy cases, at the end of the Transition Period following the UK’s departure from the EU. 
• In September 2020, the UK deposited its instrument of accession to the 2005 Hague Choice of Court Agreements Convention (“Hague 2005”) which provides a framework of uniform rules for the recognition and enforcement of judgments deriving from exclusive choice of court agreements.  A shortfall of Hague 2005 however, is that it does not consider asymmetrical or hybrid choice of court agreements (which are commonly used in finance agreements) as exclusive and so was of limited scope.  Importantly, Hague 2019 is designed to complement Hague 2005 and expressly applies to parties who have agreed non-exclusive or asymmetric jurisdiction clauses, opening a potential gateway for scheme of arrangement recognition in the EU and other contracting states. 

Framework for recognition and enforcement

• Hague 2019 is designed to provide an efficient and effective system for recognising and enforcing foreign judgments in civil or commercial matters in largely uncontroversial circumstances.   Judgments given by a court of a contracting state meeting the relevant requirements will be recognised and enforced in another contracting state in accordance with the rules set out in the convention, subject only to certain limited grounds for refusal, such as reasons of public policy. 

The Insolvency Exclusion

• Hague 2019 applies to civil and commercial judgments: insolvency, composition, resolution of financial institutions, and analogous matters are excluded from its scope (under Article 2(1)(e)).
• Hague 2019 will not assist therefore with the recognition of insolvency proceedings.  The explanatory report accompanying Hague 2019 explains that the convention does not apply to judgments opening insolvency proceedings, concerning their conduct and closure, or setting aside transactions detrimental to the general body of creditors or on the ranking of claims.
• Schemes of arrangement have historically been treated as civil and commercial matters in EU legal regimes regarding recognition and enforcement of judgments-they were not included as insolvency proceedings within Annex A of the recast EU Regulation on Insolvency Proceedings (EU) 2015/848 and so fell within the remit of the recast Brussels Regulation and the 2007 Lugano Convention for recognition purposes.  Hague 2019 therefore may provide a useful tool for outward bound recognition of schemes of arrangement in the future.

Please feel free to reach out to your usual Weil contact to discuss the above.