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EU joins convention on commercial law

The EU and Ukraine have today (29 August) joined the Hague Judgements Convention, an international agreement aimed at facilitating cross-border trade and investment.

The convention sets out conditions for the recognition and enforcement of judgments in civil and commercial matters – including consumer and employment contracts – and possible grounds for their refusal.

The European Commission said that the EU's accession would provide legal certainty and predictability to European businesses operating in different countries – including outside the EU.

Didier Reynders (commissioner for justice, pictured) said that the EU move would pave the way for other states to join the convention soon.

‘Legal uncertainty’

“The wider the accession rate of states to the Hague Judgments Convention, the more powerful an instrument it will become for the benefit of more citizens, more companies, and wider international trade and investment,” Reynders stated.

Six states have so far signed the agreement, which was drawn up in 2019.

The commission said that the legal uncertainty – and associated higher costs for businesses – caused by diverse laws and practices around the world had often hindered the flow of international trade and investment.

The agreement allows the recognition and enforcement of third-country judgments in the EU, but only where “fundamental principles of EU law are respected”, and the EU’s internal rules on the same subject matter are not affected.

The commission has estimated the direct benefits to EU businesses over the next four years at between €1.1 million and €2.6 million, mainly due to lower legal costs.