Since Brexit, the UK and the EU have not yet defined the framework of border disputes in detail. Uncertainty has increased the costs for the parties involved. In fact, for the parties to the border dispute with the EU, the criteria are no longer the same. Local consultation has become necessary and disputes have escalated. UK companies doing business in the EU face major challenges such as delays in shipping.
The Main Problem
Prior to Brexit, manufacturers and suppliers had regulations that allowed litigation, authority, and enforcement in civil litigation with EU parties. But this is no longer the case.
UK businesses must usually take advantage of alternative regimes that were previously used in litigation with non-EU businesses only. This will inevitably include elements of uncertainty as compared to when the UK was a member of the EU.
Manufacturers and suppliers to EU companies should check their contracts immediately to see how appropriate the dispute resolution rules are and whether they face increased disputes and cross-border costs.
Dispute Resolution Rules
After Brexit, the provisions of the cross-border trade law were supposed to be in line with the laws of England and Wales. But now, EU countries are avoiding clauses that explicitly choose UK laws governing the treaty.
Another dispute concerns the Judicial Services Act. The parties use EU services instead of the Hague Convention, which complicates the process for many international companies.
The Competence of the Previous Regime
The authority of the previous regime ensured that a ruling in favour of the courts of an EU member state was respected by the courts of other member states. But this regime no longer applies.
The type of competence is now problematic. Types of competencies are unique, non-exclusive, one-sided, or asymmetric.
If your contract contains a non-exclusive or asymmetric authority clause, there are more potential risks to parallel litigation.
These competencies now determine whether they are recognised and approved by EU countries or whether EU countries enforce their own laws.
Most EU countries respect the authority of their national laws when dealing with the UK and further action may be required.
If a customer wants to sue for defective goods or late delivery, they may want to sue in the UK, where the problem is initiated; contracts translated into the customer’s language are unusual and do not preclude misunderstanding.
After Brexit, arbitration rules or enforcement have become problematic. As a result, the parties have not been able to include an arbitration clause in their contracts to prevent post-Brexit border disputes.
The existing arbitration system is not suitable for all types of disputes and a strategy commensurate with dispute resolution has become necessary.
Because UK court rulings are less enforced by Russian and Chinese courts, the UK usually must refer to specific jurisdictions in countries such as Russia, China, and the United States in its trade agreements.
EU law provides a way to deal with the issue of documents in EU member states. It was a very simple and cheap method that is no longer applied.
Most EU laws on border disputes have now disappeared from the UK statute book. The British government has also referred some disputes to the Hague Convention.
The EU, on the other hand, takes a different stance, stating that the Hague Convention applies only within the framework of its entry into force.
The parties rely on a combination of various international treaties, UK law, and the national laws of EU member states. This situation has created more confusion and complexity.
In this case, submitting documents in other EU countries may be more time- consuming and costly, and local lawyers in EU countries must be consulted.
Therefore, there is the risk of a rising number of jurisdictions and spreading disputes to different countries.
No Written Solution
There are still no laws to resolve disputes and related clauses that determine which courts have authority in the event of a dispute, and which law should govern the contract.
The UK now uses the Hague Convention on Services (“the Convention on Services“) to prepare documents.
In case of non-implementation of the Convention, the statutes and statutes of the Commonwealth of Independent States or the national laws of the EU member states will apply.
Britain is currently relying on the Hague Convention to obtain evidence abroad. In case of non-implementation of the Convention, the laws, statutes and statutes of the Commonwealth or the national laws of the EU member states will apply.
In summary, although the UK and the EU have reached the TCA agreement, this does not provide a solution to the border disputes. For parties to a border dispute, some aspects of lawsuits will no longer be as simple as they were in the past. Therefore, there is a need for local consultation, which increases the time and cost of any dispute. The EU and the UK have not yet reached a simpler, faster, and less costly reciprocal regime.