Brexit and Arbitration

Since Wednesday it is official: The UK will leave the EU. What this means for judicial cooperation in cross-border matters has been the subject of an intense debate over the last months. A White Paper has just been released by the UK government.

In the European Judicial Area, London was the most important hub for cross-border disputes arising from the European internal market. In around 80% of all commercial cases at least one party is foreign, while almost 50% of all claims issued in the London court concern only foreigners. The value of disputes before the London Commercial Court is regularly in the 6 – 7-digit range. Often, the jurisdiction of the High Court of London was based on jurisdiction agreements (Article 25 Brussels Ibis Regulation).

Brexit will change this situation. The United Kingdom as a state will no longer benefit from the benefits of the European Judicial Area; the UK will rather be a third country. Parties to civil disputes must already consider whether they prefer to choose other courts within the European Judicial Area. The liberal rules of jurisdiction laid down in Article 25 of the Brussels Ibis Regulation and the special jurisdiction rules established in Articles 7 and 8 of the Brussels Ibis Regulation promote appropriate strategies. Therefore, Germany, France, Austria can become a competing judicial hub. With the expected relocation of the financial center from London to other European locations, a relocation of the judicial hub is also to be expected.

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