Private International Law (Implementation of Agreements) Bill [HL]

Lord Mance Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Thursday 19th November 2020 Lords Chamber

[The Deputy Speaker (The Earl of Kinnoull) (Non-Afl)]

Does anybody else in the Chamber wish to speak? I call the noble Lord, Lord Mance.

[Lord Mance (CB) [V]]

My Lords, I declare an interest as a practitioner in the field of private international law and as joint chair of the Lord Chancellor’s advisory committee on private international law, to which reference has been made. I do not, of course, speak in that capacity and, as I mentioned on a previous occasion, that committee was not consulted about this Bill before its original introduction, although we have been very happy to be involved subsequently in relation to machinery under and related to the Bill.

I too welcome the Minister to his place and possibly, in succession to his predecessor the noble and learned Lord, Lord Keen of Elie, to a co-chairing of that committee with me. I would of course welcome that very much. I particularly welcome his measured and very careful consideration of the issues raised by the Bill. Described as “technical”, it has happily and rightly also been described as “important”. It is promoted as part of the United Kingdom’s preparation for the post-Brexit era—I will come back to that. It will certainly introduce into the UK’s legal systems three identified and very valuable Hague conventions, which have been mentioned, including the choice of court convention of 2005. As the noble and learned Lord, Lord Falconer of Thoroton, said, what has been controversial is the provision for the introduction by delegated legislative regulations of any number of further private international law measures which might be agreed at international level during an indefinite future.

I hope that I shall not be thought ungrateful in what follows for the mercies which have been granted. Certainly, the amendment relating to offences and the removal of the delegated power to create criminal offences punishable by imprisonment is highly welcome. So too is the Government’s agreement to limit the operation of Clause 2 to an operative period of five years. However, that is renewable, as has been pointed out, so that is not as large a change as the House wished —and I think would still wish—to see. The five-year period is capable of being extended by regulations and, moreover, more than once. In that respect, I support what the noble and learned Lord, Lord Falconer of Thoroton, said.

If the Bill is addressing the post-Brexit era, let us truly hope that that at least will be well and truly past within 10 years. In any event, we should be under no illusion that any great volume of instruments is likely to require attention under the Bill. Again, I echo a point that the noble and learned Lord, Lord Falconer, made. We know that the Government have, for better or worse, decided, if permitted by the European Union, to sign up to membership of the Lugano Convention 2007—that paler image of the present Brussels regime, which, as I previously remarked, is well accepted and understood, and popular in the City in particular. The signing up to the Lugano Convention 2007 will, as I have also pointed out, largely undo as regards EU states the potential benefits of signing up to the Hague choice of court convention 2005. That is because Lugano trumps the choice of court convention under the internal terms providing for their priority.

Apart from that, the 2019 Hague convention is a possibility which has been mentioned. It relates to recognition of judgments and one day, but certainly not soon, it may come into play as a possibility. At the moment it has no subscriptions of any significance at all. Then there is the Singapore mediation convention, previously much loved by government speakers here and in another place—but I am glad to see that, I think realistically, it was not mentioned by the noble and learned Lord, Lord Stewart. Its significance in promoting the enforcement of agreements reached as a result of mediation is certainly commendable but hardly earth shattering, those agreements being in any case enforceable at common law.

Private International Law (Implementation of Agreements) Bill [HL]

Lord Mance Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Wednesday 17th June 2020 Lords Chamber

[Lord Thomas of Gresford (LD) [V]]

The Government’s position appears to be that the incorporation into domestic law of the terms of a treaty, or of an international agreement involving private international law, should not require any detailed scrutiny by Parliament. The Government’s reasoning is that the time for stakeholders to make representations is before the international agreement is made. Once the rules have been agreed, they say, a Minister has little or no discretion to exercise in framing the requisite statutory instrument. It is all over and there is no need for any shouting.

This would be all very well if we could have the slightest confidence that the negotiations of that agreement were transparent; but we have seen in the Brexit negotiations a complete lack of transparency. Many times, pleas were made to Ministers to outline our negotiating position. “Oh, we couldn’t do that,” the Minister would reply, “because that would undermine our bargaining position.”

The noble and learned Lord, Lord Keen, in his response of 17 April to the report of the Delegated Powers Committee, said:

“As the UK develops its wider trading policy with the EU and rest of the world, agreements on private international law will be key to supporting cross-border commerce by providing businesses, investors and consumers with greater confidence that disputes across borders can be resolved in a clear and efficient way.”


This surely underlines the importance of the issues that we are discussing today. The question of jurisdiction and the enforcement of judgments is crucial. Just because the word “private” is attached in the title to “international law”, it should not be thought that we are concerned merely with family disputes and the enforcement of access to children or maintenance orders in different jurisdictions. Important as those issues undoubtedly are, the significance of these provisions goes very much to the heart of rebuilding our economy and regaining our leading trading position in the world, not least in the provision of financial and legal services. For example, in the current negotiations concerning our leaving the European Union, with or without a trade deal, one stumbling block appears to be the jurisdiction of the European Court of Justice. For 40 years, we have accepted its jurisdiction and an analysis of its judgments demonstrates the overwhelming success of British lawyers before that court. We have lost very few contested cases and settled others very satisfactorily on agreed terms.

Jurisdiction is important. I cannot see why the Prime Minister thinks that the European Union is likely in these current negotiations to accept the British rejection of the European Court of Justice as a tribunal for resolving disputes, but that it will accept our Supreme Court as the ultimate arbiter. Such an approach seems to me to be in cloud-cuckoo-land.

Where there are critical issues such as jurisdiction to be resolved, obviously it is wholly inadequate to tell business and other stakeholders that they may make their case only before the details of a treaty or agreement emerge into the light of day. As for Parliament, do we have the slightest idea of the detailed negotiating position in these current talks? What possible contribution can parliamentarians make to the rules of our future trade with Europe, which may emerge by the end of October or by Christmas Day?

Government negotiators should have to bear in mind that any agreement or treaty they may enter into will require full analysis and debate in Parliament before being given the full endorsement of incorporation into domestic law. I was disappointed, as was the noble Lord, Lord Blunkett, by the gloomy comments of the noble and learned Lord, Lord Garnier, in Committee. In effect, he said that we all agree in principle to parliamentary accountability, but in government, the reality is that the only consideration is time—getting the business over and done with. It was interesting that the noble and learned Lord, Lord Keen, in his letter to the Committee, used the expression “in a timely manner” no fewer than five times, and with something of a Homeric ring. Come to think of it, the Prime Minister might pin on his wall in No. 10 the Greek motto of the Roman emperor Augustus: “speude bradeos”, or “hasten slowly”.

Suetonius wrote of Augustus:

“Nihil autem minus perfecto duci quam festinationem temeritatemque convenire arbitrabatur”,


meaning, “He thought nothing less becoming in a well-trained leader than haste and rashness.” Well, Augustus was a pretty successful politician. He really did rule the whole of the known world.

[Lord Mance (CB) [V]]

My Lords, I declare my interest in the field of private international law and arbitration. I am also chair of the Lord Chancellor’s Advisory Committee on Private International Law, which was not involved in the Bill generally but has, since Second Reading, been asked to advise on the subject of the government amendments to Schedule 5, which we will come to later and which the committee blessed. I have nothing to add on Clause 1, which is admirable and conventional. On Clause 2, I am grateful personally to the noble and learned Lord the Advocate-General for Scotland for engaging with me, but I regret that his response strikes me as a little like that of the Black Knight in the Monty Python sketch; having lost the arms and legs of his argument, he still comes forward with the Bill—particularly Clause 2—between his teeth.

Opinion is almost universally against Clause 2. The two committees that have reported have categorically condemned it. The argument based on the existence of CRaG 2010 has been described by the Constitution Committee as limited and flawed, and I will come back to that. The speeches at Second Reading and in Committee were almost unanimously against Clause 2. One wonders, as the noble Lords, Lord Thomas of Gresford and Lord Holmes of Richmond, have hinted, why this House exists as a revising Chamber at all if such universal adverse opinion is ignored.

It is true that Parliament generally has not had a major role in private international law since we became an EU state but, as noble Lords have pointed out, one thought that the purpose of recent events was to restore UK institutions to a fuller role. There is no real explanation or justification for Clause 2, an indefinite provision without a sunset clause, as my noble and learned friend Lord Hope has just pointed out.

Private international law is important, both to individuals personally, in areas such as divorce and family, and to businesses. It merits direct parliamentary scrutiny. The Government’s justification for Clause 2 is simply that it would be very convenient and might speed things up. The same reasoning would justify removing any role for Parliament at all, just leaving it to bless by affirmative order on a yes/no basis any subordinate legislation devised by the Executive.

As my noble friend Lord Pannick pointed out, the prior Acts relied on do not justify this large extension. The 1920 and 1933 Acts were confined in scope to recognise jurisdictions, starting with Her Majesty’s overseas jurisdictions and then other comparable foreign jurisdictions, and were limited to recognition and enforcement of judgments only. We are concerned in this Bill with wide-ranging schemes such as those we will lose the benefit of at the end of the implementation period for allocation of jurisdiction, dealing with things such as concurrent proceedings in two states. These are very controversial issues.

Although by itself the Lugano convention may well be the best we can go for in the present state, it merits parliamentary debate. There are defects in the Lugano convention compared with our present state of affairs as a member of the EU. There are very considerable questions whether one might not be better off with other arrangements. Still, while one might have accepted Lugano alone, the wide-ranging nature of Clause 2 means that it applies to anything indefinitely in the future.

The only things actually suggested are Lugano and passing references to the Singapore mediation convention, which is an extremely minor area of the law—it is important when mediation occurs, but there is probably no difficulty in any event enforcing mediation results under present domestic law. There is also the 2019 Hague Convention, which has many merits but is in complete infancy. It has only two signatories: Uruguay and Ukraine. That is a long way down the road. There is no urgency. There are no model laws pointed to, even if it were desirable to give the Government this power in respect of model laws. As my noble and learned friend Lord Thomas of Cwmgiedd said a moment ago, private international law measures proceed at glacial pace.

I revert to the position on CRaG: quite apart from the inadequacy of its procedures, reliance on CRaG is fallacious for two reasons. The Explanatory Notes say that everything will already have been scrutinised by CRaG before domestic legislation takes place; Parliament will already, through CRaG, have agreed that the UK should join. That is not right; it is the wrong way round. Normally—this was practice until today—domestic legislation is enacted before ratification, and CRaG comes into operation only at ratification. There are a number of examples of that; in the case of the Civil Jurisdiction and Judgments Act, the convention was 1978, the domestic Act was 1982 and ratification was one or two years later. There is the same pattern with the Warsaw convention and the CMR convention on the carriage of goods by road. The domestic legislation preceded ratification by six years for the Warsaw convention and two years for the CMR convention, I think. CRaG does not help for that reason.

CRaG also does not help for a different reason: ratification may be subject, like signature, to reservations or declarations which are permitted by the relevant international agreement or are not inconsistent with its object and purpose. That is Article 19 of the Vienna convention of 1969. It is not therefore merely a question of whether to implement or the manner in which to implement domestically, as my noble friend Lord Pannick suggested. There are huge questions at the level of international law about what declarations or reservations to make, or there can be.

--- Later in debate ---

[Lord Mance [V]]

My Lords, as my noble and learned friend Lord Keen has just said, these amendments were considered by the advisory committee that I chair. We welcome them. They are a wonderful simplification compared with the huge complexity of the previous Schedule 5, which introduced savings on savings on what was already, in Section 4 of the withdrawal Act, a saving. They also correct one important misconception or potential error that had crept into the drafting of some of the previous instruments by making it absolutely clear that, insofar as the Hague 2005 choice of court convention will be relevant—and it will not be very relevant if we join Lugano—it will be relevant in respect of all agreements since October 2015, when the UK was originally signed up to the convention as a member of the EU. That is a point on which the noble and learned Lord and I had personal communication after Second Reading.

I will mention just one further point. That protects, or would protect insofar as it applies, choice of court clauses made after October 2015 that fall within Hague 2005. That means probably only exclusive choice of court clauses. There are two categories that are therefore not potentially covered: first, non-exclusive, asymmetric choice of court clauses, which are very important on the London market and are frequently used in banking documentation; and, secondly, pre-2015 choice of court clauses. At the moment, they are protected under the Brussels regime—the Brussels regulation recast in 2012, of which we are going to lose the benefit.

I know that the Minister has this in mind, but I mention it openly: we should surely, domestically, introduce as much protection for those clauses as we now can. It may not be reciprocal, because we can legislate in this area only domestically unless we can persuade other states to agree with us. But domestically, we should protect clauses, particularly those favouring London, and we should avoid people who rely on such clauses having to go through the formality of seeking leave to serve out of the jurisdiction of the court. At the moment, under the Brussels regime, these clauses are protected, whether they are exclusive or non-exclusive, whenever they were made and we do not have to seek leave to serve out—so I urge the noble and learned Lord to pursue that message, as I know he has it in mind already.

[Lord Marks of Henley-on-Thames [V]]

My Lords, I will add only this: I urge the Minister to heed what the noble and learned Lord, Lord Mance, has just said in looking at ways in which we can give further protection to choice of court clauses—those that favour London are to our greatest advantage—and that he does so as far as possible after the implementation period ends.

--- Later in debate ---

[Lord Thomas of Cwmgiedd [V]]

I will be very brief, as this amendment really has no purpose in the light of the result of the Division.

I too agree that, as a matter of principle, it was wrong to seek to include this power in the Bill. Furthermore, it must be recalled that, in relation to most aspects of private international law and the reciprocal enforcement of orders of other courts, the courts have significant powers by way of committal for contempt or injunctions. It cannot be justified to create and impose criminal offences with sentences of imprisonment in the circumstances of this particular Bill.

[Lord Mance [V]]

I share the view of other noble Lords and noble and learned Lords. This is pre-eminently a matter for Parliament. It has been slipped into Schedule 6 as a qualification to Section 2 powers regarding private international law. I suggest that, if one had read Section 2 by itself, one would not normally have expected it to cover crime at all, and yet this comes in as if it is automatic that it would cover it. It clearly should not.

Private International Law (Implementation of Agreements) Bill [HL]

Lord Mance Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Wednesday 13th May 2020 Lords Chamber

[Lord Adonis (Lab)]

My Lords, the arguments put forward by my noble and learned friend Lord Falconer seem utterly compelling and are supported not only by every speaker in this debate so far but also by the Constitution Committee, chaired, as he said, by my noble friend Lady Taylor.

My aim in speaking is not to contribute to the specific discussion on the amendment, though I think it is overwhelming, but to comment on the Virtual Proceedings, because understanding what happens in this Committee will be hugely important to how we take forward both the Virtual Proceedings and hybrid proceedings afterwards. I hope that I can be permitted to comment on what is happening, as I will at later stages of our discussions, because this will be so important to the Procedure Committee in deciding how to take forward our proceedings hereafter. Of course, the noble Lords and the officials doing that will read the record; it is important to have in Hansard what is happening at these key stages.

I want to make three points that have occurred to me already. First, it is not clear to people taking part in these proceedings who exactly is in the Committee. At the moment I can see only a handful of faces. After the Deputy Speaker calls people to speak, they suddenly appear from nowhere on my screen. It is very pleasant to see them appearing but it is not at all clear who will appear next. I cannot see the Minister at all; I assume that he is in the Committee, but that is not evident on the screen. My second key point is that is it a bit haphazard as to whether people can be followed, depending on the quality of audio and visual equipment.

Thirdly, I flag up the point made by the noble Lord, Lord Pannick, about Report. My understanding is that it will be possible to table amendments exactly as tabled in Committee on Report, because we cannot vote in Committee—a hugely important point. In the discussion in the Chamber last week about how Report would be handled, the Leader of the House and my noble friend the Leader of the Opposition gave an almost categorical undertaking that we would not have Report until we had a hybrid House, so that it is possible for Members to participate in the Chamber and we can have the usual cut and thrust that we have in the Chamber, particularly when we are dealing with legislation and technical points.

I simply make the point that, from my observation of proceedings so far, it is essential that Report takes place in the Chamber and we should not have Report for this highly important Bill until it is possible to have the hybrid proceedings in operation.

[Lord Mance (CB)]

My Lords, I support the observations of the noble and learned Lord, Lord Falconer, and of the noble Lord, Lord Pannick. At Second Reading, I described this Bill as, by its own lights, a sensible measure, but said that its lights were rather dimmer than the halogen welcome given to it by the Explanatory Notes. I took some issue with Clause 2. The reality is that we are grasping in the half-light for whatever instruments we can find to replace the full toolkit of the Brussels regulations—including I and II, to which the noble Baroness, Lady McIntosh, referred—which were in existence when we were members of the EU. This has been apparent ever since the House of Lords European Union Committee’s 17th Report of Session 2016-17, Brexit: Justice for Families, Individuals and Businesses?

In some areas, such as divorce jurisdiction, there seems to be simply no substitute in sight. In others, Clause 1 identifies three limited instruments, each in its own right very sensible. The second, the Hague choice of court convention, would protect the exclusive choice of court clauses in favour of UK courts, which are so important to the United Kingdom’s financial and business markets. The protection would be increased if the UK also signed up to the 2019 Hague Convention, which my noble friend Lord Anderson referred to and the Explanatory Notes mention as a possibility.

--- Later in debate ---

[Lord Keen of Elie]

First, let me make it clear that I do not accept that it is an invariable constitutional practice that the implementation in domestic law of an international law treaty is undertaken by way of primary legislation only. Secondly, when it comes to the implementation of a treaty that has been entered into at the level of international law, the purpose of drawing it down into domestic law is either to accept it into domestic law or not to accept it into domestic law. There is no scope for amending the terms of the treaty that has already been entered into. Therefore, the use of the affirmative statutory instrument procedure is considered appropriate. It gives this House and the other place ample opportunity to debate whether they should draw down the treaty obligations into domestic law. There is, essentially, no real scope for amendment; therefore, we consider the affirmative procedure perfectly adequate for that purpose.

[Lord Mance]

I have just a few points to raise with the Minister. At one point, he said that the first amendment would prevent us joining two other measures, the Singapore mediation convention and the 2019 Hague Convention. It is too easy to slip into that sort of language. What he really means is that it would prevent us joining those measures without proper parliamentary scrutiny by primary legislation.

In response to the Minister’s last point, yes or no can be a very important question, even if you cannot amend an international treaty once it is made; Lugano is a classic example. It is a difficult decision, as has been illustrated. It is also very easy to say that we would be prevented from implementing future measures in a timely manner, but there is no real evidence for that at all.

The Minister took various rather minor—if I may call them that— drafting points on, for example, the definition of related international instruments and ancillary provisions. Those would all be sorted out if the principle of the first four amendments was accepted.

On that principle, the Minister also took various points about the intra-UK relationship, suggesting that Amendments 4 and 5 raised complexity. As I see it, those amendments are perfectly simple. They ensure that the general power marches in tandem with the specific power to legislate Lugano into the intra-UK jurisdictional relationships and interrelationships with overseas territories. They are “keeping pace” amendments and there is nothing inconsistent or complicated about them.

As to the 1920 and 1933 Acts, I pointed out in my previous remarks that they are quite different, minor and limited measures relating to recognition of superior court judgments overseas, coming either from UK overseas territories or from territories with which we have reciprocal arrangements. Those judgments would have been recognised as common law by action on the judgments, which would operate as an estoppel in any event, so they are minor amendments.

It is true that the Civil Jurisdiction and Judgments Act contained some provisions for delegated legislation in respect of, for example, Gibraltar. However, it was a piece of primary UK legislation in the first place, and it is no doubt a tribute to the quality of the UK Parliament’s consideration of that legislation if overseas territories are willing to accept that they should be legislated for on a delegated basis.

[Lord Keen of Elie]

I thank the noble and learned Lord, Lord Mance, for his further observations. I simply notice this: for the last 20 years, Parliament has had no oversight of the drawing down of these obligations into domestic law because it has been an EU competence. That has not led to any dramatic constitutional issue, as far as I am aware.

In the meantime, however, we have introduced CRaG, which means that the entering into a treaty at the level of international law is now subject to scrutiny by Parliament. After that scrutiny, the Executive can enter into the relevant treaty. Then, when it is drawn down into domestic law, the affirmative statutory instrument procedure ensures that both Houses of Parliament have an opportunity to scrutinise and debate this. There is no difficulty about that; it is the outcome that matters.

However, I notice the noble and learned Lord’s observation that there is little that can be done by way of amendment at that stage. That is why we would suggest that the affirmative procedure was a perfectly adequate mechanism, as distinct from primary legislation.

--- Later in debate ---

[The Deputy Chairman of Committees]

I believe that the noble Lord, Lord Adonis, does not wish to contribute at this point. I therefore move on to the noble and learned Lord, Lord Mance.

[Lord Mance]

My Lords, as has been pointed out, these amendments illustrate the width of the delegated power proposed. They really matter only if Amendments 1, 4 and 5 fail and Clause 2 remains in the Bill unaltered. I basically agree with all my noble and learned friend Lord Falconer said and will add some comments on only some of the amendments.

On Amendment 10—replacing “includes” with “means”—Clauses 2(7) contains a quite exhaustive definition. “Includes” suggests that it is not exhaustive and that there are further things to be covered. To suggest that the definition is only partial in that way is a recipe for future doubt and argument.

Amendment 2 aims to rephrase the power

“so far as relating to private international law”

to read so far as

“that agreement exclusively relates to”

private international law. In his letter responding to the Delegated Powers Committee’s report, the noble and learned Lord, Lord Keen, pointed out that the Warsaw convention, governing the responsibility of international aviation carriers, and the CMR convention —he described it as the Geneva convention, but it is better known as the CMR convention—governing the liability of international road carriers each contain an individual provision relating to private international law. He went on to say that

“importantly, only those individual provisions could have been implemented under the clause 2 power in the Bill.”

That statement illustrates the reason for this amendment, because if that is how this Bill is or may be interpreted, it certainly needs amendment. It is wholly inappropriate to use this Bill to cherry pick a provision about jurisdiction, for example, or recognition of judgments out of a composite scheme, and to suggest that the Bill enables such a provision to be enacted without any context.

Take either convention. The jurisdiction provisions—who can be sued and where—make sense only in the light of the provisions regarding who can claim and who is liable. To require a consignor or consignee of goods, whether by air or by road, to sue in a particular country without incorporating the provisions that create the cause of action, and provide against whom the cause of action is, would be completely to misunderstand the scheme of such conventions. They are conceived as a composite package. Take the CMR convention—the acronym is French, but it deals with transport. The concept of a contract for the carriage of goods by road is fundamental to the operation of that convention, but it is an artificial one which may be satisfied by status and activities, such as taking over goods and the consignment note, rather than on ordinary contractual principles. If you incorporated the jurisdictional provisions, you would not incorporate the liability provisions—the two do not make sense separated.

The insertion of the words “exclusively relates to” in Clause 2(1) would ensure that it is only pure private international law agreement matters that can attract the use of the general delegated power, if that remains at all in Clause 2.

Turning to Amendment 3, I declare a potential interest as a practising arbitrator, in view of the definition in the Bill of private international law to include recognition and enforcement of an “arbitral award”.

[The Deputy Chairman of Committees]

My Lords, for information, Amendment 3 is in the next group of amendments. In this group we have Amendments 2, 6, 9, 10, 11, 12, 13 and 16. I hope that that is helpful.

[Lord Mance]

Yes, it is very helpful. Have I started addressing Amendment 3 by mistake? I certainly did not intend to. I want to address Amendment 11, which seeks to include the words “or arbitral award” in the definition of private international law.

As I said, I declare an interest as an arbitrator. Perhaps I might mention that, although I may not speak on this, I chair the Lord Chancellor’s Advisory Committee on Private International Law, which is referred to later, in proposed Amendment 20. I assure the Committee that that committee had nothing to do with that amendment.

To go back to arbitral awards, the recognition of arbitration clauses and the enforcement of arbitral awards are matters governed by special international agreements, most notably the highly successful 1958 New York convention and the 1966 International Centre for the Settlement of Investment Disputes convention, also known as the World Bank convention. The current Brussels regime, the Lugano convention, the Hague Convention on Choice of Court Agreements and the 2019 Hague Convention are all extremely careful to exclude arbitration expressly. But this definition for some reason includes it. One of the virtues of the 2012 recast of Brussels 1 was to reinforce that exclusion still further. London is a world centre of arbitration, and there would be concern about any suggested intervention by delegated legislation.

The inclusion of a reference to an “arbitral award” is therefore inappropriate and will arouse concern. It will also raise the further question: if arbitral awards are within private international law, what about international agreements on the jurisdiction of arbitrators? Is the word “jurisdiction” in Clause 2(7)(a) to be interpreted as enabling delegated legislation about arbitral jurisdiction?

The response at Second Reading from the noble and learned Lord, Lord Keen, was not comforting. He said:

“We do not intend to intrude wholesale on the New York convention or other aspects of arbitration, but it might be that there will be bilateral or multilateral … issues where a party wishes to refer to arbitration … we will want to have the power to proceed with such an agreement.”—[Official Report, 17/3/20; col. 1451.]


On the face of it, that suggests that, so far as the Government have any clear conception of why these words are there, they would cover jurisdictional issues—in other words, issues about where a party wishes to refer to arbitration and not just the recognition and enforcement of arbitral awards. That is an unwise and unnecessary indication of possible future interference by international agreement and delegated legislation in one of this country’s more successful export activities.

Surely the better approach is: if it ain’t broke, don’t fix it. If, at the international level, the New York or ICSID convention is supplemented, their domestic implementation should be by primary legislation, as it currently is under the Arbitration Act 1996 and the Arbitration (International Investment Disputes) Act 1966.

Finally, on Amendment 16, I endorse what has been said by my noble friend Lord Anderson and the noble and learned Lord, Lord Falconer. Admirable though they may be, model laws do not have the same status as international agreements and frequently need close attention before domestic implementation.

[Lord Thomas of Gresford (LD)]

My Lords, in his letter of 19 April in response to the report of the Delegated Powers Committee, the Minister said:

“The Committee’s Report implies that the power in clause 2 of the Bill would allow the Government to implement agreements on any aspect of private law with a foreign element, rather than merely agreements on the much narrower subject area of private international law, as defined by clause 2(7) of the Bill. … It will not be possible for matters outside of the areas indicated by the definition of ‘private international law’ in clause 2(7) to be implemented using the power.”


The Minister echoed what was set out in paragraph 7 of the Explanatory Notes, which state:

“PIL agreements cover a discrete area of law that is narrowly defined.”


One would therefore have expected that the interpretation of Clause 2(7) to be narrowly defined, but as the noble and learned Lord, Lord Falconer, pointed out, there is a width and uncertainty about these provisions that really do not follow the expressions being used.

For example, the definition clause for “international agreement”, which Amendment 9 deals with, includes,

“an agreement to which the UK is, or is expected to become, a party.”

What does that mean? Does that mean that legislation will be brought forward under these provisions and regulations brought forward in respect of an agreement to which we are not a party? As the noble and learned Lord, Lord Falconer, pointed out, what happens if the agreement is not ultimately made and the negotiations fall through? We would then, presumably, have regulations on the statute book dealing with an agreement to which we were not a party.

The definition of “private international law” is also contained in that same subsection, and Amendments 10, 12 and 13 demonstrate the loose wording that is used in case anything has been missed. That is rather typical of the drafting of the legislation. It is so drafted that anything can be bought in and the door is kept open. For example, it includes “rules and other provisions”, and there is to be co-operation in relation to the

“service of documents, taking of evidence and other procedures”

not defined. Paragraph (c)(ii) deals with

“anything within paragraphs (a) and (b).”

It is so loose and ill-defined.

So the purpose of the amendment moved by the noble and learned Lord, Lord Falconer, is to define the scope of regulation-making powers of the Bill so that the regulations should be confined exclusively to the field of private international law. Any provisions that trespass into any other territory could not be incorporated into domestic law by these regulations. I wholly support what he says about that.

I also support what was said by the noble and learned Lord, Lord Manse, on arbitral awards and model laws.

But I am interested in Amendment 6. Perhaps the Minister will share his thoughts about any proposed regulations concerning legal aid. What proceedings in the field of private international law does he envisage? To what is this directed? Would these be additional provisions to existing legal aid regulations? Would there be more hoops or fewer? Would there be more generous or less generous provision, and in what fields?

Private International Law (Implementation of Agreements) Bill [HL]

Lord Mance Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 17th March 2020 Lords Chamber

[Lord Mance (CB)]

My Lords, this is an area in which I have long been engaged as a practitioner, and I believe that I still have the honour of chairing the Lord Chancellor’s advisory committee on private international law—although, so far as I recall, we were not consulted on this Bill, nor on the 2018 regulations on private international law that until now have operated as the default on Brexit.

At the heart of this Bill is jurisdiction. Former practitioners such as I know that jurisdiction is commonly the most important preliminary issue in international litigation. The noble Baroness, Lady Shackleton, referred to this in the context of divorce. I shall be referring to commercial litigation, but the same applies to other areas, including matrimonial disputes, children, insolvency and divorce. Any party wishing to avoid or delay liability or a judgment will seek the slowest or most amenable jurisdiction. To prevent this, it is common in commercial law to insist on an agreed forum for disputes—a choice of court or arbitration clause, often in favour of London.

London’s practitioners and courts have a reputation for the impeccable handling of complex disputes. It is part of the package of financial, business and trading facilities and activities that has made London a—if not the—world business centre. But what matters is that other courts and states recognise our jurisdiction. We can legislate domestically for all we are worth, but international recognition and enforcement of jurisdiction and judgments require in practice reciprocal international agreement.

The Bill’s Explanatory Memorandum notes that “key stakeholders” have consistently made clear the importance of the UK continuing to take a leading role internationally on private international law. The Minister has emphasised that it is essential for legal certainty to have a framework. The memorandum goes on to say that the UK

“will need to take steps to ensure continued participation in key PIL international law agreements”,

and that Brexit will allow the UK

“to agree ambitious new PIL frameworks with international partners all over the world”.

There is hyperbole in both statements. We are ceasing to participate in some key instruments with EU states, and the Bill is unspecific—to say the least—about the ambitious new frameworks with other world partners.

From the end of this year, the UK will cease to be party to what is probably—in fact, certainly—the most significant set of private international law measures in the world: the Brussels regime regulating jurisdiction and the enforcement of judgments across EU states, and parallel measures such as the insolvency Regulation 2015/848 and the regulation on jurisdiction, recognition and enforcement in matrimonial and parental matters. The UK was itself a proponent of the successful recasting in 2012 of the first of those—the central Brussels regulation—to meet UK needs. As the Minister noted, we helped build these instruments.

The Government’s ambitions do not extend to repeating this existing framework, which has, over 35 years, attracted very considerable support in London as elsewhere. However, some form of substitute is now necessary, to apply as between the UK and EU states. In relation to children, there are, happily, the Hague conference conventions of 1996 and 2007—non-EU measures, which are referred to in the Bill—on which to fall back. In relation to commercial law, insolvency and divorce, there are no such parallels, although there are other measures focusing on commercial law, which are referred to in the Bill, to which I come.

The Bill is by its own lights a sensible measure, but its lights are rather dimmer than the halogen welcome given to it by the Explanatory Memorandum. I take first the Hague choice of court convention of 2005, which Clause 1(2) of the Bill paves the way to joining. That is an excellent instrument, again promoted by this country. In that, the committee that I chair had the privilege of playing a role but, absent specific declaration, it does not cover the very important area of asymmetric jurisdiction clauses. Many of the derivatives and banking clauses on which the City relies are asymmetric; in other words, they give one party but not the other, or others, a choice of jurisdiction. The better view is that the existing Brussels regime covers all choice of court clauses, whether they are asymmetric or not.

As a consequence of that, if you go to the website of the International Swaps and Derivatives Association, the first document you will see is headed “ISDA Amendment Agreement”, to change

“English Law to Irish or French Law”.


It provides the means to change the usual London jurisdiction clause in favour of Paris or Ireland. That is a measure of the current doubts about the future value of English jurisdiction clauses, which have been allowed to continue for some four years now to the detriment of London as a world centre.

A second problem about the Hague choice of court convention is that, even on the most optimistic reading, it covers only exclusive jurisdiction clauses agreed since l October 2015, when the EU first signed the UK up as a member state. In contrast, the 2012 Brussels regulation, which we have at present, applies to all proceedings begun since 10 January 2015; that is, proceedings begun rather than jurisdiction clauses agreed. But this will cease to apply to all proceedings begun after the end of this year. So, the position is that presently enforceable asymmetric jurisdiction clauses in favour of London will cease to be recognised at an international level by other EU states overnight on 31 December 2020. Indeed, all enforceable jurisdiction clauses, asymmetric or not, will cease to be recognised at an international level; they may, of course, be recognised at an overseas domestic level—that is quite a different matter. Until 19 June 2018, the UK’s position was that such clauses should be preserved, or grandfathered; that is, retain their current validity. This has gone. No doubt, even an additional glimmer of Court of Justice jurisdiction after the end of the year, however benign, was not acceptable.

A third problem with the Hague choice of court convention is that it contains a list of excluded topics, which is considerably longer than that in the Brussels regime. The excluded topics include, for example, personal injury, simple tort claims, immovable property and intellectual property claims.

I turn to the second instrument, which the Explanatory Memorandum and the Government’s paper on the future relationship evince enthusiasm for acceding to. As already mentioned, that is the Lugano Convention 2007; Clause 2 of the Bill would be used for that. The Lugano Convention corresponds to the main Brussels regulation before it was recast in 2012. As a result, it has severe defects. On the other hand, no doubt the great attraction, in the Government’s eyes, would be that the European Court of Justice would have no jurisdiction over it; there would be an obligation merely to take account of Court of Justice jurisprudence, not necessarily to agree with it.

On the other hand, the UK needs the consent of the other parties to join. There are four, three of which have welcomed the UK aboard. Switzerland, Iceland and Denmark all welcomed the UK aboard, but the last party—the EU, for its member states—is apparently silent, and there are rumours that it may not consent. Any clarity the Minister can give would be most welcome.

Even if we were to sign up, the un-recast, unreformed Lugano has significant weaknesses. First, its arbitration exclusion is less clear than the Brussels regime; again, that is important for London. Secondly, it is vulnerable to the famous “Italian torpedo”, whereby a London choice of court clause can be undermined by an entirely wrong or even abusive commencement of jurisdiction in some other court—the typical example being Italy. The aphorism comes from an Italian law professor, so I am not, I hope, in any way using unduly what is a well-quoted phrase. Lugano’s third defect is that it makes no provision for stay of proceedings in the face of prior litigation in a non-contracting state: in other words, you can agree on a New York choice of court clause, but Lugano will override it. That is an extraordinarily Eurocentric provision, which the recast Brussels regime avoids, largely. Can the Government say whether, having joined Lugano, they hope to follow the Brussels example, whereby the UK did have a big role, and recast the Lugano convention to cure these defects?

There is one other problem with signing up which the Government may have overlooked—again, I would welcome the Minister’s comments. If we sign up to Lugano, we are locked into its limitations, potentially precluding us from getting the advantages of the next instrument which the Government express an interest in joining: the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. This is fairly hot off the press: it is mentioned in the Explanatory Memorandum and, again, the UK played a significant role in its preparation in the Hague conference. Perhaps it is one of the “ambitious new” private international law frameworks which the Government hope to agree

“with international partners all over the world”.

The less hyperbolic reality is that it has at present only two member states, with which our most obvious affinity is purely alphabetical: Uruguay and Ukraine. Even according to the Hague conference website, they have only signed, not ratified.

Secondly, this instrument deals only with recognition and enforcement; it does not limit or define jurisdiction, as the Brussels regime and Lugano do. Nevertheless, it appears to have one particular advantage in relation to our former EU partners which Lugano does not. It should be noted that the EU has expressed interest in signing up to the 2019 convention. If it does and we do, the convention will go some way to avoiding the Italian torpedo, because it will enable the refusal of such recognition or enforcement of any judgment given in breach of a choice of court clause, whether exclusive or asymmetric. For example, if proceedings were commenced in Italy in breach of a choice of court clause pointing to London, the UK or any EU contracting state could refuse to recognise the judgment. That beneficial provision would go some way to evading the Italian torpedo and correcting the main defect of the Lugano convention. Under Lugano, EU and Lugano courts—including the UK if it joined Lugano—would have to recognise and enforce the Italian judgment, even though it was patently given in proceedings started in Italy in breach of a London choice of court clause.

The UK would lose the advantages of this beneficial provision if we signed up to Lugano before signing up to the 2019 Hague convention, because Article 23 of the latter states expressly that it does

“not affect the application by a Contracting State of a treaty that was concluded”

by that state prior to conclusion of the convention. I would be very glad to hear the Government’s thinking on this. On the face of it, the message is: festina lente—in other words, be very careful and do not sign up immediately to Lugano without thinking very hard about it. By all means, sign up to the Hague choice of court convention as soon as possible, but consider whether it may not be better to wait for the EU to sign up to the 2019 convention and sign up ourselves at least before any attempt to join Lugano.

There are one or two minor points, or at least more minor points, although I do not want to underestimate their importance, particularly relating to the width of the powers relating to delegated legislation, on which noble Lords have already spoken. Even taking into account the Constitutional Reform and Governance Act, providing for scrutiny of any international agreement, the powers of delegated legislation are of a width that is questionably wide. That refers among other things, but perhaps particularly, to the Henry VIII clause, which my noble and learned friend Lord Judge has referred to.

Of particular interest to me, I declare as a practising arbitrator, is the definition of “private international law” to include recognition or enforcement of foreign arbitral award. Private international law normally keeps court jurisdiction and arbitration separate. International arbitration awards are enforceable under the New York convention of 1958. Brexit should not affect the enforceability or recognition and enforcement of arbitration awards. The Bill seems quite an inappropriate place to give Ministers the power to make regulations about arbitration, even subject to affirmative approval.

I conclude by welcoming this opportunity to discuss openly in this House a subject of huge importance to the City and this country’s financial position. There has been a fear that it may have been too low down the Government’s agenda and the subject of too little attention. I hope this debate will have focused minds and that there will now be wide and open consultation on whatever future measures, ambitious or not, the Government may consider signing up to.

--- Later in debate ---

[Lord Keen of Elie]

I thank all noble Lords for their contributions to the debate. I will take some of those points in turn. The noble and learned Lord, Lord Wallace of Tankerness, raised Hague Convention 35. Hague, unlike Lugano, for example, can be entered into by a state, but can be ratified and applied in respect of only one jurisdiction within the state. It so happens that Hague Convention 35 was implemented in respect of Scotland, but not of England and Wales, nor, I believe, Northern Ireland. I am not able to explain why it has been in abeyance for a number of years with respect to those other jurisdictions, but I can say that since the noble and learned Lord raised the point with me I have spoken to officials who are addressing that matter. Certainly, our recommendation would be that it should be applied in respect of England and Wales as well.

The noble and learned Lord asked when we last implemented an international treaty obligation without primary legislation. My stock response was going to be that we now have CRaG 2010, but he went on to criticise that. While I understand that some observations have been made about the sufficiency of CRaG, my response is that we now have primary legislation that requires parliamentary scrutiny in circumstances where we intend to enter into an international treaty. It is in that context that we use the affirmative procedure to draw down those obligations and apply them in domestic law. I venture that that is an acceptable mechanism, because it requires parliamentary scrutiny at the stage of international law. It allows parliamentary scrutiny at the stage of drawing it down into domestic law in accordance with the duality principle.

The noble and learned Lord, Lord Judge, adopted and advanced the submissions of the noble and learned Lord, Lord Mance—which shows courage and, indeed, prescience. He also asked why we refer to arbitration. We do not intend to intrude wholesale on the New York convention or other aspects of arbitration, but it might be that there will be bilateral or multilateral jurisdictional issues where a party wishes to refer to arbitration. If, at that stage in the negotiation, we consider that appropriate, albeit in a limited circumstance, we will want to have the power to proceed with such an agreement. However, we are conscious of the need to keep a dividing line between provisions with regard to arbitration that are generally addressed by wholly different conventions, such as the New York convention, as distinct from those that apply more generally in private international law. We are not endeavouring to cross any lines there.

Schedule 6 is where it is because that is where it should be. It is not hiding. I reassure the noble and learned Lord of that. With regard to Schedule 2, my understanding is that it reflects or replicates the text of the 1996 Hague Convention on child protection and is in that form for that reason.

A question was also raised by the noble Lord, Lord Collins, and others about why we have these Henry VIII powers to amend primary legislation. There may be circumstances in which we want to insert implementation provisions into existing primary legislation. I ask noble Lords to notice that that is exactly what we are doing with Clause 1, where we are putting the three Hague Conventions into the Civil Jurisdiction and Judgments Act 1982. It might be that we will want to use existing primary legislation and implement using existing primary legislation. That is why that power has been taken.

The noble and learned Lord, Lord Mance, gave a very detailed and reasoned distinction between the merits of the Brussels regime, in which we played a very prominent part, and the perhaps deficiencies, to use one term, or the less robust regime we find in Hague and even in Lugano, which essentially reflects Brussels rather than Brussels Ia and Brussels IIa. I have to notice that there are those differences. It is a consequence of us having left the EU on 31 January 2020 —it is as simple as that, is it not? I know the noble and learned Lord recognises that. We cannot be part of the Brussels regime now we have left the EU, and the Government have made it clear that they will not be subject to the jurisdiction of the ECJ.

Of course, if and when we become a party to Lugano, we will seek to move forward the Council of the Lugano Convention to address its equivalence because Lugano originally reflected Brussels I and Brussels II and it is yet to catch up, as it were, with Brussels Ia and Brussels IIa, but certainly if we were a party to it, we can see that we could drive the direction of travel.

That said, we have to be careful about when we engage in the Lugano process. We have made an application to the Council of the Lugano Convention. We have letters of support from the three existing Lugano states, but noble Lords are quite right to point out that we require the consent of the EU to become a party to the Lugano Convention. There are also questions about the way in which that will interrelate with the provisions of the 2019 Hague Convention, and we will have to look at that. Again, my understanding is that we were a material contributor to the development of the Council provision on the 2019 Hague Convention as well, so we are familiar with it, and we see its considerable benefit, all the more so if the EU were to become a contracting state to the 2019 convention.

However, the noble and learned Lord, Lord Mance, is ahead of me. I thought only Uruguay had ratified so far, but he was able to add Ukraine.

[Lord Mance]

It has signed but not ratified.

[Lord Keen of Elie]

I apologise—it has signed but not ratified. As the noble and learned Lord will know, it takes a little time for signatures. There has to be a certain number of states signing to the convention and then ratification can take place. Clearly, we are conscious of that. The noble and learned Lord has highlighted a real issue, which is the care we must take in considering our position with regard to Lugano and with respect to the 2019 Hague Convention. If we were not conscious of that before, we are now, if I can put it that way. It may be that the Lord Chancellor’s consultative committee should have sat earlier.

I hope I have addressed the majority of the points that have been raised so far. There was one point the noble and learned Lord, Lord Wallace, raised about intra-UK powers. We will have powers to implement an agreement intra-UK but clearly we would do so only after engagement with the devolved Administrations because the implementation of private international law is a devolved competence, albeit that entry into the treaty at the level of international law is a reserved competence. I reassure the noble and learned Lord that we would not do that without full consultation with the relevant parties.

I see that the noble Baroness, Lady Shackleton, is about to rise, but before she does so I shall just say that in the absence of Brussels and in the absence of provision in international law convention under Hague for certain matters, such as jurisdiction on divorce, we will fall back on our previous common-law position, which some will regard as less than entirely satisfactory, but it is a consequence of us having left the EU. I hope that that anticipates the intervention I was going to get.

Given the hour, I will rest my further submissions there. I look forward to further detailed discussion of these matters in Committee.