To be clear, this does not mean that an English court decision after Brexit is not recognised and enforced by an EU court, and that does not mean that an English law agreement is less « valid » or that EU and EEA counterparties will not be able to continue using binary agreements under English law. This potentially means more costs, more insecurity and more bureaucracy. Suppose an Italian counterpart and a French party act under an English legal agreement with the English court after Brexit; There is a dispute and the English court renders a judgment in favour of the Italian opponent. The Italian side would have to have this English court decision recognized by a French court in order to enforce it – it is another step in the process that could take years or, worse, lead another court to decide to reopen part of the case. The UK`s exit from the EU in March 2019 will change this situation. Since « Brexit means Brexit, » the UK will become a third country and, if there is no agreement with the EU on this issue, the decisions of the British courts will no longer be automatically recognised by the rest of Europe. Other procedures must be followed in each country where a party wishes to obtain recognition of a decision taken in the United Kingdom. In France, an execution warrant (exequatur) must be obtained. While it is unlikely that such a procedure is likely to challenge or overturn the decision of the British courts, the mere fact that it is necessary will result in additional delays and delays, resulting in risks that are difficult to bear in transactions where underlying volatility is significant. It is difficult to predict how the market will use these new master`s contracts. It is not unreasonable, however, to think that European banks and counterparties will see advantages in using the new contractual instruments offered by ISDA for their intercontinental European activities.
in particular because, after Brexit, ISDA acknowledged that, in the absence of an appropriate agreement between the UK and the EU in the Brexit process, the ability of an EU counterparty to invoke the enforceable force of an English court`s decision in a Member State could be compromised, since the UK would be considered a third country. Although English court decisions are probably still recognised and enforced in a Member State after Brexit, the recognition and execution of an English court`s sentence in a Member State cannot be « automatic, » as the recognition and enforcement process can be costly and tedious. It goes without saying that the dissemination of one of these two new versions of the ISDA agreement will depend on the type of agreement reached in the negotiations between Britain and the EU and on the clarification of the UK`s status at the time of withdrawal. English courts have extensive experience in disputes related to ISDA master contracts, which are under English law, and their decisions are currently directly applicable throughout the European Union (EU) and the European Economic Area (EEA). Indeed, european regulations (Regulation 1215/2012 of 12 December 2012) stipulate that judgments rendered in a Member State are recognised in all Member States without the need for a particular procedure. Therefore, after making a decision in England, a party to a senior contract of the ISDA may, under English law, rapidly increase the assets of a failing counterparty, regardless of the circumstances of those assets. Any branch, institution or fund established in the Union and acting with documents of the English rule of law is confronted with these problems. These new framework contracts are therefore not used to document domestic transactions in the French and Irish markets. The new framework contracts will be contractual instruments designed to meet the needs of market users throughout the EU to document their transactions and relationships, even if no French party is involved.