< PreviousQUARTERLY Q/1 – 2020 The UK has ratified the Hague Convention on Choice of Court Agreements 2005 (“Hague Convention”) in its own right. The other contracting states are the EU, Mexico, Singapore and Montenegro. As long as the Brussels Recast Regulation applies in the UK, the Hague Convention is largely inapplicable as the Recast Brussels Regulation takes priority over it. The Hague Convention provides rules on jurisdiction and enforcement of judgments in circumstances, where the disputing parties have concluded an exclusive jurisdiction agreement in civil and commercial matters. The Hague Convention has, therefore, a much more limited scope than the Brussels Recast Regulation and the Lugano Convention. It will not apply in case of non-exclusive jurisdiction agreements, nor interim measures and may not apply to agreements concluded before the end of the transition period. It is uncertain as to whether the courts in EU member states will apply the Hague Convention to contracts concluded with a UK party before 1 January 2021, the date when the UK is expected to rejoin the Hague Convention in its own right, after the Transition Period. The UK courts will, however, be likely to apply the Hague Convention to contracts concluded on or after 1 October 2015, the date when the Hague Convention entered into force in EU member states. THE LUGANO CONVENTION MAY APPLY AFTER THE TRANSITION PERIOD The UK has previously indicated that it wishes to re-join the 2007 Lugano Convention in its own right. The UK may be able to do so, if all the current signatories, EU, Iceland, Norway and Switzerland agree. The Lugano Convention provides for similar rules than the Brussels Recast Regulation for determination of a court’s jurisdiction and recognition and enforcement of judgments. There are, however, differences. The rules concerning jurisdiction and enforcement of judgments after the transition period WHERE THE PROCEEDINGS ARE COMMENCED BEFORE THE END OF THE TRANSITION PERIOD, THE BRUSSELS RECAST REGULATION APPLIES Article 67 of the Withdrawal Agreement provides that the Recast Brussels Regulation will apply to proceedings commenced before the end of the transition period and to the recognition and enforcement of judgments given in proceedings commenced before the end of the transition period. A NEW AGREEMENT BETWEEN THE UK AND THE EU MAY PROVIDE RULES FOR THE DETERMINATION OF A COURT’S JURISDICTION AND RECOGNITION AND ENFORCEMENT OF JUDGMENTS During the transition period, the UK and the EU may be able to conclude a new bilateral agreement that provides new rules for the determination of a court’s jurisdiction and recognition and enforcement of judgments in disputes between UK and EU companies. It is too early to tell but a potential new agreement may stipulate similar rules than the Brussels Recast Regulation stipulates. THE HAGUE CONVENTION GOVERNS JURISDICTION AND ENFORCEMENT OF EUROPEAN JUDGMENTS IN THE UK IN CASE OF EXCLUSIVE JURISDICTION AGREEMENTS 1 2 3 4 How to prepare for the future when drafting dispute resolution clauses When drafting dispute resolution clauses, we would foremost recommend opting for arbitration instead of dispute resolution in domestic courts. Arbitral awards will be recognised and enforced almost universally under the New York Convention framework. This remains unaffected by Brexit. In contrast, as described above, while the UK and the EU are still negotiating for their future cooperation, there remains uncertainty as to what rules will eventually govern jurisdictional issues and enforcement of judgments in disputes between UK and EU companies. The changed framework after the transition period may make enforcement of UK judgments in the EU and vice versa more onerous, time-consuming and expensive. Alternatively, if the parties cannot agree on arbitration, we would recommend agreeing on an exclusive jurisdiction clause. This would ensure that at least the Hague Convention applies after the transition period. However, if the contract is concluded before -Thinking Ahead Since 1899- Under Brussels Recast Regulation, the courts in the member states uphold the parties’ jurisdictional agreements, where the parties have agreed that a court in an EU member state has jurisdiction over their dispute, even if the parties themselves are domiciled elsewhere. In contrast, under the Lugano Convention, the parties’ jurisdictional agreements are effective only if one of the parties is also domiciled in one of the member states. In addition, unlike the Brussels Recast Regulation, the Lugano Convention does not contain the lis pendens rule, which obligates a court of a member state to stay proceedings in favour of the court that the parties have designed as having exclusive jurisdiction over the matter. Thus, under the Lugano Convention, there is a risk of parallel proceedings, even where the parties have agreed on an exclusive jurisdiction clause. WHERE NONE OF ABOVE INSTRUMENTS APPLY, THE COMMON LAW RULES GOVERN JURISDICTION AND ENFORCEMENT OF EUROPEAN JUDGMENTS IN THE UK In cases, where the rules of the above described instruments do not apply, the jurisdictional issues and enforcement of judgments will be governed by the common law in the UK. The common law rules on jurisdiction are arguably less certain and predictable than the rules under the European regime instruments as they contain an element of discretion. The common law rules further include a court’s power to grant anti-suit injunctions, which may be benefi cial in some circumstances but may also increase the time and costs of disputes over jurisdiction. Enforcement of European judgments under the common law rules may be more time-consuming and onerous, as the rules require the judgment debtor to commence fresh proceedings to enforce the foreign judgment as a debt. In addition, the common law rules provide wider grounds for resisting enforcement than the Brussels Recast Regulation and the Lugano Convention. WHERE NONE OF THE ABOVE INSTRUMENTS APPLY, THE DOMESTIC LAW OF AN EU MEMBER STATE IN QUESTION GOVERNS JURISDICTION AND ENFORCEMENT OF UK JUDGMENTS In circumstances, where none of the instruments described above apply, after the transition period, the courts of EU and EFTA member states will determine their jurisdiction in accordance with the domestic law in the member states in question and, where applicable, the rules of the Recast Brussels Regulation applicable to parties from non-EM member states. Similarly, unless the Hague Convention (or the other instruments described above) applies, the enforcement of UK judgments will be subject to the rules of the domestic law of the EU member state in question. In Finland, in cases, where the Hague Convention, or any other above instruments, does not apply, there will be no simplified enforcement procedure to enforce UK judgments. The case may be retried on its merits, in which case the foreign judgment only serves as evidence in the retrial. Consequently, the enforcement of UK judgments in EU and EFTA states becomes potentially more onerous, time-consuming and expensive. 6 5 the end of the transition period, it may be advisable to subsequently amend the jurisdiction clause in the contract on or after 1 January 2021, particularly if the parties envisage that a potential judgment may need to be enforced in an EU member state. This is because it is not currently entirely certain that the courts of EU member states will apply the Hague Convention to contracts concluded before the end of the transition period. The outstanding uncertainties created by Brexit may, however, be lifted in the near future if the UK is able to re-join the Lugano Convention or if the EU and the UK conclude a new agreement to replace the Brussels Recast Regulation. There is also a new Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matter, dated 2 July 2019. This Convention is not yet in force but it may in the future be an important legislation. Heidi Yildiz, Senior Attorney, Solicitor in England and Wales, Finnish Attorney, Dispute Powerhouse @heidi_yildizQUARTERLY Q/1 – 2020 A little bed time story about trademarks & the lesson from Her Majesty the Queen INNOVATION POWERHOUSE Once upon a time… nce upon a time, over 100 years ago, before e-commerce platforms and online sales were invented and when goods were still traded on markets and horse carriages prevailed over cars, laws were enacted to protect marks used in business. The function of a trademark was to distinguish the origin of the goods or services. According to said acts, today in force all over the world, trademark was to confer an exclusive right to the mark within a certain territory. The right would enable excluding others from using the same or confusingly similar marks for the same products or services for which the trademark was registered or established. However, trademark should never mislead the general public. While this piece of information has been the very basics of trademark law already for a long time, sometimes it may come as a surprise - even to the heirs of the Royals, such as Prince Harry, the Duke of Sussex and his spouse, Duchess, who claimed there is no law on earth that would prevent them from using the word “ROYAL” in their personal branding. Royal runaways ollowing launch of the Instagram account and The Sussex Royal Foundation last year, the Duke and Duchess of Sussex secretly filed an international trademark application for the wordmark “SUSSEX ROYAL”, P32 O F-Thinking Ahead Since 1899- claiming priority from a UK application. The international trademark application covered the European Union, the United States as well as Canada and Australia. Shortly after the fi lings, her Majesty the Queen issued a statement announcing that while Harry, Meghan and their son Archie will always be much loved members of the Royal family, the Queen supports their wish for a more independent life. This created a big hassle in the Kingdom and around the world. Finally, a settlement agreement on the royal quarrel was reached between the family members and the Kingdom. According to its terms, the separation would take effect in Spring 2020, after which the Royal runaways were to make their own living and would no longer draw on the public funds. However, as a goodwill gesture, the Queen kept the grandson’s order of precedence to the throne of The British Monarchy unchanged. Now, while the trademark applications were fi led before the Duke and Duchess of Sussex would leave their senior positions in the Royal family, the registrations would come into force after such separation. The royal trademark hassle s a surprise to the Duke and Duchess of Sussex, the applications to claim exclusivity over the “SUSSEX ROYAL” –mark were not well received by the general public. Several notices of threatened oppositions were fi led against the mark, indicating that formal oppositions setting forth the grounds for opposition would ensue. Even if such oppositions would turn speculative for having been fi led by third parties outside of the Royal family, this was not the only challenge for the Duke and Duchess of Sussex’s branding strategy. Evidently, the Royal runaways had not sought prior consent from the Queen for use of the mark “SUSSEX ROYAL”. Namely, when Her Majesty the Queen heard of the trademark fi lings, she was not pleased at all. In fact, she was furious. The Queen reportedly ordered the Royal runaways to cease using the mark immediately as of their separation from the Royal family. Shortly after the Queen’s earful, the Duke and Duchess of Sussex withdrew the applications and promised to the empire never to use the “SUSSEX ROYAL” – mark in the United Kingdom or anywhere else in the world, for that matter, as of their transition from Royals to ordinary citizens. Accordingly, in order to show their obedience to the Queen, the Duke and Duchess of Sussex withdrew their priority UK trademark application, which then failed also the international trademark applications. Consequently, it will never be assessed in a formal trademark opposition proceedings whether the Royal runaways would have been entitled to refer by use of the “SUSSEX ROYAL” - mark to the prestige and goodwill of the Royal family and the British Monarchy gained over the past centuries once they no longer are Royals. …Happily ever after! hile withdrawal of the Duke and Duchess of Sussex’s trademark applications triggered a flow of third party trademark applications for the “SUSSEX ROYAL” – mark, another hassle in the brand protection efforts remains to be sorted: the Royal runaways need to sharpen their brand strategy and come up with a new mark. Before any details are revealed about this Royal rebranding exercise, the general public has already debated the success of adopting wordmarks such as “H&M” or “MARKLE & SPENCER”. These marks, however, might be held as confusingly similar to the well known marks used in the fashion retail. Luckily, every cloud has a silver lining, and so does this. By abandoning the trademark applications for the “SUSSEX ROYAL” – mark, the Duke and Duchess of Sussex avoided a potentially very long, costly and demanding opposition proceedings over the trademark that could have burdened their yet thin cash fl ow and, even worse, caused wrinkles or grey hair. Further, after the post-Brexit Megxit, the Duchess will be able to resume her acting career, noting also that the world’s biggest acting job in the role of a Royal is soon to end. Harry, the Duke of Sussex, in turn, will have more time and energy to fulfi l whatever demands the Duchess sets upon him. Therefore, all is well that ends well, and even though in this fairy tale, the frog did not turn into a prince (quite the contrary), the Duke and Duchess of Sussex lived (hopefully) happily ever after. The story does not tell, however, whether the pair adopted, after their move out of the Frogmore Cottage, “FROG &THE DUCHESS” as their new trademark. Anna Haapanen, Partner, Innovation Powerhouse @AnnaHaapanen A WQUARTERLY Q/1 – 2020 Regtech - A new approach to old challenges? INNOVATION POWERHOUSE Regtech is more than a buzzword and more than just something for the smaller players. This fast-growing industry develops technological solutions with an aim to carry part of the regulatory and compliance burden that regulated entities face in their daily operations, especially those operating in the financial sector. D&I co-hosted the Regtech Day on 27 February 2020 at our office together with our good co-operation partner Helsinki Fintech Farm. Regtech is definitely a hot topic, and Regtech Day gathered a full house of attendees from financial institutions, regulators, innovators and technology providers. We would like warmly to thank all the speakers for their insightful presentations and the participants for their activity and interesting discussions! Not just a buzzword Technologies and services that aim to assist in regulatory and compliance processes, and by doing so to lighten the compliance burden, are referred to as regulatory technology, or regtech for short. Regtech is now a buzzword, but also more than that. Regulatory regimes are expanding and reflecting the increasing complexity of many companies’ operating environments. For a long time, the rule of thumb has been that this trend goes hand in hand with the need for and cost of compliance. However, such dynamics have driven companies, especially in the financial sector, to explore technologies that may have the potential to solve at least parts of the equation. There is a big bunch of regtech solutions available (some of which were demonstrated during the Regtech Day). However, as the architects of the regulatory landscape, i.e., the legislators and the supervisors, are under little, if any, pressure to adopt a less robust approach and technological innovations are expected to drive the market forward, financial institutions will likely continue to have regtech solutions at their disposal. The regulators’ focus areas In the increasingly complex regulatory landscape, regulators also need to target their resources carefully. While all legal requirements should be observed and complied with, knowing the focus points of the relevant regulators provides insight on what the regulators consider most relevant. The Data Protection Ombudsman, for example, has stated that it will focus its inspections on accountability, data protection impact assessments, data protection issues of children and the elderly and facial recognition technologies utilised by certain authorities. On the other hand, competition law is increasingly relevant, while new regulations, such as the PSD2, are intended to boost competition. In addition, the centralisation of data, and with it the market powers, may lead to competition law related issues that need to be solved. Cooperation and transparency play a crucial role The authorities aim to be increasingly cooperative and transparent, and cooperation between different market players is crucial for the development of the fintech / regtech ecosystem in Finland. The Regtech Day was not only excellent proof that cooperation is embraced by companies and regulators alike, but also in itself a step towards a more cooperative and transparent fintech and regtech landscape in Finland. Kristian Karlsson, Senior Attorney @Kristian_Karlss P34-Thinking Ahead Since 1899- D&I ranked in Band 1 in Chambers Fintech 2020 D&I is the only fi rm in Finland ranked in Band 1 in Chambers’ FinTech Guide, including the ranking of Partners Hanna-Mari Manninen and Jukka Lång and recognising Senior Attorney Iiris Kivikari as “Up and Coming” in the fi ntech fi eld. Eight Finnish fi ntech practitioners were ranked in this 2020 edition; four of them representing D&I at the time of the publication. Fintech may refer to many things, such as the disrupting start-ups or incumbent banks’ digitalisation. For us, it means, above all, a new way of thinking and a constantly changing and extremely interesting legal landscape. D&I’s lawyers regularly advise clients in the rapidly evolving fi ntech fi eld. We act for companies at all stages of development, be they banks, other established players or start-up and emerging growth companies.Q/4 2019 Read the previous issues Q4/2019 Quarterly Q/1 2017 p.2 Politics, Protectionism and Technology Revolution Editorial p.4 It’s All About the Core Thinking Ahead p.5 The Technology Revolution Drives Transactions Transaction Powerhouse p.8 Dispute Academy – Preventing Future Disputes Difference that Matters p.10 Legal Tech Lab Right Now p.12 FinTech and Regulation – Creating Opportunities Substance Matters Dittmar_Quarterly_Q1_2019_7_C.indd 11.4.2019 15.24 Q3/2019 Q3–Q4/2017 Quarterly Q/1–Q/2 2018 p.4 INTERVIEW IN ADVOKAATTI MAGAZINE 2/2018 Servant Leadership with Low Organisational Structures p.8 TRANSACTION POWERHOUSE Loose Lips Sink Ships - How to Control Inside Information in M&A Transactions p.10 DISPUTE POWERHOUSE Transfer Pricing Related Tax Disputes – Significant Risk for Multinational Enterprises p.12 FEATURED D&I ALUMNA RAIJA-LEENA OJANEN Earth Needs Good Lawyers p.22 INNOVATION POWERHOUSE The GDPR and Its National Derogations Dittmar_Quarterly_3-4_2018_21_C.indd 113.12.2018 15.36 Quarterly Q/3–Q/4 2017 p.6 Thoughts on Business in the Digital Era Innovation Powerhouse p.9 New Year’s Promise – PSD2 Will Change the World in 2018 Substance Matters p.16 Tools for Advanced M&A – How to Reduce Uncertainty in Transactions Transaction Powerhouse Quarterly Q/2 2017 p.3 All Disputes Can Be Resolved Editorial p.4 Digital Disruption Creating Opportunities Thinking Ahead p.7 Sustainability – Core Consideration in M&A Transaction Powerhouse p.9 State Aids in Taxation Transaction Powerhouse p.12 The Finnish National Implementation of the GDPR On Its Way Right Now p.14 DR Meets Tech Difference That Matters p.18 Catching Up with D&I Alumnus Teemu Oksanen of Futurice Featured D&I Alumnus Q2/2019 Q1/2019 Q3–Q4/2018 Q1–Q2/2018 Quarterly Q/3 2016 p.12 Featured D&I Alumna Hannele von Hertzen of SRV p.4 Paris Climate Agreement Paved Way for Circular Economy and Cleantech p.3 What You Need Is a TPH and Don’t Forget CSR Editorial p.8 Sustainability and Green Thinking We Asked Leading Infrastructure Investor’s Views on Key Drivers Quarterly Q/4 2016 p.2 Technology Revolution New Perspectives on Assets and Services p.4 Creating Precedents MAR for Executives p.8 What’s the Big Deal with Mega-Deals? Transaction Powerhouse p.11 New Analysis on Corporate Benefit We Asked p.12 Recent Changes in Finnish Employment Laws Substance Matters Quarterly Q/2 2016 Trust Is Paramount p.4 The D&I Journey p.3 Thinking Ahead Editorial p. 12 Whistleblowing Regime Proposed to Be Expanded p.16 We Asked New Partner Kai Erlund p.18 Featured D&I Alumna Kaarina Ståhlberg of Posti Group Q2/2017 Q1/2017 Q4/2016 Q3/2016 -120 Years of Thinking Ahead- Q/3 2019Q/3 2019 -120 Years of Thinking Ahead- Q/2 2019Next >