Dispute settlement and the Brexit withdrawal agreement


Professor Steve Peers,
University of Essex
One of the more contentious
issues in the Brexit withdrawal
agreement
is dispute settlement, in particular whether the Court of Justice
of the European Union (CJEU) still retains jurisdiction regarding the UK. This blog
post first presents an overview of the issue, and then a detailed annotation of
all the provisions in the withdrawal agreement relating to dispute settlement
and the CJEU.
This is the third in a series of
blog posts on the details of the withdrawal agreement: the first two posts in
turn set out an overview
of the whole agreement, and an annotation
of the linked political declaration on the future UK/EU relationship. I hope to
continue the series with a post on the Irish border backstop and possibly another
post on the legal issues of separate declarations or decisions that might try
to clarify the withdrawal agreement.
I’ve also annotated parts of the
withdrawal agreement when it was in draft form: the blog posts on citizens’
rights
and the transition
period
, which are both linked to dispute settlement, remain relevant
because the final withdrawal agreement did not change these clauses much
(except to provide for the possible extension of the transition period, for one
extension of one or two years after the end of 2020).
Also, I previously
annotated
the dispute settlement and CJEU provisions of an earlier
draft
of the withdrawal agreement. This text differs a lot from the final
text of the withdrawal agreement, although in a few cases I have adapted my previous
comments in that blog post.  
Background: CJEU and
WTO dispute settlement
The drafters of the withdrawal
agreement refer to existing CJEU jurisdiction several times, and the dispute
settlement provisions are broadly similar to the dispute
settlement rules
of the World Trade Organisation (WTO). So I’ll explain
here the basics of the two systems for the benefit of non-specialists.
The CJEU’s most important
jurisdiction – set out in Article
267 TFEU
– is over preliminary
rulings from national courts
on the interpretation or validity of EU
law. For example, see the recent Wightman
case on whether the Article 50 notification can be reversed, discussed here.
In that case, a Scottish court paused its proceedings, asked the CJEU to answer
questions about Article 50, and will now resume its proceedings in light of the
Court’s reply.  
The Court also has jurisdiction
over direct challenges to the
validity acts of the EU institutions or other bodies (Article
263 TFEU
). For example, see the recent Shindler
case in which UK citizens living in EU27 countries challenged the validity of
the EU Council’s decision to start negotiations for the withdrawal agreement,
discussed here.
Finally, the Court’s other important jurisdiction is over infringement actions against Member States which have
allegedly violated EU law, usually brought by the EU Commission (Article
258 TFEU
; see also Article
260 TFEU
, which mainly concerns fines for non-compliance with a prior judgment
determining an infringement of EU law).
As for the WTO, the dispute
settlement rules
allow any WTO Member to bring a complaint against any
other WTO Member for an alleged breach of WTO rules eventually to a panel of
trade experts. The panel’s findings can be appealed by either side (or both
sides, if they each are unhappy about different parts of the findings) to the
WTO’s Appellate Body (although this Body’s work is currently slowed down by the
US government’s objections to aspects of the WTO’s functioning).
If, at the end of this process, a
WTO Member is found to have breached WTO rules, it has a “reasonable period of
time” to comply with the ruling against it, by bringing its law in line with
its WTO obligations. If there’s a dispute about how long the “reasonable period
of time” should be, that can be settled by arbitration. If the losing Member
then indisputably complies with the ruling in time, that’s fine. If not, then
the losing Member can agree on alternative compensation with the winning Member
(which could be, say, reducing its tariffs on another product which the winning
Member exports a lot of to the losing Member).

Failing that, the winning Member
can retaliate against the losing Member by imposing trade sanctions, as long as
they are equivalent to its losses due to the losing Member’s breach of WTO law.
If there are disputes about whether such retaliation really is equivalent to
the losses or goes “over the top”, the issue can go to arbitration. Finally, if
there is an argument as to whether the losing Member has complied with the WTO
ruling or not, in practice that dispute can go to arbitration as well.

The crucial point is that most of
the UK’s obligations under the withdrawal agreement end when the transition period ends. After that point, the
UK’s obligations mainly relate to: (a) pending cases and proceedings being
wrapped up; (b) the acquired rights of EU27 citizens in the UK before the end
of the transition period (with matching provisions for UK citizens in the EU27
States); and (c) the “backstop” relating to the Irish border, which applies a customs
union to the UK as a whole and rules on free movement of goods to Northern
Ireland in particular, until replaced by another treaty.
First of all, the withdrawal
agreement says that the EU law principles
of “direct effect” and “supremacy” in EU law still apply, to the extent that
the UK is still bound by EU law. (Remember, most of those obligations end when
the transition period ends). The UK is also bound by CJEU judgments delivered
before the end of the transition period. In the case of judgments delivered
afterward, it only has to take “due regard” of them.
During the transition period, the Court’s normal rules apply to the UK.
After that, the withdrawal agreement sets out rules on jurisdiction for the
CJEU in cases pending at the
end of the transition period, as well as cases linked to events which took
place before the end of the transition period.  

There is also special
jurisdiction over citizens’ rights
(for eight years after the end of the transition period), for disputes over EU budget legislation, and for
cases concerning parts of the Irish border
protocol
and the whole protocol on UK
army bases in Cyprus
.

The core of the dispute
settlement system in the withdrawal agreement sets out an arbitration process for resolving disputes that cannot be
settled by discussion. This process is broadly similar to the WTO dispute settlement
rules described above. However, it may involve the CJEU where EU law issues are
involved. This was, however, an unavoidable legal “red line” for the EU side,
as the case law of the CJEU provides that only the EU courts can give an
interpretation of EU law that binds the EU institutions or Member States (see,
for instance, Opinion
1/92
).
Note that this does not give the
CJEU jurisdiction to settle disputes concerning the entire agreement, as some have wrongly claimed; its jurisdiction
here is limited to EU law issues. But the nature of the agreement is such that it
is possible that a lot of the issues being disputed concern will concern the interpretation
of EU law. It’s also noteworthy that the dispute settlement rules don’t apply
at all to many of the rules on labour law, environmental law, tax law and
competition law which apply to the Irish border “backstop”.  
Note that there are different
dates of entry into force and termination for these provisions. I’ve set out a
time frame below which summarises in one place when each type of dispute
settlement rule starts and stops, and which aspect of CJEU jurisdiction is
applicable.
For those who loathe the
existence of the CJEU, the withdrawal agreement may be a disappointment, for it
does not immediately end the Court’s jurisdiction over the UK. However, as
noted above, most of that jurisdiction ends when the transition period ends,
with the Court’s remaining role after that point concerning either: (a) pending
proceedings or cases; (b) special jurisdiction (citizens’ rights, EU budget
legislation, parts of the Irish border protocol, and the protocol on Cyprus);
and (c) a possible role in the arbitration process.
Much of this jurisdiction will be
wound up too: there’s an eight-year time limit for the Court’s jurisdiction
over citizens’ rights; the pending cases and budget legislation issues will
wind down naturally; and the Irish border protocol is meant to be replaced
eventually.  Moreover, not all of this
jurisdiction relates to the UK courts and setting aside UK law, which is the
most sensitive issue for some (it might be what the UK government means when it
refers to ending “direct jurisdiction” of the CJEU in the UK, although I fear
that if we asked the Prime Minister to clarify, she would answer by saying: ‘“Direct
jurisdiction” means “direct jurisdiction”’).
In particular, despite the role
of the CJEU in some arbitration cases, the arbitration process as a whole is
based on general international law, not EU law; the Court of Justice is not
answering in such cases to national 
courts applying EU law in proceedings before them.  Furthermore, it should be noted that the UK
government successfully obtained amendments to much of the dispute settlement text
as proposed by the Commission: replacing the CJEU with arbitration as much as
legally possible as regards the main dispute settlement provisions; limiting the
Court’s jurisdiction over pending cases; and denying any special jurisdiction
for the Court as regards the “separation provisions” in the withdrawal agreement
(ie what happens to European Arrest Warrants issued by the UK to request arrest
and surrender of fugitives in the EU27, or vice versa, if those warrants have not
been executed already by the end of the transition period).
Like everything else in the
withdrawal agreement, the role of the CJEU is a complex compromise, in which
the links with the EU are essentially unchanged during the transition period
but are curtailed significantly after that – and then continue to diminish
further.  The withdrawal agreement might
entail several dozen more judgments of the CJEU directly concerning the UK after
Brexit.  Perhaps those who find this
prospect ideologically so unacceptable that they would rather leave the EU
without any agreement, with the economic dislocation that will result, should
offer to compensate any of their fellow citizens who suffer as a result?
         
During transition
period (end of 2020, possibly
extended): ordinary jurisdiction of the CJEU (Article 131)
         
Pending
cases at end transition
: all types of cases, if they reached the CJEU
beforehand (Article 86)
         
New cases
after transition:
         
a) Infringement proceedings (four-year time
limit) if UK allegedly breached EU law before end of the transition period, or failed
to enforce a ruling in an EU administrative proceeding pending before the end
of the transition period, or relating to issues arising before the end of the
transition period, but decided afterward (Article 87)
         
b) Annulment actions: challenges to
administrative decisions taken concerning proceedings pending before the end of
the transition period, or relating to issues arising before the end of the
transition period, but decided afterward (Article 95(3))
         
c) EU27 citizens’ rights: preliminary rulings
(eight-year time limit) from UK courts (Article 158)
         
d) financial settlement: preliminary rulings and
infringement proceedings (indefinitely) relating to EU budget legislation
(Article 160)
         
e) reference from arbitration panel
(indefinitely) (Article 174)
         
f) Northern Ireland protocol (Article 14(4)), full
jurisdiction over parts of protocol (until protocol is replaced)
         
g) Cyprus bases protocol (Article 12), full
jurisdiction over protocol (indefinitely)  
         
Impact of
CJEU judgments:
         
a) compliance with CJEU rulings on relevant EU
law before end of the transition period (Article 4(4))
         
b) due regard for CJEU rulings on the agreement
after the end of the transition period (Article 4(5))
         
c) continued compliance with CJEU rulings under
Northern Ireland protocol (Article 15 of protocol), until protocol is replaced
Barnard & Peers: chapter 10, chapter 27
Photo credit: Yabiladi.com
CJEU and dispute
settlement provisions in the Withdrawal Agreement

Methods and
principles relating to the effect, the implementation and the application of
this Agreement

1. The provisions of this
Agreement and the provisions of Union law made applicable by this Agreement
shall produce in respect of and in the United Kingdom the same legal effects as
those which they produce within the Union and its Member States. Accordingly,
legal or natural persons shall in particular be able to rely directly on the
provisions contained or referred to in this Agreement which meet the conditions
for direct effect under Union law.
2. The United Kingdom shall
ensure compliance with paragraph 1, including as regards the required powers of
its judicial and administrative authorities to disapply inconsistent or
incompatible domestic provisions, through domestic primary legislation.
3. The provisions of this
Agreement referring to Union law or to concepts or provisions thereof shall be
interpreted and applied in accordance with the methods and general principles
of Union law.
4. The provisions of this
Agreement referring to Union law or to concepts or provisions thereof shall in
their implementation and application be interpreted in conformity with the
relevant case law of the Court of Justice of the European Union handed down
before the end of the transition period.
5. In the interpretation and
application of this Agreement, the United Kingdom’s judicial and administrative
authorities shall have due regard to relevant case law of the Court of Justice
of the European Union handed down after the end of the transition period.
Comments: Article 4 does not confer any jurisdiction
on the CJEU as such. However, it addresses two related issues: the legal effect
of the agreement and the EU law it refers to, as well as the impact of CJEU
case law. Its practical relevance will diminish over time, in particular when
the transition period ends and the UK’s obligations under the agreement are hugely
truncated. (See my overview
of the entire agreement). As noted above, the transition period will end at the
end of 2020, unless extended.
Article 4(1) retains the EU law principle of “direct effect”, as well
as other principles on the legal effect of EU law, as regards the agreement
itself and EU law made applicable by the agreement. (Note that Articles 2(a)
and 6 define “Union law” for the purposes of the agreement).
Article 4(2) reflects the principle of supremacy of EU law, meaning
that national measures incompatible with the withdrawal agreement will have to
be disapplied by the courts. Due to its cross-reference to Article 4(1), it applies
to the agreement itself and to EU law made applicable by the agreement.
Article 4(3) is a general provision, supplemented by the following two
paras, on the interpretation of the EU law referred to in the agreement in
conformity with EU law principles. (Again, note that Articles 2(a) and 6 define
“Union law” for the purposes of the agreement).
Article 4(4) means that CJEU case law on the interpretation of the EU
law referred to in the agreement up until the end of the
transition/implementation period will be binding upon the UK. Again, Articles
2(a) and 6 define “Union law” for the purposes of the agreement. It is not
clear if this provision will still have much effect (other than the citizens’
rights in Part Two, which refers extensively to EU law) after the end of the
transition period, given that the scope of EU law binding the UK will be hugely
reduced from that point.
Article 4(5) requires the UK to “have due regard” to CJEU case law on
the agreement handed down after the end of the transition period. It differs
from Article 4(4) as regards both the extent of the obligation and the law it
refers to: the agreement, rather than the EU law referred to in it. 
Note that Article 15 of the Protocol on Northern Ireland applies even
CJEU case law after the end of the transition period, within the context of that
Protocol, as a derogation from Article 4. So does the protocol on military
bases in Cyprus, discussed further below.
UNION JUDICIAL AND
ADMINISTRATIVE PROCEDURES
Pending cases before
the Court of Justice of the European Union
1. The Court of Justice of the
European Union shall continue to have jurisdiction in any proceedings brought
by or against the United Kingdom before the end of the transition period. Such
jurisdiction shall apply to all stages of proceedings, including appeal
proceedings before the Court of Justice and proceedings before the General
Court where the case is referred back to the General Court.
2. The Court of Justice of the
European Union shall continue to have jurisdiction to give preliminary rulings
on requests from courts and tribunals of the United Kingdom made before the end
of the transition period.  
3. For the purposes of this
Chapter, proceedings shall be considered as having been brought before the
Court of Justice of the European Union, and requests for preliminary rulings
shall be considered as having been made, at the moment at which the document
initiating the proceedings has been registered by the registry of the Court of
Justice or the General Court, as the case may be.
Comments: this regulates the position of cases pending
before the CJEU concerning the UK at the end of the transition period. As discussed
below, the Court’s usual jurisdiction applies during the transition period, and
so this provision – like the other separation provisions in the agreement –
sets out what happens at the end of that period to pending cases, namely that
they continue to fall within the Court’s jurisdiction as long as they have been
brought before the Court before the end of that period, as defined in para 3. Para
2 explicitly covers preliminary rulings requested by UK courts, and para 1 covers
infringement actions against the UK and annulment actions brought by the UK.
New cases before the
Court of Justice

1. If the European Commission
considers that the United Kingdom has failed to fulfil an obligation under the
Treaties or under Part Four of this Agreement before the end of the transition
period, the European Commission may, within 4 years after the end of the
transition period, bring the matter before the Court of Justice of the European
Union in accordance with the requirements laid down in Article 258 TFEU or the
second subparagraph of Article 108(2) TFEU, as the case may be. The Court of
Justice of the European Union shall have jurisdiction over such cases.

2. If the United Kingdom does not
comply with a decision referred to in Article 95(1) of this Agreement, or fails
to give legal effect in the United Kingdom’s legal order to a decision, as
referred to in that provision, that was addressed to a natural or legal person
residing or established in the United Kingdom, the European Commission may,
within 4 years from the date of the decision concerned, bring the matter to the
Court of Justice of the European Union in accordance with the procedural
requirements laid down in Article 258 TFEU or the second subparagraph of
Article 108(2) TFEU, as the case may be. The Court of Justice of the European
Union shall have jurisdiction over such cases.
3. In deciding to bring matters
under this Article, the European Commission shall apply the same principles in
respect of the United Kingdom as in respect of any Member State.
Comments: This provision provides for limited
jurisdiction for new cases to be brought after the end of the transition period,
but this is dependent upon the dispute in question relating back to before the
end of the transition period. Para 1 sets out this power in relation to infringement
proceedings or actions relating to State aid (Article 108). But there is a
four-year time limit from the end of the transition period to bring such cases.
This time limit has been added since the March
draft
of the withdrawal agreement, as has the reference to State aid
proceedings. This limit is a victory for the UK.
Also the UK won a victory as regards preliminary rulings, as the March
draft provided that cases pending in the UK courts at the end of the transition
period which concerned EU law issues could still be sent to the CJEU for a
preliminary ruling after that point. This prospect has disappeared entirely.
Para 2 concerns jurisdiction over infringement actions to enforce a final
decision concerning an EU administrative proceeding which was pending at the
end of the transition period, but where a decision was made afterward. This was
moved here from another part of the March draft. Again, a four-year deadline
was added.
The provisions of Union law governing
the procedure before the Court of Justice of the European Union shall apply in
respect of the proceedings and requests for preliminary rulings referred to in
this Title.  
Comments: this applies the Treaty and rules of
procedure regulating CJEU proceedings to all legal actions referred to in this
Title (Articles 86-91). Article 267 TFEU preliminary rulings are mentioned
explicitly.
Binding force and
enforceability of judgments and orders
1. Judgments and orders of the
Court of Justice of the European Union handed down before the end of the
transition period, as well as such judgments and orders handed down after the
end of the transition period in proceedings referred to in Articles 86 and 87,
shall have binding force in their entirety on and in the United Kingdom.
2. If, in a judgment referred to
in paragraph 1, the Court of Justice of the European Union finds that the
United Kingdom has failed to fulfil an obligation under the Treaties or this Agreement,
the United Kingdom shall take the necessary measures to comply with that
judgment.
3. Articles 280 and 299 TFEU
shall apply in the United Kingdom in respect of the enforcement of the
judgments and orders of the Court of Justice of the European Union referred to
in paragraph 1 of this Article.
Comment: Some misconstrued this provision as giving
the CJEU indefinite jurisdiction, but it clearly does not. It only refers to
other jurisdiction in the agreement, as regards rulings made during the transition
period (on which, see below), or after the transition period where the case was
pending at the end of the transition period (Article 86), or related to
disputes that go back to the transition period (Article 87).  As noted in the discussion of Article 158
below, it is a legal requirement stemming from CJEU case law that the Court’s
judgments – to the extent it has jurisdiction – are always binding.
Paragraph 2 reflects the wording of Article 260(1) TFEU, which requires
Member States to comply with judgments of the Court in infringement actions,
finding that they have infringed EU law.
Article
280 TFEU
simply provides that CJEU judgments are enforceable under the
conditions set out in Article
299 TFEU
, while Article 299 TFEU lays out the details of how EU measures are
enforceable under national law.
Right to intervene
and participate in the procedure
Until the judgments and orders of
the Court of Justice of the European Union in all proceedings and requests for
preliminary rulings referred to in Article 86 have become final, the United
Kingdom may intervene in the same way as a Member State or, in the cases
brought before the Court of Justice of the European Union in accordance with
Article 267 TFEU, participate in the procedure before the Court of Justice of
the European Union in the same way as a Member State. During that period, the
Registrar of the Court of Justice of the European Union shall notify the United
Kingdom, at the same time and in the same manner as the Member States, of any
case referred to the Court of Justice of the European Union for a preliminary
ruling by a court or tribunal of a Member State.
The United Kingdom may also
intervene or participate in the procedure before the Court of Justice of the
European Union in the same way as a Member State:
(a) in relation to cases which
concern a failure to fulfil obligations under the Treaties, where the United
Kingdom was subject to the same obligations before the end of the transition
period, and where such cases are brought before the Court of Justice of the
European Union in accordance with Articles 258 TFEU before the end of the
period referred to in Article 87(1) or, as the case may be, until the moment,
after the end of that period, at which the last judgment or order rendered by
the Court of Justice of the European Union on the basis of Article 87(1) has
become final;
(b) in relation to cases which
concern acts or provisions of Union law which were applicable before the end of
the transition period to and in the United Kingdom and which are brought before
Court of Justice of the European Union in accordance with Article 267 TFEU
before the end of the period referred to in Article 87(1) or, as the case may
be, until the moment, after the end of that period, at which the last judgment
or order rendered by the Court of Justice on the basis of Article 87(1) has
become final; and
(c) in relation to the cases
referred to in Article 95(3).
Comment: the UK will be able to intervene or
participate in cases as a non-EU state (see Article 23 of the CJEU
Statute
, which allows this already if a treaty between the EU and a non-EU
State provides for it). This Article gives a lengthy time period for the UK to
intervene in such cases: essentially until the last cases brought under
Articles 86 or 87 of this agreement have been decided by the CJEU, or (point
(c)) where a challenge to an EU administrative decision affecting the UK has been
brought.
Representation before
the Court
1. Without prejudice to Article
88, where, before the end of the transition period, a lawyer authorised to
practise before the courts or tribunals of the United Kingdom represented or
assisted a party in proceedings before the Court of Justice of the European
Union or in relation to requests for preliminary rulings made before the end of
the transition period, that lawyer may continue to represent or assist that
party in those proceedings or in relation to those requests. This right shall
apply to all stages of proceedings, including appeal proceedings before the
Court of Justice and proceedings before the General Court after a case has been
referred back to it.
2. Without prejudice to Article
88, lawyers authorised to practise before the courts or tribunals of the United
Kingdom may represent or assist a party before the Court of Justice of the
European Union in the cases referred to in Article 87 and Article 95(3).
Lawyers authorised to practise before the courts or tribunals of the United
Kingdom may also represent or assist the United Kingdom in the proceedings
covered by Article 90 in which the United Kingdom has decided to intervene or
participate.
3. When representing or assisting
a party before the Court of Justice of the European Union in the cases referred
to in paragraphs 1 and 2, lawyers authorised to practise before the courts or
tribunals of the United Kingdom shall in every respect be treated as lawyers
authorised to practise before courts or tribunals of Member States representing
or assisting a party before the Court of Justice of the European Union.
Comment: this preserves rights of audience of UK
lawyers in relevant cases.
ADMINISTRATIVE
PROCEDURES
Binding force and
enforceability of decisions
1. Decisions adopted by
institutions, bodies, offices and agencies of the Union before the end of the
transition period, or adopted in the procedures referred to in Articles 92 and
93 after the end of the transition period, and addressed to the United Kingdom
or to natural and legal persons residing or established in the United Kingdom,
shall be binding on and in the United Kingdom.
2. Unless otherwise agreed
between the European Commission and the designated national competition
authority of the United Kingdom, the European Commission shall continue to be
competent to monitor and enforce commitments given or remedies imposed in, or
in relation to, the United Kingdom in connection with any proceedings for the
application of Articles 101 or 102 TFEU conducted by the European Commission
under Regulation
(EC) No 1/2003
or proceedings conducted by the European Commission under Regulation
(EC) No 139/2004
in connection with the control of concentrations between
undertakings. If so agreed between the European Commission and the designated
national competition authority of the United Kingdom, the European Commission
shall transfer the monitoring and enforcement of such commitments or remedies
in the United Kingdom to the designated national competition authority of the
United Kingdom.
3. The legality of a decision
referred to in paragraph 1 of this Article shall be reviewed exclusively by the
Court of Justice of the European Union in accordance with Article 263 TFEU.
4. Article 299 TFEU shall apply
in the United Kingdom in respect of the enforcement of decisions referred to in
paragraph 1 of this Article that impose pecuniary obligations on natural and
legal persons residing or established in the United Kingdom.
Comment: Articles 92 and 93 of the agreement give
power to EU bodies to continue proceedings relating to the UK if those proceedings
were launched before the end of the transition period (Article 92), or relate
to events taking place before the end of the transition period, where there is
a four-year period where the EU institutions may act (Article 93). This relates
to competition, State aid, mergers, financial services regulation, and anti-fraud
measures. Paragraph 1 makes decisions on the basis of those Articles binding. Those
decisions can be challenged, according to para 3, on the basis of the annulment
action jurisdiction in Article 263 TFEU.
Paragraph 2 gives continuing powers to the Commission to monitor the application
of competition or mergers legislation, although there is an option to transfer
that power to the relevant UK agency.
Paragraph 4 concerns the enforceability of decisions: as noted above, Article
299 TFEU
lays out the details of how such decisions are enforceable under
national law.
Article 87(2), discussed above, gives the Court jurisdiction on an infringement
action if the UK does not give effect to decisions delivered pursuant to
Article 95. Article 90(c) provides for rights of intervention for the UK tim
efraif there are legal challenges under Article 95(3).  
Supervision and
enforcement
During the transition period, the
institutions, bodies, offices and agencies of the Union shall have the powers
conferred upon them by Union law in relation to the United Kingdom and to
natural and legal persons residing or established in the United Kingdom. In
particular, the Court of Justice of the European Union shall have jurisdiction as
provided for in the Treaties.
The first paragraph shall also
apply during the transition period as regards the interpretation and
application of this Agreement.
Comments: the ordinary jurisdiction of the CJEU will
apply to the UK during the transition period. As noted already, this period will
last until the end of 2020, except a single decision can extend it by one or two
years (Article 126). The  issue of what happens
if cases are pending at the end of that period is addressed by Articles 86-91,
discussed above. The position during the transition period differs in that the
UK does not have any judges or Advocates-General on the EU courts (see Article
7 of the agreement).
INSTITUTIONAL AND
FINAL PROVISIONS
CONSISTENT
INTERPRETATION AND APPLICATION
References to the
Court of Justice of the European Union concerning Part Two
1. Where, in a case which
commenced at first instance within 8 years from the end of the transition
period before a court or tribunal in the United Kingdom, a question is raised
concerning the interpretation of Part Two of this Agreement, and where that court
or tribunal considers that a decision on that question is necessary to enable
it to give judgment in that case, that court or tribunal may request the Court
of Justice of the European Union to give a preliminary ruling on that question.
However, where the subject matter of the case before the court or tribunal in
the United Kingdom is a decision on an application made pursuant to Article
18(1) or (4) or pursuant to Article 19, a request for a preliminary ruling may
be made only where the case commenced at first instance within a period of 8
years from the date from which Article 19 applies.
2. The Court of Justice of the
European Union shall have jurisdiction to give preliminary rulings on requests
pursuant to paragraph 1. The legal effects in the United Kingdom of such
preliminary rulings shall be the same as the legal effects of preliminary
rulings given pursuant to Article 267 TFEU in the Union and its Member States.
3. In the event that the Joint
Committee adopts a decision under Article 132(1), the period of eight years
referred to in the second subparagraph of paragraph 1 shall be automatically
extended by the corresponding number of months by which the transition period
is extended.
Comments: As noted already, the transition period will
end at the end of 2020, unless there is a single decision to extend that period
by one or two years. Para 3 makes clear that if the transition period is
extended, the 8-year special jurisdiction for the CJEU will start running from
the later date. “Part Two” refers to the provisions on citizens’ rights, which
only apply from the end of the transition period (see Article 185).
The Court’s jurisdiction is slightly less than it is under Article 267
TFEU in that final courts in the UK are not obliged as a rule to refer cases
under this Article, whereas they are under Article 267 TFEU. However, the legal
effects of such rulings are the same as under Article 267, ie binding and
setting aside conflicting national law (see also Article 4, discussed above). It
would not have been legally possible to provide for non-binding jurisdiction of
the CJEU, because the CJEU has ruled that its judgments (where its jurisdiction
exists) must always be binding, even as regards non-EU states (see Opinion 1/91, para
38). It is implicit that the Court’s other jurisdiction (notably on
infringement proceedings) will not apply.
As noted already, according to Article 185, this provision – and the
whole of Title I of Part Six (Articles 158 to 163) will only apply from the end
of the transition/implementation period. That temporal limitation appears in
the text of Article 158, but not Articles 159 to 163.
As the Court’s jurisdiction will explicitly apply as long as a case was
first brought before the UK courts before the end of the eight-year period, it
is necessarily implicit that it will retain jurisdiction to rule on cases
pending at the end of that period even if it has not ruled (or been asked to
rule) on such cases at that point. (Compare with Article 86, discussed above).
It should be noted that there is no time limit on the CJEU’s jurisdiction
to rule on the application of this agreement as regards UK citizens in the EU27,
if the national courts in the EU27 ask for a ruling. Nor is there any other
limit on its jurisdiction relating to UK citizens in the EU27 (ie final courts
will in principle have to send cases concerning them to the CJEU; infringement
proceedings can apply).
As the UK’s notice on ‘no deal’ implications for EU27 citizens
(discussed here)
observes, the CJEU would have no jurisdiction on EU27 citizens in the UK if the
withdrawal agreement is not ratified. As I discuss in the other blog post,
there would in that scenario be fewer EU law rules applicable to UK citizens in
the EU27.
Monitoring of the
implementation and application of Part Two
1. In the United Kingdom, the
implementation and application of Part Two shall be monitored by an independent
authority (the “Authority”) which shall have powers equivalent to
those of the European Commission acting under the Treaties to conduct inquiries
on its own initiative concerning alleged breaches of Part Two by the
administrative authorities of the United Kingdom and to receive complaints from
Union citizens and their family members for the purposes of conducting such
inquiries. The Authority shall also have the right, following such complaints,
to bring a legal action before a competent court or tribunal in the United
Kingdom in an appropriate judicial procedure with a view to seeking an adequate
remedy.
2. The European Commission and
the Authority shall each annually inform the specialised Committee on citizens’
rights referred to in point (a) of Article 165(1) on the implementation and
application of Part Two in the Union and in the United Kingdom, respectively.
The information provided shall, in particular, cover measures taken to
implement or comply with Part Two and the number and nature of complaints
received.
3. The Joint Committee shall
assess, no earlier than 8 years after the end of the transition period, the
functioning of the Authority. Following such assessment, it may decide, in good
faith, pursuant to point (f) of Article 164(4) and Article 166, that the United
Kingdom may abolish the Authority.
Comments: The Authority will have power to: a)
“to receive complaints from Union citizens and their family members”; b) “to
conduct inquiries on its own initiative concerning alleged breaches” of the
rules by UK “administrative authorities”; and c) to “bring a legal action
before a competent court or tribunal in the United Kingdom in an appropriate
judicial procedure with a view to seeking adequate remedy”, if it believes that
the administration does not react appropriately. Implicitly it will not be able
to make its own binding decisions on complaints brought to it.
Some text was deleted from the first draft of this Article, which had
also provided that the Authority was “without prejudice” to other remedies. But
such other remedies remain available, in light of the express wording of the
citizens’ rights provisions on remedies, as well as Article 158. The final
draft also dropped text saying that: the authority “may make its findings
public”; it “shall inform” the Commission on legal actions and “may consult” it
beforehand; the Commission may also suggest that the authority brings such
actions.
If the withdrawal agreement is ratified, the UK Bill to implement it
might go into more details about the Authority, including guarantees of
independence, staff and funding. It may also be necessary to address what
happens if the authority gives a disappointing reply to a complaint, or fails
to reply within a reasonable time. Is there a remedy against the authority in
that case? Must its decisions be reasoned? There are also questions of whether
there will be time limits upon bringing complaints, or upon the authority
bringing legal proceedings. The authority does not appear to have the power to
bring proceedings as regards general changes to the law, or to comment on them.
It seems to have the discretion whether to make its proceedings public. It is
not clear that the authority’s power to bring proceedings can lead to a remedy directly
for the complainant; and it would be useful if the authority could submit
observations in cases which it didn’t bring itself, by analogy with Articles 161
and 162.
Substantively, the definition of “family members” logically entails an
implied cross-reference to the definition in Article 9, in light of the
reference to Part Two. “Union citizens” are defined in Article 2, which applies
to the entire agreement.
Note that according to Article 185, this provision will only apply from
the end of the transition/implementation period.  This is problematic,
since even though Part Two will not apply until the end of the transition period,
the UK will be rolling out a “settled status” scheme well before that time, and
EU27 nationals may need the assistance this body will offer as soon as possible
after Brexit day.
Note that the UK’s notice on “no deal” implications for EU27 citizens
(discussed here)
is silent on the question of whether this Authority would still be set up in a
no deal scenario. There would be no legal obligation to do so, but the UK could
choose to set an Authority up unilaterally.
Jurisdiction of the
Court of Justice of the European Union concerning certain provisions of Part
Five
Without prejudice to Article 87
of this Agreement, Articles 258, 260, and 267 TFEU shall apply in respect of
the interpretation and application of applicable Union law referred to in
Article 136 and Article 138(1) or (2) of this Agreement. To this effect, any
reference made in Articles 258, 260, and 267 TFEU to a Member State shall be
understood as including the United Kingdom.
Comment: This gives the CJEU its jurisdiction as regards
infringement actions and preliminary rulings over cases concerning the
references to EU budget law in Part Five (financial settlement), which will
still apply after the end of the transition/implementation period to the extent
that payments are made after that date, which will diminish over time. Compared
to the earlier drafts, continued jurisdiction over the separation provisions
(Part Three) was dropped from this Article.
According to Article 168, this provision will only apply from the end
of the transition/implementation period. As noted above, the Court’s ordinary
jurisdiction will apply up until to the end of that period. Unlike Article 158,
there is no time limit on the jurisdiction in this Article, but as noted
already, this jurisdiction will become less relevant over time.
The cross-reference to Article 87 covers cases brought for a limited
period after the end of the transition/implementation period, if they related
to events before that deadline (see discussion above) which the CJEU will still
have jurisdiction to decide.
Procedures before the
Court of Justice of the European Union
1. Where a court or tribunal of a
Member State refers a question concerning the interpretation of this Agreement
to the Court of Justice of the European Union for a preliminary ruling, the
decision of the national court or tribunal containing that question shall be
notified to the United Kingdom.
2. The provisions of Union law
governing procedures brought before the Court of Justice of the European Union
in accordance with Article 267 TFEU shall apply mutatis mutandis to requests
for a ruling of the Court of Justice of the European Union made pursuant to
Article 158 of this Agreement.
The provisions of Union law
governing the procedure before the Court of Justice of the European Union shall
apply in respect of the proceedings before the Court of Justice of the European
Union and requests for preliminary rulings made in accordance with Article 160
of this Agreement.
3. In the cases brought before
the Court of Justice of the European Union in accordance with paragraph 1 and
Articles 158 and 160 of this Agreement and Article 12 of the Protocol on the
Sovereign Base Areas:
(a) the United Kingdom may
participate in the proceedings before the Court of Justice of the European
Union in the same way as a Member State;
(b) lawyers authorised to
practise before the courts or tribunals of the United Kingdom shall be entitled
to represent or assist any parties to such proceedings before the Court of
Justice of the European Union; in such cases those lawyers shall in every
respect be treated as lawyers authorised to practise before courts of Member
States representing or assisting a party before the Court of Justice of the
European Union.
Comment: this Article is similar to Articles 90 and
91, discussed above, which give the UK rights to participate in proceedings and
UK lawyers a right of audience in relevant cases.
Participation of the
European Commission in cases pending in the United Kingdom
Where the consistent
interpretation and application of this Agreement so requires, the European
Commission may submit written observations to the courts and tribunals of the
United Kingdom in pending cases where the interpretation of the Agreement is
concerned. The European Commission may, with the permission of the court or
tribunal in question, also make oral observations. The European Commission shall
inform the United Kingdom of its intention to submit observations before
formally making such submissions.
Comments: This Article
has been expanded in scope compared to the March draft, when it only referred
to Part Two on citizens’ rights. According to Article 185, this provision will
only apply from the end of the transition/implementation period. However, it
will not expire after any particular period, although the number of cases
concerning the Agreement in the UK courts is likely to be much less after the
end of the transition period, due to the hugely reduced scope of obligations for
the UK.
As far as I know this explicit power to intervene in a national court
proceeding is novel, although it could be compared to the Commission’s power to
make observations in EFTA Court proceedings. It overlaps with the Authority’s
power to bring cases on citizens’ rights (Article 159), and (for a number of
years) with the UK courts’ ability to ask the CJEU questions about the
citizens’ rights in Part Two, or the budget legislation referred to in Article
160.
Note that Article 11(2) and (3) of Annex 4 to the Northern Ireland
protocol (not reproduced here) also gives the right to the Commission to bring proceedings
or intervene in UK courts as regards State aids.
Regular dialogue and
exchange of information
In order to facilitate the
consistent interpretation of this Agreement and in full deference to the
independence of courts, the Court of Justice of the European Union and the
United Kingdom’s highest courts shall engage in regular dialogue, analogous to
the dialogue in which the Court of Justice of the European Union engages with
the highest courts of the Member States.
Comments: this provision is not limited in time (although
it only applies from the end of the transition period, according to Article 185),
or the specific parts of the agreement.
The Union and the United Kingdom
shall at all times endeavour to agree on the interpretation and application of
this Agreement, and shall make every attempt, through cooperation and
consultations, to arrive at a mutually satisfactory resolution of any matter
that might affect its operation.
Comment: This is a “best endeavours” Article that
points toward trying to find political solutions to disputes. It does not
include any specific legal obligations but could nevertheless be relevant in
practice, given that disputes under the EU’s free trade agreements are usually
settled diplomatically.
In accordance with Article 185, it applies as soon as the agreement
enters into force, with no time limit on its application.
For any dispute between the Union
and the United Kingdom arising under this Agreement, the Union and the United
Kingdom shall only have recourse to the procedures provided for in this
Agreement.  
Comment: This Article prevents using other means
besides those in the agreement to settle disputes, unless the agreement itself
is amended. In accordance with Article 185, it applies as soon as the agreement
enters into force, with no time limit on its application.
Consultations and
communications within the Joint Committee
1. The Union and the United
Kingdom shall endeavour to resolve any dispute regarding the interpretation and
application of the provisions of this Agreement by entering into consultations
in the Joint Committee in good faith, with the aim of reaching a mutually
agreed solution. A party wishing to commence consultations shall provide
written notice to the Joint Committee.
2. Any communication or
notification between the Union and the United Kingdom provided for in this
Title shall be made within the Joint Committee.
Comment: the starting point for dispute settlement is
discussions in the Joint Committee, with a view to reaching a political settlement.
This is comparable to consultations under Article 4 of the WTO Dispute Settlement
Understanding. It is not clear what precise legal powers the Joint Committee would
be exercising as regards dispute settlement, however.
In accordance with Article 185, this Article, and the remaining dispute
settlement provisions, apply from the end of the transition period, with no
time limit on their application.
Initiation of the
arbitration procedure
1. Without prejudice to Article
160, if no mutually agreed solution has been reached within 3 months after a
written notice has been provided to the Joint Committee in accordance with
Article 169(1), the Union or the United Kingdom may request the establishment
of an arbitration panel. Such request shall be made in writing to the other
party and to the International Bureau of the Permanent Court of Arbitration.
The request shall identify the subject matter of the dispute to be brought
before the arbitration panel and a summary of the legal arguments in support of
the request.
2. The Union and the United
Kingdom may agree that the establishment of an arbitration panel may be
requested before the expiry of the time limit laid down in paragraph 1.
Comment: once a dispute has been brought to the
Joint Committee but has not been settled within three months, either party can
send it to arbitration. Before that point, the two parties can jointly agree to
send it to arbitration. This is different from the March 2018 draft, where the
same time limits applied, but the CJEU would have had jurisdiction, not arbitrators.
 
This Article is comparable to Article 6 of the WTO Dispute Settlement Understanding,
where there is a right to a panel to settle disputes within a specified period of
time.
A large part of the ‘level playing field’ rules in Annex 4 to the
Protocol on Northern Ireland are excluded
from the scope of Articles 170-181, with the consequence that there are limited
means of enforcing them. In particular, the dispute settlement rules do not apply
to: (a) most of the tax obligations (Article 1(5) of the Annex), except the
obligation to apply some specific tax laws on tax cooperation, tax avoidance
and financial reporting in Article 1(2)); (b) the substantive environmental
obligations (Article 2(7)), although the dispute settlement rules apply to the
enforcement obligations in Article 3; (c) the substantive employment law obligations
(Articles 4(2) and 5(4)), although the dispute settlement rules apply to the
enforcement obligations in Article 6; or (d) the provisions on competition law
(Article 24(2)), except the obligation to enforce competition law effectively
set out in Article 24(1). Note that there is no exclusion of dispute settlement
for the State aid rules in Articles 7 to 15 of the Annex, or the public
ownership rules in Article 25 of the Annex.
Articles 170-179 are disapplied as regards EU reaction to the UK
infringing the customs union rules in the Northern Ireland protocol (see
Article 6 of that protocol), although the same Article oddly goes on to say
that the general dispute settlement rules in Part Six apply. I suspect that
this Article will not be submitted for any legal drafting awards.
Establishment of the
arbitration panel
1. The Joint Committee shall, no
later than by the end of the transition period, establish a list of 25 persons
who are willing and able to serve as members of an arbitration panel. To that
end, the Union and the United Kingdom shall each propose ten persons. The Union
and the United Kingdom shall also jointly propose five persons to act as
chairperson of the arbitration panel. The Joint Committee shall ensure that the
list complies with these requirements at any moment in time.
2. The list established pursuant
to paragraph 1 shall only comprise persons whose independence is beyond doubt,
who possess the qualifications required for appointment to the highest judicial
office in their respective countries or who are jurisconsults of recognised
competence, and who possess specialised knowledge or experience of Union law
and public international law. That list shall not comprise persons who are
members, officials or other servants of the Union institutions, of the
government of a Member State, or of the government of the United Kingdom.
3. An arbitration panel shall be
composed of five members.  
4. Within 15 days of the date of
a request in accordance with Article 170, the panel shall be established in
accordance with paragraphs 5 and 6.
5. The Union and the United
Kingdom shall each nominate two members from among the persons on the list
established under paragraph 1. The chairperson shall be selected by consensus
by the members of the panel from the persons jointly nominated by the Union and
the United Kingdom to serve as a chairperson. In the event that the members of
the panel are unable to agree on the selection of the chairperson within the
time limit laid down in paragraph 4, the Union or the United Kingdom may
request the Secretary-General of the Permanent Court of Arbitration to select
the chairperson by lot from among the persons jointly proposed by the Union and
the United Kingdom to act as chairperson.
6. The Secretary-General of the
Permanent Court of Arbitration shall make the selection referred to in second
subparagraph of paragraph 5 within 5 days of the request referred to in
paragraph 5. Representatives of the Union and of the United Kingdom shall be
entitled to be present at the selection.
7. The date of establishment of
the arbitration panel shall be the date on which the selection procedure is
completed.  
8. In the event that the list
referred to in paragraph 1 has not been established by expiry of the time limit
laid down in paragraph 4, the Union and the United Kingdom shall within 5 days
each nominate two persons to serve as members of the panel. If persons have
been proposed under paragraph 1, the nominations shall be made from among those
persons. The chairperson shall then be appointed in accordance with the
procedure set out in paragraph 5. In the event that the Union and the United
Kingdom have not, within a further 5 days, jointly proposed at least one person
to serve as chairperson, the Secretary-General of the Permanent Court of
Arbitration shall within five days, after consultation with the Union and the
United Kingdom, propose a chairperson who fulfils the requirements of paragraph
2. Unless either the Union or the United Kingdom objects to that proposal
within 5 days, the person proposed by the Secretary-General of the Permanent
Court of Arbitration shall be appointed.
9. In the event of failure to
establish an arbitration panel within 3 months from the date of the request
made pursuant to Article 170, the Secretary-General of the Permanent Court of
Arbitration shall, upon request by either the Union or the United Kingdom,
within 15 days of such request, after consultation with the Union and the
United Kingdom, appoint persons who fulfil the requirements of paragraph 2 of
this Article to constitute the arbitration panel.
Comments: This Article is comparable to Article 8 of
the WTO Dispute Settlement Understanding, although there are different ‘tie-break’
rules as regards the final arbitrator, the qualifications are different, and there
are five arbitrators instead of the usual three WTO panellists.
Dispute settlement procedures set
out in this Title shall be governed by the rules of procedure set out in Part A
of Annex IX (“Rules of Procedure”), the Joint Committee shall keep
the functioning of those dispute settlement procedures under constant review
and may amend the Rules of Procedure.
Comments: Appendix 3 to the WTO Dispute Settlement Understanding,
referred to in Article 12 of the DSU, similarly sets out working procedures for
dispute settlement panels.
Time-frame of the
procedure before the arbitration panel
1. The arbitration panel shall
notify its ruling to the Union, the United Kingdom and the Joint Committee
within 12 months from the date of establishment of the arbitration panel. Where
the arbitration panel considers that it cannot comply with this time limit, its
chairperson shall notify the Union and the United Kingdom in writing, stating
the reasons for the delay and the date on which the panel intends to conclude
its work.
2. Within 10 days of the
establishment of the arbitration panel the Union or the United Kingdom may
submit a reasoned request to the effect that the case is urgent. In that case,
the arbitration panel shall give a ruling on the urgency within 15 days from
the receipt of such request. If it has determined the urgency of the case, the
arbitration panel shall make every effort to notify its ruling to the Union and
the United Kingdom within 6 months from the date of its establishment.
Comments: para 1 can be compared to Article 12(8)
and (9) of the DSU, and even copies some of the wording of Article 12(9). The
WTO rules say that panels must report within six months, with a maximum extension
to nine months. These deadlines are not always kept, which may explain why the
withdrawal agreement provides for more flexibility: a 12-month deadline, with
no absolute deadline if the arbitrators fail to meet it.
Paragraph 2 can also be compared to Article 12(8) and (9) of the DSU,
which set a three-month deadline for urgent cases, with a possible extension to
nine months. The six-month deadline for urgent cases in the withdrawal agreement
is more flexible, especially since the deadline is not absolute (“shall make
every effort”).
Note that Article 174(3) suspends the time limits in this Article if a
case is referred to the CJEU.
Disputes raising
questions of Union law
1. Where a dispute submitted to
arbitration in accordance with this Title raises a question of interpretation
of a concept of Union law, a question of interpretation of a provision of Union
law referred to in this Agreement or a question of whether the United Kingdom
has complied with its obligations under Article 89(2), the arbitration panel shall
not decide on any such question. In such case, it shall request the Court of
Justice of the European Union to give a ruling on the question. The Court of
Justice of the European Union shall have jurisdiction to give such a ruling
which shall be binding on the arbitration panel.
The arbitration panel shall make
the request referred to in the first subparagraph after having heard the parties.
2. Without prejudice to the first
sentence of the first subparagraph of paragraph 1, if the Union or the United
Kingdom considers that a request in accordance with paragraph 1 is to be made,
it may make submissions to the arbitration panel to that effect. In such case,
the arbitration panel shall submit the request in accordance with paragraph 1
unless the question raised does not concern the interpretation of a concept of
Union law, interpretation of a provision of Union law referred to in this
Agreement, or does not concern whether the United Kingdom has complied with its
obligations under Article 89(2). The arbitration panel shall provide reasons
for its assessment. Within 10 days following the assessment, either party may
request the arbitration panel to review its assessment, and a hearing shall be
organised within 15 days of the request for the parties to be heard on the matter.
The arbitration panel shall provide reasons for its assessment.
3. In the cases referred to in
paragraphs 1 and 2, the time limits laid down in Article 173 shall be suspended
until the Court of Justice of the European Union has given its ruling. The arbitration
panel shall not be required to give its ruling less than 60 days from the date
on which the Court of Justice of the European Union has given its ruling.

4. The first subparagraph of
Article 161(2) and Article 161(3) shall apply mutatis mutandis to the
procedures brought before the Court of Justice of the European Union in
accordance with this Article.

Comment: this provision gives jurisdiction to the
CJEU to interpret EU law issues (defined as three categories of issues) upon
request of the arbitration panel. Article 89(2), discussed
above, concerns the UK’s obligations
to comply with CJEU rulings in cases pending at the end of the transition
period, or relating to events which occurred before the end of the transition
period, as further defined in Articles 86 and 87. The Court’s rulings must
always be binding, as noted already. It was always going to be difficult to
avoid CJEU jurisdiction over this issue, because its case law going back to Opinion
1/92
states that the CJEU must give final rulings whenever there is an issue
of interpretation of EU law between the EU and non-EU countries. Since a lot of
the withdrawal agreement concerns EU law, it is possible that Article 174 will
be frequently invoked, although it is also possible that disputes about the
interpretation of EU law can be settled politically: the equivalent provisions of
EU association agreements have never been used to date.
The Article goes in to some procedural detail about a request to the
CJEU: the parties must be heard before the arbitrators decide to refer the issue,
the UK or EU side can request the reference and make submissions on the issue, a
refusal to refer to the CJEU must be reviewed upon request with a hearing, and
reasons must be given for the assessment. The deadlines for arbitration in
Article 173 are suspended until the CJEU judgment, and the arbitrators have 60
days at least to consider the impact of the Court’s ruling.
Paragraph 4 means that the Treaty rules on preliminary rulings from
national courts, and the rules on UK interventions and rights of audience of UK
lawyers, will apply to references to the CJEU from the arbitrators.
Compliance with the
arbitration panel ruling
The arbitration panel ruling
shall be binding on the Union and the United Kingdom. The Union and the United
Kingdom shall take any measures necessary to comply in good faith with the
arbitration panel ruling and shall endeavour to agree on the period of time to
comply with the ruling in accordance with the procedure in Article 176.
Comments: the final ruling is binding but the timing
and follow-up measures are determined by the following Articles of the
withdrawal agreement, which have more in common with WTO dispute settlement
rules than they do with ordinary EU law.
Reasonable period of
time for compliance
1. No later than 30 days after
the notification of the arbitration panel ruling to the Union and the United
Kingdom, the respondent shall, if the panel has ruled in favour of the
complainant, notify the complainant of the time it considers it will require
for compliance (the “reasonable period of time”).
2. If there is disagreement
between the Union and the United Kingdom on the reasonable period of time to
comply with the arbitration panel ruling, the complainant shall, within 40 days
of the notification by the respondent under paragraph 1, request the original
arbitration panel in writing to determine the length of the reasonable period
of time. Such request shall be notified simultaneously to the respondent. The
arbitration panel shall notify its decision on the period for compliance to the
Union and the United Kingdom within 40 days of the date of submission of the
request.
3. In the event of the original
arbitration panel, or some of its members, being unable to reconvene to
consider a request under paragraph 2, a new arbitration panel shall be
established as set out in Article 171. The time limit for notifying the
decision shall be 60 days from the date of establishment of the new arbitration
panel.
4. The respondent shall inform
the complainant in writing of its progress in complying with the arbitration
panel ruling referred to in Article 173 at least 1 month before the expiry of
the reasonable period of time.
5. The reasonable period of time
may be extended by mutual agreement of the Union and the United Kingdom.
Comments: the concept of a reasonable period of time
for compliance is comparable to Article 21(3) of the WTO dispute settlement
understanding, although the DSU rules have different time limits and a
suggested guideline period for compliance (15 months). Paragraph 4 can be
compared to Article 21(6) of the WTO dispute settlement understanding, which provides
for more detailed review of compliance with a DSU ruling.
Review of any measure
taken to comply with the arbitration panel ruling
1. The respondent shall notify
the complainant before the end of the reasonable period of time of any measure
that it has taken to comply with the arbitration panel ruling.
2. If, at the end of the
reasonable period, the complainant considers that the respondent has failed to
comply with the arbitration panel ruling referred to in Article 173, the
complainant may request the original arbitration panel in writing to rule on
the matter. The arbitration panel shall notify its ruling to the Union and the
United Kingdom within 90 days of the date of submission of the request.
3. In the event of the original
arbitration panel, or some of its members, being unable to reconvene to
consider a request under paragraph 2, a new arbitration panel shall be
established as set out in Article 171. The time limit for notifying the ruling
shall be 60 days from the date of establishment of the new arbitration panel.
4. Where a case referred to the arbitration
panel pursuant to paragraph 2 raises a question of interpretation of a concept
of Union law or a question of interpretation of a provision of Union law
referred to in this Agreement, Article 174 shall apply mutatis mutandis.
Comment: the settlement of a possible dispute over
whether the losing party has in fact complied with its obligations is not expressly
dealt with in the WTO dispute settlement rules, but a practice has developed of
assessing this issue as part of disputes over retaliation. The EU has an
interest in setting out express rules on this issue because it was involved in
such disputes in the WTO (notably in the case of the EU’s banana import
regime). Note the possible need to ask the CJEU about EU law issues again.
Temporary remedies in
case of non-compliance
1. If the arbitration panel rules
in accordance with Article 177(2) that the respondent has failed to comply with
the arbitration panel ruling referred to in Article 173, at the request of the
complainant it may impose a lump sum or penalty payment to be paid to the
complainant. In determining the lump sum or penalty payment, the arbitration
panel shall take into account the seriousness of the non-compliance and
underlying breach of obligation, the duration of the non-compliance and
underlying breach of obligation.  
2. If, 1 month after the
arbitration panel ruling referred to in paragraph 1, the respondent has failed
to pay any lump sum or penalty payment imposed on it, or if, 6 months after the
arbitration panel ruling referred to in Article 177(2), the respondent persists
in not complying with the arbitration panel ruling referred to in Article 173,
the complainant shall be entitled, upon notification to the respondent, to
suspend obligations arising from:
(a) any provision of this
Agreement other than those contained in Part Two; or
(b) parts of any other agreement
between the Union and the United Kingdom under the conditions set out in that
agreement.
The notification shall specify
the provisions which the complainant intends to suspend. Before deciding to
suspend parts of an agreement referred to in point (b) the complainant shall
first consider whether the suspension of the provision of this Agreement in
accordance with point (a) would be an appropriate response to the breach. Any
suspension shall be proportionate to the breach of obligation concerned, taking
into account the gravity of the breach and the rights in question and, where
the suspension is based on the fact that the respondent persists in not
complying with the arbitration panel ruling referred to in Article 173, whether
a penalty payment has been imposed on the respondent and has been paid or is
still being paid by the latter. The complainant may implement the suspension at
any moment but not earlier than 10 days after the date of the notification,
unless the respondent has requested arbitration under paragraph 3.  
3. If the respondent considers
that the extent of the suspension set out in the notification referred to in
paragraph 2 is not proportionate, it may request the original arbitration panel
in writing to rule on the matter. Such request shall be notified to the
complainant before the expiry of the 10-day period referred to in paragraph 2.
The arbitration panel shall notify its ruling to the Union and the United
Kingdom within 60 days of the date of submission of the request. Obligations
shall not be suspended until the arbitration panel has notified its ruling, and
any suspension shall be consistent with the arbitration panel ruling.
4. In the event of the original
arbitration panel, or some of its members, being unable to reconvene to
consider a request under paragraph 2, a new arbitration panel shall be
established as set out in Article 171. In such cases, the period for notifying
the ruling shall be 90 days from the date of establishment of the new
arbitration panel.
5. The suspension of obligations
shall be temporary and shall be applied only until any measure found to be
inconsistent with the provisions of this Agreement has been withdrawn or
amended, so as to achieve conformity with the provisions of this Agreement, or
until the Union and the United Kingdom have agreed to otherwise settle the
dispute.
Comments: this Article provides for escalating
penalties in the case of continued breach of the agreement. First of all, para
1 provides for imposition of a fine upon the party which has been found to have
breached the agreement and not to have fixed its breach within the reasonable
time period. This penalty is imposed by the arbitrators, apparently at the same
time when they consider whether the breach is continuing (this is similar to
WTO practice). However, unlike the WTO, the arbitrators impose the penalty as
such; it is not negotiated by the parties (compare to Article 23(2) of the WTO
dispute settlement understanding).
The wording of para 1 has some similarities to Article
260 TFEU
(fines for not complying with a prior CJEU judgment) and the
criteria resemble those developed by the CJEU case law on this provision (which
I discussed here).
However, there is no express reference to CJEU case law or to EU law here.  This process differs from that in the March
draft, where the UK or EU could go to the CJEU and ask it to rule on a breach
of its previous ruling on dispute settlement under the withdrawal agreement,
with the Court applying a fine if the argument was upheld.
Paragraph 2 escalates by providing for retaliation, in the event that
the losing party refuses to pay a fine after one month or has not implemented a
ruling confirming that it is still in breach of the agreement six months after
that ruling was handed down. Note that it is not permissible to retaliate by
suspending citizens’ rights, and retaliation under a future treaty is possible
if that treaty provides for it. Retaliation also has to be proportionate.
Compare to Article 22(3) to (6) of the WTO dispute settlement rules.
The proportionality of the retaliation is guaranteed by para 3, which
provides for arbitration if the losing party thinks that the retaliation levied
against it is excessive. Compare to Article 22(6) and (7) of the WTO dispute settlement
rules. Using the arbitrators is a change from the original draft proposal,
which was to have judicial review by the CJEU of retaliation. Note that there
is no reference to the CJEU here; the assumption is probably that the
proportionality of retaliation is not an EU law issue that the Court would have
to be involved in interpreting.   
Para 5 on the temporary nature of retaliation can be compared to
Article 22(8), first sentence, of the WTO dispute settlement rules.
Review of any measure
taken after temporary remedies
1. Where the complainant has
suspended obligations in accordance with Article 178 or where the arbitration
panel has imposed a penalty payment on the respondent in accordance with
Article 178(1), the respondent shall notify the complainant of any measure it
has taken to comply with the ruling of the arbitration panel and of its request
for an end to the suspension of obligations applied by the complainant or to
the penalty payment.
2. If the Union and the United Kingdom
do not reach an agreement on whether the notified measure brings the respondent
into conformity with the provisions of this Agreement within 45 days of the
date of submission of the notification, either party may request the original
arbitration panel in writing to rule on the matter. Such request shall be
notified simultaneously to the other party. The arbitration panel ruling shall
be notified to the Union and the United Kingdom and to the Joint Committee
within 75 days of the date of submission of the request.
If the arbitration panel rules
that the respondent has brought itself into conformity with this Agreement, or
if the complainant does not, within 45 days of the submission of the
notification referred to in paragraph 1, request that the original arbitration
panel rule on the matter:
(a) the suspension of obligations
shall be terminated within 15 days of either the ruling of the arbitration
panel or the end of the 45-day period;
(b) the penalty payment shall be
terminated on the day after either the ruling of the arbitration panel or the
end of the 45-day period.
3. In the event of the original
arbitration panel, or some of its members, being unable to reconvene to
consider a request under paragraph 2, a new arbitration panel shall be established
as set out in Article 171. The period for notifying the ruling shall in that
case be 90 days from the date of establishment of the new arbitration panel.
4. Where a case referred to the
arbitration panel pursuant to paragraph 2 raises a question of interpretation
of a concept of Union law or a question of interpretation of a provision of
Union law referred to in this Agreement, Article 174 shall apply mutatis
mutandis.
Comments: this is another issue not expressly addressed by the
WTO dispute settlement rules: what happens if the losing party insists that it
has now complied with the original ruling, but the winning party insists that
it has not? The withdrawal agreement sends the issue back to arbitration,
noting also that it might be necessary in this context to ask the CJEU to rule
on interpretation of EU law.    
Arbitration panel
decisions and rulings

1. The arbitration panel shall make
every effort to take decisions by consensus. Where, nevertheless, a decision
cannot be arrived at by consensus, the matter at issue shall be decided by
majority vote. However, in no case dissenting opinions of members of an
arbitration panel shall be published. 

2. Any ruling of the arbitration
panel shall be binding on the Union and the United Kingdom. The ruling shall
set out the findings of fact, the applicability of the relevant provisions of
this Agreement, and the reasoning behind any findings and conclusions. The
Union and the United Kingdom shall make the arbitration panel rulings and
decisions publicly available in their entirety, subject to the protection of
confidential information.
Comments: note the lack of dissenting opinions, in
the event that that the arbitrators vote by a majority. The obligation for
reasoned rulings is comparable to Article 11 of the WTO dispute settlement
rules. The obligation to publish decisions (also WTO practice) is useful.
Members of an
arbitration panel
1. The members of an arbitration
panel shall be independent, shall serve in their individual capacity and shall
not take instructions from any organisation or government, and shall comply
with the Code of Conduct set out in Part B of Annex IX. The Joint Committee may
amend that Code of Conduct.
2. The members of an arbitration
panel shall, as from the establishment thereof, enjoy immunity from legal
proceedings in the Union and the United Kingdom with respect to acts performed
by them in the exercise of their functions on that arbitration panel.
PROTOCOL ON
IRELAND/NORTHERN IRELAND
Implementation,
application, supervision and enforcement
1. Without prejudice to paragraph
4, the authorities of the United Kingdom shall be responsible for implementing
and applying the provisions of Union law made applicable by this Protocol to
and in the United Kingdom in respect of Northern Ireland.
2. Without prejudice to paragraph
4, Union representatives shall have the right to be present during and receive,
upon request, all relevant information relating to any activities of the United
Kingdom authorities related to the implementation and application of provisions
of Union law made applicable by this Protocol. The United Kingdom shall
facilitate that presence of Union representatives and provide them with the
information requested. Where the Union representative requests the United
Kingdom authorities to carry out control measures in individual cases for duly
stated reasons, the United Kingdom authorities shall carry out those control
measures.
3. The practical working
arrangements related to the exercise of the rights of Union representatives
referred to in paragraph 2 shall be determined by the Joint Committee, upon
proposal from the Specialised Committee.
4. As regards Article 6(2), and
Articles 8 to 12 of this Protocol, as well as Article 7(1) of Annex 4 to this
Protocol in respect of measures of the Member States, the institutions, bodies,
offices, and agencies of the Union shall in relation to the United Kingdom, and
natural and legal persons residing or established in the territory of the
United Kingdom, have the powers conferred upon them by Union law. In
particular, the Court of Justice of the European Union shall have jurisdiction
as provided for in the Treaties in this respect. The second and third
subparagraphs of Article 267 TFEU shall apply to and in the United Kingdom in
this respect.
5. Acts of the institutions,
bodies, offices, and agencies adopted in accordance with paragraph 4 shall
produce in respect of and in the United Kingdom the same legal effects as those
which they produce within the Union and its Member States.  
6. When representing or assisting
a party in relation to administrative procedures arising from the exercise of
the powers of the institutions, bodies, offices, and agencies of the Union
referred to in paragraph 4, lawyers authorised to practise before the courts or
tribunals of the United Kingdom shall in every respect be treated as lawyers
authorised to practise before courts or tribunals of Member States who
represent or assist a party in relation to such administrative procedures.
7. In cases brought before the Court
of Justice of the European Union pursuant to paragraph 4:
(a) the United Kingdom may
participate in the proceedings before the Court of Justice of the European
Union in the same way as a Member State;
(b) lawyers authorised to
practise before the courts or tribunals of the United Kingdom may represent or
assist a party before the Court of Justice of the European Union in such
proceedings and shall in every respect be treated as lawyers authorised to
practise before courts or tribunals of Member States representing or assisting
a party before the Court of Justice of the European Union.
Comments: this Article applies from the end of the transition
period, except para 3, which applies as soon as the withdrawal agreement enters
into force (see Article 185). They key provision for the Court is para 4, which
retains the Court’s jurisdiction over parts
of the Protocol. More precisely, the Court’s jurisdiction applies to: the
specific provisions on customs and movement of goods relating to Northern
Ireland (Article 6(2)); technical regulations, VAT and excise law, agriculture
and environmental law, electricity market, and State aid law as applicable to
Northern Ireland (Articles 8 to 12); and State aid (Article 7(1) of Annex 4), “in
respect of measures of the Member States”.
3. Notwithstanding Articles 4(4)
and 4(5) of the Withdrawal Agreement, the provisions of this Protocol referring
to Union law or concepts or provisions thereof shall in their implementation
and application be interpreted in conformity with the relevant case law of the
Court of Justice of the European Union.
Comment: the other provisions of Article 15 of the
protocol are not reproduced. This provision differs from Article 4 in that all
CJEU judgments, even after the end of the transition period, continue to apply
within the scope of the Protocol. Article 15 itself applies from the end of the
transition period.
PROTOCOL RELATING TO
THE SOVEREIGN BASE AREAS
OF THE UNITED KINGDOM
OF GREAT BRITAIN AND NORTHERN IRELAND
2. By way of derogation from
Article 4(4) and (5) of the Withdrawal Agreement, the provisions of this
Protocol referring to Union law or concepts or provisions thereof shall in
their implementation and application be interpreted in conformity with the
relevant case law of the Court of Justice of the European Union.
Comment: the other provisions of Article 1 of the
protocol are not reproduced. Like Article 15 of the Northern Ireland protocol,
this provision differs from Article 4 in that all CJEU judgments, even after
the end of the transition period, continue to apply within the scope of the
Protocol. Article 1 itself applies from the end of the transition period.
Supervision and
enforcement
1. In respect of the Sovereign
Base Areas and in relation to natural and legal persons residing or established
in the territory of those Areas, the institutions, bodies, offices and agencies
of the Union shall have the powers conferred upon them by Union law in relation
to this Protocol and provisions of Union law made applicable by it. In
particular, the Court of Justice of the European Union shall have jurisdiction
as provided for in the Treaties in this respect.
2. Acts of the institutions,
bodies, offices and agencies adopted in accordance with paragraph 1 shall
produce the same legal effects with regard to and in the Sovereign Base Areas
as those which they produce within the Union and its Member States.
Comments: this Article applies from the end of the
transition period. Like Article 14 of the Northern Ireland protocol, it retains
the Court’s jurisdiction for the Protocol, although unlike the other provision
it applies to the whole protocol, not selected parts of it.



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