Withdrawal Agreement Disputes


The UK is currently a party to the EU because of its EU membership, but this will cease when the UK leaves the EU on 31 January 2020. However, as has already been mentioned, the UK and the EU agreed that the UK would be treated as an EU member state during the transition period for international agreements, including The Hague. The United Kingdom would have gradually joined Hagues in the event of a withdrawal of the “no deal” immediately after the withdrawal, but in light of the withdrawal agreement, it is now expected that the United Kingdom will withdraw its accession instrument and adhere to it (probably) effectively at the end of the transition period. The VA also establishes a dispute settlement procedure in which the UK and the EU disagree on the interpretation or application of the agreement, but which will come into force after the end of the transition period. In the event of a dispute, the UK and the EU will first try to resolve it in the Joint Committee. If this is not possible, the dispute may be referred to an arbitral tribunal which can make binding decisions. The European Court of Justice (ECJ) will present interpretations of EU law issues to the body. Non-compliance may lead to the imposition of a lump sum or outstanding penalty and non-compliance would give the complainant the right to suspend certain contractual obligations or elements of other agreements between the UK and the EU. At first glance, the reference system appears to be in place in the withdrawal agreement.

However, this is not new for the EU. Indeed, the reference mechanism of the withdrawal agreement resembles reference models in some association agreements between the EU and the former Soviet states (cf.B. Article 403 of the EU-Moldova Association Agreement). More generally, there are at least theoretical dispute resolution clauses that contemplate a reference from an arbitral tribunal to a permanent tribunal. Section 5 of Part XI of the 1982 Law of the Sea Convention (`LOSC`) provides for a system for resolving disputes relating to mining in the international seabed area. Section 188, paragraph 2 of the LOSC indicates that disputes relating to the interpretation or application of contracts relating to activity in the seabed area may be subject to arbitration proceedings under the CNCI rules. The central element of section 188, paragraph 2 of the LOSC is that the arbitration tribunal refers issues relating to the interpretation and application of the LOSC for binding decision to the Seabed Disputes Chamber. The United Kingdom will continue to fulfil its obligations under international conventions relating to judicial jurisdiction and the enforcement of judgments (including) to which union is a contracting party, such as the 2007 Lugano Convention (applicable between EU member states and EFTA countries, Iceland, Norway and Switzerland) and the 2005 Hague Convention on Course Choice (which is in force between EU Member States and Mexico). Singapore and Montenegro). By the end of December 2020, the English court will therefore have to suspend the proceedings or resurrect the jurisdiction if these conventions require it – for example, in The Hague, if an agreement has been reached since 1 October 2015 (the date Of Hague`s entry into force for Mexico), or after Lugano, if parallel proceedings have been initiated in a Swiss court.

Given the many references to EU law, it is likely that a dispute in the context of the withdrawal agreement will raise questions about the proper interpretation and application of EU law. For example, if the UK adopts a subsidy programme including business assistance in Northern Ireland, the problem would be that these measures would comply with EU state aid rules, as interpreted by the ECJ. However, the need for a reference may be less likely if the current disagreement over the UK domestic market law were referred to an arbitration tribunal. The language of Article 174, paragraph 1 of the withdrawal agreement follows the language of Article 267 of the Treaty on the Functioning of the European Union (hereafter the TFUE).