More Lex Brexitaria. CJEU OKs AG’s opinion.

The Court of Justice has just announced its decision in Wightman. It confirms the opinion of the Attorney General published last week that the UK is free to withdraw its article 50 notice before 29 March 2019.

In today’s Press Release it is stated.

“In today’s judgment, the Full Court has ruled that, when a Member State has notified the
European Council of its intention to withdraw from the European Union, as the UK has
done, that Member State is free to revoke unilaterally that notification.
That possibility exists for as long as a withdrawal agreement concluded between the EU
and that Member State has not entered into force or, if no such agreement has been
concluded, for as long as the two-year period from the date of the notification of the
intention to withdraw from the EU, and any possible extension, has not expired.
The revocation must be decided following a democratic process in accordance with
national constitutional requirements. This unequivocal and unconditional decision must be communicated in writing to the European Council. Such a revocation confirms the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State and brings the withdrawal procedure to an end.”

Another instalment in the Lex Brexitaria is expected later today in the judicial review application concerning article 50 in the Administrative Court which was heard last Friday.

 

In the light of the judgment, the current Prime Minister Mrs May has made  a statement at 15.30 in which she  announced a delay to tomorrow’s meaningful vote in the House of Commons on the Draft Withdrawal Agreement. The Prime Minister hopes to use this delay to address the concerns of MPs regarding the backstop. She could start by getting them to read paragraphs 20 and 21 of the Attorney General’s advice which points out that Northern Ireland will be in a more advantageous position with the EU than the rest of the UK in the event the UK enters the backstop.

Advocate General comes out for unilateral right to revoke article 50 notice (terms and conditions apply)

 

Today Advocate General Campos Sánchez-Bordona has given an opinion[1] that Article 50 TEU allows the unilateral revocation of the notification of the intention to withdraw from the EU, until such time as the withdrawal agreement is formally concluded, provided that the revocation has been decided upon in accordance with the Member State’s constitutional requirements, is formally notified to the European Council and does not involve an abusive practice. Revocation is only possible within the two year period that starts when the intention to withdraw is notified.

The decision of the Court of Justice on this matter is expected later this month.

 

[1] Advocate General’s Opinion in Case C-621/18 Wightman and Others v Secretary of State for Exiting the European Union

A couple more cases in the ‘Lex Brexitaria’. 

 

First, last Monday in its Judgment in Case T-458/17 Shindler and Others v Council of the European Union the Court of Justice of the European Union held that the application for annulment of the decision authorising the opening of Brexit negotiations, brought by thirteen British citizens who live in EU Member States other than the UK, was inadmissible. The applicants based their claim on the fact that, as UK citizens living in another Member State, they were unable to vote in the 2016 referendum. They claimed that this had a direct impact on the rights which they derive from the Treaties. and sought to annul the act by which the Council accepted the UK’s notification of intention to withdraw from the EU. The Court noted that, although the decision of the Council authorising the opening of the Brexit negotiations had legal effects as regards the relations between the EU and its Member States and between the EU institutions, in particular the Commission, which was authorised by that decision to open negotiations for an agreement with the UK, it did not directly affect the legal situation of the applicants. The action was dismissed as inadmissible since the Council’s decision did not produce binding legal effects capable of affecting the interests of the applicants by bringing about a distinct change in their legal position.

Second, in Susan Wilson v The Prime Minister this Friday, 7 December, the Administrative Court is due to hear an application for judicial review of the UK government’s giving of notice under art.50 on the grounds that “facts recently revealed since the Prime Minister exercised her power under s. 1 of the European Union (Notification of Withdrawal) Act 2017(“the 2017 Act”) to notify the European Union (“EU”) of the UK’s intention to leave the EU show that the 2016 referendum (“the Referendum”) on whether the UK should remain a member of the European Union (“the EU”) was vitiated by illegality and/or unlawful misconduct.” This is particularised with reference to the recent finding by the Electoral Commission that serious offences were committed by the designated campaign for leaving the EU and by others, in breach of the statutory framework established by Parliament for the Referendum. The applicants are seeking a declaration that the result of the EU Referendum is invalid and asking for the decision of the Prime Minister to invoke Article 50 to be quashed.

And we still await the CJEU’s decision on whether an article 50 notice can be unilaterally withdrawn by the Member State that gives the notice.

Brexit. The draft political declaration – and a Spaniard in the works?

The draft political declaration has now been published. The shopping list for determining the shape of negotiations on the future relationship between the UK and the EU, which cannot start until after exit day, has grown from 7 pages to 26 pages. In the maritime sphere there is a brief reference to the UK’s relationship with EMSA in para 65, providing for facilitation of cooperation on maritime safety and security, including exchange of information between EMSA and the UK Maritime and Coastguard Agency, consistent with the UK’s status as a third country. There is nothing on civil jurisdiction.

Fishing opportunities are referred to in paras 73 to 76 with para 75 stating ‘Within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares.” There is also some reference to what will be needed to ensure the new agreement is WTO compliant, so that, for example, in line with article V of the General Agreement on Trade in Services the Parties should aim at substantial sectoral coverage, covering all modes of supply and providing for the absence of substantially all discrimination in the covered sectors, with exceptions and limitations as appropriate.

Chapter IX notes that free  movement of persons between the EU and the UK will no longer apply and sets out various non discriminatory mobility arrangements such as confirming commitments to effective family law instruments to which the EU and the UK are party and noting the UK’s intention to accede to the 2007 Hague Maintenance Convention. In case the UK changes its mind on free movement in the future para 54 commits the Parties to consider addressing social security coordination.

A last minute obstacle to the signing of the agreement on Sunday has come with Spain’s objections to article 184 in the draft withdrawal agreement which provides that the EU and the UK will seek to “negotiate rapidly the agreements governing their future relationship” between the official day of withdrawal on 29 March 2019 and the end of a transition period in December 2020. Spain wants to ensure that negotiations on the future of the EU-UK relationship would not include Gibraltar and confine discussions to bilateral arrangements with the UK. No reference is made to this in the political declaration

It still remains uncertain whether the UK Parliament will vote for the withdrawal agreement when it is put before it in the meaningful vote, scheduled for some time early in December. There have been some interesting cultural references to the agreement. Following Dominic Raab’s resignation, various commentators have referenced ‘Hotel California’ with regard to the Backstop, “You can check out any time you like, but you can never leave.” while the Chief Minister of Gibraltar, Fabian Picardo, has referred to a ‘Thelma and Louise’ exit from the EU.

For myself, I go back to Tancredi’s words in ‘The Leopard’ by Giuseppe di Lampedusa. ‘For everything to stay the same, everything must change’.

Government loses challenge to article 50 CJEU reference.

 

 

The Secretary of State for Exiting the European Union sought  permission from the Supreme Court to appeal against the orders of  the Inner House of the Court of Session dated 21 September and 3 October 2018 requesting the CJEU to give a ruling on the following question:

“Where, in accordance with article 50 of the Treaty on European Union, a member state has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying member state; and, if so, subject to what conditions and with what effect relative to the member state remaining within the European Union?”

Yesterday, the Supreme Court declined to give permission to appeal. Under section 40 of the Court of Session Act 1988 the only basis for an appeal against the orders would be if they constituted “a decision constituting final judgment in any proceedings”. The order did not constitute a final judgment. Under art. 267 of the TFEU under which the preliminary ruling has been requested the purpose of the ruling is “to enable [the national court] to give judgment”. The preliminary ruling is merely a step in the proceedings pending before the national court which is the court which must assume responsibility for the subsequent judicial decision.

The CJEU hears the case on 27 November.

Brexit. It’s the Supremes again!

More judicial fun and games around Brexit – this time arising out of  the Court of Session sending a reference to the CJEU seeking a preliminary ruling on whether EU law permitted unilateral revocation of an article 50 notice of withdrawal by a notifying state.

The CJEU applied its expedited procedure and fixed an oral hearing  for tuesday week, 27 November 2018.

An application was made to appeal to the Supreme Court on 16 October 2018 against the Court of Session’s reference. The First Division of the Inner House refused the application on 8 November 2018.

The Secretary of State for Exiting the European Union has now applied to the Supreme Court for permission to appeal.

Secretary of State for Exiting the European Union (Appellant) v Wightman and others (Respondents)

UKSC 2018/0209

The Draft Withdrawal Agreement. The financial settlement.

A useful summary of the ‘divorce settlement’ in the Draft Withdrawal Agreement from the EU Commission’s press release  http://europa.eu/rapid/press-release_MEMO-18-6422_en.htm

“How much will the UK pay?

The objective of the negotiations was to settle all obligations that will exist on the date of the UK’s withdrawal from the European Union. Therefore, the agreement is not about the amount of the UK’s financial obligation, but about the methodology for calculating it.

Both sides agreed on an objective methodology which allows honouring all joint commitments vis-à-vis the Union budget (2014-2020), including outstanding commitments at the end of 2020 (“Reste à liquider”) and liabilities which are not matched by assets.

The UK will also continue to guarantee the loans made by the Union before its withdrawal and will receive back its share of any unused guarantees and subsequent recoveries following the triggering of the guarantees for such loans.

In addition, the UK agreed to honour all outstanding commitments of the EU Trust Funds and the Facility for Refugees in Turkey. The UK will remain party to the European Development Fund and will continue to contribute to the payments necessary to honour all commitments related to the current 11th EDF as well as the previous Funds.

How do you calculate the UK’s share?

The UK will contribute to 2019 and 2020 budget and its share will be a percentage calculated as if it had remained a Member State. For the obligations post-2020 the share will be established as a ratio between the own resources provided by the UK in the period 2014-2020 and the own resources provided by all Member States (including the UK) in the same period. This means that the British rebate is included in the UK’s share. 

How long will the UK be paying for?

The UK will be paying until the last long-term liability has been paid. The UK will not be required to pay sooner than if it had remained a member of the EU. The possibility for both sides to agree to some simplification is foreseen. 

Will the UK pay the pension liabilities of the EU civil service?

The UK will pay its share of the financing of pensions and other employee benefits accumulated by end-2020. This payment will be made when it falls due as it is the case for the remaining Member States. 

What would be the financial implications of an extension of the transition period?

During any extension of the transition period, the UK will be treated as a third country for the purposes of the future Multiannual Financial Framework as of 2021. However, extending the transition period will require a financial contribution from the UK to the EU budget which will have to be decided by the Joint Committee established for the governance of the Withdrawal Agreement.”

 

There is no reference to any payment in the event of the Backstop period.

 

The Northern Ireland Protocol. The ‘Backstop’

The most contentious part of the draft withdrawal agreement signed off by the Cabinet last night is the Northern Ireland Protocol.

This is helpfully explained by the Commission’s press release of 14 November, http://europa.eu/rapid/press-release_MEMO-18-6423_en.htm

Highlighted in italics are those elements that are likely to cause the DUP to vote against the Draft Withdrawal Agreement when it comes before the House of Commons.

“If an agreement on the future EU-UK relationship is not applicable by 31 December 2020, the EU and the UK have agreed that a backstop solution will apply until such a time as a subsequent agreement is in place.

Alternatively, the UK may, before 1 July 2020, request an extension of the transition period. Such a request would be dealt with under article 132 of the Withdrawal Agreement and must therefore be agreed by the Joint Committee.

In the scenario where the “backstop solution” would apply, this would mean the following in practice:

  • There will be a single EU-UK customs territory. This will avoid the need for tariffs, quotas or checks on rules of origin between the EU and the UK.
  • The EU and the UK have agreed on a set of measures to ensure that there is a level playing field between the EU and the UK.
  • The Union’s Customs Code(UCC), which sets out, inter alia, the provisions for releasing products into free circulation within the EU, will continue to apply to Northern Ireland. This will ensure that Northern Irish businesses will not face restrictions when placing products on the EU’s Single Market.
  • The UK in respect of Northern Ireland will remain aligned to a limited set of rules that are related to the EU’s Single Market and indispensable for avoiding a hard border: legislation on goods, sanitary rules for veterinary controls (“SPS rules”), rules on agricultural production/marketing, VAT and excise in respect of goods, and state aid rules.

Is there any review mechanism foreseen? Can the EU or the UK ask to stop applying the backstop in whole or in part?

If at any time after the transition period, the EU or the UK considers that this Protocol, in whole or in part, is no longer necessary, it may notify the other party, setting out its reasons. The Joint Committee [as established in Article 164 of the Withdrawal Agreement] will consider the notification and may seek an opinion from institutions created by the Good Friday (Belfast) Agreement 1998. Following discussions in the Joint Committee, the EU and the UK may decide jointly that the Protocol, in whole or in part, is no longer necessary to achieve its objectives.”

The UK would be unable unilaterally to withdraw from the Backstop.

During the Backstop the UK would be unable to implement any trade agreements it had negotiated with non-EU states. Another red line for some Members of Parliament.

 

 

 

The Draft Withdrawal Agreement and Shipping Law

 

They came, they argued, they agreed (but now minus Raab and McVey).

This evening the Cabinet signed up to the Draft Withdrawal Agreement, all 586 pages of it – and also the seven page outline of the Political Declaration on the future relationship between the United Kingdom and the European Union.

All eyes are now focussed on the special status of Northern Ireland in the ‘backstop’ in the Agreement and on the inability of the UK unilaterally to withdraw from that agreement in article 21 of the Northern Ireland Protocol.

Less controversial are the provisions of the Agreement on Jurisdiction, Applicable Law, and Insolvency that are to be found in Articles 66 and 67, as follows.

Applicable law.

ARTICLE 66

Applicable law in contractual and non-contractual matters

In the United Kingdom, the following acts shall apply as follows:

(a) Regulation (EC) No 593/2008 of the European Parliament and of the Council shall apply in respect of contracts concluded before the end of the transition period;

(b) Regulation (EC) No 864/2007 of the European Parliament and of the Council shall apply in respect of events giving rise to damage, where such events occurred before the end of the transition period.

Jurisdiction.

ARTICLE 67

Jurisdiction, recognition and enforcement of judicial decisions, and related cooperation between central authorities

  1. In the United Kingdom, as well as in the Member States in situations involving the United Kingdom, in respect of legal proceedings instituted before the end of the transition period and in respect of proceedings or actions that are related to such legal proceedings pursuant to Articles 29, 30 and 31 of Regulation (EU) No 1215/2012 of the European Parliament …the following acts or provisions shall apply:

(a) the provisions regarding jurisdiction of Regulation (EU) No 1215/2012

Insolvency

Article 67

  1. In the United Kingdom, as well as in the Member States in situations involving the United Kingdom, the following provisions shall apply as follows:

(c) Regulation (EU) 2015/848 of the European Parliament and of the Council shall apply to insolvency proceedings, and actions referred to in Article 6(1) of that Regulation, provided that the main proceedings were opened before the end of the transition period;

For financial service providers, the following statement on p2 of the Political Declaration is of interest.

 

“Commencement    of    equivalence    assessments    by    both    Parties    as    soon    as    possible    after    the    United     Kingdom’s     withdrawal     from     the     Union, endeavouring     to     conclude     these     assessments     before the    end    of    June 2020.”

.

Back to the common law. Jurisdiction and judgments if there’s a ‘no deal’ Brexit.

 

 

On 13 Sept 2018 the UK government stated that in the event of a no-deal Brexit, it would repeal most of the existing civil judicial cooperation rules and instead use the domestic rules which each UK legal system currently applies in relation to non-EU countries. This is due to the lack of reciprocity from EU Member States that would pertain after ‘exit day’.

So, for the bin, would be:

The 2012 Brussels Regulation (Recast). Back to common law. The return of the anti-suit injunction to protect London arbitration agreements from suits commenced in EU states.

The Enforcement Order, Order for Payment and Small Claims Regulations: which establish EU procedures for dealing with, respectively, uncontested debts and claims worth less than EUR5,000

The EU/Denmark Agreement: which provides rules to decide where a case would be heard when it raises cross-border issues between Denmark and EU countries, and the recognition and enforcement of civil and commercial judgments between the EU and Denmark

The Lugano Convention: which is the basis of our civil judicial relationship with Norway, Iceland and Switzerland.

Most of the Insolvency Regulation, which covers the jurisdictional rules, applicable law and recognition of cross-border insolvency proceedings, although the EU rules that provide for the UK courts to have jurisdiction where a company or individual is based in the UK will be retained.

In addition, last year shipping minister John Hayes told members of the UK Major Ports Group that the hated 2017 Port Services Regulation will be “consigned to the dustbin” in the UK due to Brexit.

 

Staying out of the bin will be Rome I and Rome II on choice of law in contract and non-contractual matters. No reciprocity is involved with these regulations.

The Government intends the UK to accede to the 2005 Hague Convention on Choice of Court Agreements in its own right and anticipates that the convention would come into force across the UK by 1 April 2019. This is somewhat of a surprise as article 31 (a) provides the convention to come into effect for each state ratifying it on the first day of the month following the expiration of three months after the deposit of its instrument of ratification, acceptance, approval or accession. So, 1 July 2019.

The Convention does not apply to: consumer or employment contracts; insolvency; carriage of passengers or goods; maritime pollution; anti-trust/competition; rights in rem in immovable property, and tenancies of immovable property; the validity, nullity or dissolution of legal persons, and the validity of decisions of their organs; various matters concerning the validity or infringement of intellectual property rights; the validity of entries in public registers; arbitration and related proceedings