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Enforcement and dispute resolution after Brexit

Introduction

1.  On 23 August 2017, DExEU published their latest policy paper on Brexit: “Enforcement and dispute resolution: A Future Partnership Paper”. As part of the UK’s withdrawal from the EU, it will need to reach various agreements with the EU. Since the UK has a dualist system, these agreements will then need to be implemented in the UK by domestic legislation (just as the original European Communities Act 1972 made EU law part of the UK’s internal legal order).

2.  The agreements, and consequential implementing legislation, will need to deal with both enforcement of rights/obligations under the agreements, and dispute resolution over the interpretation and application of the agreements.

Enforcement

3.  The paper says that the UK’s domestic implementing legislation will “as appropriate provide for an effective means for individuals to enforce rights under the agreements”. This would apply to all individuals and businesses operating in the UK, and enforcement would be via the UK courts. The UK Government hopes that an equivalent enforcement of rights in the agreements will be available to UK individuals and businesses in the domestic courts of the remaining EU member states.

Dispute resolution

4.  The agreements will need to contain a mechanism for resolving disputes between the EU and the UK as to the interpretation and implementation of those agreements. The key question is who will arbitrate those disputes.

5.  The UK thinks it would be unfair for the CJEU, as the court of one party to the agreements, to have the final say (para. 29):

“Such an arrangement would be incompatible with the principle of having a fair and neutral means of resolving disputes, as well as with the principle of mutual respect for the sovereignty and legal autonomy of the parties to the agreement. When entering into international agreements, no state has submitted to the direct jurisdiction of a court in which it does not have representation”

6.  The problem is (para. 19):

“The EU’s position is that there are limitations, under EU law, as to the extent to which the EU can be bound by an international judicial body other than the CJEU. Where an international agreement concluded by the EU contains provisions which are in substance identical to EU law, the CJEU has taken the view that no separate body should be given jurisdiction to give definitive interpretations of those provisions.”

7.  The paper discusses some options for independent dispute resolution, e.g. a joint committee (comprising members from both the UK and the EU) and an arbitration model (decisions taken by a judicial or quasi-judicial body). The paper floats the idea that either a committee or an arbitration panel could decide to refer a question of interpretation of EU law to the CJEU.

8.  When interpreting provisions in the agreements that replicate language that is identical in substance to EU law, one suggested approach in the paper is to divide pre- and post-agreement CJEU decisions: the former would be binding; the latter need only be “taken into account”.

Conclusions

9.  The conclusions of the paper indicate clearly that David Davis’ team in the negotiations will be resisting any attempts by the EU to give the CJEU the last word on dispute resolution and enforcement:

“67. There is no precedent, and indeed no imperative driven by EU, UK or international law, which demands that enforcement or dispute resolution of future UK-EU agreements falls under the direct jurisdiction of the CJEU.

68. The precedents examined in this paper demonstrate that there are a number of additional means by which the EU has entered into agreements which offer assurance of effective enforcement and dispute resolution and, where appropriate, avoidance of divergence, without necessitating the direct jurisdiction of the CJEU over a third party. Such an arrangement, whereby the highest court of one party would act as the means of enforcing or interpreting an agreement between the two parties, would be exceptional in international agreements.

69. The UK will therefore engage constructively to negotiate an approach to enforcement and dispute resolution which meets the key objectives of both the UK and the EU in underpinning the effective operation of a new, deep and special partnership.”

10.  It remains to be seen whether the EU’s Brexit negotiating team will agree to an independent adjudicator, and if so, in what form.