LANDMARK RULING ON THE WTO NATIONAL SECURITY EXCEPTION

In a landmark decision concerning Ukraine’s complaint against Russia’s transit restrictions, a WTO Panel has ruled for the first time on the nature of the GATT national security exception.

The Panel took the view that the invocation of the exception is justiciable and subject to scrutiny by the WTO Dispute Settlement Body (DSB). This is contrary to the position long held by the US (and invoked by Russia in the current dispute) that the exception is totally “self-judging”, i.e. that it can be unilaterally invoked by a Member without the possibility of further scrutiny. The Panel ultimately concluded that – in the circumstances – Russia’s invocation of the exception was justified.

The implications of the ruling will reverberate far beyond the Ukraine-Russia dispute at hand. A number of WTO Members, including the US and Saudi Arabia, have sought to rely on the self-judging nature of the security exception in their pending WTO disputes, a position they may now need to revisit. Further, the ruling could also play a role in any prospective WTO dispute against the recent activation of US sanctions for “trafficking” in Cuban property under Title III of the Helms-Burton Act.

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CJEU upholds opinion of Advocate General and rules that UK can unilaterally cancel Brexit by revoking Article 50

In a landmark decision delivered on an accelerated timetable, the Court of Justice of the European Union (“CJEU“) has ruled that a Member State can unilaterally revoke its notice of intention to withdraw from the European Union (“EU“) under Article 50 of the Treaty on the European Union (“TEU“), upholding the opinion given by the Advocate General last week (see post).

The CJEU, in Wightman and Others v Secretary of State for Exiting the European Union, held that an Article 50 TEU notification can be unilaterally revoked if (1) the revocation is submitted in writing to the European Council (“Council“), (2) the revocation is clear and unequivocal, (3) no withdrawal agreement has entered into force, or if no such agreement has been concluded, the two year (or extended) period has not expired, and (4) the revocation is made in accordance with the Member State’s constitutional requirements.

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State-to-State dispute settlement under the EU’s draft Withdrawal Agreement: CJEU jurisdiction not arbitration

We have known for some time now that the UK and EU have very different views regarding the state-to-state dispute resolution mechanism to be contained in the Withdrawal Agreement between the EU and the UK. The EU has never made any secret of its intention for the CJEU to adjudicate on disputes between the UK and the EU over the interpretation of, and compliance with, the Withdrawal Agreement. Yesterday the EU released a draft Withdrawal Agreement for the UK’s consideration which contains a state-to-state dispute resolution provision which is consistent with that approach. This post provides an initial reaction to this draft provision.

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The European Court of Justice renders its opinion on the EU-Singapore free trade agreement: investment chapter is not within EU’s exclusive competence

On 16 May, 2017 the European Court of Justice (the Court) rendered its Opinion on the competence of the European Union to conclude the Free Trade Agreement (FTA) with Singapore. The Opinion recognises exclusive EU competence over most of the agreement and largely settles a long-standing dispute between the Commission and the Member States on the division of competences under the Lisbon Treaty.

Importantly, in the context of investor-state dispute resolution, the Court's Opinion is likely to render any agreement including protection for non-direct foreign investments or investor-state dispute settlement (ISDS) provisions a so-called "mixed agreement" which requires each of the Member States as well as the EU itself to become party, unless certain aspects commonly found in such agreements are removed or the Member States otherwise agree (discussed further below).  

The Opinion will have a major impact on the negotiation of future EU trade agreements, whether pending or anticipated (including the potential FTA between the UK and the EU following Brexit).

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