State-to-State Dispute Settlement under the EU’s latest draft of the Withdrawal Agreement: CJEU jurisdiction remains

On 15 March 2018 the European Commission published a revised version of the draft Withdrawal Agreement between the EU and the UK previously published on 28 February 2018 following consultation with the Member States and the European Parliament. The revised document has been transmitted to the UK for negotiation. A comparison between the two drafts is available on our Brexit notes blog here.

In terms of State-to-State dispute settlement, little has changed since our blog post on 2 March 2018.

As was seen in the previous draft, under Part Six, Title III (“Dispute Settlement”), the Withdrawal Agreement proposes that a Joint Committee (co-chaired by representatives from each of the UK and the EU) be established to resolve disputes regarding the interpretation or application of the Withdrawal Agreement. In the event that the dispute cannot be resolved, then the Joint Committee itself, or either one of the UK or the EU, can refer the dispute to the CJEU under Article 162 (para. 1). The ruling from the CJEU is binding, and non-compliance with that ruling may result in the CJEU issuing a “lump sum or penalty payment”.

However, there is a slight change in when the rights of the EU or the UK arise to suspend rights and obligations in the event of such a dispute. Article 162 (para. 2) now states that, in the event that the dispute is not referred to the CJEU under paragraph 1 of that provision, then the EU or the UK may suspend aspects of the Withdrawal Agreement (other than those related to citizens’ rights) or any agreement between them “proportionate” to the gravity of the breach. In a further addition, paragraph 2 now states the EU or the UK, as the case may be, shall inform the other Party of its intention to suspend and allow the other Party, within 20 days, to remedy the situation. Any suspension shall take effect no earlier than 20 days after its notification to the other Party.

In view of the sensitivities over CJEU jurisdiction discussed in our earlier blog post, it will be interesting to see how the UK responds.

For further information, please contact Andrew Cannon, Partner, Vanessa Naish, Professional Support Consultant, Hannah Ambrose, Professional Support Consultant or your usual Herbert Smith Freehills contact.

Andrew Cannon
Andrew Cannon
Partner
+33 15 357 6552
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112
Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 20 7466 7585

PCA Tribunal rules on disputed Slovenia and Croatia land and maritime boundaries

In a long-running dispute, the Permanent Court of Arbitration (“PCA“) Tribunal has issued its Final Award. The Final Award, which runs to nearly 400 pages, determines disputed territorial and maritime boundaries between the Republic of Slovenia and the Republic of Croatia. The Final Award also creates a “junction” in the Adriatic Sea for Slovenia’s uninterrupted access to and from international waters and a regime for use of that junction. The parties are bound to comply with the Final Award within six months of its issue.

Having purported to withdraw from the arbitration in 2015, Croatia has stated that it does not consider itself bound by the Final Award. Slovenia, on the other hand, has indicated that it considers continued incursions into its territorial sea as delimited by the Tribunal to be a breach of both international and EU law (as Slovenia became part of the Schengen area on its accession to the EU).

The parties are reported to be engaging in dialogue regarding the implementation of the Final Award, with speculation as to if and how the EU Commission will bring pressure to bear on Croatia. Continue reading

HSF Consultant Antonio Pastor’s book published: “The economic relevance of the settlement of maritime boundaries between States. The role of insular formations”

Herbert Smith Freehills' consultant Antonio Pastor is pleased to announced the release of his book  'Delimitation of maritime boundaries between states. Insular formations and low-tide elevations' (TIRANT LO BLANCH, Valencia, 2017).

Commenting on the book, Antonio said: "There is an economic dimension of this subject matter. The settlement of maritime boundaries can have a significant impact on the economic decisions of States as well as of commercial actors. Businesses need to know which State exercises sovereignty or jurisdiction over an insular formation, and therefore to grant commercial concessions in relation to that territory."

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EU trade agreement enters into effect with five southern African countries

On 10 June 2016 the EU signed an Economic Partnership Agreement (EPA) with the Southern Africa Development Community EPA Group comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland (the SADC EPA).

On 10 October 2016 that agreement entered into effect between the EU and five of those countries: with Mozambique in the process of ratifying the agreement and due to join immediately thereafter.

The SADC EPA represents the latest agreement in a scheme to create a free trade area between the EU and the African, Caribbean and Pacific Group of States (ACP).  Like previous EPAs, a key objective is to support the conditions for increasing investment and economic growth in the SADC EPA states. The EU is the SADC EPA Group’s largest trading partner. Export products from the SADC region include, notably, diamonds (from South Africa, Botswana, Lesotho and Namibia) as well as agricultural products, oil and metals. Manufactured goods, wine and food products are exported from South Africa, the largest EU trading partner in the region. EU imports to the SADC EPA Group include vehicles, machinery, electrical equipment, pharmaceuticals and processed food.

The key provisions of the SADC EPA are discussed below.

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