UK Supreme Court confirms the limited scope of state and diplomatic immunity from employment claims: Benkharbouche and Reyes

In two judgments handed down on 18 October 2017, the Supreme Court (the “Court”) has allowed certain employment claims made by foreign nationals employed as domestic workers at the embassies of foreign states and a diplomat’s residence to proceed despite claims of immunity. The judgments consider important aspects of state and diplomatic immunity, the differences between the two, and wider considerations of the interplay between domestic, EU and international law.

In Benkharbouche (Respondent) v Secretary of State for Foreign and Commonwealth Affairs (Appellant) and Secretary of State for Foreign and Commonwealth Affairs and Libya (Appellants) v Janah (Respondent) [2017] UKSC 62, the Court held that certain provisions of the State Immunity Act 1978 (“SIA”) barring the claims were not justified by any rule of customary international law and were therefore incompatible with both Article 6 (right to a fair trial) of the European Convention on Human Rights (“ECHR”) and Article 47 (right to an effective remedy and to a fair trial) of the EU Charter of Fundamental Rights (the “Charter”). The Court affirmed the Court of Appeal’s decision to (i) disapply these provisions of the SIA to the extent that they conflicted with EU law (Article 47 of the Charter), thereby allowing the employment claims that derive from EU law (discrimination, harassment and holiday pay) to proceed, and (ii) to make a declaration of incompatibility in respect of the SIA provisions under Article 6 of the ECHR – this being the only remedy available in respect of the domestic claims not derived from EU law (including unpaid wages and unfair dismissal), which therefore remained barred.

In Reyes (Appellant/Cross Respondent) v Al-Malki and another (Respondents/Cross-Appellants) [2017] UKSC 61, the Court found that a diplomat’s immunity after leaving his or her post is limited by Article 39 of the Vienna Convention on Diplomatic Relations 1961 (the “Vienna Convention”) to acts performed in the exercise of their diplomatic functions, regardless of whether the diplomat was otherwise entitled to immunity at the time the relevant acts took place. The Court held that the employment and mistreatment of domestic staff does not fall under the category of acts performed in the exercise of diplomatic functions and allowed Ms Reyes’ appeal.

Please see here for our previous blog post on both Court of Appeal decisions.
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UK Government’s Future Partnership Paper on Foreign policy, defence and development: including proposals for co-operation on sanctions, cyber security, and the defence and security industries

The UK Government has released a Paper outlining the UK’s proposals for a future partnership with the EU regarding foreign policy, defence and development. The Paper highlights the UK’s shared interests and values with the EU regarding foreign policy and defence, and the UK Government’s offer and intention to work closely with the EU in the future in a partnership “unprecedented in its breadth”, and that is deeper than any other third country relationship. The Paper offers a number of insights into the practical ways in which the UK envisages that such cooperation will be achieved after Brexit, including in relation to sanctions, cyber security, defence and security, development and broader foreign policy. Continue reading

Enforcement and dispute resolution under the Withdrawal Agreement and any future relationship agreement: no role for the CJEU….or is there?

On its face, the thrust of the UK Government’s Future Partnership Paper on Enforcement and Dispute Resolution (the Paper), published on 23 August, is to rule out the jurisdiction of the Court of Justice of the European Union (CJEU) to determine the enforcement of rights and obligations by individuals and businesses derived under the Withdrawal Agreement (and any future relationship agreement) and disputes between the EU and the UK.  Since the Paper was published, the Prime Minister has again reiterated the Government’s position that “the UK will be able to make its own laws – Parliament will make our laws – it is British judges that will interpret those laws, and it will be the British Supreme Court that will be the ultimate arbiter of those laws.”

However, as discussed below, whilst perhaps consistent with the stage of negotiations, the Paper is drafted to leave considerable room for manoeuvre, and it leaves many questions unanswered regarding enforcement of rights and obligations under the Withdrawal Agreement and any future relationship agreements and dispute resolution between the UK and the EU after Brexit.

The Paper follows the publication on 22 August of the UK Government’s Future Partnership Paper on Providing a Cross-border Civil Judicial Cooperation Framework, considered in our blog post here, which presented the UK’s position on the extent to which current EU rules on choice of law, jurisdiction and enforcement of judgments should continue to apply as between the UK and the EU Member States post-Brexit. Continue reading

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

UK Government Publishes Technical Notes, including relating to “Privileges and Immunities”

On 28 August, in advance of the next round of EU-UK talks, the UK Government published three Technical Notes, one of which “provides further information to support the UK’s position published on 13 July in the UK’s position paper on Privileges and Immunities” (the Technical Note). The 13 July Position Paper is discussed in our blog post here. The Technical Note requests clarification from the EU on a number of issues, in particular as regards the EU’s position on the implications of the UK’s withdrawal from Protocol (No 7) on the privileges and immunities of the European Union of the Treaty on the Functioning of the EU (Protocol 7).

As a general premise, the Government asks whether the EU’s position on the extent of the privileges and immunities to be granted under the Withdrawal Agreement (the Agreement) should differ depending upon whether or not the Agreement confers, or continues to confer, upon the EU functions in, or in respect of, the UK.

In particular, the Technical Note seeks confirmation from the EU that it agrees that the privileges and immunities granted to EU institutions, agencies and officials in the UK should reduce after exit so as to be linked solely to any function that may be conferred, or continue to be conferred, by the Withdrawal Agreement. To the extent that any wider application of privileges and immunities of the EU in the UK is envisaged, the EU is asked to clarify why this is necessary.  Specifically, the Government requests an indication from the EU as to the rationale for any continued protections in the UK for MEPs, and how such protections would operate.

The Technical Note foresees the continued presence of an EU delegation to the UK after the UK’s exit, and asks for clarification regarding how provision could be made to allow for this. It also asks for confirmation and assurances that the UK’s representation to the EU should continue to enjoy the same diplomatic privileges and immunities as a permanent mission of a Member State after Brexit. A reciprocal recognition is also acknowledged of ongoing privileges and immunities for representatives of Member States taking part in the work of institutions, agencies or bodies based in the UK, and of the UK taking part in the work of the EU within Member States’ territory, where such continued work is envisaged in the Agreement.

COMMENT

The questions posed in the Technical Note provide an interesting indication of the nature of the discussions taking place between the EU and the UK on the issue of ongoing privileges and immunities. This issue is fundamentally bound into the nature of the future relationship between the UK and the EU under the Agreement (and any further relationship agreements). As such, the Technical Note centres its requests on the continuing functions to be carried out by each side, and seeks clarification in respect of privileges and immunities that may be sought outside such functions. Central to these questions, therefore, will be the continuing role of the EU in the UK, and vice versa, under the Agreement.

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

Andrew Cannon
Andrew Cannon
Partner
+33 15 3576 552
Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112

Is the recently signed Morocco-Nigeria BIT a step towards a more balanced form of intra-African investor protection?

On 3 December 2016, Morocco and Nigeria signed a new bilateral investment treaty (the "BIT"), with the overarching aim of strengthening "the bonds of friendship and cooperation" between the two States.  The BIT (available here) is yet to be ratified and to enter into force. 

The BIT takes an interesting and in some ways innovative approach to the balance of rights and obligations as between investors and the respective host States, placing emphasis on the promotion of sustainable development and expressly safe-guarding the State's discretion to take measures to meet policy objectives.  As compared to traditional investment treaties, the BIT imposes additional obligations on investors and appears to seek to address, to a degree, the criticism that such investment treaties have been too heavily geared towards protecting investor interests. 

We explore below some of the more unusual aspects of the BIT, and consider the innovative nature of the BIT by comparison to other intra and extra-African treaties concluded in recent years.   

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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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ICSID announces sixteen topics for consideration in its review of the ICSID Arbitration Rules

Following invitations to ICSID member States and the public to submit topics for potential review, ICSID has published a paper on the Rules Amendment Process. The paper lists sixteen topics which are to be canvassed in the next stage of the review. The topics include areas of arbitral practice which have been subject to much broader discussion – such as the disclosure of third party funding (a point picked up in the SIAC Investment Arbitration Rules which took effect earlier this year), and the possible introduction of a code of conduct for arbitrators. Also included for review are aspects of the procedure, such as consolidation, the annulment mechanism, the preliminary objections process and the possible publication of decisions and orders. Further, ICSID will consider security for costs and allocation of costs.

Each of the sixteen topics will be addressed by ICSID in background papers to be published in early 2018.  The goal of the amendments is to (i) incorporate lessons learnt from case law; (ii) to make the process increasingly time and cost effective whilst maintaining due process and a balance between investors and States, and (iii) make the procedure less paper-intensive.

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Herbert Smith Freehills’ Response to EU Consultation: the Future of Investor-State Dispute Settlement

As discussed in our blog post here, on 21 December 2016 the EU Commission launched a public consultation on the multilateral reform of the investment dispute settlement system. The consultation closed on 15 March 2017 with a full report of the responses anticipated later this year. Herbert Smith Freehills has submitted a position paper to the Commission in response to the consultation.

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Brexit—the future of state-to-state, investor-state and domestic dispute resolution

The Brexit White Paper

The much-anticipated Brexit White Paper, ‘The United Kingdom’s exit from and new partnership with the European Union’, was published on 2 February 2017. This post focuses on a subject that has to date received relatively little attention—what it has to say about the future of dispute resolution. In its Chapter 2 (‘Taking control of our own laws’), and Annex A, the White Paper contains perhaps a surprising amount on dispute resolution, in comparison to the text devoted to the other eleven of the UK government’s 12 stated principles.

In this blog post we review the White Paper with the aim of discerning so far as possible the potential future of dispute resolution for the UK. In particular, we consider how the UK government envisages, at this relatively early stage, that disputes will be resolved under new post-Brexit UK-EU agreements, and if and how UK businesses will be able to enforce their provisions. We also consider certain implications of the end to the Court of Justice of the European Union (CJEU)’s jurisdiction in the UK and the adoption of the acquis under the Great Repeal Bill.

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