Skip to main content
SpringerLink
Log in
Book cover

European Yearbook of International Economic Law 2021 pp 335–352Cite as

Enter the Dialogue: Reference Mechanisms in Dispute Resolution Clauses

  • Chapter
  • First Online:

  • 373 Accesses

Part of the book series: European Yearbook of International Economic Law ((EUROYEAR,volume 12))

Abstract

If a dispute on the interpretation of the Withdrawal Agreement arises and no solution can be reached following political consultation within the Joint Committee, either the EU or the UK may resort to arbitration. The dispute shall be heard by a five-member tribunal and shall be administered by the Permanent Court of Arbitration. The particulars of the arbitration clause embodied in the Withdrawal Agreement would not give much reason for discussion. However, the arbitration panel is not the exclusive arbiter for disputes between the EU and UK under the Withdrawal Agreement. As a dispute under the Withdrawal Agreement may give rise to questions on the interpretation of Union law, a reference mechanism is built into the Withdrawal Agreement. The arbitration panel shall not decide on issues of Union law. Rather, it must request the Court of Justice of the EU to give a ruling on the respective Union law issues; the CJEU’s ruling shall then be binding on the arbitration panel. Direct judicial dialogue between two international judicial fora in the form of a reference mechanism is a rare feature in international treaties and mostly untested where it exists. The present chapter reflects on reference mechanisms in dispute resolution clauses, placing a specific focus on the arbitration clause in the Withdrawal Agreement.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   139.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   179.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD   179.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    The Proliferation of International Judicial Bodies: The Outlook for the International Legal Order—Speech by His Excellency Judge Gilbert Guillaume, President of the International Court of Justice, to the Sixth Committee of the General Assembly of the United Nations, 27 Oct 2000.

  2. 2.

    Kassoti (2015), pp. 22 ff.

  3. 3.

    Tzanakopoulos (2014), p. 6.

  4. 4.

    Slaughter (1994), p. 103; Kassoti (2015), p. 36.

  5. 5.

    Slaughter (1994), pp. 103 ff; Kassoti (2015), p. 36.

  6. 6.

    Kassoti (2015), p. 36.

  7. 7.

    Jacobs (2003), p. 548.

  8. 8.

    See Schima (2019), pp. 1823 ff, concerning the key characteristics of the preliminary reference procedure pursuant to Article 267 TFEU.

  9. 9.

    Rudyuk (2017), p. 41.

  10. 10.

    Article 322 of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part.

  11. 11.

    Article 403 of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part.

  12. 12.

    Churchill (2017), pp. 216 f.

  13. 13.

    Notably, parties to such disputes include not just states; instead, parties may also be non-state actors, including state enterprises, or other natural and legal persons; see Churchill (2017), p. 216.

  14. 14.

    Article 188(2)(b) LOSC.

  15. 15.

    Burke (2017), p. 1266.

  16. 16.

    Article 167 of the Withdrawal Agreement.

  17. 17.

    Dashwood (2020), pp. 4 f.

  18. 18.

    Article 168 of the Withdrawal Agreement. There is no single dispute settlement process embodied in the Withdrawal Agreement. Instead, the provisions on dispute settlement “are scattered throughout the text” of the Withdrawal Agreement; see Peers (2020), p. 60. In addition to proceedings pending at the end of the transition period, or events which occurred before that date, the CJEU has “continued jurisdiction” over particular cases arising after that date. For a period of 8 years from the end of the transition period, the CJEU retains jurisdiction over financial issues set forth in Part Five of the Withdrawal Agreement. Further, the CJEU jurisdiction after the transition period extends to cases concerning parts of the Irish border protocol. Finally, the CJEU retains jurisdiction over the entire Protocol on the Sovereign Base Areas in Cyprus. See Peers (2020), pp. 60 ff.

  19. 19.

    Article 185(4) Withdrawal Agreement.

  20. 20.

    Peers (2020), p. 10. To give two illustrative examples: (1) the parties may resort to arbitration after a period of consultations (compare Article 170(1) of the Withdrawal Agreement with Article 6 of the DSU); (2) the procedure is subject to a comparatively stringent time-frame (compare Article 173 of the Withdrawal Agreement with Article 12(8) and (9) of the DSU).

  21. 21.

    Compare Article 173 of the Withdrawal Agreement with Article 12(7) of the DSU.

  22. 22.

    See, by contrast, Article 16 of the DSU.

  23. 23.

    Article 170(1) of the Withdrawal Agreement.

  24. 24.

    Article 171(3) of the Withdrawal Agreement. The EU and the UK shall each propose ten persons; further, they shall jointly propose five persons to act as chairperson of the arbitration panel. Arbitrators on the list must be persons whose independence is beyond doubt, who possess the qualifications required for appointment to the highest judicial office in their respective countries or who are jurisconsults of recognised competence. Moreover, arbitrators must “possess specialised knowledge or experience of Union law and public international law”. Arbitrators must not be members, officials or other servants of the EU Institutions, of the Government of a Member State, or of the Government of the UK. The arbitrators on the Withdrawal Agreement Panel are listed in the Decision No 7/2020 of the joint committee established by the agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Union Atomic Energy Community, which is signed by the co-chairs of the committee, UK politician Michael Gove and the Vice-president of the European Commission for Interinstitutional Relations, Maroš Šefčovič. The Decision No 7/2020 was approved on 17 December and made public by the EU on 28 December 2020.

  25. 25.

    Article 171(5) of the Withdrawal Agreement.

  26. 26.

    Article 171(5) of the Withdrawal Agreement.

  27. 27.

    Article 171(9) of the Withdrawal Agreement.

  28. 28.

    Within 10 days of the establishment of the arbitration panel the EU or the United Kingdom may submit a reasoned request to the effect that the case is urgent. In that case, the arbitration panel shall give a ruling on the urgency within 15 days from the receipt of such request. If it has determined the urgency of the case, the arbitration panel shall make every effort to notify its ruling to the EU and the UK within 6 months from the date of its establishment; see Article 173(2) of the Withdrawal Agreement.

  29. 29.

    Article 180(1) of the Withdrawal Agreement.

  30. 30.

    Article 180(1) of the Withdrawal Agreement.

  31. 31.

    Article 180(2) of the Withdrawal Agreement.

  32. 32.

    Article 180(2) of the Withdrawal Agreement.

  33. 33.

    Article 180(1) of the Withdrawal Agreement.

  34. 34.

    Article 176(1) of the Withdrawal Agreement.

  35. 35.

    Article 176(2) of the Withdrawal Agreement.

  36. 36.

    Article 177(2) of the Withdrawal Agreement.

  37. 37.

    Article 178(1) of the Withdrawal Agreement.

  38. 38.

    Article 178(1) of the Withdrawal Agreement.

  39. 39.

    Article 178(2) of the Withdrawal Agreement.

  40. 40.

    This article does not discuss whether, from the perspective of Union law, the CJEU has jurisdiction over issues referred to it by an arbitration panel, which is established in an international agreement concluded by the EU.

  41. 41.

    Dashwood (2020), p. 184.

  42. 42.

    Article 89(2) of the Withdrawal Agreement concerns the UK’s compliance with judgements issued by the CJEU before the end of the transition period.

  43. 43.

    Peers (2020), pp. 23 f.

  44. 44.

    CJEU, Case C-283/81, CILFIT and others, EU:C:1982:335, para. 21.

  45. 45.

    Article 174(2) of the Withdrawal Agreement.

  46. 46.

    Article 174(2) of the Withdrawal Agreement.

  47. 47.

    Article 174(3) of the Withdrawal Agreement.

  48. 48.

    Crawford (2019), p. 693.

  49. 49.

    Brosseau (2018), p. 94.

  50. 50.

    Veeder (2016), p. 160.

  51. 51.

    CJEU, Opinion 1/17, ECLI:EU:C:2019:341, para. 106.

  52. 52.

    CJEU, Opinion 1/17, ECLI:EU:C:2019:341, para. 107.

  53. 53.

    See, for instance, CJEU, Case C-109/20, PL Holdings. This case raises the question whether “an arbitration agreement is invalid if it has been concluded between a Member State and an investor — where an investment agreement contains an arbitration clause that is invalid as a result of the fact that the contract was concluded between two Member States — [despite the fact that] the Member State, after arbitration proceedings were commenced by the investor, refrains, by the free will of the State, from raising objections as to jurisdiction.” Moreover, on 3 December 2020, Belgium advised that it will submit a request to the CJEU for an opinion on the compatibility of the intra-European application of the arbitration provisions of the future modernised Energy Charter Treaty with Union law; see https://diplomatie.belgium.be/en/newsroom/news/2020/belgium_requests_opinion_intra_european_application_arbitration_provisions (last accessed on 31 January 2021).

  54. 54.

    Riffel (2019), pp. 515 f.

  55. 55.

    CJEU, Opinion 1/17, ECLI:EU:C:2019:341, para. 131.

  56. 56.

    CJEU, Opinion 1/17, ECLI:EU:C:2019:341, paras. 131 ff.

  57. 57.

    Indeed, paragraph 17 of the Council’s 22 May 2017 Directives for the negotiation of the Withdrawal Agreement states that any dispute settlement mechanism shall “fully respect the autonomy of the Union and of its legal order, including the role of the Court of Justice of the European Union”.

  58. 58.

    Fowler, Red line crossed? The Withdrawal Agreement’s arbitration clause (2018), https://www.4newsquare.com/publications/red-line-crossed-the-withdrawal-agreements-arbitration-clause/ (last accessed on 31 January 2021).

  59. 59.

    Baudenbacher, Back to Start? Switzerland, Great Britain and the Ukraine Mechanism (2020), https://verfassungsblog.de/back-to-start/ (last accessed on 31 January 2021).

  60. 60.

    Duque (2020), pp. 797 ff. Investment tribunals assess the legal effects of the Agreement based on well-settled public international law principles. The Agreement does not take effect retroactively; a tribunal’s jurisdiction is determined at the time of the institution of proceedings. Thus, if the tribunal had jurisdiction on that date, this will remain so regardless of subsequent events, including the termination of a BIT. See Muszynianka Spółka z Ograniczoną Odpowiedzialnością v. The Slovak Republic, PCA CASE No. 2017-08, Award (7 October 2020), para. 263.

  61. 61.

    Pursuant to Article 3(1)(e) TFEU, the European Union has exclusive competence with respect to the common commercial policy. At the time of the Treaty of Lisbon entered into force, Member States maintained a great number of bilateral investment agreements with third countries. The TFEU does not set forth transitional provisions for such bilateral investment agreements. Regulation (EU) No 1219/2012 of the European Parliament and of the Council of 12 December 2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries provides that bilateral investment agreements that specify and guarantee the conditions of investment should be maintained in force and progressively replaced by investment agreements of the EU.

  62. 62.

    The Proliferation of International Judicial Bodies: The Outlook for the International Legal Order—Speech by His Excellency Judge Gilbert Guillaume, President of the International Court of Justice, to the Sixth Committee of the General Assembly of the United Nations, 27 Oct 2000.

  63. 63.

    Address to the Plenary Session of the General Assembly of the United Nations by Judge Stephen M Schwebel, President of the International Court of Justice, 26 Oct 1999, A/54/PV 39.

  64. 64.

    Boisson de Chazournes (2017), p. 13.

  65. 65.

    United Nations Committee of Jurists, Report on Draft of Statute of Statute of an International Court of Justice Referred to in Chapter VII of the Dumbarton Oaks Proposals (1945), p. 821; Boisson de Chazournes (2017), p. 24.

  66. 66.

    Compare Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction (25 January 2004) with Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction (8 February 2005).

  67. 67.

    Compare SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan, ICSID Case No. ARB/01/13, Decision of the Tribunal on Objections to Jurisdiction (6 August 2003) with SGS Société Générale de Surveillance S.A. v. Republic of the Philippines, ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction (29 January 2004).

  68. 68.

    Boisson de Chazournes (2017), pp. 32 f.

  69. 69.

    Declaration by Judge Greenwood in Ahmadou Sadio Diallo, Judgement (18 June 2012), ICJ Reports 2012, p 391, para 8.

  70. 70.

    Brosseau (2018), p. 95.

References

  • Boisson de Chazournes L (2017) Plurality in the fabric of international courts and tribunals: the threads of a managerial approach. Eur J Int Law 28(1):13–72

    Article  Google Scholar 

  • Brosseau J (2018) The distinction between arbitration and judicial settlement in international law: three characteristics and why they matter for reforms. In: Biondi A, Sangiuolo G (eds) Beyond TTIP: a new season for EU FTAs? Working papers 2018/3. King’s College, London, pp 93–105

    Google Scholar 

  • Burke C (2017) Article 188 UNCLOS. In: Proells A (ed) United Nations Convention on the Law of the Sea: UNCLOS – a commentary. C.H. Beck, pp 1261–1266

    Google Scholar 

  • Churchill R (2017) The General Dispute Settlement System of the UN Convention on the law of the sea: overview, context, and use. Ocean Dev Int Law 48:216–238

    Article  Google Scholar 

  • Crawford J (2019) Third party settlement of international disputes. In: Crawford J (ed) Brownlie’s principles of public international law. Oxford University Press, pp 692–716

    Chapter  Google Scholar 

  • Dashwood A (2020) The Withdrawal Agreement: common provisions, governance and dispute settlement. Eur Law Rev 45(2):183–192

    Google Scholar 

  • Duque G (2020) The termination agreement of Intra-EU Bilateral Investment Treaties: a spaghetti-bowl with fewer ingredients and more questions. J Int Arbitr 37(6):797–826

    Article  Google Scholar 

  • Jacobs FG (2003) Judicial dialogue and the cross-fertilization of legal systems: the European Court of Justice. Tex Int Law J 38(3):547–556

    Google Scholar 

  • Kassoti E (2015) Fragmentation and inter-judicial dialogue: the CJEU and the ICJ at the interface. Eur J Leg Stud 8(2):21–49

    Google Scholar 

  • Peers S (2020) The end - or a new beginning? The EU/UK Withdrawal Agreement. Yearbook of European law, vol 38. Oxford University Press, pp 1–77

    Google Scholar 

  • Riffel C (2019) The CETA opinion of the European Court of Justice and its implications—not that selfish after all. J Int Econ Law 22(3):503–521

    Article  Google Scholar 

  • Rudyuk Y (2017) How the trade disputes between EU and Ukraine will be settled under the EU Ukraine Association Agreement. Lex Portus 4:37–50

    Google Scholar 

  • Schima B (2019) Article 267 TFEU. In: Kellerbauer M, Klamert M, Tomkin J (eds) The EU Treaties and the Charter of Fundamental Rights – a commentary. Oxford University Press, pp 1822–1840

    Google Scholar 

  • Slaughter AM (1994) A typology of transjudicial communication. Univ Richmond Law Rev 29(1):113–139

    Google Scholar 

  • Tzanakopoulos A (2014) Judicial dialogue as a means of interpretation. https://ssrn.com/abstract=2497519

  • Veeder J (2016) What matters – about arbitration. Int J Arbitr Mediation Dispute Manag 82(2):153–161

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Schönherr Rechtsanwälte GmbH, Vienna, Austria

    Sebastian Lukic

Authors
  1. Sebastian Lukic
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sebastian Lukic .

Editor information

Editors and Affiliations

  1. Leuphana University of Lüneburg, Lüneburg, Germany

    Jelena Bäumler

  2. Bundeswehr University Munich, Neubiberg, Germany

    Christina Binder

  3. Saarland University, Saarbrücken, Germany

    Marc Bungenberg

  4. University of Erlangen-Nuremberg, Erlangen, Germany

    Markus Krajewski

  5. Humboldt-Universität zu Berlin, Berlin, Germany

    Giesela Rühl

  6. University of Glasgow, Glasgow, UK

    Christian J. Tams

  7. Leuphana University of Lüneburg, Lüneburg, Germany

    Jörg Philipp Terhechte

  8. Université de Lausanne, Lausanne, Switzerland

    Andreas R. Ziegler

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Lukic, S. (2021). Enter the Dialogue: Reference Mechanisms in Dispute Resolution Clauses. In: Bäumler, J., et al. European Yearbook of International Economic Law 2021. European Yearbook of International Economic Law, vol 12. Springer, Cham. https://doi.org/10.1007/8165_2021_73

Download citation

  • DOI: https://doi.org/10.1007/8165_2021_73

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-05082-4

  • Online ISBN: 978-3-031-05083-1

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation