Legal Certainty in the Preliminary Reference Procedure: The Role of Extra-Legal Steadying Factors (Elgar 2022)

 

John Cotter, Lecturer in Law, School of Law, Keele University

 

A quote most often attributed to Benjamin Franklin asserts that there is nothing certain in this world “except death and taxes”. If ‘certainty’ is to be understood in its absolute sense, the litigating lawyer attempting to forecast the outcome of a legal action might agree. There are indeed significant obstacles to ‘certainty’ for anyone charged with predicting courts. Some of these obstacles may arise from uncertainty within the rules themselves, caused by the limitations of language in communicating meaning (what I call, ‘legal obstacles’). Other obstacles may emerge from surrounding circumstances which may affect how the rules are chosen, understood, and applied to the case facts (‘extra-legal obstacles’). These extra-legal obstacles may arise from matters such as the idiosyncrasies of the individuals working with the rules, the vagaries of fact-finding, institutional pressures placed on decision-makers, or case-by-case variables like the quality of counsel.

 

These obstacles are arguably more formidable in the context of EU law. EU laws are translated into twenty-four official languages of equal value and are often the product of significant intergovernmental and inter-institutional compromise. The EU is also institutionally more complex than most national legal and political systems, which may expose the Court of Justice to more numerous competing, and perhaps less transparent, external pressures on its decision-making. The existence of such obstacles and their significance should be a cause for concern for a legal order like the EU’s that seeks to promote the uniformity and effectiveness of its laws throughout its multi-state territory. Legal certainty is a general principle of EU law and the Court of Justice has stated that “the effect of [EU] legislation must be clear and predictable for those who are subject to it” (Cases 212-17/80 Meridionale Industria Salumi and Others).

 

Given that Court of Justice rulings are a de facto source of EU law, this observation also has relevance for the Court itself. Clarity and predictability are especially pertinent in the context of the Article 267 TFEU preliminary reference procedure, through which the Court provides rulings on questions relating to the validity or interpretation of EU law referred to it by national courts. Such rulings are binding not only on the referring court, but also on courts throughout the EU’s Member States, and the procedure has played a key role in promoting a uniform and effective interpretation and application of EU law throughout the Union.

 

That obstacles to ‘certainty’ exist is not, however, probative of a kind of radical indeterminacy that might suggest that outcomes are wholly unpredictable. The purpose of my book is to draw attention to (perhaps neglected) factors within the EU legal order, and within the preliminary reference procedure specifically, which mitigate the obstacles to ‘certainty’. These factors are called ‘steadying factors’ and are drawn from American legal realist Karl Llewellyn’s book, The Common Law Tradition: Deciding Appeals (Little Brown 1960). Llewellyn, in order to counter any impression that American appellate court decisions were unpredictable, argued that there were fourteen steadying factors that made such decisions ‘reckonable’ (or reasonably predictable).

 

In chapter 2, I isolate those of Llewellyn’s steadying factors that can be applied to the Court of Justice and re-model them, dividing the factors into two categories, legal and extra-legal. I identify two factors as legal steadying factors: “legal doctrine” and “known doctrinal techniques”. However, my book concentrates on the extra-legal factors; that is, those factors outside of legal rules or principles and the limited number of interpretative techniques used to interpret them. I argue that these extra-legal factors help promote greater stability in preliminary reference outcomes in the following ways: first, by reinforcing the pressures exerted by legal rules on judges; second, by narrowing the number of conceivable outcomes; and third, by providing various signposts to a lawyer attempting to forecast an outcome. In the book, I further divide the extra-legal steadying factors into three sub-categories: internal, external, and procedural.

 

The internal factors, examined in Part II of the book (chapters 4 and 5), are common values, outlooks, and working methods which are (or ought to be) internalised by judges. In the book, I adopt, as a working assumption, Llewellyn’s argument that the “law conditioning” of judges – resulting from their legal education and professional backgrounds – should cause an internalised understanding of the normative quality of legal rules and more uniform approaches to interpretation. In Chapter 4, I re-model Llewellyn’s definition of a “law-conditioned official”. This recast definition is then applied to the biographical details of the past and present judges of the Court of Justice in chapter 5, revealing that 100 of the 111 judges appointed since 1952 have had twenty or more years of post-qualification experience in law after their legal educations. Examination of the biographical details of the judges also reveals a (perhaps expected) tendency for the judges to be experts in European law or to have international legal experience prior to appointment, something that should serve to diminish the impact of differing legal-cultural backgrounds on commonality of approach to interpretative problems.

 

The external factors, analysed in part III, are those factors which serve to reduce the impact of destabilising external pressures on judges and to reinforce the pressures established by the applicable legal rules. In chapters 6-10, I test a hypothesis – derived from Llewellyn’s “judicial security and honesty” steadying factor – that the institutional design of the EU legal order and the Court of Justice’s relationship with other institutional actors serves to promote greater stability in preliminary reference outcomes. This two-pronged hypothesis posits that an institutional independence-accountability balance ensures that: (1) the Court and its judges are sufficiently independent to make rulings which are contrary to the interests of powerful countervailing powers, but (2) are simultaneously more likely to face countermeasures (legal and illegal) where they make rulings which fail to demonstrate minimal adherence to applicable legal doctrine.

 

The procedural factors, discussed in Part IV (chapters 11-15), are the aspects of the preliminary reference procedure arising from procedural rules and practices that play a role in narrowing the scope of the Court’s decisional options. In this regard, six of Llewellyn’s factors are applied to the preliminary ruling procedure in the order in which they typically arise chronologically in a reference: “issues limited, sharpened, and phrased in advance”, “a frozen record from below”, “adversary argument by counsel”, “a known bench”, “group decision”, and “an opinion of the court”. The analysis in Part IV highlights the role that these factors play in confining the Court of Justice’s decisional latitude or in influencing its approach. For instance, the significance of Article 267 TFEU itself in removing the jurisdiction of the Court of Justice over fact finding in the main proceedings and confining the Court to ruling on limited questions of EU law is discussed. Moreover, consideration is given to other procedural aspects, which stymy the Court’s ability to pursue ideological agendas divorced of legal basis; for example, the division of labour in the procedure ensures that the Court of Justice is dependent on national courts for references, cannot engineer its own, and has no official method of docket control. Further, the effect of the questions referred by the national court in the order for reference in narrowing the scope of the Court’s enquiries is examined. Additionally, attention is given to aspects of the Court’s deliberative and decisional processes, such as the fact that judgments or orders are always the result of a group decision and need to be justified in a published written ruling. These latter aspects serve to reduce the impact of individual idiosyncrasies on the ruling and to place pressure on the judges to demonstrate the rigour of the Court’s legal reasoning.

 

The book concludes that the steadying factors analysed in the book play a role in promoting greater ‘certainty’ and consistency in the Court’s preliminary rulings by, among other things, exerting pressure on the Court to recognise the limits placed on it by legal doctrine and known accepted doctrinal techniques. These pressures, it is concluded, arise from a combination of factors such as internalised values of the judges, external accountability mechanisms, and procedural rules and practices which circumscribe the decisional freedom of the judges. While the book in no way asserts that the rulings of the Court of Justice are wholly predictable, even to the most skilled lawyer, it is maintained that these pressures at least contribute to reducing the impact of the obstacles to ‘certainty’ and ensuring that the Court is cognisant of the normative effect of the rules it interprets and applies.

Scotching Brexit? Background to the Wightman case about reversing the Article 50 notification unilaterally

Alan S. Reid, Senior Lecturer in Law, Sheffield Hallam University. The author welcomes comments on the blog at a.s.reid@shu.ac.uk

As the Brexit clock ticks down, and the diametrically opposed objectives of Theresa May's negotiating imperatives become ever more exposed, the clamour to clarify the processes and procedures surrounding Brexit intensifies.

At the tail end of 2017, a group of seven Scottish politicians, from across the political spectrum and from all three legislatures for Scotland (the Scottish Parliament, the UK Parliament and the European Parliament) commenced an action in the Scottish Court of Session, essentially seeking an answer to the simple question 'Can a member State of the European Union unilaterally revoke their Article 50 TEU notification to leave the EU?' The group is headed by Andy Wightman MSP, and the other pursuers are Ross Greer MSP, Alyn Smith MEP, David Martin MEP, Catherine Stihler MEP and Joanna Cherry QC MP. English MPs Tom Brake and Chris Leslie were joined in the case in May 2018.  The case was crowdfunded through the Good Law Project, headed by Jolyon Maugham, who is also a petitioner.

The pursuers are keen to know the answer to this question since they believe that the route to Brexit is not unidirectional and binary. For the pursuers, representing constituents in a nation of the United Kingdom which voted overwhelmingly to remain in the EU referendum, Brexit does not have to result in 'Deal or No Deal'. Rather, there may be a third way: A People's Vote that includes the option to Remain in the European Union.

In order for a Scottish court to make any pronouncement on this legal question, the court would have to send a preliminary reference request to the European Court of Justice under Article 267 of the Treaty on the Functioning of the European Union since Article 50 TEU is a provision of EU law and by definition, only the CJEU can offer a binding interpretation of EU law for the entire EU.

In February 2018, the pursuer's application for judicial review (subject, in Scotland, to the Court of Session Act 1988, s. 27B) was refused by Lord Doherty in the Outer House of the Court of Session, on the basis that the question of the revocability or otherwise of an Article 50 TEU notification was a purely hypothetical and academic one, since both the UK Parliament and Her Majesty's Government had no yearning to resile from the path to Brexit (paras 10-14 of the judgment).  In particular, Lord Doherty opined that the pursuer's action had no reasonable prospect of success (para 8; see s 27B(2)(b) of the Act) since the matter was not a justiciable matter suitable for judicial determination.

The pursuers appealed the decision to refuse the judicial review and accompanying CJEU reference to a bench of three Scottish judges in the Inner House of the Court of Session by way of a reclaiming motion (which is the process whereby a decision of the Outer House of the Court of Session can be appealed). In their judgment, the panel of three judges heavily criticised the terms of the original judicial review pleadings as being overly complicated, unclear and potentially confusing and fell way below the standards expected for a judicial review application. (The clarity and structure expected in a judicial review claim were set out by Lord Hope in Somerville v The Scottish Ministers [2007] UKHL 44, at paras. 39, 46, 52 and 65. See also Lord Rodger's dicta at para. 88) Nevertheless, given the constitutional importance of the question raised, their lordships were minded to forgive such careless drafting and allow the appeal and remit the case to the Outer House for judgment (para 12). In the opinion of their lordships, the case was neither academic nor hypothetical given that the UK Government could be asked to revoke the Article 50 TEU notification at the request of the UK Parliament (para 30). But, even where the case were to proceed, the pursuers would need time to revisit and rephrase their averments (para 34).

Following a much amended set of pleadings, Lord Boyd of Duncansby heard the application for judicial review in June 2018. Lord Boyd refused the application and thus with it any chance of a preliminary reference request being submitted to the European Court of Justice (para 75). His Lordship's opinion hinged on the hypothetical and speculative nature of the claim. At the time of the judgment, the EU (Withdrawal) Act 2018 was still a bill progressing through Parliament and thus a definitive date for UK withdrawal from the European Union had not yet been set out as a matter of UK law. Rather, the date of exit of the UK was only set out as a matter of EU law as per the terms of Article 50(3) TEU, that is the date of entry into force of the withdrawal agreement or two years from the date of Article 50 notification itself.

As is well known, the European Court of Justice does not entertain national courts submitting hypothetical questions concerning EU law (see, for instance, Foglia v Novello). The preliminary ruling procedure is a practical cooperative link (for example, Case C‑470/12 Pohotovost) between the national courts of the member States and the Court of Justice of the EU, designed to help the national courts decide cases in which the interpretation of EU law is integral to the resolution of the dispute before the national court. (In the Scottish context, see the case of Scotch Whisky Association v Lord Advocate, discussed here) Having reviewed the authorities in this matter, Lord Boyd declared that the case was a hypothetical one which did not need to be answered in order for him to give judgment. He also stated that this position was synonymous with the position adopted by the Scottish courts as to hypothetical cases before them (for example, see Macnaughton v Macnaughton Trustees 1954 S.C. 312 as discussed by Lord Boyd at para. 48).

The petitioners, in their case, also objected to the stated position of UK Ministers that outlines that Article 50 TEU is not unilaterally revocable. Indeed, in the earlier seminal constitutional case of Miller,  the question of unilateral revocability of Article 50 TEU was assumed by both parties to be answered in the negative (para 10 of that judgment). Lord Boyd refused to entertain an in-depth discussion as to the legal appropriateness of the stated position of UK Ministers on the revocability of Article 50 TEU on the basis that were he to do so, this would be a usurpation of Parliamentary privilege and contrary to Article 9 of the Bill of Rights 1689 (paras 54-58 of his judgment). 

The pursuers then immediately appealed to the Inner House of the Court of Session, where their reclaiming motion was successful. The judgment of the Inner House was delivered on the 21st of September 2018. The Inner House found for the Reclaimers on a number of grounds. Lord Carloway, the Lord President, dismissed the UK Government's claim that the judicial review action was not competent because the order sought was not practical. On the contrary, Lord Carloway considered that the issue was justiciable precisely because there was such controversy as to the appropriate way forward within the parliamentary process (paras 22-23 of the judgment). More significantly, the court also found that the case was no longer hypothetical since in between the date of the judgment by Lord Boyd and the present case, the EU (Withdrawal) Act 2018 had now passed onto the statute books and certain provisions of that Act had come into force.

In particular, section 13 of the Act – the “meaningful vote” section – provides that the UK Parliament will be faced with a binary choice after a withdrawal agreement has been provisionally agreed between Her Majesty's Government and the European Union: Parliament must either approve the terms of the withdrawal agreement and accompanying text on the future framework for UK-EU relations or not approve. In the event that approval has not been forthcoming, the Government must inform the Parliament of how it intends to proceed within 21 days of the decision not to approve. Further, in the period up to the 21st of January 2019, if the Government again considers that no deal can be agreed then Parliament must be told of how the Government intends to proceed and again after the 21st of January 2019, the Government must inform Parliament of how it intends to proceed.

In all of these scenarios, there is a presupposition that both the Brexit clock inexorably continues to countdown to the 29th of March 2019 and that the choice for the UK Parliament is stark: Deal or No Deal. The Scottish politicians at the heart of this case contended that there is an alternative to this dystopian vision: The UK population can be given a People's Vote on the terms of the deal, including an option to Remain in the EU. However, this option will only be realisable if the UK's automatic exit from the EU on the 29th of March 2019 can be postponed and the only ways to disapply the automatic departure of the UK is by the UK either securing the agreement of the 27 other Member States to extend the Article 50 TEU time period or by unilateral rescission of the Article 50 TEU notification.  If neither of these options can be secured, then clearly, given that it is November 2018, there will be insufficient time to organise the necessary preparations for what would be in effect a second referendum on UK membership of the EU.

In the reclaiming motion, the Scottish judges approved the text of the question that they wished to send to the CJEU (see the Appendix to the judgment). The question is thus:

“Where, in accordance with Article 50 of the TEU, a Member State has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying Member State; and, if so, subject to what conditions and with what effect relative to the Member State remaining within the EU.”

Given that time is of the utmost essence in this case, the Scottish court expressly requested use of the expedited procedure (see Article 105 of the Rules of Procedure of the CJEU) before the Luxembourg court. At present, the average time taken for the CJEU to deliver a ruling under the Article 267 TFEU procedure is 15.7 months (page 114 of the 2017 Annual Report of the CJEU) . Such a timeframe would, ironically, render the judgment academic since the UK is heading towards Brexit in just over four months.  However, even with the expedited procedure, the Court will in all likelihood take between 3 and 5 months to render a judgment. Even this timeframe is problematic given that, at the time of writing, the UK and the EU have agreed a provisional withdrawal agreement on the 13th of November 2018.

In order for the issue of the revocability of Article 50 TEU to have practical import, UK politicians would need to know the answer to this question before they are asked to perform their constitutional task of participating in a meaningful vote on the terms of the withdrawal agreement. Given that there is an agreement in principle in existence between the UK and EU, it is likely that UK MPs will be asked to vote on the terms of the deal before the Christmas parliamentary recess, a mere six weeks away.

The window of opportunity for the CJEU is exceedingly tight. It received the Scottish reference on the 3rd of October 2018. Sixteen days later, the President of the CJEU confirmed that, given the constitutional seriousness of the case, the case would be expedited. It will be heard on the 27th of November 2018.

The UK Government has formally objected to this preliminary ruling request on a number of fronts. Firstly, the UK Government has published a policy paper to the effect that the question from the Scottish court is still a hypothetical one and that the CJEU has overstepped its judicial role in effectively acquiescing in this subterfuge. These arguments can be dealt with cursorily. As a cooperative horizontal judicial process between national courts and the CJEU, it is for the national court alone to determine the appropriateness of sending an EU law question to the CJEU for adjudication. As such, it is a subjective task for the judges seised of the case before them to assess whether they require a resolution to an EU law question in order to enable them to make a decision (See for example, Case 126/80 Salonia).  Secondly, if that is the case, then the answer from the CJEU is not merely an advisory one, rather it is a sine qua non of the national judges preforming their constructive and practical constitutional role.

The UK Government's second approach to taking exception to this Scottish court reference was to challenge the process of requesting assistance from the CJEU itself. The Advocate General for Scotland alleged that the proper course for this issue should have been for the Court of Session to have appealed the case up to the UK's Supreme Court for adjudication rather than sending the case to Luxembourg. The Inner House of the Court of Session, on the 8th of November 2018 refused leave to appeal to the Supreme Court. The UK Government has not given up and has more recently submitted legal papers to try to get the Supreme Court to order cancellation of the reference request from the Court of Session. The Supreme Court has confirmed receipt of these legal papers and has assigned the case to Lady Hale, Lord Reed and Lord Hodge. It is to be expected that a ruling will be forthcoming from the Supreme Court given the Supreme Court's statement itself that it is aware of the urgency of the matter and the fact that the CJEU will hear the Wightman case on the 27th of November 2018.

Regardless of the relative merits or demerits of such an approach by the UK Government, these legal actions evidence a worryingly poor grasp of EU law principles. It is a well-established doctrine of EU law that the Article 267 TFEU Preliminary Ruling Procedure is not an appeal mechanism and as such national courts are free to submit requests to the Luxembourg court, free of any interference from higher national courts (See for example Cases 36 and 71/80 Irish Creamery Milk Suppliers Association v Ireland ECLI:EU:C:1981:62 and Case 338/85 Fratelli Pardini SpA v Ministero del Commercio con l'Estero ECLI:EU:C:1988:194).

Superior courts of the Member States are of course free to issue guidelines to the lower courts on when references should be sent to the CJEU (See for example the dicta of Sir Thomas Bingham MR in R. v International Stock Exchange of the United Kingdom and the Republic of Ireland Ltd Ex p. Else (1982) Ltd [1993] QB 534 and the case of Emerald Supplies Limited & Others v British Airways Plc [2017] EWHC 2420 (Ch)), and the CJEU itself issues guidelines on how to refer EU law questions to it, however, these guidelines cannot fetter the wide discretion afforded to national courts to make their own decision on the appropriateness of an Article 267 TFEU reference.  The lack of knowledge of basic underpinnings of EU law at the heart of the UK Government is either negligence writ large or an unashamed attempt to circumvent well established judicial lines of communication between national courts and the CJEU. Either way, it diminishes the reputation of UK Plc. and conversely enhances the standing and reputation of the Scottish courts and politicians.

Nevertheless, inexorably the Brexit clock lurches forward and it remains to be seen whether Scotland can Scotch Brexit for the evident utility of the entire United Kingdom.

*Update (23 Nov 2018): on 20 November 2018 the UK Supreme Court refused to give leave to appeal against the decision to refer, on the grounds that the Court of Session judgment was not final. The CJEU will therefore hold a hearing in this case as planned on 27 November. Also, you can find the full text of the written legal arguments of Mr Wightman and others before the CJEU here. 

Barnard & Peers: chapter 27

Photo credit: Scotcourts.gov.uk

The Court of Justice and EU Foreign Policy: what jurisdiction should it have?

Luigi Lonardo, PhD student, King’s College London

The second paragraph of Article 24(1) Treaty on the European Union explains that “the Common Foreign and Security Policy (CFSP) is subject to specific rules and procedures”, and ends with the rather explicit sentence “the Court of Justice of the European Union shall not have jurisdiction with respect to these provisions”.

Lawyers are currently discussing whether the sentence “the CJEU shall not have jurisdiction” means “the Court has some jurisdiction”. Seriously. AG Wahl elegantly phrased it this way: “The main question could be framed as follows: does the exclusion from the CJEU’s jurisdiction cover, in principle, all CFSP acts or only certain categories of CFSP acts?” (Case C‑455/14 P H v Council and Commission AG Opinion, Par 52).

The question is of fundamental constitutional importance because an answer will enable lawyers to understand with clarity what EU foreign policy acts are excluded from the Court’s judicial review – a legal issue that the Court has not yet had the opportunity to adjudicate upon. While Art 19 TEU confers on the Court jurisdiction to ensure that in the interpretation and application of the Treaties the law is observed, Article 24, as recalled, introduces an exception. The scope of this exception, however, has not been fixed. In Case C- 658/11 the Court said that the exception “must be interpreted narrowly” because it introduces an exception from a general rule (par 70). In Opinion 2/13 (on ECHR accession), it only concluded, without further specification, that “as EU law now stands, certain acts adopted in the context of the CFSP fall outside the ambit of judicial review by the Court of Justice” (par 252). To further complicate the issue, however, Article 24 TEU also introduces an exception to the exception: the Court has jurisdiction to monitor compliance with Article 40 TEU (the division between foreign policy and other EU measures) and to review the legality of sanctions.

So, when does the Court of Justice of the European Union (CJEU) have jurisdiction? Two cases may offer guidance with respect to this issue. One case, H v Council and Commission, was decided by the Court in July, and another, Rosneft, is currently pending.

H v Council

In H, an Italian magistrate sought annulment, before the General Court (Order in H v Council and Others, T‑271/10), of the decision of a Head of an EU Mission established under CFSP. The contested decision concerned the transfer of H, a seconded Legal Officer of the EU Police Mission in Sarajevo, to the post of Prosecutor in another regional office of the same country. The General Court (GC) held that it lacked jurisdiction to hear the complaint and therefore found that the action was inadmissible. The GC reasoned that the exclusion of jurisdiction under Art 24(1) TEU only encounters two exceptions: monitoring compliance with Article 40 TEU (ie the division of competence between CFSP and non-CFSP external measures) and the review of the legality of sanctions under the second paragraph of Article 275 TFEU.

The General Court took the view that the appellant’s situation did not fall under one of the exceptions to the general rule that EU Courts do not have jurisdiction in CFSP matters (it was not, therefore, one of the two “exceptions to the exception”). The General Court considered that the contested decisions were adopted by the Head of Mission pursuant to powers that had been delegated to him by the Italian authorities. It thus concluded that it was for Italian courts to review the legality of the contested decisions and to hear the action for damages. It finally added that, should the Italian court having jurisdiction consider the contested decisions unlawful, it could make that finding and draw the necessary conclusions, even with respect to the very existence of those decisions.

The applicant appealed the decision before the ECJ. Applicant, Council, and Commission all wanted to set aside the GC’s order, albeit each for different reasons, which will be briefly outlined below with regards to the issue of the extent of the Court’s jurisdiction on CFSP matters.

The position of the Applicant

The Applicant took the view that the exclusion of the Court’s jurisdiction does not cover merely administrative measures (such as the decision at stake in the present case) but only the acts provided for in Article 25 TEU: general guidelines, decisions on actions and positions to be taken by the EU (and implementation thereof), and acts of systemic cooperation between Member States

The position of the Council

Par 32 of the Advocate General opinion explains that “The Council is of the view that the statement of reasons in the order under appeal does contain two legal errors. First, in deciding to relocate H, the Head of Mission did not exercise powers delegated to him by the Member State of origin, but by the competent EU institution (the Council itself). Second, the national court hearing the case does not have the power to annul the act challenged. Nevertheless, those errors do not — in the opinion of the Council — invalidate the conclusion reached by the General Court”

The position of the Commission

The Commission argued that the Court lacks jurisdiction only on acts that are “expression of sovereign foreign policy”, thus leaving the Court empowered, for example, to review the lawfulness of (a) acts of implementation, or (b) adopted in the framework of the CFSP when the alleged invalidity stems from a possible infringement of non-CFSP provisions. The Commission took the view, nonetheless, that the contested decision was not an implementing act.

The findings of the Court

Somewhat unsurprisingly, the Court reversed the order of the GC and found that the circumstance that the decision was a CFSP measure “does not necessarily lead to the jurisdiction of the EU judicature being excluded” (par 43).

The Court interpreted the exclusion of jurisdiction very narrowly. It gave a systematic reading of the general provisions of EU law (Article 2) and of CFSP (Articles 21 and 23 TEU) to recall that the EU is founded, in particular, on the values of equality and the rule of law ( Segi and Others v Council; Opinion 2/13). It stated that “The very existence of effective judicial review designed to ensure compliance with provisions of EU law is inherent in the existence of the rule of law (Schrems)” (par 41).

In the current case, the Court considered that the decision of the Head of Mission was subject to legal scrutiny because under Article 270 TFEU the EU judicature has jurisdiction to rule on all actions brought by EU staff members having been seconded to the EUPM. They remain subject to the Staff Regulations during the period of their secondment to the EUPM and, therefore, fall within the jurisdiction of the EU judicature, in accordance with Article 91 of those regulations (even though H was seconded by a Member State, the two situations were considered similar). The decision of the Head of Mission was considered to be merely “staff management”.

Therefore, the Court concluded, “the scope of the limitation, by way of derogation, on the Court’s jurisdiction, which is laid down in the final sentence of the second subparagraph of Article 24(1) TEU and in the first paragraph of Article 275 TFEU, cannot be considered to be so extensive as to exclude the jurisdiction of the EU judicature to review acts of staff management relating to staff members seconded by the Member States the purpose of which is to meet the needs of that mission” (par 55).

The ECJ concluded that “[the] jurisdiction stems, respectively, as regards the review of the legality of those acts, from Article 263 TFEU and, as regards actions for non-contractual liability, from Article 268 TFEU, read in conjunction with the second paragraph of Article 340 TFEU, taking into account Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights of the European Union” (par 58). It therefore referred the case back to the GC.

Rosneft

A similar question recurs in Rosneft, the first request ever for a preliminary ruling on a CFSP act, currently pending before the Court. The case stems from a Russian gas company, Rosneft, challenging sectorial measures (not target sanctions) prohibiting EU natural or legal persons, from engaging in contractual relations with certain Russian state-owned companies and banks, and from providing such companies and banks access to financial markets.

A central question is the admissibility, as discussed at the hearing and in paragraphs 32-76 of AG Wathelet’s opinion.

The AG believes that the measure can be reviewed if it meets these cumulative two conditions: if (a) it relates to Articles 23 to 46 TEU (the foreign policy rules) and or EU acts adopted on the basis of those provisions; and if (b) its substantive content also falls within the sphere of CFSP implementation.

The first condition is derived, for Wathelet, from the consideration that the last sentence of the second subparagraph of Article 24(1) TEU excludes the Court’s jurisdiction only ‘with respect to these provisions’, and the reference thus made is to Chapter 2 of Title V of the EU Treaty, entitled ‘Specific provisions on the common foreign and security policy’, of which Article 24 forms part.

In the AG’s opinion, in particular, the court should have jurisdiction to hear actions for annulment and preliminary rulings on decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the EU Treaty – and not, therefore, regulations implementing them. For the AG, therefore, the Court has jurisdiction, but the challenged decision, to the extent that it is directly addressed to Rosneft, is not invalid. The very long opinion explains in detail why, but here we limit the scope of the analysis to the question on jurisdiction.

Comment

Judicial protection and uniformity of interpretation of EU law

The decision of the ECJ in H should be welcomed because it avoids the potential deterioration of the protection of fundamental rights which would derive from each national court being able to monitor CFSP decisions in the absence of a centralised mechanism. If national Courts had jurisdiction when the CJEU does not, this might lead to diverging and potentially even conflicting interpretations of the same CFSP measure.

Uniformity of interpretation of EU law would be further guaranteed if the Court affirmed jurisdiction to hear requests for preliminary rulings (and AG Walthelet in paras 61-62 of his opinion in Rosneft suggests that the Court can rule on CFSP preliminary rulings). The importance of judicial dialogue between the CJEU and national courts has been repeatedly affirmed in the Court’s case law (Opinion 1/09; CILFIT; Adeneler; Kamberaj). Moreover, absence of the Court jurisdiction to hear on preliminary rulings would be at issue with the third paragraph of Article 267 and the CILFIT doctrine.

The prohibition of judicial dialogue and cooperation between national and EU courts in CFSP may very well be a breach of the right to effective judicial remedy as enshrined in Article 47 EU Charter of Fundamental Rights. Article 47 Charter creates what has been described as a “composite, coherent, and autonomous” standard of EU judicial protection. Pursuant to Article 19(1) TEU, national Courts shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law, with the standard set and as determined by the CJEU (which has the final saying on interpretation and application of the Treaties). Completely excluding the Court’s jurisdiction from an area of EU law such as CFSP would seriously hinder the system of judicial protection (see to a similar effect  Gestoras Pro Amnistía and Others v Council par 53; Segi and Others v Council par 53).

Even though it is left to the discretion of national courts to decide whether to make a reference for a preliminary ruling as well as the questions to be referred, completely ruling out the opportunity for an applicant (or the national court) to make such a request may indeed be against Article 47 Charter. All the more so if one accepted the reading proposed by the Council in its appeal in H, that is, that the national court does not have the power to annul the CFSP decision. This would leave a legal vacuum in the annulment of the provision (unlike what happened in C-583-11 Inuit, where the Court found that existence of alternative legal remedies allowed for a restrictive rule on judicial remedy).

Political questions doctrine

The preferable option seems to be that only genuinely political acts of CFSP cannot be subject to the Court’s substantial judicial review, although the Court should be able to monitor compliance with the procedural rules of the Treaty and compliance with fundamental human rights. This position is very similar to that expressed by the Commission in H, where it said that only sovereign acts of foreign policy cannot be scrutinised by the Court – without saying anything of formal control.

In H, the Court seemed to conclude that if there was any other reason for the which the Court should have jurisdiction, that reason takes precedence over the exclusion of Article 24, and then the Court does have jurisdiction. This is too broad an understanding of the Court’s powers.

In its judgment in Manufacturing Support & Procurement Kala Naft v Council, the CJEU ruled that it does not have jurisdiction on a CFSP provision which is not a restrictive measure against natural or legal persons pursuant to Article 275 TFEU, and the substantial result might be similar in Rosneft (par 85 AG opinion).

For the reasons explained above, the Court should accept the request on the preliminary ruling in Rosneft, but should then take the opportunity to draw a clear distinction: on one hand, (a) EU acts which are purely political and diplomatically sensitive acts of sovereign foreign policy; on the other hand, (b) all remaining CFSP decisions, all acts of implementation, and provisions of general application.

On (a), which I submit should be assessed on a case by case basis and on their substantial content: the Court should recognise it lacks power of judicial review. Those acts, determined with a “substance over form” rule (see Les Verts par 27; AG Wathelet seems to be taking this position in paras 49-50 of his opinion in Rosneft; see also Gestoras Pro Amnistía and Others v Council par 54; Elitaliana v Eulex Kosovo par 48-49) will have too indirect an effect on individuals (as the case law on Article 263(4) TFEU now stands)

Such acts also have such a discretionary content that courts should defer to the decision of the political actors who adopted them. The latter element, which American constitutional lawyers refer to as the “political question doctrine” is present in many jurisdiction (see par 52 AG Opinion in Rosneft): deference toward the so called “actes de gouvernement”. The Commission proposed this thesis in its written submission and at the oral hearing in Rosneft. The “political question doctrine” is the attitude of courts not to review issues which are inherently political, are best left to the discretion of the actor who took the decision, and are ultimately non-justiciable.

In the leading case on the issue, Baker v Carr, the US Supreme Court held that a question is eminently political if it presents some characteristics such as “a textually demonstrable constitutional commitment of the issue to a coordinate political department”, or “an unusual need for unquestioning adherence to a political decision already made”. While in some cases involving foreign policy decisions the need for adherence to a political decision is evident (ie the ECJ could hardly decide that the EU cannot prohibit commerce with certain Russian companies involved in Crimea at all), arguably the retention of CFSP provisions in the TEU, the preference for intergovernmental institutions in that domain, the scant role of the European Parliament in the decision-making process, not to mention the exclusion of the Court’s jurisdiction, all militate in favour of a strong constitutional preference for CFSP to be resolved by purely political departments. The doctrine could very well be embraced for the first time by the ECJ in deciding Rosneft.

On the other hand, as regards category (b), which includes the case of the “decision on staff management” in H, the Court should exercise its powers of judicial review.

Barnard & Peers: chapter 24

Art credit: The Economist, Peter Schrank

Preliminary references and investment tribunals: is the Luxembourg Court extending a helping hand?

Hannes Lenk, PhD Candidate at the University of Gothenburg

The relationship of arbitral tribunals with the Court of Justice of the European Union (CJEU) has been the subject of a long-lasting juridical struggle. The current position is as simple and pragmatic as it is controversial. Commercial arbitration tribunals are not considered to be a ‘court and tribunal of a Member State’ within the meaning of the Article 267 TFEU and, thus, unable to refer questions to the CJEU on matters of interpretation of EU law.  At the same time, it is an open secret that questions of EU law do arise during arbitration proceedings, and there is an inherent risk that tribunals get it wrong—at least sometimes. In commercial arbitration these shortcomings might be addressed through the indirect involvement of domestic courts and the CJEU at the recognition and enforcement stage of arbitral awards. A similar possibility might not exist in investment arbitration and for some time now the question of whether or not investment tribunals are entitled to request preliminary references from the CJEU has been simmering under the surface of a deeply politicised debate on investor-state dispute settlement provisions in currently ongoing negotiations for deep and comprehensive trade and investment agreements with, inter alia, Canada and the US. A recent opinion of Advocate General Wathelet might break new ground in this debate and prepare the field for future judicial dialogue.

Commercial arbitration: from Nordsee to Eco Swiss

'Article 267 TFEU is an important instrument for cohesion and coherence in the judicial system of the European Union (EU), including domestic courts as ‘ordinary courts of the EU legal order’ (Opinion 1/09, para. 80). By way of establishing a judicial dialogue, the preliminary reference mechanism guarantees that individuals have their rights under EU law enforced in domestic courts, and assures a uniform interpretation and application of EU law in all Member States. Notably, the decision to request a preliminary reference is generally within the discretion of domestic courts, which are obligated to refer questions only in limited circumstances, i.e. in instances where the case is pending before a domestic court of last instance.

Article 267

1. The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:

(a) the interpretation of the Treaties;

(b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union;

2. Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.

3. Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.

4. If such a question is raised in a case pending before a court or tribunal of a Member State with regard to a person in custody, the Court of Justice of the European Union shall act with the minimum of delay.'

However, Article 267 TFEU includes a significant procedural limitation. In order to to request a reference from the CJEU the judicial body must be covered by the concept of ‘any court or tribunal of a Member State’. The CJEU has historically interpreted this concept restrictively. In Dorsch Consult the CJEU clarified the characteristics that need to be taken into account. Accordingly, a ‘court of tribunal’ is any judicial body that exercises judicial functions, i.e. that is (a) established by law, (b) a permanent institution, (c) with compulsory jurisdiction, (d) whose procedure is inter partes, (e) applying rules of law, and (f) acts independent of other branches of government. Applying these criteria to a commercial arbitration tribunal, the CJEU subsequently declared in Nordsee that despite “certain similarities between the activities of the arbitration tribunal … and those of an ordinary court”, the tribunal in question was not a ‘court or tribunal’ within the meaning of the preliminary reference procedure.

Arbitral tribunals are, therefore, left without guidance on the interpretation of EU law where this becomes relevant during the arbitration proceedings. From an EU law perspective, the adverse effect of incorrect interpretation and application of EU law in commercial arbitration is mitigated by the indirect involvement of domestic courts, and by association the CJEU. Indeed, domestic courts play an important role in supporting the arbitral tribunal upon request, as well as in the recognition and enforcement of arbitral awards. In Eco Swiss the CJEU emphasized that domestic courts are generally required to assess the compatibility of arbitral awards with EU public policy and may request a preliminary reference from the CJEU to that end. The award in Eco Swiss was considered a violation of EU competition rules (now Article 101 TFEU), which, according to the CJEU, constitutes a ‘fundamental provision which is essential for the accomplishment of tasks entrusted to the [Union]’ (para. 36). The CJEU furthermore clarified that it is to be considered part of public policy in the meaning of Article V(1)(c) and (e), and II(b) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  Consequently, arbitral awards that are irreconcilable with EU public policy are unenforceable within the territory of the Member States under domestic and international law.

Investment arbitration: commercial arbitration in disguise or something else entirely?

This approach is open for much criticism, not least because the concept of EU public policy remains notoriously undefined. “In light of a constant referral of additional tasks upon the European Union over the last twenty years, it has become increasingly difficult to identify those provisions which may be regarded as fundamental for those tasks.” (Basedow, p. 373). Nonetheless, from an EU law perspective it appears to provide a pragmatic procedural solution that reserves the involvement of the CJEU and assures the application of EU law in domestic courts. Particularly in the area of investment arbitration it has been suggested that invoking EU public policy at the enforcement stage might prevent some of the most controversial awards from gaining legal effect within the EU legal order. But investment arbitration is in many ways different from commercial arbitration. The vast majority of proceedings is governed by the rules of the International Centre for Settlement of Investment Disputes (ICSID). Article 54 ICSID provides for the automatic recognition and enforcement of awards, excluding domestic courts from any involvement in the review of ICSID awards vis-à-vis public policy. To make matters worse, non-ICSID awards are not seldom enforced outside the territory of the respondent state. Enforcement of the controversial Micula award, for instance, is currently sought in the US.

Gaffney and Basedow have recently advocated the view that investment tribunals should be able to request references under Article 267 TFEU. It is in this context noteworthy that the CJEU in Nordsee conceded to the possibility that an arbitral tribunal might fall within the scope of Article 267 TFEU, provided that the tribunal derives its jurisdiction not exclusively from party autonomy of the disputing parties, but instead involves the exercise of state authority to the extent that it can be considered an institution of the state. This view was later confirmed in Ascendi, a request from the Tribunal Arbitral Tributário in Portugal. The CJEU observed that Portuguese law provides for the resolution of tax disputes through arbitration, which also regulates the functioning and constitution of the tribunal. “[The Tribunal’s] jurisdiction stems directly from the provisions of Decree-Law No 10/2011 and is not, as a result, subject to the prior expression of the parties’ will to submit their dispute to arbitration”, the CJEU concluded (para. 29). Not unlike the Tribunal Arbitral Tributário, investment tribunals are an alternative dispute settlement system provided for in law, i.e. the the underlying investment agreement, which constitute a “non-transient element of [the domestic] judicial system” (Basedow, p. 379-380).

The idea to construe investment tribunals as ‘court or tribunal’ for the purpose of Article 267 TFEU is not merely a scholarly endeavor to square the circle. There are signs from within the CJEU that this might present an acceptable solution to the problem of integrating investment tribunals in the EU legal order. In his recent Opinion in Genentech, a preliminary ruling from the Cour d’appel de Paris concerning the notion of EU public policy in the recognition and enforcement of arbitral awards, Advocate General Wathelet presented his well-balanced and carefully drafted view on the relationship of arbitral tribunals with the CJEU. On the outset the AG simply confirms well established case law along the lines of Nordsee and Eco Swiss.

'Referring to the system for reviewing the compatibility of international arbitral awards with EU law through the public policy reservation […] the Court has held that arbitral tribunals ‘constituted pursuant to an agreement’ are not courts of the Member States within the meaning of Article 267 TFEU. Consequently, they cannot refer questions for a preliminary ruling. It is therefore for the courts of the Member States, within the meaning of Article 267 TFEU, to examine, if necessary by referring a question for a preliminary ruling, the compatibility of (international or domestic) arbitral awards with EU law where an action is brought before them for annulment or enforcement, or where any other form of action or review is sought under the relevant national legislation.'

Much more powerful considerations are hidden in the footnotes. Here the AG addresses the situation of investment tribunals explicitly to which, in his view, different considerations should apply.

Footnote 34

'Based on this case-law, the arbitral tribunals hearing cases within the framework of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID) could be regarded as being able to refer questions to the Court for a preliminary ruling. See, to that effect, [Basedow], p. 376 to 381. Since the number and size of investment arbitrations raising questions on the application of EU law are increasing, particularly in the field of State aid, the possibility for arbitral tribunals to refer questions for a preliminary ruling could help to ensure the correct and effective implementation of EU law.'

Indeed, these remarks are merely obiter dicta and the CJEU is unlikely to address any of this in the final judgment, other than—probably—following the AG on substance. The opinion, nonetheless, sends a strong signal to investment tribunals, i.e. an explicit invitation to request preliminary references from the CJEU on matters of interpretation of EU law.

Helping hand or last straw

In the best of cases AG Wathelet’s opinion would be construed as a helping hand from Luxembourg to find an amicable solution to the current conflict, based on judicial dialogue and mutual comity. However, investment tribunals have thus far refused to engage with the CJEU on questions of EU law. Or put differently, it does not appear as if investment tribunals consider EU law to be of actual relevance to arbitration. In Oostergetel and Laurentius, for instance, the tribunal acknowledged that there is “absence of any conclusive position of the [CJEU]” on the relevant issues of EU law, but subsequently rejected the respondent’s request to refer a question to the CJEU with the help of a domestic court (para. 109). The investment tribunal in Micula rejected concerns raised by the Commission to the effect that the award, if rendered, were unenforceable under EU state aid law; plainly ignoring the resulting conflict.

Gaffney suggested that a lack of guidance on questions of EU law would prompt a domestic court’s responsibility under Article 267 TFEU. However, even domestic courts might be cautious of involving requests for preliminary references in investment arbitration cases. When the award on jurisdiction in Achmea was challenged in May 2012 the Higher Regional Court of Frankfurt decided that, while EU law was raised during the arbitration, the dispute concerned in fact the interpretation of the arbitration clause in the investment agreement and as such fell outside the scope of interpretation of EU law. Ultimately, the final award was challenged before the same court in December 2014. The Frankfurt court recognized that the compatibility of arbitration clauses in intra-EU investment agreements with the Treaties is much debated but refused to refer the question to the CJEU. These cases reflect anything but excitement about the involvement of the CJEU in the arbitration process. Rather than jumping on the invitation from Luxembourg to refer questions, AG Wathelet’s opinion runs the risk of being perceived as a last straw for investment tribunals that are ultimately expected to accept the dominance of EU law and the jurisdiction of the CJEU.

Remaining challenges

However, even if investment tribunals refer questions to the CJEU in the future, a few questions still remain. First, courts or tribunals against whose decision there is no judicial remedy are not only entitled, but, in accordance with Article 267(3) TFEU, obligated to refer questions on the interpretation and the legality of EU law. Although domestic arbitration laws may provide for investment awards to be set aside, it does not prevent the award from being enforced under Article (1)(e) of the New York Convention in another state. Article 52 ICSID provides for an internal procedure for the annulment of ICSID awards on limited grounds, which effectively excludes the involvement of domestic courts. Considering, therefore, that an investment award cannot be appealed or permanently set aside on the basis of wrongful interpretation of EU law, investment tribunals might fit squarely into Article 267(3) TFEU.

The investment court, which was recently incorporated in the Comprehensive Economic and Trade Agreement with Canada (CETA) and the EU-Vietnam FTA, and which is proposed in Transatlantic Trade and Investment Partnership with the US (TTIP), raises similar concerns. Decisions of the Tribunal may be appealed before the Appeals Tribunal, inter alia, on grounds of the wrongful appreciation of domestic law (as a matter of fact). Albeit that the first instance Tribunal is relieved from any obligation under Article 267(3) TFEU, it ultimately shifts this burden onto the Appeals Tribunal. The more fundamental problem in this regard is that the EU Treaties cannot actually obligate investment tribunals to refer questions to the CJEU.

Secondly, decisions of the CJEU under the preliminary reference procedure are binding on the referring court. Without explicit safeguards in the investment agreement, however, investment tribunals are under no obligation to follow the interpretation of the CJEU (Gaffney, p. 13). There is no obvious reason why investment tribunals would refer a question to the CJEU just to subsequently ignore the answer provided. Be that as it may, these two above reservations are likely to affect the essential characteristics of Article 267 TFEU, and the powers conferred thereunder on the CJEU. According to well-established case law of the CJEU, this would adversely affect the autonomy of the EU legal order and consequently violate the Treaty (Opinion 1/09, para. 77-79). An interpretation of Article 267 TFEU that invites arbitral tribunals to refer questions but neither obligates them to do so under Article 267(3) TFEU nor renders answers of the CJEU binding on the referring investment tribunal would, thus, be incompatible with the Treaties.

Third, and perhaps most problematic, are denial of justice cases where the interpretation of domestic law might itself be the reason for an investment dispute. It would be bizarre scenario, indeed, for investment tribunals to request a preliminary ruling from the CJEU on a domestic court’s interpretation of EU law, particularly if the CJEU was involved during the domestic proceedings. Under the EU-Vietnam FTA and CETA, such a scenario could be captured by manifest arbitrariness (e.g. Article 8.10(2)(c) CETA). Gaffney points out a few other challenges such as the steadily growing influx of preliminary references that is already creating a backlog of cases, and which is likely to extend the arbitration process for several month, if not years (p. 14).

Conclusions

Although we are unlikely to see changes in the approach of the CJEU to commercial arbitration anytime soon, AG Wathelet’s opinion amounts to a strong endorsement of the view that investment tribunals are an entirely different story. Whether or not the preliminary reference procedure paves the way for much needed judicial comity between Luxembourg and investor-state tribunals is, however, still very much an open question. 

Barnard & Peers: chapter 10

Photo: ICSID headquarters, Washington DC

Photo credit: icsid.worldbank.org

Libel law, EU law and the ECHR: A Comment on Arlewin v. Sweden

Athanassios Takis: PhD, Special Adviser to General Secretariat of Greek government

The judgment of the European Court of Human Rights of 1 March 2016 in the case of Arlewin v. Sweden concerns the (mis)application of EU Regulation 44/2001 (which determines which Member State’s courts have jurisdiction over civil and commercial cases) on behalf of the Swedish courts and illuminates the limits of the ‘acte clair’ doctrine (the principle that final national courts do not always have to send questions about EU law to the CJEU).

The Arlewin judgment

The facts of the Arlewin case, which gave the ECHR the chance to decide on an issue concerning the application of EU law have as follows: The applicant, Raja Arlewin, is a Swedish national, a self-employed businessman, who attempted to bring private prosecution proceedings and a claim for damages for gross defamation against X. X is a Swedish national, the Chief Executive Officer of a television company and anchor-man of a popular show in which Mr. Arlewin was accused of, among other things, involvement in organised crime in the media and advertising sectors. The television programme had been produced in Sweden, in the Swedish language and was sponsored by Swedish advertisers. The programme was sent from Sweden via satellite to a London-based company (Viasat Broadcasting UK Ltd), which broadcast and transmitted it to viewers in Sweden.

In a preliminary ruling the Stockholm District Court declined jurisdiction over Mr. Arlewin’s claims because the programme had not originated from Sweden. The court applied the relevant Swedish law, mainly the Constitutional law on freedom of expression, and followed the case law of the Swedish Supreme Court. The Court of Appeal upheld this decision, finding that Mr. Arlewin had not established that the decisions concerning the content of the programme had been taken in Sweden, a fact which was a prerequisite for the jurisdiction of Swedish courts. It contested that the defamation claim should be decided by the courts of the United Kingdom where the seat of the company transmitting the programme is.

Mr. Arlewin appealed, alleging that the Swedish courts’ position ran counter to EU law and specifically to the Brussels I Regulation (44/2001), as interpreted by the Court of Justice of the European Union (CJEU). The Regulation establishes the principle that in cases relating to liability for wrongful acts, jurisdiction is to be exercised by the courts of the place where the harmful event had occurred and, according to Mr. Arlewin, in his case the harmful effects of his defamation had occurred in Sweden. He also requested that a question concerning the interpretation of the Brussels I Regulation be referred by the national court to the CJEU for a preliminary ruling. The Swedish Supreme Court rejected Mr. Arlewin’s referral request, finding no reason to request a preliminary ruling from the CJEU, and rejected the case.

Since Mr. Arlewin was not satisfied with this, he brought an application against the Kingdom of Sweden before the ECtHR claiming that he had been deprived of effective access to court and that the State had failed to provide him with sufficient protection against allegations that violated his right to privacy. In its judgment of 1 March 2016 the ECtHR notes that the core issue in this case is whether the Swedish State violated the applicant’s rights through the courts’ decisions to dismiss the defamation suit on grounds of admissibility. The Court examined the relevance to Mr Arlewin’s case of two instruments adopted within the framework of the European Union, namely the EU Audiovisual Media Services Directive (2010/13) and the Brussels I Regulation.

The Court rejected the Government’s argument that the Audiovisual Media Services Directive determined the country of jurisdiction when an individual initiated a defamation claim. In particular the Directive. More precisely Article 28, which addresses the situation where a person’s reputation and good name have been damaged in a programme, sets out only the right of reply; it does not deal with defamation proceedings or a related claim for damages. The Court therefore considered that the Audiovisual Media Services Directive did not regulate the matter of jurisdiction when it came to defamation proceedings arising out of the content of a transborder programme service.

Rather, jurisdiction under EU law was regulated solely by the Brussels I Regulation. Under Articles 2 and 5 of that Regulation, it appears prima facie that both the United Kingdom and Sweden had jurisdiction over the subject matter of Mr. Arlewin’s case. On the one hand, X is domiciled in Sweden, and, on the other, Viasat Broadcasting UK Ltd is registered, and thus domiciled, in the United Kingdom (Article 2 gives jurisdiction to the country of domicile of the defendant). Furthermore, Article 5 gives jurisdiction to the place where the harmful event occurred, and it could be argued that the harmful event had occurred in both countries, as the television programme had been broadcast from the United Kingdom and the alleged injury to Mr. Arlewin’s reputation and privacy had manifested itself in Sweden. The programme had been produced in Sweden in the Swedish language, was backed by Swedish advertisers, was to be shown live to an exclusively Swedish audience, while the alleged harm to Mr. Arlewin’s reputation had occurred in Sweden. With the exception of the technical detail of satellite reception transmission, the facts of the case were entirely Swedish in nature.

Therefore, the Court noted that the content, production and broadcasting of the television programme as well as its implications had very strong connections to Sweden and very little to the United Kingdom. Under those circumstances the Swedish State had an obligation under Article 6 of the Convention to provide Mr. Arlewin with an effective right of access to court. The Swedish courts’ interpretation of both the Swedish and the EU law had led to a situation where the alleged victim of the defamation could not hold anyone responsible under Swedish law and could only find his way to a court in the UK. Requiring Mr. Arlewin to take proceedings before the UK courts could not be said to have been an equally viable and reasonable alternative, as far as the practical and economic obstacles to initiate proceedings abroad would render the remedy inefficient. The Swedish courts, by dismissing Mr. Arlewin’s action without examination of the merits and by referring to the alternative of initiating proceedings in another country, had impaired the very essence of his right of access to court and consequently breached Article 6 of the ECHR.

Comment

This is an ECHR judgment which directly examines the application of the EU acquis by the Member States’ courts and indirectly touches upon the issue of these courts’ obligation to apply for a preliminary ruling by the CJEU. As far as the first matter is concerned, the ECtHR clarifies the scope ratione materiae of the EU's Audio-visual Media Services Directive as not regulating every issue of substance and jurisdiction that may arise in relation to the broadcast of a television programme. The Directive only regulates a person’s right to reply to claims concerning him or her and not his or her right to initiate civil or criminal proceedings before national courts for his or her defamation.

The Court further addresses the issue of the provisions of the Brussels I Regulation and their impact on the right to a fair trial. In underlining the importance of the systematization of solutions ensured by the Regulation and the criterion of ‘strong connections’ of a dispute to a country as a jurisdictional basis (article 5 paragraph 3 of the Regulation), the judgment affirms that in general the Regulation observes the right to a fair trial and draws a fair balance between diverging interests. The special jurisdiction in matters relating to tort establishes the jurisdiction of the courts of the place where the harmful event occurred or may occur (locus damni) and constitutes a comprehensive derogation from the main rule set in Article 2. 

The ratio of this provision rests on the indissoluble ties between the component parts of liability with the evidence and of the conduct of the proceedings and the causal connection between the damage and the event from which that damage originates. That is why litigation before an alternate forum abroad would be too burdensome for the applicant and a violation of his right to enjoy practical and effective access to a court. The Court of Strasbourg relies upon the findings of the Luxembourg Court and reaffirms the existence of a direct dialogue between the two jurisdictions, with the first affirming the findings of the second in a noteworthy manifestation of its endeavour to choose -whenever possible- an interpretation of the ECHR that facilitates the proper application of EU law by national authorities.

As for the second issue at hand, namely the obligation to address a question to the CJEU, the Court doesn’t explicitly address this issue. However, it seems rather apparent that had the Swedish courts applied for a preliminary ruling, the CJEU would have affirmed that the referring courts were competent to examine the defamation claims of Mr. Arlewin by virtue of Article 5 paragraph 3 of the Brussels I Regulation. This is clearly the outcome of the CJEU judgments cited and of the paragraphs 36-39 of the ECtHR judgment concluding that ‘Brussels I Regulation requires EU Member States to make their courts available if jurisdiction is confirmed, [as] the ECJ noted in Kongress AgenturHagen GmbH v. Zeehaghe BV that the Regulation does not govern matters of procedure. This means that a court can reject a case for reasons relating to domestic procedural rules as long as the national procedural law does not impair the effectiveness of the Brussels I Regulation’.

However, the Swedish courts applied the Brussels I Regulation in a manner inconsistent with EU law and in considering the jurisdictional provisions to be an acte clair, rejected the request of the applicant. According to Article 267 of the TFEU, when questions on the interpretation or validity of EU law are raised in a case pending before a court of a Member State against whose decisions there is no judicial remedy under national law, that court is required to bring the matter before the Court of Justice of the European Union and apply for a preliminary ruling. The CJEU in the Cilfit and Others case has established three limited exceptions to this rule. Under the third of these exceptions, a national court against whose decisions there is no judicial remedy doesn’t have to apply to CJEU for a preliminary ruling when it is convinced that no doubt arises as the meaning or the validity of the law to be applied is clear and unequivocal (acte clair) and therefore, immediately comprehensible.

A court or tribunal adjudicating at last instance may take the view that, although the lower courts have interpreted a provision of EU law in a particular way, the interpretation that it proposes to give of that provision, which is different from the interpretation espoused by the lower courts, is so obvious that there is no reasonable doubt as to its meaning. The Court has also made clear that the existence of such a possibility must be assessed in the light of the specific characteristics of EU law, the particular difficulties to which the interpretation of the latter gives rise and the risk of divergences in judicial decisions within the European Union (see judgments in Intermodal Transports, para 33, and in João Filipe Ferreira da Silva e Brito and Others, para 39, and discussion here and here). 

However, the Court in the latter judgment found that, in cases where a question of EU law has given rise to a great deal of uncertainty on the part of many national courts, the courts of last instance should deem themselves obliged to make a reference to the Court of Justice. A persistent uncertainty strongly indicates not only that there are difficulties of interpretation, but also that there is a real risk of divergences in judicial decisions within the European Union. Should a failure on behalf of the national court to observe this duty imposed by Article 267 TFEU cause damages to individuals (see Köbler), the Member States should either set aside the court’s decision or, where this is impossible due to the principle of res judicata, compensate the individual for infringement enacted by the court of last instance of its EU law obligation (João Filipe Ferreira, para 60).

The relationship between the refusal to request a preliminary ruling and the violation of the right to a fair trial has been the subject of two other important judgments delivered by the ECtHR. At the same time, a third application is still pending (Repcevirág Szövetkezet v. Hungary, Application no. 70750/14 vii Application no. 17120/09). In the case of Dhahbi v. Italy the Court said that refusing a request for a preliminary ruling, while providing no reasoning at all for the refusal, constitutes a breach of Article 6 ECHR. In the more recent judgment of 21 July 2015 in the case of Schipani and others v. Italy (discussed here), the Italian Cour de cassation did not make any reference whatsoever to whether the issue at hand was an acte clair and therefore, justified an exemption from the rule that renders the preliminary reference obligatory for the last instance courts. According to the ECtHR ‘it is therefore not clear from the reasoning of the impugned judgment whether that question was considered not to be relevant or to relate to a provision which was clear or had already been interpreted by the CJEU, or whether it was simply ignored’. The Court of Strasbourg again reached the conclusion that the applicants’ right to a fair trial had been breached.

Examining the cases of Dhahbi, Schipani and Arlewin of the ECtHR and João Filipe Ferreira of the CJEU together, indicates that the Courts of Luxembourg and Strasbourg have restricted the criteria of the application of the doctrine of acte clair. The national courts have to accurately reason their decisions not to apply for a preliminary ruling based on their unequivocal understanding of the EU law. The combination of the Arlewin and João Filipe Ferreira judgments shows that a breach of EU law resulting from the misapplication by the highest national courts of Article 267 TFEU may entail the responsibility of the Member State to compensate the individuals at the same time for both their material damages (a EU law consequence in line with the Francovich and Köbler rulings) and their non-pecuniary damages (a ECtHR consequence in line with the Arlewin judgment).

Barnard & Peers: chapter 9, chapter 10

Photo credit: legalthrillernovels.com