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 CJEU and the rule of law in Poland: Note on the Polish Supreme Court preliminary ruling request of 2 August 2018

Alicja Sikora, Chair EU Law, Jagiellonian University

As Eugene Ionesco put it, you can only predict things after they have happened (Rhinoceros, 1959).

On Thursday the Polish Supreme Court submitted to the European Court of Justice a preliminary ruling request under Article 267 TFEU. While doing so it also suspended the application of a Polish law forcing the early retirement of Supreme Court justices who are above 65 years old, including the President of the Supreme Court whose mandate is guaranteed by the Polish Constitution. This is a challenge to the Polish government’s changes to the judiciary, on the grounds that it violates the rule of law.

There were many preliminary ruling requests in the course of the history of EU law from van Gend den Loos, Costa/Enel, Nold, Francovich, Defrenne, Akerberg Fransson, Melloni, Pringle, Gauweiler and many others which shaped a ‘constitutional order of States’. Judicial dialogue established under Article 267 TFEU has been a cornerstone for the development of the EU legal order.

Thursday’s request might, however, not constitute just a major doctrinal novelty. The Polish Supreme Court stepped into the path of active claim for rule of law, which is not only a common principle to Member States, but also expression of the axiology on which EU is founded as expressed in Article 2 TEU. Polish judges seek advice which will in a way sans precedent engage the Court of Justice in the legal and political battle for independent justice in Poland. It is a symbolic proof of how much Europe is needed and how crucial and fragile the enforcement of common values turns to be.

The Court of Justice has already prepared the foundations of such action in recent cases such as C-64/16, Associação Sindical dos Juízes Portugueses (on the independence of Portuguese judges in the context of austerity, discussed here) and C‑216/18 PPU, LM (on the recognition of Polish European Arrest Warrants in light of rule of law concerns), where Article 19 TEU (which sets out the basics of the CJEU’s role) was linked to the protection of the rule of law. Consequently, it is, according to the Court, for the national courts and tribunals and the Court of Justice to ensure the full application of EU law in all Member States and judicial protection of the rights of individuals under that law. It follows that every Member State must ensure that the bodies which, as ‘courts or tribunals’ within the meaning of EU law, meet the requirements of effective judicial protection, which include, in particular, the independence and impartiality of those courts.

In the present case, the Polish Supreme Court referred to the Court of Justice five questions which relate mostly to the interpretation of the principle of judicial independence in the light of EU primary law (Articles 2, 4(3), 19 (1) TEU as well as Article 47 of the Charter of Fundamental Rights). Other questions focus on the interpretation of Directive 2000/78, which includes the principle of non-discrimination based on age. The referring judges also applied for the application of the expedited treatment of the case under Article 105 of the Rules of Procedure of the Court of Justice.

Unsurprisingly, it is the suspension of the application of the national law which caused fierce criticism of the highest Polish authorities. Yet, Polish Court acted in perfect conformity with the classic case-law of the Court concerning interim measures (Factortame, Zukerfabrick, Atlanta) whereby national courts suspend application of a national measure which represents a risk of breach of EU law, pending the decision of the CJEU clarifying whether there is a conflict between national law and EU law (or, in some cases, on whether an EU law being challenged in the national courts is invalid).

The underlying question is whether the CJEU is willing to address the rule of law dispute in Poland directly, via use of the preliminary ruling procedure, or leave the issue to the EU’s political authorities, which are considering warning or sanctioning Poland under the process set out in Article 7 TEU. The Polish Supreme Court is potentially opening a new chapter in the enforcement of EU law and values.

Barnard & Peers: chapter 6, chapter 9

Photo credit: France 24

UK nationals and EU citizenship: References to the European Court of Justice and the February 2018 decisions of the District Court, Amsterdam

Professor Anthony Arnull, University of Birmingham, UK

The decision of 7 February 2018

The interim decision of the District Court, Amsterdam, of 7 February 2018 caused quite a stir among Brexit-watchers. The case concerned promised not only to be the first reference to the Court of Justice on Brexit but also to raise one of the most fundamental questions posed by the UK’s decision to withdraw from the EU: whether, in the absence of an agreement to the contrary, withdrawal would necessarily mean that UK nationals would lose their EU citizenship and the rights that status gave them.

The proceedings had been brought by seven claimants. The first five were UK nationals resident in the Netherlands. The sixth and seventh were associations. One, Brexpats, had been established to protect the interests of UK nationals affected by Brexit. Its claim was found to be inadmissible. The other, CADS, had been established to promote Anglo-Dutch trade relations. A challenge to the admissibility of its claim was rejected. The defendants were the State of the Netherlands and the Municipality of Amsterdam. The case was heard by Judge F B Bakels, a former Vice President of the Netherlands Supreme Court who, it is understood, had chosen to devote a short period of time before his retirement to hearing first instance cases.

The claimants were seeking a ruling that, should UK citizens retain EU citizenship after Brexit, the defendants would respect the attendant rights of the first five claimants. In particular, they asked the court to rule that the defendants should not agree to implement any agreement between the UK and the EU27 which failed to guarantee those rights. Such a ruling may not strictly speaking be necessary, since the withdrawal agreement, as an act of secondary EU law, could not alter the rights conferred by citizenship of the Union, which derive ultimately from the TFEU. In practice, however, a ruling in the terms sought might avoid the need for further litigation on the point.

Should the withdrawal of the UK from the EU be found to remove from UK citizens their status as citizens of the EU (as the wording of Article 20(1) TFEU would suggest), the claimants sought an order requiring the Netherlands to carry out an individual assessment of the compatibility with the principle of proportionality of any decision to restrict rights deriving from EU citizenship; ordering the Municipality to give effect to the individual assessments carried out; prohibiting the State from insisting that one of the claimants should relinquish her UK nationality; and ordering the Municipality and the State to facilitate multiple nationality for a person seeking Netherlands nationality within two weeks of the court’s ruling. The claimants argued that these claims required an authoritative ruling on the effect of Article 20 TFEU. They had therefore drafted a number of questions with a view to having them referred to the Court of Justice for a preliminary ruling.

The claimants stated that they had all made use of the fundamental freedoms to reside and work in another Member State and that the uncertainty surrounding their future legal position was already causing them harm. In organising their lives, they had to take account of the distinct possibility that the Netherlands might after Brexit classify them as third country nationals and require them to leave without conducting an individual assessment of their circumstances. That threat meant that they had to decide now whether to seek citizenship of the Netherlands. This was an expensive process and might have consequences for their right to retain UK nationality and therefore for their continuing right to visit the UK. There were also questions about the status of partners who might or might not have UK nationality; parents of UK nationality who had children born in the Netherlands; and UK nationals in the Netherlands whose work made it essential for them to continue to be able to travel freely throughout the EU27.

The judge ruled that, in order to assess these claims, it was necessary to establish whether loss of the status of nationality of a Member State automatically resulted in loss of citizenship of the Union or whether considerations of fundamental, acquired and minority rights and solidarity between EU citizens might require that outcome to be qualified. He therefore announced his intention to submit two questions to the Court of Justice:

Whether, in the absence of an agreement on the matter in the Brexit negotiations, UK withdrawal from the EU would automatically deprive UK nationals of their status as EU citizens and of the rights and freedoms attaching thereto;

If not, whether those rights and freedoms were subject to any conditions or restrictions.

The parties were given the right to comment on the proposed questions within a week of the judgment. They were expressly told they could not comment on any other aspect of the judgment or on the judge’s intention to refer questions to the Court of Justice.

The decision of 20 February 2018

It therefore seemed likely that the Court of Justice would be given the opportunity to rule on issues of profound significance for the scope of EU citizenship and the course of the Brexit negotiations. However, on 20 February 2018, Judge Bakels granted the State and the Municipality permission to appeal to the Court of Appeal, Amsterdam, against his earlier ruling. The appellants argued that the uncertainty of which the claimants were complaining could not be resolved by the proposed questions because their legal position depended on the content of the withdrawal agreement. This was not entirely correct because, as noted above, the provisions of the TFEU on citizenship will take precedence over the terms of the withdrawal agreement. The appellants rejected the claimants’ argument that they were already suffering harm and asserted that there was no real dispute between the parties.

Appearing to have a change of heart, Judge Bakels decided to depart from the normal rule laid down by the Netherlands Code of Civil Procedure that an appeal could be lodged only at the same time as the final judgment. He acknowledged that this did not in itself suspend the decision to refer to the Court of Justice. However, he observed that it would be contrary to due process for a reference to be made at this stage and decided that this should not now be done. It would be for the Court of Appeal, Amsterdam, to decide whether a reference should be made and, if so, what questions should be referred.

Challenging reference decisions

There is a considerable body of case law on the circumstances in which a decision of a national court to make a reference to the Court of Justice may be challenged before a superior national court. It may seem surprising that such an appeal is possible. In Joined Cases C-332/92, C-333/92 and C-335/92, Eurico Italia, for example, the Court of Justice pointed out (para 17) that

‘it has consistently held that it is solely for the national courts before which actions are brought, and which must bear the responsibility for the subsequent judicial decision, to determine in the light of the special features of each case both the need for a preliminary ruling in order to enable them to deliver judgment and the relevance of the questions which they submit to the Court.’

Moreover, the Court made it clear in Case 166/73 Rheinmühlen v Einfuhr- und Vorratsstelle Getreide that a national court cannot be deprived of its power to make a reference by the rulings of superior national courts. Indeed, in that case Advocate General Warner argued (at pp. 43-44) that ‘national legislation cannot effectively provide for a right of appeal against an order of a lower Court referring a question to this Court.’ The discretion conferred on lower national courts by what is now Article 267 TFEU, he said, was exercisable at any stage of proceedings before them and could not ‘be fettered by any rule or provision of national law’ (at p. 47).

The view of Advocate General Warner was not initially followed by the Court. In Case 146/73 Rheinmuhlen-Düsseldorf (para 3), the Court ruled:

‘in the case of a court against whose decisions there is a judicial remedy under national law, Article [267] does not preclude a decision of such a court referring a question to this Court for a preliminary ruling from remaining subject to the remedies normally available under national law.’

The Court added: ‘Nevertheless, in the interests of clarity and legal certainty, this Court must abide by the decision to refer, which must have its full effect so long as it has not been revoked.’

In 2008, that approach was substantially modified in Case C-210/06 Cartesio. In that case, the Court of Justice declared (paras 95 and 96):

‘Where rules of national law apply which relate to the right of appeal against a decision making a reference for a preliminary ruling, and under those rules the main proceedings remain pending before the referring court in their entirety, the order for reference alone being the subject of a limited appeal, the autonomous jurisdiction which Article [267 TFEU] confers on the referring court to make a reference to the Court would be called into question, if – by varying the order for reference, by setting it aside and by ordering the referring court to resume the proceedings – the appellate court could prevent the referring court from exercising the right, conferred on it by the [TFEU], to make a reference to the Court.

In accordance with Article [267 TFEU], the assessment of the relevance and necessity of the question referred for a preliminary ruling is, in principle, the responsibility of the referring court alone, subject to the limited verification made by the Court in accordance with the case-law… Thus, it is for the referring court to draw the proper inferences from a judgment delivered on an appeal against its decision to refer and, in particular, to come to a conclusion as to whether it is appropriate to maintain the reference for a preliminary ruling, or to amend it or to withdraw it.’

The Court’s ruling in Cartesio effectively made judgments of superior courts on the appropriateness of a reference advisory only. That outcome might in some cases be incompatible with the national court hierarchy. In the Lady & Kid case (Order of 11 February 2010), the Danish Supreme Court therefore ruled that references made by lower Danish courts should no longer be subject to appeal. (See M Broberg and N Fenger, Preliminary References to the European Court of Justice (OUP, 2nd ed, 2014) 329-330; M Broberg and N Fenger, ‘Preliminary references as a right: but for whom? The extent to which preliminary reference decisions can be subject to appeal’ (2011) 36 European Law Review 276.) Similarly, in a decision of 30 March 2010, the Belgian Cour de Cassation declared an appeal brought against a reference by a lower court inadmissible (see K Lenaerts, I Maselis and K Gutman, EU Procedural Law (OUP, 2014, 81). The same conclusion was reached by the Irish Supreme Court as long ago as 1983: see Campus Oil v Minister for Industry and Energy [1984] 1 Common Market Law Reports 479; D O’Keeffe, ‘Appeals against an order to refer under Article 177 of the EEC Treaty’ (1984) 9 European Law Review 87.

It should be noted, however, that Cartesio does not apply unless it is only the decision of the lower court to make a reference that is the subject of an appeal and where the main proceedings therefore ‘remain pending before the referring court in their entirety’ (para 98). Thus, in Case C-525/06 Nationale Loterij, the Court held that there was no need to reply to a reference made by a court before which the case concerned was no longer pending, having been brought in its entirety before a higher court. Responsibility for ensuring that the outcome was consistent with the requirements of Union law in such circumstances belonged to the latter court.

Implications for the Amsterdam proceedings

What are the implications of the case law briefly summarised above for the proceedings brought before the District Court, Amsterdam? It will be noted that no reference has so far been made in those proceedings. It would therefore seem to follow that the argument that a reference should be made will need to be repeated before the Amsterdam Court of Appeal.

The question whether an appeal could be brought against a decision of a national court not to make a reference was considered by the Danish Supreme Court in Lady & Kid. It was held there that this remained possible and that, if the appellate court decided that a reference should be made, that ruling would be binding on the lower court. However, O’Keeffe (above, p103) argues persuasively that ‘[t]he reference in a case where the appellate court finds it necessary should be by order of the appellate court, otherwise the discretion of the lower court under Article [267] is directly violated...’ This appears to have been the view taken by Judge Bakels in his decision of 20 February 2018.

The grounds of appeal put forward by the Netherlands Government are varied. On the central issue of the effect of Article 20 TFEU, the Government asserts that this provision is acte clair and rejects the judge’s reasoning on acquired rights. A national court might easily conclude that these questions at least should be referred to the Court of Justice, provided it did not accept the argument of the Netherlands Government that the case is artificial or contrived.

As the Court explained in Case C-62/14 Gauweiler v Deutscher Bundestag (para 25),

‘…questions concerning EU law enjoy a presumption of relevance. The Court may refuse to give a ruling on a question referred by a national court only where it is quite obvious that the interpretation, or the determination of validity, of a rule of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it…’

This makes it necessary for the national court to ‘give at least some explanation’ of why it has chosen the EU provisions of which it is requesting an interpretation (Case C-370/12 Pringle, para 84).

The claimants in the case under discussion have given plausible explanations of the range of ways in which the uncertainty surrounding their status is causing them direct and immediate harm. Even if the claims of only one of the claimants were considered credible, that would be enough to justify a reference to the Court of Justice. In his first ruling, the judge was satisfied that there was in the circumstances ‘no question of a hypothetical or notional dispute’. The questions he decided to refer to the Court were based on a detailed examination of the legal background and included extensive analysis of the case law of the Court. It therefore seems unlikely that the Court would refuse to give a ruling if it were asked to do so.

It is not clear why Judge Bakels departed from the normal rule by permitting an appeal to be brought at the interim stage and changed his mind about the desirability of a reference. If the case were none the less to reach the Court of Justice by way of a reference from either the District Court or the Court of Appeal, it would present the Court of Justice with a welcome opportunity to clarify the scope of citizenship of the Union. This would enable the Brexit negotiations to proceed on the basis of a correct understanding of the law and provide a degree of certainty to current citizens of the Union whose interests are in danger of being overlooked.

Barnard & Peers: chapter 27

Photo credit: DutchReview

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