Syrian Refugees in Europe: what’s happening?

The following is the text of remarks made by our Dr Justin Borg-Barthet at a panel discussion organised by the Aberdeen University Yad’am Society on 6 February 2017.

Introductory remarks

To begin with, it is worth considering why we in Europe should be concerned about the Syrian refugee crisis.  Syria, after all, is not a European state and Syrians do not traditionally consider Europe to be their most immediate cultural hinterland.  It is arguable, therefore, that Syria and Syrian refugees are not European problems.

But let’s be clear that since the end of the Second World War, at least, we have all embraced the principle of a common humanity.  This is not merely a political statement, but is a principle entrenched in international law – like the 1951 Refugee Convention – and in the human rights law of the European Union and the European Convention on Human Rights (ECHR).

In the spirit of a broader humanity, I will not confine my comments to matters solely pertaining to the Syrian crisis.  That crisis is simply the most recent in a series of developments which have seen the European Union fall short of its humanitarian and human rights obligations in respect of refugees and asylum seekers.  It illustrates, in stark terms, an ongoing systematic and systemic problem in the EU’s relations with its neighbourhood.

In these brief remarks, I will address two main points.  First, I wish to highlight a failure to comply with obligations.  Secondly, I will consider briefly the constitutional policy implications of this failure, and make modest recommendations about how the Union could seek to address persistent problems.

Humanitarian and human rights obligations

EU human rights law has come a long way since the first steps towards European integration in the 1950s.  This is most clearly seen in recent judgments of the Court of Justice of the European Union (CJEU) regarding relocation of asylum seekers.  In the NS case, Afghan asylum seekers in the UK were to be returned to Greece, which was their point of entry into the EU.  Under the Dublin Regulation, Greece was responsible for processing the asylum claim.  It was found, however, that the applicants’ right to be free from inhuman and degrading treatment would be at risk due to systemic problems in Greece.  It followed that the UK could not return the asylum seekers.

The decision of the CJEU is, of course, to be applauded.  It demonstrated a shift in emphasis from the rights of states to those of individuals.  However, that judgment did nothing to alter the facts on the ground for most asylum seekers in Europe.

Reception conditions

Greece, Italy and Malta are the main ports of entry for refugees and asylum seekers from Africa, the Middle East and further afield.  Each of those states has been found to be in breach of the European Convention on Human Rights due to their inadequate treatment of refugees (e.g. M S S v Belgium and Greece (2011) 53 EHRR 2; Aden Ahmed v Malta ECHR App No 55352/12 (23 July 2013); Hirsi Jamaa v Italy (2012) 55 EHRR 21).  In particular, reception conditions have been found to breach the prohibition of the right to liberty (due to forced detention) and, consequently, the prohibition of torture (due to the adverse effects of detention on mental health).

The problems in these three states are compounded by the fact that they bear the brunt of responsibility for dealing with migration to the EU.  Whatever lofty declarations are made in the north and west of Europe, and despite images of hundreds of people trekking across a continent, the fact remains that pressures are concentrated in a small number of member states, which brings us to another problem of so-called burden sharing.

Burden sharing

A number of EU member states have long argued that there should be a system of compulsory burden sharing.  In other words, the responsibility for hosting and processing asylum seekers should be shared between the Member States rather than being concentrated in border-states.  The Geneva Convention arguably requires burden sharing as a matter of international law.  EU law itself is founded on the principle of solidarity between states and people.

But still, wealthier states which are geographically insulated from the crisis have resisted compulsory burden sharing.  Instead, they initially accepted a voluntary system.  Latterly, a system of agreed relocation has been put into place, but the Member States have been very slow in taking any practical steps to ensure that pressures are distributed.

This is important to member states which face significant financial and social burdens.  And because of those burdens, it is also important to asylum seekers.  No member state is able single-handedly to accommodate and welcome the numbers that have been crossing the Mediterranean Sea.  In the absence of collective action, asylum seekers remain vulnerable to the inadequacies of ill-equipped states.

Relocation to third countries

Following repeated failures in seeking compulsory burden-sharing within Europe, southern EU member states have changed their strategies.  Rather than advocating relocation of asylum claimants within the EU, they have successfully argued for the externalisation of problems through so-called reception centres in Turkey and Libya.  An agreement with Turkey is now fully operative.

Of course, there is nothing wrong, in principle, with supporting Turkey in its own efforts to provide reception to migrants, or in discouraging dangerous sea-crossings.  But the fact is that, for all the failures of EU member states, the treatment of asylum seekers in Turkey and Libya leaves far more to be desired.

You may recall that I mentioned the judgment in NS earlier.  In that case, it was decided that Member States could not return migrants to other EU States if there were systemic problems in the destination state.

There is no logical reason why that principle should not be applied between the EU and third countries in the same manner as it is applied within the EU.  Fundamental rights, after all, bind the member states whether they are acting unilaterally or collectively.  The principle of non-return in the judgment in NS should preclude the return of asylum seekers to Turkey.  Yet, just last week, the informal council meeting in Malta concluded that the Turkey agreement should be replicated in Libya.  Far from questioning the strategy, the Member States are seeking instead to entrench and extend it to ever more questionable destinations.

Tellingly, humanitarian corridors were not addressed in the council conclusions, but were determined to be a matter for the future.  We will deal with that once we have secured the border.  Now where have we heard that before?

Constitutional observations

The refugee and migrant crises expose cracks in the institutional architecture of the European Union.  There has been a consistent failure to act according to constitutional principles due to the stranglehold that the member states hold over law and policy-making processes.  If they refuse to act, the Union’s principles are meaningless in practice.  While the EU rightly baulks at President Trump, its own record of treatment of refugees has not been pristine.

Of course, it is difficult for the Union and Member States to act when public opinion is unsupportive.  But let’s not forget that public opinion is divided.  It is far from unanimous in its opposition to migration.

And there is equally a great danger in failing to uphold and defend principles.  If constitutional principles are not upheld, this lends an air of legitimacy to the ideologies that are threatening the EU’s collective model itself.  By reducing the stranglehold of states, and focusing instead on representation of people and rights of people, the Union could ensure that collective action remains possible, and that it is given further effect in future.

In other words, far from the answer being less Europe; far from the answer being the dismantling of Schengen; and far from the answer being border fences between states; the answer is a more principled Europe – a more meaningful European Union that is capable of acting internationally in accordance with its founding principles.

Dr Borg-Barthet is the co-author (with Carole Lyons) of an analysis article in the 2016 Edinburgh Law Review. ‘The European Union Migration Crisis’ is currently the ‘Most Read’ article online.

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The poster for the recent event hosted by the Yad’am Society

The Brexit Case: The Reasoning, Implications and Potential Consequences of the High Court’s Judgment

This post is by Dr Robert Brett Taylor. It is an expanded version of his note that appeared in the Press & Journal on Friday 4 November 2016.

Following the decision of 52% of the UK electorate to exit the European Union (EU) on 23 June 2016, Prime Minister Theresa May has been steadfast in her belief that the power to initiate the UK’s exit from the EU lay with the Government under the ‘royal prerogative’ and not with Parliament. On Thursday 3 November 2016, however, the High Court of Justice in England gave its highly anticipated judgment in the Brexit Case (R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin)), ruling that the UK Government must seek parliamentary approval before exiting the EU. This blog post will briefly outline the reasoning of the High Court in reaching its decision, as well as its implications and potential consequences.

Justiciability and the Irrevocability of Article 50

Before considering the reasoning of the High Court, two points must be stressed.

Firstly, all parties to the case, including the Government, accepted that the matter before the Court was entirely justiciable. In other words, that it concerned a legal matter that the courts are best placed to decide.

Secondly, the case proceeded on the basis that Article 50 – the legal mechanism by which a Member State may formally leave the EU – once triggered, could not be revoked.  In other words, the UK will be unable to change its mind and stop Brexit once notice has been given under the provision. Although the accuracy of this interpretation has been questioned on this blog, it must be stressed that the Court did not have to make a ruling on this matter as both parties were in agreement that Article 50 was irrevocable.

The High Court’s Reasoning

The central question before the Court was whether the UK Government can use the royal prerogative to give notice of the UK’s intention to exit the EU under Article 50 as it claimed. The royal prerogative is the body of executive powers held by the Monarch but which is now mostly exercised in practice by Government Ministers.

The High Court rejected the Government’s argument, deciding that the royal prerogative could not be used without parliamentary approval.  According to the Court, triggering Article 50 without Parliament’s approval would have the effect of removing the rights currently enjoyed by UK citizens by virtue of the UK’s membership of the EU both at home and abroad.  Examples include workers’ rights, freedom of movement across the other EU Member States, and the right to vote in elections to the European Parliament. When the UK joined the EU in 1973, Parliament first had to pass the European Communities Act 1972, which gave domestic effect to EU law.  As a result, EU law became part of UK law, and citizens could thereafter bring actions for breach of EU law, including their EU rights, in the domestic courts. The Court decided that, in passing the 1972 Act, Parliament did not intend to allow the UK Government to take away these rights unilaterally.  To do otherwise would be to change the domestic law of the UK as enacted by Parliament, and only Parliament had the power to do so because it was legally sovereign.

The Court’s decision therefore makes it clear that the Prime Minister now needs Parliament’s consent before Article 50 can be triggered.  The implication of the decision is that this approval must take the form of primary legislation, thus making a one-off vote in the House of Commons insufficient.  Unsurprisingly, the decision of the High Court, and the necessity for legislation, could have potentially far reaching consequences.

The Future of Brexit

The High Court’s decision represents a serious setback for the UK Government, and the Prime Minister is already under considerable pressure to concede and comply with the decision. Although the Prime Minister had said that she would trigger Article 50 in March 2017, this looks to be in doubt should she be compelled to put the matter before Parliament for legislative approval.  Whilst this may only result in a delay in the triggering of Article 50, Parliament could also decide to block the UK’s exit from the EU altogether.  Whether or not Parliament would do so, however, is unclear.  Although not legally required to follow the referendum result, political forces both within and outwith Parliament may compel members to go ahead with Brexit, albeit perhaps on terms different from what the current Government wants.

Even if the elected House of Commons consents to any Bill authorising the triggering Article 50, however, Theresa May will likely face strong opposition from the unelected House of Lords.  Because leaving the EU was not a manifesto commitment of Theresa May’s newly-formed Government, the Salisbury Convention will not be engaged, and the Lords will not be compelled constitutionally to approve the legislation as a result. (It will be recalled that conventions are very important to the House of Lords, as I explored in a post on this blog and a related post for the UK Constitutional Law Association.) This may necessitate, therefore, the use of the Parliament Acts 1911 and 1949 to ensure the Bill’s passage through Parliament, which will further delay Brexit.

The UK Supreme Court

Whether or not Parliament will ever be given a say, however, is still far from settled, as the UK Government have said that they will appeal the decision to the UK Supreme Court in the hope that it will be overturned. The case is expected to be heard in December before a panel of 11 Justices for the very first time in history. A judgment is expected sometime in the New Year.  Although the case was heard in England and concerned a matter of English Law, Nicola Sturgeon and the Scottish Government may formally intervene in the legal proceedings. The Welsh Counsel General has indicated his intention to apply to intervene, in accordance with the Government of Wales Act 2006. Withdrawal from the EU will unquestionably impact upon the UK’s devolutionary settlement, and the UK Supreme Court has jurisdiction to decide devolutionary matters.

An Early General Election

Although there is speculation in the media that the Prime Minister could call an early General Election to try and receive a mandate from the public on pursuing her vision of Brexit, it must be stressed that she does not in fact have the power to do so. The Fixed-term Parliaments Act 2011 abolished the prerogative power of the Crown, exercised by the Prime Minister, to call a general election, and gave that power to the House of Commons.  In order to have an election before 2020, therefore, Theresa May must lose a vote of no confidence, or two-thirds of the Commons must agree to call one. Should the Government lose their appeal at the UK Supreme Court, a vote of no confidence in the Prime Minister is possible given the Conservative party’s narrow majority in the House of Commons.

What next?

That is a good question. As noted by my colleague Dr. Justin Borg-Barthet, the one thing we can be sure of is we still cannot be quite sure what Brexit means.

On Tuesday 8 November at 18:00 the University of Aberdeen will be hosting a free guest lecture by Dr. Holger Hestermeyer, How will Brexit Happen? Legal Questions Faced by the UK. Details can be found here.

Yeah but, no but: why the High Court was right and wrong in the Brexit case

This blog post is by Dr. Justin Borg-Barthet.

The High Court decision in Miller (the ‘Brexit case’) was essentially a public law case.  The judgment (PDF) addresses the question of whether the royal prerogative can be exercised to repeal vested statutory rights.  As is well known, the Court found in the negative.  In the Court’s view, therefore, notice of the UK’s intention to withdraw from the European Union requires parliamentary consent.

But the judgment turns on a question of EU law, namely whether revocation of notice of intention to withdraw from the EU is possible.  Here too the Court found in the negative.  Both the claimants and government were of the view that once notice is given under Article 50 TEU, that notice is irrevocable.  In other words, once the UK notifies the European Council that it wishes to withdraw, the UK cannot change its mind and withdraw notification.  Rights derived from the European Communities Act 1972 will be repealed whether Parliament consents or otherwise.

But is the Court correct in its findings regarding Article 50 TEU?  If it is not, its public law findings rest on a false premise and are therefore potentially unfounded.

Article 50 TEU provides as follows:

1) Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

2) A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

3) The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

4) For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.

A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

5) If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

There is nothing in that article which addresses the question of a change of mind (or heart, as the case may be).  Once Article 50 is invoked, it seems, the process of withdrawal is inexorable.

Yeah but

The High court was correct in its findings, or so it appears at first blush.  Surely if the Member States wished the Treaty to provide for revocation of notice under Article 50, they would have done so.  What is more, if the withdrawing Member State were at liberty unilaterally to revoke its notification of withdrawal from the Union, this would have the practical effect of enabling that State unilaterally to extend the two-year period for withdrawal.  It could revoke notice and start the two-year period afresh at a later date of its own choosing.  Surely, then, unilateral revocation of notice is not allowed.

But it does not necessarily follow that the revocation of notice is impossible.  The Member States are at liberty, should they agree unanimously, to extend the two-year period.  Art 50(3) does not establish a ceiling for the extension of that period.  In the absence of any such limits, it follows that the Member States may extend the period indefinitely.  Effectively, they can agree unanimously to suspend the withdrawal of the Member State.  It would be absurd in such circumstances to argue that the Member States could not formalise an informal suspension of notice to withdraw from the Union.

No but

It appears, therefore, that the High Court was not entirely correct in its findings.  The basic premise that Article 50 is irrevocable is not unimpeachable.  But it does not follow that the rest of the Court’s reasoning is wrong.  The public law reasoning concerns the potential usurpation by government of Parliament’s sovereign right to retain or repeal rights conferred by the European Communities Act 1972.  The power to revoke notification under Article 50 does not reside in the sovereign Parliament of the United Kingdom.  Instead it resides with every other Member State of the Union.  Malta, for the sake of the argument, could choose whether rights conferred on British citizens by the European Communities Act 1972 are to be repealed.

The High Court’s findings are therefore unaffected by the potential flaw in its (and the parties’) reasoning.  If the Court is correct in its reasoning as to the public law question, the judgment remains sound notwithstanding the potential flaw in the interpretation of Art 50 TEU.  Any notification by government of the UK’s intention to withdraw from the European Union divests Parliament of its right to retain or repeal rights conferred by the European Communities Act 1972.

But but

Prof Steve Peers argues, persuasively it is submitted, that the question of revocability of Article 50 is not settled.  Indeed, contrary to the High Court’s ruling and to my own reasoning above, Lord Kerr, the author of Article 50, argues that unilateral revocation of notice is possible. Where there is a question as to the interpretation of EU law, Article 267 TFEU requires a supreme court of a Member State (and the Supreme Court of the United Kingdom still plays that role) to seek interpretative guidance from the Court of Justice of the European Union. If the Supreme Court fails to refer the question, the United Kingdom could be liable to damages under the Kobler doctrine.

There could yet, therefore, be many twists in the tale of Brexit.  All that is certain at this juncture, is that we cannot be quite certain of the meaning of Brexit (means Brexit).

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Image credit – BBC

Exploring and combining the Human Rights Act 1998, intellectual property and EU competition law – while we still can

This blog post is by Dr Abbe Brown, Reader.

The prospect of the UK leaving the EU has, as already explored elsewhere on this blog, significant legal implications. So too would the possible repeal of the Human Rights Act 1998, perhaps to be replaced by a Bill of Rights.  One implication relates to proposals I put forward in my 2012 monograph Access to Essential Innovation and Technology: Intellectual Property, Human Rights and Competition.

These three legal fields of intellectual property (“IP”), human rights and competition were combined in the book as they can be relevant to questions of access to technologies from different perspectives.

Taking access to medicines as an example:

  • IP encourages the developing of new medicines by conferring exclusive rights and the ability to charge licensing fees;
  • the right to life indicates that there should be access to medicines, without money being an obstacle; and
  • competition law, in its prohibition on abuse of a dominant position, objects to an IP owner having too much power.

It is of course possible for these three fields to co-exist and complement each other: IP develops medicines to further the right to life and rewards the activities of innovators, and the ultimate goal of both IP and competition has been argued to be to encourage innovation. Yet conflict is possible; and this can be entrenched by the fact that within the UK jurisdictions there are significant differences in the extent to which each field can be the base of an action.

The book developed a means of enabling these three legal fields to be combined in judicial decision making in the UK, to deliver greater access to technology while still respecting the contribution which IP can make to developing innovation. At the heart of the book’s proposals are firstly a Human Rights Emphasis, which is a framework for enabling courts to consider the wide range of human rights relevant to a dispute to establish what is meant by delivering decisions (in light of the Human Rights Act 1998 and also EU fundamental rights) which are “consistent with human rights”; and secondly there is a new, human rights influenced, approach to the “Euro-defence” (a term explored in this resource from the law firm Slaughter and may (PDF)) and the case law on when refusal to license IP could be an abuse of a dominant position.  These two approaches could lead to courts, in some cases, finding that what seemed to be IP infringement from a pure IP law perspective was not in fact so.  The book then went on to argue that this approach was consistent with UK’s responsibilities to IP owners under the European Convention on Human Rights, and also obligations to protect IP under TRIPS, the IP element of the World Trade Organization  (“WTO”) Agreement. As a result, the approach and the UK would not be vulnerable to challenge at the European Court of Human Rights and through WTO dispute settlement.

The book develops its arguments through several scenarios, across health, communications, and the environment, with a range of outcomes depending on the facts. The proposals have been well reviewed (and also termed “possibly heretical” (Stothers 2013)) and stimulated wide interest among lawyers and IP owners, notably at the Licensing Executive Society International Conference in 2011.

Looking forward it does seem possible that there will be some sort of a Bill of Rights and also be some sort of competition law framework in post-Brexit UK, yet  in these new regimes human rights and competition may not have their present special legal status that has enabled the societal objectives (other than short term reward of innovation) to prevail.

My ongoing work (including blog posts of 26 November 2015, 2 May 2016, and 26 July 2016) explores how the interaction between legal fields can be further developed, including by looking beyond the Human Rights Act 1998 and EU competition law. (This could be serendipitous, given the current political situation.)  For now, the arguments developed remain a valuable tool for experimentation by lawyers and activists who are faced with IP obstacles to using technologies to pursue important goals.

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A positive approach to Investor-State Dispute Settlement? IP and Climate Change

This blog post is by Dr. Abbe Brown

Introduction

Intellectual Property (“IP”) and climate change laws operate in different legal spaces.

For the former, the World Trade Organization’s TRIPS agreement imposes obligations on states to have IP laws. States pass IP laws which confer private rights, which are enforceable in national court.

For the latter, the UN’s Framework Convention on Climate Change provides that states should reduce emissions. There have been varying attempts to bring this about, notably the Kyoto Protocol of 1997 which imposed targets on states (which were not met) and the Paris Agreement of 2015, when states agreed to targets but it is left to states as to how this may come about. Technology, and transfer of technology, is mentioned repeatedly in all these documents, and there is now the Technology Mechanism.

Yet all this does not really engage directly with (to the extent to trying to solve) the fact that some of the technologies relevant to reducing emissions may be the subject of IP rights. Thus states have two obligations which are potentially inconsistent. Further, private entities have rights in respect of IP, which can enable them to control technologies, and private entities have no obligation to transfer technologies.

I explored some elements of this issue in a previous post on this blog on 2 May 2016. This post will develop this theme through the lens of national court actions, trade agreements and investor-state dispute settlement (“ISDS”).

National action

What if a US company which owns a UK patent for a wind turbine technology (which has proven very effective and is the best means of harnessing the wind, which is the most reliable means of delivering renewable energy), raises an infringement action when a competitor seeks to use this technology without consent? In other work (namely my book from 2012), I have argued that human rights and competition law could be used (in specific limited cases) such that there is no infringement.  A court in the UK jurisdictions might decide to follow this very novel argument, (subject to the slight caveat that both of these depend a great deal on the UK being a member of the EU and a party to the ECHR working alongside the Human Rights Act 1998).

I also argue in my book that if the court does so, this outcome could also be argued to be consistent with the UK’s obligations under the ECHR and TRIPS. Yet the link between the proposed national approach and another international agreement, the proposed Transatlantic Trade and Investment Partnership (“TTIP”), should also be considered.

TTIP

TTIP is a proposed trade agreement between the USA and the EU. Negotiations started in 2013. At the time of writing, its prospects of coming into effect might seem slim. From a US perspective, whilst Obama has been supportive, Trump is not, and Clinton’s enthusiasm is waning. In the EU, the finer points of EU law mean that support of both the EU and also Member States would likely be required for the agreement to come about. The EU Parliament is supportive at present, however France does not support it and Germany is uncertain. A further complexity comes, of course, from the fact that the UK now seems likely not to be part of TTIP, however the points which will be made below are also of potential relevance to the possible new swathe of international trade agreements which the UK might negotiate in the coming years.

So what is the problem with TTIP? Firstly, the secrecy of its negotiations (although Greenpeace and to an extent the EU have leaked some drafts and position papers: see here (PDF), here, and here). Secondly, and of interest to this post, concerns that trade is treated as more important than climate change and the environment (a view that continues after the July 2016 meeting and leaking of climate change (PDF),  sustainable development (PDF) and energy drafts). Thirdly, and a common theme across more recent trade agreements, if there is state interference with a private investment, the investor could complain and raise an ISDS claim that could lead to the state paying money to it.  This is an opportunity for direct private action, rather than the investor needing, for example, to persuade the USA to raise a WTO action.

TTIP and national action

Draft investment dispute proposals put forward by the EU provide that IP is a covered investment. If a state does not treat an investment fairly and equitably, or indirectly expropriates it, then the IP owner (in this example, a US patent owner) could raise an action. Would this innovative national court decision be fair and equitable treatment or indirect expropriation?

An analogy for the impact of a trade agreement on national IP decisions is being explored in a challenge by Eli Lilly to a decision of Canadian courts, in a dispute under the North American Free Trade Agreement. There, the Canadian court took what is said to be a new approach to the meaning of a term in patent law, which led to patents being revoked. Eli Lilly challenged Canada on the basis of expropriation and the lack of a minimum standard of treatment, including fair and equitable treatment (amongst other things). This dispute is ongoing and the interpretation of minimum standard of treatment under NAFTA is already unclear (as illustrated by the Bilcon dispute).

Two key issues are: the basis on which the national decision could be challenged: and also who would hear the challenge. The EU’s proposals (PDF) regarding investment are of interest here.

Firstly, how could a decision be challenged? The proposals provide that the court shall not affect the rights of parties to regulate within their territories through measures necessary to achieve legitimate policy objectives such as protection of the environment (art 2(1)), and that the availability of the process does not involve a commitment that the legal framework will not be changed (art 2(2)).  The parties are (again) to accord fair and equitable treatment to covered investments, and a list is provided as to what this means, which seems to be exhaustive. In particular, there shall not be fair and equitable treatment if a measure:

  • denies justice, is a fundamental breach of due process, is manifestly arbitrary or an abuse of power (art 3(2) (a)—(c), (e));
  • is in breach of a specific representation to induce an investment which was relied on and which created legitimate expectation, (art 3(4)); or
  • is in breach of what the services and investment committee might otherwise agree to be covered (art 3(2)(f), 3(3)).

Further a breach of any other international agreement (say TRIPS or the UNFCCC) does not mean that there is a breach of the provision of fair and equitable treatment (art 3(6)). In addition, parties shall not indirectly expropriate by a process whereby investors are substantially deprived of the fundamental attributes of property, including the right to use and enjoy, with this to be assessed on a case by case basis with regard to economic impact, object and content and duration (article 5 and Annex 1). There is no specific reference to human rights or competition here, although, speaking very broadly, many of the themes explored are similar to those which would be involved in the human rights and competition analysis at national level.

Secondly, process. One base for criticism of ISDS is that these disputes are heard before arbitration panels of trade lawyers and that decisions often conflict. The EU proposal includes a new type of court (section 3 art 1). There are detailed rules of procedure for security for costs, unfounded claims, consideration of ethics and arrangements for appeal and third party intervention and interestingly, qualifications of the judges (although there will still only be experts in international trade and public international law – there are no references to IP, climate change, human rights or competition) (section 3, arts 5, 6, 9, 10, 11, 17, 21, 23). The tribunal would apply TTIP and other rules of international law applicable between the parties (here, this may cover TRIPS and the UNFCCC agreements), as interpreted in line with the Vienna Convention on the Law of Treaties, and is to adopt prevailing approaches on national law (art 13 (1)-(4)). There are also proposals for how to arrange a system of precedent if difficulties arise (art 13(5)).

Criticisms continue. The EU proposal has been termed a zombie ISDS (PDF), whilst being critiqued for the noted narrow breadth of expertise of judges and also for basically trying to improve something which should not exist in any event.  Yet this final argument draws from the premise that national courts should determine national issues, whereas the IP and climate change discussion proceeds from the premise that this cannot work, because of the different allocations of power between states and private entities. Indeed, because of this it could be argued that ISDS – or perhaps a new form of ISDS – might provide an exciting model for a more holistic approach to dispute resolution.

Some rose-tinted foresighting

How could TTIP be further improved – both for itself and for other agreements? Substantively, it could provide that states and also investors must take steps to pursue protection of the environment and action against climate change, and that this is to be of equal (or greater?) importance than trade and economic gain –  or at least, that trade and environment policies should be mutually supportive . It could also provide that states should meet obligations imposed under UNFCCC instruments and that investors must assist them in  doing this – rather than refuse to share their IP.  It could be argued that this is highly unlikely to come about, but then again there has been significant innovation in the EU and US negotiations and also elsewhere, with for example tobacco based activity being excluded from ISDS in the Trans-Pacific Partnership (art 29.5).

From a different perspective, the agreement could provide that it would not be in breach of the minimum treatment and fair and equitable treatment obligation, or indirect expropriation provision, if decisions are made which are consistent with constitutions and with all or certain international obligations of a state. This would mean that decisions which national courts might properly make in a dispute could not be challenged by ISDS. This could support national courts in taking innovative but legitimate approaches to combining different sets of obligations which their country has accepted. Importantly it would also enable public and private perspectives to be considered together.  The approach does involve significant power being held by courts. Yet as long as they are permanent courts, with relevant diversity of expertise, this is perhaps preferable to parallel negotiations leading to results which can be ignored, as set out at the start of this blog post. It is also preferable to a trade panel being able to find that compensation should be paid to an investor for a human rights based decision of a national court. In the times of Brexit, the possibility of more trade agreements, and increasing concerns about climate change, this is, at the very least,  a useful thought experiment.

These thoughts were developed for “Warnings (?) from elsewhere: intellectual property, trade, climate change and the Transatlantic Trade and Investment Partnership” presented at the conference “Intellectual Property and Innovation Law Research Program Symposium: The Trans-Pacific Partnership: Intellectual Property and Trade” at the State Library of Queensland, Brisbane, Australia in June 2016. Many thanks to all involved and to all at Queensland University of Technology Intellectual Property and Innovation Law, in particular Matthew Rimmer, Angela Daly, Nic Suzor and Brooke Lee.

Brexit and English Jurisdiction Agreements: A Look into the Post-Referendum Legal Landscape

This blog is by Dr. Mukarrum Ahmed from the University of Aberdeen’s Centre for Private International Law

The initial shock at the UK’s referendum vote must be replaced by a reasoned consideration of how best to respond in an uncertain situation. Will it really happen? When will it happen? Will the continuing EU play hardball in negotiations or will it seek to ensure that the UK becomes a good neighbour? What will the post-Brexit UK and EU look like? One decision for those entering into cross border commercial contracts in the post-referendum legal landscape is what to do about an English jurisdiction provision in the contract. The referendum result hasn’t itself changed anything legally, but it may be necessary to invoke these jurisdiction provisions of a contract in two or more years’ time, when the legal framework might be different.

Jurisdictional Principles

The jurisdiction of the English courts and the courts of other EU Member States in civil and commercial matters is currently governed by the Brussels I Regulation (Recast) or the Recast Regulation (EU Regulation 1215/2012). The Regulation provides that a choice of jurisdiction by the parties should be upheld and that judgments given by the courts of one Member State should be enforced in all other Member States. After Brexit, the Recast Regulation will in all probability cease to apply to the UK, which has led some lawyers in continuing EU Member States to promote the idea that commercial litigation that might have traditionally come to the English courts should instead be diverted to the other emerging European centres of international litigation. English lawyers are naturally perturbed by such a prospect. What the post-Brexit jurisdictional and enforcement landscape will look like is uncertain. Lawyers can debate enthusiastically whether judgments given in proceedings commenced before Brexit will continue to be enforceable after Brexit, whether the 1968 Brussels Convention will be restored, whether the pre-Brussels Convention bilateral treaties between the UK and individual Member States will revive, whether the UK has a right to adhere to the Lugano Convention or, if not, whether one or more of the existing Contracting States will block the UK’s doing so. Interesting though those debates will be, they do not reduce the uncertainty and offer scant help to those who must make a decision now.

The Starting Point on Jurisdiction

The first question is what the jurisdiction agreement in any particular contract is trying to achieve. If a fundamental objective of the jurisdiction clause is to provide a judgment that will be enforceable throughout the EU, then the uncertainties of the post-referendum world come into play (as illustrated in this earlier post by Dr. Jon Fitchen). There is a real risk that, with the departure of the Recast Regulation and the uncertainties over Lugano and other issues, an English judgment will not be readily enforceable in the continuing EU and vice versa. Possible responses where enforceability of a judgment in the continuing EU is an important factor are discussed below.

There are, however, many reasons for a choice of jurisdiction save for the enforceability of the resulting judgment within the continuing EU. For example, the party against whom enforcement is likely to be required may not have any accessible assets in the EU. Most obviously, the party might have assets in the UK or otherwise outside the EU, in which case the issues will be the same pre-Brexit as post-Brexit. In some instances, enforceability might not be a major issue. For instance, a party may have sufficient security against which to discharge its counterparty’s obligations within the jurisdiction. Or a party may conclude that it is more likely to be the sued rather than sue the counterparty. Or enforcement risk may simply not be a big factor for the particular counterparty. In these situations, a jurisdiction clause may fulfil a more defensive role of ensuring that the party can only be sued in a court in which it has confidence. If so, again the considerations may not have changed significantly as a result of the referendum vote. Post-Brexit, a jurisdiction clause in favour of the English courts may not require courts in EU Member States to defer to the English courts in quite the same way or for the same reasons as now, but the counter may be that, if so, the English courts will, contrary to the current position, be able to grant anti-suit injunctions to restrain a party from pursuing proceedings in an EU court. A party with any business, presence or assets in the UK cannot afford to ignore an injunction.

EU Enforceability: Solutions

If enforceability of a judgment throughout the continuing EU is important, there are four solutions in circumstances where, pre-referendum, jurisdiction would have been given to the English courts.

First, give jurisdiction to the courts of an EU Member State or a Lugano Convention Contracting State (Norway, Iceland and Switzerland). This depends upon being comfortable with proceedings in that court, including as to its procedures, costs, speed and outcomes. This is already sometimes done in, for example, security agreements where the security in question is located in another EU Member State.

Second, give non-exclusive jurisdiction to the English courts. This cautious approach hedges the parties’ choice of jurisdiction and allows the position to be reconsidered at the time when legal proceedings are commenced. If at that time enforcement remains important and an English judgment is enforceable in the EU, then the English courts can be used; if, however, an English judgment is not enforceable in the EU, it will allow the use of other courts. A variant of non-exclusive jurisdiction clauses is the asymmetric or unilateral jurisdiction agreement, which is commonly used in cross border finance contracts. This binds one party to sue exclusively in the primary non-exclusive forum, but allows the other party to commence proceedings in that court or in any other court of competent jurisdiction. The French Cour de cassation has cast some doubt on the validity of these clauses under Article 23 of the Brussels I Regulation in Mme X v Rothschild (26 September 2012) and Article 23 of the Lugano Convention in ICH v Credit Suisse (25 March 2015). However, the position has been somewhat ameliorated by the most recent Cour de cassation decision in Apple Sales International v eBizcuss (7 October 2015). Moreover, doubt as to a matter of EU law may be less significant if the UK is outside the EU because the English courts have traditionally enforced these clauses. It could, however, affect EU Member States’ courts’ approach to the jurisdiction clause, but that is in any event a matter of some uncertainty until finally resolved by the Court of Justice of the European Union.

Third, arbitration is a possibility. Arbitration is already commonly used if enforcement is important and the counterparty has assets in a location where an English judgment is not enforceable because of the extensive reach of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. All EU Member States are parties to the New York Convention, which provides for the enforcement in participating states of an arbitral award given in another participating state. An arbitration seated in a participating state, whether the UK, a continuing EU Member State or elsewhere, should therefore be able to give an award enforceable throughout the EU.

Fourth, parties could continue with whatever their current policy is. The massive uncertainties surrounding what Brexit will bring could be treated as meaning that the risks of change are as great as the risks of no change.

EU Enforceability: The Hague Convention on Choice of Court Agreements

There is another possible solution to the problem of enforceability of a judgment throughout the EU. This is to give the English courts exclusive jurisdiction. The potential benefits of this route arise because the EU is a party to the Hague Convention on Choice of Court Agreements. In addition to the EU, Mexico and most recently Singapore have signed and ratified the Convention, which is therefore currently of limited significance in global terms. The Convention does, however, provide that all Contracting States must give effect to exclusive jurisdiction agreements (Articles 5 and 6) and enforce the resulting judgment given by the chosen court (Article 8). The UK is not currently an individual Contracting State to the Convention because the Convention’s subject matter falls within the exclusive competence of the EU. There is divided academic opinion on the issue whether the UK is bound by this international treaty post-Brexit without any need for the UK to ratify the treaty afresh as it might be argued that the UK is only bound by the treaty while it is a Member State of the EU. Assuming the UK would not be bound, the UK would still be entitled to sign and ratify the Convention in order to bring it into force immediately on the UK’s leaving the EU or soon afterwards; the consent of the existing parties is not required. If the UK were to do so, a judgment given by an English court that has taken jurisdiction under an exclusive jurisdiction clause will again be enforceable throughout the EU. This position is not, however, without potential transitional wrinkles. Article 16 of the Convention states the Convention applies to exclusive jurisdiction agreements concluded after its entry into force for the state of the chosen court and that the Convention does not apply to proceedings instituted before its entry into force in the state of the court seised. The Convention has, however, already entered into force in the UK because of the EU’s ratification of the Convention.

Suppose that a contract contains an English exclusive jurisdiction clause but that, post-Brexit, a court in an EU Member State is seised of proceedings falling within the scope of that clause. What will the EU Member State’s court do, assuming that the Hague Convention on Choice of Court Agreements is not applicable?

Post-Brexit, so far as the continuing EU is concerned the English courts will (subject to any future contrary arrangements with the EU) be in the same position as any other courts outside the EU. The commercial expectation might be that the courts of EU Member States would give effect to the parties’ wishes, but it is not entirely clear that this will necessarily be the case. Article 33 of the Recast Regulation provides that courts in EU Member States may stay proceedings in favour of courts outside the EU if three conditions are met: first, the non-EU court was first seised; secondly, the non-EU court can give a judgment capable of enforcement in the EU Member State in question; and, thirdly, a stay is necessary for the proper administration of justice. If these three conditions are met, then the court in the EU Member State can stay, and might generally be expected to stay, proceedings in favour of the court outside the EU. But what if any of these conditions is not met (for example, because the court in the EU Member State was seised first)? It is arguable that, despite the fact that the agreement between the parties has been broken by one party starting proceedings in an EU Member State’s courts, the courts of EU Member States cannot stay their proceedings in favour of the non-EU court. Before Article 33 was added to the Recast Regulation, there was no explicit provision addressing the position of non-EU courts. There is evidence of some Member State court’s practice which gives effect to jurisdiction agreements in favour of non-EU courts under the guise of giving ‘reflexive effect’ to the Regulation’s provisions regarding jurisdiction clauses. However, as the Recast Regulation now specifically addresses the position of non-EU courts, the convenient legal fiction of the doctrine of reflexive effect may be harder to justify in principle.

Ultimately, the Court of Justice of the European Union will have to determine the most appropriate approach in these circumstances. Even if the courts of an EU Member State consider that they have no power to stay proceedings in favour of the English courts despite an exclusive jurisdiction clause in favour of the English courts, the English courts may not be without a pragmatic remedy. Under the Recast Regulation, the English courts cannot grant an anti-suit injunction to restrain a party from pursuing proceedings in the courts of another EU Member State bought in breach of the jurisdiction agreement (Case C-159/02 Turner v Grovit [2004] ECR I-03565). However, if the UK is no longer an EU Member State, its mutual trust constraints will no longer apply and the English courts would again be free to grant, and would generally grant, anti-suit injunctions ordering parties to stop legal proceedings brought in breach of contract. Failure to obey an injunction would constitute contempt of court, which could lead to a fine, imprisonment and, ultimately, sequestration of assets. A party with any presence or assets in the UK would have to comply with the injunction or reconcile itself to the loss of those assets. If, contrary to the assumption made above, the Convention was applicable, the courts of an EU Member State that are seised of proceedings in breach of an exclusive jurisdiction agreement should defer to the English courts according to Article 6 of the Convention. Moreover, the Convention’s system of qualified mutual trust may also permit the use of anti-suit injunctions, the damages remedy for breach of exclusive jurisdiction agreements and anti-enforcement injunctions where such relief furthers the objective of the Convention.

 

Brexit and EU private international law: cross-border judgments – unintended consequences

This blog post is by Dr. Jonathan Fitchen.

The UK’s vote for Brexit has thrown up a huge range of complex legal problems concerning the disengagement of the UK from the European Union. One such problem concerns the effect of Brexit on existing private international law, also known as ‘conflict of laws’,  in the UK. These are issues of particular interest and concern to the School of Law, especially those in the University of Aberdeen’s Centre for Private International Law. This interest is not simply an academic one, as our colleagues have at various times directly advised on and participated in the development of the law in this area.

Private international law (PIL) deals with questions that arise when a civil case between private parties also involves a foreign element. PIL provides the answers to basic legal questions arising from the foreign element including:

Can I bring my case before my local court (or not)?

If I can do so, what law should be applied to the dispute by that court?

If I win, can I get my judgment enforced abroad?

Does any earlier or competing foreign litigation affect or stop my case?

The EU has put in place many PIL Regulations to replace the different complex national answers to these basic questions with harmonised answers (in different Regulations) applying across all (or very nearly all) EU Member States. These PIL Regulations simplify the otherwise very complex interactions of different systems of PIL (each with different approaches to, and answers for, the questions noted above) and also simplify many of the complex legal issues arising in PIL that affect the lives of ordinary private individuals and businesses in Scotland, England and Wales and Northern Ireland.

Given our present dependency in the UK on EU PIL Regulations, the effect of a ‘clean-break’ Brexit on PIL in England and Wales, in Scotland and in Northern Ireland will be profound: the EU PIL Regulations that provide many aspects of what we in the UK presently understood to be ‘our’ private international law will cease to apply unless positive legislative action is taken by the Scottish Government (PIL is a devolved matter) and by the Westminster Government to off-set this eventuality post Brexit. This might sound technical (it is) and abstract (it isn’t) but the basic point as it concerns the cross-border enforcement of ‘UK’ judgments in the rest of the EU can be simply illustrated with a before and after example.

Example

FACTS – An English company sells goods to a German company. The contract calls for the German company to collect the goods from the factory in England with payment due within one week of collection: though this arrangement has worked well in the past, this time the English company is not paid by the due date. The English company goes to the English court and wins a judgment that obliges the German company to pay it the money due and also its costs. The problem is that the goods and the German company are both in Germany.

NOW – The English Company can quickly and cheaply automatically enforce the English judgment against the German company using the EU’s Brussels Ia Regulation (Regulation 1215/2012): there is no need to go to court in Germany to ask permission to enforce because the EU Regulation means that the incoming UK judgment has to be treated as if it is an enforceable German one. The EU’s Brussels Ia Regulation has streamlined the enforcement process by presuming that the foreign (English) judgment is valid (etc.) and by reducing to an absolute minimum any possibility of the German company challenging the enforcement of the UK judgment in Germany.

AFTER BREXIT – The EU’s Brussels Ia Regulation will no longer technically apply to the English claim, nor to the overseas enforcement of the English Judgment as far as the other 27 EU Member States are concerned. If nothing has been done by the Scottish and Westminster Governments to avoid this prior to Brexit, it will be necessary for the English company to hire German lawyers to ask the German court to decide that the English judgment is capable of being recognised as a foreign judgment by the non-Brussels Ia PIL rules of the German legal system and then, assuming that the English judgment is so recognised, that it is then capable of actual enforcement in Germany. No part of this procedure will be automatic and neither will there be any presumptions that the English judgment is valid. It may well be possible that the enforcement of the English judgment will be obstructed by the un-harmonised German PIL enforcement law. Though post Brexit the precise outcome and legal costs of this example will vary from one EU State to another it is plain that enforcing such a judgment from the UK without the possibility of having recourse to the benefits offered by the EU’s PIL Regulations will take longer and cost more than it does at present.

So what is to be done?  

There is no simple solution to the basic problem that many important areas of ‘our’ PIL in the UK are currently contained in EU Regulations that will, unless action is taken by the Scottish and Westminster Governments, seemingly cease to apply immediately the UK leaves the EU. The seriousness of the issue extends much further than the business dispute in the example above as different EU PIL Regulations presently govern matters as diverse as:

  • cross-border family law (including parental responsibility for children and the payment of maintenance);
  • cross-border civil claims and commercial claims;
  • cross-border insolvencies;
  • what law will be applicable to cross-border disputes over contracts or over tort / delict claims.

If these numerous EU Regulations are allowed to cease to apply at the end of the day before Brexit, we will find ourselves thrown back on domestic civil procedure rules that assume that the EU PIL Regulations still apply when in fact they do not do so: if the legislators do not act to prevent it, the delays, costs and legal problems associated with this uncomfortable reality will become plain whenever a UK judgment concerning a matter formerly governed by an EU PIL Regulation is presented for enforcement elsewhere in the EU.

Some glimmers of hope?

It may be that the legislators in the UK will consult on this matter and then act to minimise the PIL risks of Brexit for their citizens. The Brexit negotiations could – if the matter is placed high enough up on the agendas of each side and is pursued with sufficient determination by the UK – lead to the UK being able to retain the benefits of some of the existing EU PIL Regulations on some sort of a reciprocal basis by also allowing those in the 27 State version of the EU the possibility of using their EU PIL ‘rights’ within the post-Brexit UK.

The UK will replace some EU PIL with PIL derived from Hague PIL Conventions that the UK is already a party to and these Conventions will apply between the UK and the EU (apart from Denmark, in some cases). These Conventions cover child abduction, inter-country adoption, parental responsibility, access, maintenance for children and spouses and exclusive choice of court agreements in commercial cases. There is also the longer term possibility that the ongoing work on the planned global Hague Judgments Convention will succeed (it has already had its first Special Commission in June 2016) and deal with the problem of getting UK judgments recognised in EU States and indeed elsewhere in the world.

What next?

The Scottish Government, the Westminster Government and the representatives in Northern Ireland need to appreciate the nature of the looming private international law problems and to formulate effective strategies to protect their citizens and businesses from the impending uncertainty. The University of Aberdeen’s Centre for Private International Law is looking forward to contributing to that task.

Addendum

The Centre for Private International Law has just published a working paper entitled “Respecting Reverse Subsidiarity is an excellent strategy for the European Union at The Hague Conference on Private International Law: currently being well deployed in the Judgments Project“, by Professor Paul Beaumont. It also considers some implications of Brexit. The final version of that paper will be published in a Polish review: Europejski Przegląd Sądowy, 2016, issue 10 (which translates as “European Judicial Review”).