True (Bad) Faith 2020? Part One: The Commission Infringement Action against the United Kingdom for breach of the Withdrawal Agreement
In addition to being an editor at the European Law Blog, the author is the Brexit Research Fellow at the Bingham Centre for the Rule of Law, BIICL. Within these auspices, he jointly prepared the Rule of Law Monitoring of Legislation Project report on (now) clauses 44,45 and 47 of the UK Internal Market Bill.
The European Law Blog will continue its engagement with the possible case. Part Two of this post will consider a potential UK counter-argument, and John Bell (Queen Mary University London) will be engaging in a deeper analysis of the Commission’s infringement claims.
Following the referendum on 23 June 2016, some used to think that the (exit) day would never come. However, the treaties of the European Union did indeed cease to apply to the United Kingdom on 31 January 2020, and since that date the two parties have been embroiled in a Brexit epilogue legal and political psychodrama. The latest twist in the plot came on 1 October 2020, when the European Commission announced that it had commenced infringement procedures against the United Kingdom for alleged breach of the EU-UK Withdrawal Agreement.
The letter of notice marks the EU’s formal administrative reaction to the UK Internal Market Bill 2019-21, proposed by the United Kingdom government on 9 September 2020. This move signals a transition from the hypothetical phase of academic, civil society, and political claims that clauses 44, 45 and 47 may constitute a suite of actual and potential breaches of the UK’s obligations under the main text of the Withdrawal Agreement (WA) and the Protocol on Ireland/Northern Ireland (NIP), to the actual determination of those claims before authoritative judicial bodies.
The first post in this two-parter will summarise the Commission’s arguments, before considering the legal base and enforcement mechanisms for the infringement procedures. It may be speculated that temporal vicissitudes have influenced both the timing and substance of the Commission’s claim against the United Kingdom. Once the transition period ends on 31 December 2020, the direct jurisdiction of the Court of Justice of the European Union over the whole of the Withdrawal Agreement will come to an end. Therefore, ‘the clock is ticking’ for the EU to ventilate an argument before the Luxembourg court that the UK is in true breach of its good faith obligations under Article 5 of the Withdrawal Agreement.
The substance of the Commission’s argument: UK Breach of the ‘good faith’ obligation under Article 5 WA
The legal assertion: Breach of good faith by the United Kingdom proposing the UK Internal Market Bill
The European Commission states in its press release that it has commenced infringement procedures because the United Kingdom has ‘breached its obligation to act in good faith, as set out in Article 5 of the Withdrawal Agreement’ by failing ‘to withdraw the contentious parts of the Bill [clauses 44, 45, and 47 of the UK Internal Market Bill]’. The Commission regards such an omission as constitutive of breach because, if clauses 44, 47 and 47 came into force, they would ‘allow the UK authorities to disregard the legal effect of the Protocol’s substantive provisions under the Withdrawal Agreement’.
The language of Article 5 of the Withdrawal Agreement may be construed as imposing a positive obligation and a negative obligation upon the two parties. Regarding the former, it is stated that ‘the parties shall take all appropriate measures…to ensure fulfilment of the obligations arising from this Agreement’ (emphasis added). The next clause delineates the latter negative duty, through the instruction that the EU and the UK ‘shall refrain from measures jeopardising the attainment of the objectives of the Agreement’ (emphasis added). It may be debated whether this good faith obligation should be understood as closer to the supranational duty of sincere co-operation for Member States found in Article 4(3) TEU, or the international law duties pertaining to pacta sunt servanda as referenced in Article 26 of the Vienna Convention on the Law of Treaties. This is one specific manifestation of the Withdrawal Agreement’s chimeric status, as it straddles the paradigms of supranational constitutionalism and public international treaty law.
The claim that the UK Internal Market Bill breaches this good faith clause of the Withdrawal Agreement has been ventilated during the political, academic, and civil society debates in the United Kingdom. The Bingham Centre for the Rule of Law argued that ‘By the Government introducing a law in Parliament which would authorize the deliberate breaching of the WA, the UK is arguably in breach of its negative obligation under Article 5 to refrain from measures jeopardising the attainment of the objectives of the Agreement.’
A textual counter-argument for the UK?
However, nuance may derive from the discrepancy between the wording of the positive obligation and the negative obligation in Article 5 WA. Whereas the object of the first clause is the ‘obligations’ of the Agreement, the object of the second clause is the ‘objectives’ thereof. This linguistic distinction could be salient. Whereas the parties must take measures to ensure fulfilment of the obligations, thus pertaining to every clause of the main text and the Protocol, the parties duty to refrain from action could pertain solely to such measures that could jeopardise the objective of the Agreement. An explicit definition of the ‘objective’ of the Agreement is defined in Article 1 WA: to set out ‘the arrangements for the withdrawal of the United Kingdom…from the European Union…and from…(“Euratom”)’.
Consequently, a textual argument may be forwarded that the only measures which the parties must refrain from enacting are those that would jeopardise the United Kingdom’s withdrawal from the EU in accordance with Article 50(2) TEU. The argument would run that the power for UK Ministers to create domestic law that is incompatible with certain provisions of the Withdrawal Agreement, and the consequent disapplication of direct effect in relation thereto, does not impede the TEU and TFEU ‘ceasing to apply’ to and within the state. Therefore, the argument would conclude that the good faith negative obligation in the second sentence of Article 5 would not be breached in such a scenario.
Although a viable possible textual argument on paper, such a narrow reading of the objectives of the Withdrawal Agreement, relying on a formalistic textual method to limit the construction thereof, may be difficult to sustain if the dispute were heard before the CJEU.
The Court of Justice’s potential teleological argument on the basis of the dual-objective of Article 50 TEU
The Court of Justice of the European Union, employing its teleological method of interpretation, routinely looks beyond legal text to construct meaning, even in cases in which there may be no linguistic ambiguity. A salient example of this judicial tendency is found in the Wightman judgment, a case in which there was a textual lacuna (per para 48 of the judgement). In finding that Article 50 TEU did permit unilateral revocation of notification, despite the silence of the clause, the Luxembourg Court provided a paradigmatic statement of its teleological method: ‘the interpretation of a provision of EU law requires that account be taken not only of its wording and the objectives it pursues, but also of its context and the provisions of EU law as a whole’ (para 47).
The Court of Justice’s application of the teleological method in Wightman is also directly relevant to the question at hand on breach of good faith. In relation to the specific clause of Article 50 TEU, the CJEU held that the provision pursues the dual-objective of a sovereign right of withdrawal for any Member State, but subject to an orderly process at the supranational level. One can already envisage an argument whereby the Court of Justice would hold that, as the Withdrawal Agreement is the legal instrument promulgated to realise the objectives of Article 50 TEU, the ‘objectives’ of the treaty must be construed in relation to the dual-objective of the withdrawal clause itself, as the primary law source thereof.
Therefore, the Court of Justice may conclude that the reference to the ‘objective’ of the Withdrawal Agreement in Article 5 WA necessarily entails fidelity to the objective of ensuring an orderly withdrawal. Applying this telos to the facts, the conclusion may be reached that even the mere proposal of clauses 44, 45 and 47 of the UK Internal Market Bill may breach the objective of orderliness, and thus the negative obligation under Article 5 WA, by providing for the possible suspension of the application in domestic law of obligations deriving from Article 4 WA, Article 5 NIP, and Article 10 NIP.
The legal base and forum for the Commission claim: The ‘after-life’ of Article 258 TFEU before the end of the transition period
Supervision and jurisdiction during the ‘simulacrum’ of the transition period
In contrast to the substance of the claim, the Commission’s infringement press release does not explicitly state the form of the infringement claim, i.e. under what legal base the Commission is acting, nor the forum within which the Commission would seek to prosecute the infringement against the United Kingdom. However, the statement that ‘the Commission may, if appropriate, decide to issue a Reasoned Opinion’ if the UK does not ‘submit its observations to the letter of formal notice’ makes it implicitly clear that the Commission is acting in anticipation of activating its formal power to bring infringement actions against Member States for failure to fulfil obligations under the Treaties under Article 258 TFEU.
Although the United Kingdom has not been a Member State since the Treaties ceased to apply thereto on 31 January 2020, the Commission’s Article 258 power has been maintained for the duration of the transition period by Article 131 of the Withdrawal Agreement. The first sentence of this provision states that ‘During the transition period…the institutions…shall have the powers conferred upon by Union law in relation to the United Kingdom and to natural and legal persons residing [therein]’. This encompasses the Commission’s power to bring infringement actions under Article 248 TFEU, as if the United Kingdom were still a Member State until 31 December 2020.
This clause functions as the juridical means to ensure the transition period maintains a ‘simulacrum’ of the supranational constitutional order in relation to the UK immediately following withdrawal. The continuing jurisdiction of the Court of Justice of the European Union is confirmed in the next sentence of Article 131 WA. This replication of the EU legal order also functions reflexively in relation to the Withdrawal Agreement: Article 131 concludes that ‘[this jurisdiction of the CJEU established by] [t]he first paragraph shall also apply during the transition period as regards the interpretation and application of this Agreement’ (emphasis added).
This wording means that the Commission would have recourse, through Article 258 TFEU, to the Court of Justice of the European Union as the authoritative final arbiter of whether the United Kingdom has breached its good faith obligations under Article 5 of the Withdrawal Agreement, at least until 31 December 2020. So long as proceedings are commenced before this date, Article 86 of the Withdrawal Agreement ensures that ‘The Court of Justice of the European Union shall continue to have jurisdiction in any proceedings brought by or against the United Kingdom.’
Practical matters: Why has the Commission issued infringement proceedings now?
Upon first glance, it may appear that the European Commission has acted rather pre-emptively in issuing infringement procedures now. After all, the UK Internal Market Bill is still undergoing its passage through the House of Commons and the House of Lords, which could still lead to the extensive amendment or even removal of the offending clauses. Even if and when the Bill comes into force, clauses 44 and 45 would only provide a permission for Ministers to create regulations that are incompatible with the Withdrawal Agreement. It would be perfectly possible for Ministers to decide to promulgate regulations implementing Articles 5 and/or 10 NIP in domestic law that are fully compatible with the text in the Protocol on Ireland/Northern Ireland. Clauses 44 and 45, if and when in force, would impose no obligation upon the government to breach the treaty.
The termination of the Commission’s direct route to the Court of Justice for alleged infringements by the UK of the Withdrawal Agreement upon the conclusion of the transition period may provide a clue as to why the institution has issued infringement proceedings now. In turn, this may shed light on why the Commission has used the substantive claim of breach of the good faith obligation. As discussed in previous contributions on the topic on the Bingham Centre comment section, after 31 December 2020, the Commission could only commence dispute resolution procedures against the United Kingdom for breach of the main text of the Withdrawal Agreement, including the good faith obligation under Article 5 WA and the obligation to give domestic effect to the treaty under Article 4 WA, in accordance with Articles 167-181 WA. This general dispute resolution procedure relies first upon ‘cooperation and consultations’ between the UK and the EU in the co-constituted Joint Committee for at least 3 months before any request to establish an arbitration panel may be made through written notice under Article 169 WA.
Article 12(4) of the Protocol on Ireland/Northern Ireland does provide for a special dispute resolution procedure. This mirrors the simulacrum jurisdiction under Article 131 WA during the transition period. Indeed, the two provisions use the same textual formula, discussed above: Article 12(4) also provides that the Union’s institutions shall have the powers conferred upon them by the Treaties, and in particular the CJEU shall have the jurisdiction provided for by the Treaties.
Crucially, however, this jurisdiction is subject to a substantive and a temporal caveat. First, this special jurisdiction functions only in relation to Article 5, Articles 7-10, and Article 12(2)(2) NIP. The United Kingdom would not be in breach of its obligations under Article 5 NIP and/or Article 10 NIP unless and until a Minister or the Secretary of State were to exercise their permission to create regulations incompatible therewith. Therefore, arguably the Commission would only have the power to bring such an infringement action upon such an exercise of power. The counter-argument may be made that the coming into force of the clauses is sufficient to constitute breach; however, the fact that the clauses do not impose an obligation upon a Minister to issue incompatible regulations means that it is not a necessary consequence of the coming into force of clauses 44 and 45 that the Protocol on Ireland/Northern Ireland will be breached by UK domestic law.
Secondly, Article 185 of the Withdrawal Agreement explicitly does not include Article 12 NIP within the exceptions to the rule that ‘The Protocol on Ireland/Northern Ireland shall apply as from the end of the transition period’. This means that the special jurisdiction will only be activated after 31 December 2020. Indeed, the fact that the relevant provisions of the Protocol, Articles 5 and 10 NIP, in relation to which clause 44 and 45 will permit breach, will themselves only come into force after the end of transition logically implies that no claim for breach can be made out before this date.
The juridical sequencing of enforcement mechanisms is complex, but the practical strategic consequences are simple: if the European Commission wishes to prevent the United Kingdom from bringing clauses 44, 45 and 47 of the UK Internal Market Bill into force, on the basis that the legal powers contained therein may lead to breaches of the Protocol on Ireland/Northern Ireland and Article 4 of the Withdrawal Agreement, its only juridical option is to bring a claim, using the simulacrum powers under Article 131 WA before 31 January 2020, that the United Kingdom is in breach of its good faith obligations under Article 5 WA.
Conclusion: Another courtroom drama for the Brexit epilogue?
This post has sought to explicate the substance and legal base for the European Commission’s commencement of infringement procedures against the United Kingdom for alleged breach of the good faith obligations in the Withdrawal Agreement. The legal form may inform the political strategy – the Commission only has until 31 December 2020 to rely upon the supranational jurisdiction of the Court of Justice in relation to the main text of the Withdrawal Agreement. After this date, any alleged breaches of the Agreement will be subject to dispute resolution procedures that have their basis in intergovernmental public international law rather than supranational constitutionalism. The only possible exceptions in relation to which supranational jurisdiction will be maintained are certain provisions of the Protocol on Ireland/Northern Ireland. However, it may be argued that these clauses could only be breached in the United Kingdom if the powers under clause 44 and 45 of the UK Internal Market Bill came into force and were used by Ministers.
The press release commencing infringement actions against the United Kingdom does not, however, necessarily mean that the next explosive Brexit courtroom drama in Luxembourg is inevitable. The United Kingdom has one month to submit its observations, and the Commission retains discretion to proceed to the next stage of a Reasoned Opinion. Ministerial statements by the UK government, and a paper on ‘notwithstanding clauses’ does, however, provide some indication of a possible legal counter-argument that the UK could mount. This would seek to turn the tables by claiming that, in fact, it is the EU which has acted, or may act, in breach of the good faith obligations under Article 5 WA.
Part Two of this post will consider the substantive legal form and forum that such arguments could take. ‘I can’t tell you where we’re going/I guess there’s just no way of knowing…?’