On 8 January 2019, an action was brought before the Court of Justice of the European Union (hereafter CJEU) by an environmental law charity, ClientEarth (hereafter applicant) against a multilateral development bank (hereafter MDB) and European institution, the European Investment Bank (hereafter EIB). The case concerns the financing by the bank of a biomass energy generating project in Northern Spain – Galicia -, of the cost of 60 million euros, followed by the bank’s refusal to refine its decision to finance the aforementioned investment, regardless the applicant’s request for an internal review of this decision on April 2018. The applicant bases the request for an internal review on alleged ‘errors in the assessment of the financing combined with the provision of minimal information regarding the funding decision’. The main claim brought by the applicant involves the annulment of EIB’s refusal to conduct an internal review and subject its decision to scrutiny, as requested under Article 10 of the Aarhus Regulation (hereafter Regulation), bringing into discussion implementation issues of both International and European law. Continue reading →
After its State of the Union address of 13 September 2017, in which he presented his vision for the future of the Europe Union, President Juncker announced the creation of a Task Force to reflect on the application of the principles of subsidiarity and proportionality in EU policymaking and to make propositions to strengthen their role (see the President’s Decision). After several meetings and consultations, the Task Force published its findings in a final Report and the Commission released a Communication in October 2018 in which it commits to follow several of the propositions made.
This commentary presents some of these recommendations and sketches some (rough) reflections on the place of the principle of subsidiarity in the EU legal order and how to improve its role as a tool to control EU legislative activity. Continue reading →
A small change can have big consequences. Some of these changes may be unplanned and unpredictable. Some represent welcome developments that complement and contribute to long-running narratives of progress. Arguably, the recent publication of a reference to a harmonised standard in the L series of the Official Journal of the European Union belongs to the latter category. It may yet, however, prove to have unintended consequences that go beyond that which was originally envisioned.
Technical standards have long played a fundamental role in the regulation of the internal market. According to the regulatory technique of the “New Approach”, EU directives establish only the essential requirements of general interest of a product, while referring the detailed definition of technical aspects to private organizations composed of experts and representatives of the business sector, i.e. the European standard-setting organisations (ESOs). To this end, the European Commission makes a request to one of these ESOs and, where a standard satisfies the requirements set out in the request and in the corresponding Union harmonisation legislation, it publishes a reference to it in the Official Journal. Through this procedure, these standards elaborated by private European standardisation bodies are granted a presumption of conformity with the secondary EU law measures they are aimed at complementing. Consequently, they are endowed with the qualification of ‘harmonised standards’.
Recent developments in EU legislation (see Regulation EU) No 1025/2012) and in the case law (see, inter alia, Case C-171/11, Fra.bo. v DVGW) have progressively changed the view of standardization as a purely non-binding, private phenomenon. In particular, the James Elliott case established the jurisdiction of the European Court of Justice with regard to the interpretation of harmonised standards in a preliminary reference under Article 267 TFEU, clarifying that harmonised standards shall be considered as “measures implementing or applying an act of EU law” and, therefore, “part of EU law”. This ruling of the Court has thus contributed to strengthen the claims of an unstoppable “juridification” of harmonized standards, fostering the debate on their legal qualification under EU law (as discussed here, here and here). Continue reading →
All is clear, then: CETA’s Investment Chapter is perfectly compatible with EU Law. According to Advocate General Bot, the agreement is wholly separate from the normative (as opposed to the factual) universe of EU law, and merely protects readily identifiable ‘foreigners’ investing in the EU in the same way as it protects readily identifiable ‘European’ investors in foreign lands. From what we know of the hearing, the Advocate General provides not much more than a useful summary of the talking points offered by the Council, the Commission and the vast majority of the 12 intervening Member States, remarkably united in a bid to save the EU’s new external trade and investment policy. Clearly, the pressure on the Court to follow suit will be enormous. And yet. It is true, CETA builds strong fences to make good neighbors. But let spring be the mischief in me: CETA cannot wall out what EU Law walls in.[i]
The EU’s exercise of its post-Lisbon competences over foreign direct investment (FDI) has been anything but smooth. In Opinion 2/15 the CJEU clarified the EU and Member State competences over the EU’s new generation free trade and investment agreements, resulting in the splitting of the EU‑Singapore agreement into a separate trade and investment agreement. Then, in Achmea the Court found investor-state arbitration (ITA) clauses under intra-EU BITs to be incompatible with EU law, which will result in the termination of almost 200 intra-EU BITs and the non-enforcement of ITA awards rendered under them within the EU. Now, everyone is anxiously awaiting the outcome of Opinion 1/17 – requested by Belgium under the insistencies of Wallonia – and whether the Investment Court System (ICS) under CETA is compatible with EU law. This opinion will not only affect the entry into force and conclusion of the trade and investment agreements with Canada, Singapore, Vietnam and Mexico, but it will have broader implications for the multilateral ISDS reform process and the EU’s investment policy.
Therefore, Advocate General Bot’s extensive opinion delivered on 29 January 2019 (first commentaries here and here) in which it found the CETA ICS to be compatible with EU law deserves scrutiny. I will only focus on the AG’s arguments concerning the exclusive jurisdiction of the Court of Justice over the definitive interpretation of EU Law. In a separate post, Harm Schepel will focus on the AG’s arguments on non‑discrimination. Continue reading →
On 10 December 2018, the European Court of Justice (ECJ) delivered its judgment in the Wightman case on the revocation of a notification of an intention to withdraw from the EU under Article 50 TEU. Extraordinarily, the expedited process adopted by the CJEU upon the request of the referring Scottish Inner Court of Session has seen a judgment delivered barely three months after the original preliminary reference request was made in the domestic judgment on 21 September 2018. This is a reaction to the time-sensitivity of the political end-game of Brexit. The UK House of Commons had been scheduled to hold its ‘meaningful vote’ on adoption of the Withdrawal Agreement and political declaration on the future relationship on 11 December before the postponement of this vote by the government. This vote provided the factual background to the dispute in the case. The petitioners, including Scottish MPs, sought an answer to the question of whether legally there existed the third option of revocation rather than the dichotomy of either accepting the Withdrawal Agreement or else exiting the EU via the automatic operation of Article 50(3) TEU upon the elapse of the two-year time period on 29 March 2019. The full-court judgment has upheld the Advocate-General’s Opinion of 4 December that a Member State is free to revoke unilaterally a notification of intention to withdraw from the EU made under Article 50(2) TEU. Indeed, the final judgment has recognised a right to revoke that is even more receptive to the sovereign discretion of the withdrawing Member State than in the Opinion. This post will first summarise the judgment, before providing some comments thereupon. The Wightman decision has filled a lacuna in EU law; it remains to be seen whether this legal clarity will help to assuage the political chaos currently engulfing the United Kingdom. Continue reading →
A few days before the vote in the House of Commons on the Withdrawal Agreement, scheduled for December 11th, 2018, the debates are still vivid both in the United Kingdom and the European Union. The possibilities of holding a second referendum or stopping the withdrawal process have been repeatedly raised as alternatives should the Withdrawal Agreement be rejected by the House of Commons.
In this context, the pending case Wightman and others before the Court of Justice of the EU is of crucial importance. After the judgment of the UK Supreme Court in R (Miller) v Secretary of State for Exiting the European Union, which followed the submissions of counsel regarding the irrevocability of a withdrawal notification, the request for a preliminary reference from the Inner House of the Court of Session in Scotland could be a game changer. The Opinion of Advocate General Campos Sánchez-Bordona delivered on December 4th, 2018, invites the Court to rule in favour of the possibility for the UK to unilaterally revoke its notification of withdrawal, potentially opening up a third way. Continue reading →
The question whether it would be lawful for a Member State to revoke the notification of withdrawal from the EU before the two-year lapse (laid down in the third paragraph of Article 50 TEU) has, clearly, vital political, economic and social implications. Even though it cuts to the core of the philosophy governing the “ever closer Union” and the role that States and private individuals play in it, it’s also a matter to which the provision itself does not give a definite answer. Moreover, there is no case law issued on the matter by the CJEU that could contribute to the interpretation of the provision, while the UK Supreme Court seems to have posited the irrevocability of a withdrawal notification in the famous judgment issued in the case of R (Miller) v Secretary of State for Exiting the European Union [UKSC 2016/0196], foregoing the opportunity to use the preliminary reference mechanism. This absence of relevant CJEU case-law is expected to change after the Inner House of the Court of Session in Scotland decided on 21.09.2018 to refer a relevant preliminary question (see O. Garner’s analysis),
Part of the literature expressing interesting and strong legal arguments has suggested the answer to the above question to the positive (e.g. P. Craig, S. Peers, O. Garner, A. Sari). Arguing the contrary and attempting a contribution to the academic debate, this post’s point of view is based on the fundamental principle that the EU legal order constitutes an “autonomous legal system”, which is governed by its own rules enacted by its own institutions and interpreted by its established Court (C-26/62, Van Gend en Loos). It is, therefore, argued that the legal lacuna regarding the provision of revoking the withdrawal notification, leads, according to the interpretation of the provision set out in Article 50 TEU – in line with the letter and spirit thereof – to the conclusion that permitting such a revocation would contradict the principle of autonomy, regardless of whether it is unilateral or initiated upon consensus.
The present post is divided into two parts. In the first part I approach the interpretation of Article 50 TEU through its letter and spirit. In the second part I develop my argumentation concerning the critical role that the fundamental principle of autonomy should play when attempting to find the true meaning of the provision and to fill the legal gap concerning the right to revoke the withdrawal notification. Continue reading →
In a Grand Chamber ruling of 4 September 2018, the European Court of Justice annulled two decisions of the Commission to refuse access to documents on impact assessment reports in environmental matters. The decision is an important precedent to ensure greater transparency of the EU institutions at the early stages of legislative action – arguably the key stage of influence – and therefore a resounding win for those arguing for greater participation and influence of citizens in the EU legislative process. The judgment’s explicit recognition of this key constitutional EU value of greater participation of its citizens in the EU decision-making process in an access to documents case is therefore without doubt the most notable aspect of the ruling. It marks a major step forward for the utility for citizens of Regulation 1049/2001, especially considering the extensive restrictive case-law (in terms of transparency) in relation to other powers of the Commission under the Treaties. For transparency lawyers specifically, the finding of the ECJ that there is no general presumption of confidentiality to documents drafted in the context of a legislative initiative is significant, as is the role of the Aarhus Regulation in access to documents cases. Continue reading →
Investment Tribunals called upon to resolve intra-EU disputes are getting used to the European Commission showing up at their doorstep to try to convince them to decline jurisdiction. Though the range of arguments is wide and varied depending on the circumstances of the case and the underlying Investment Treaties, the overarching theme is simply that EU Law reigns supreme in relations between Member States and overrides all international law commitments that individual Member States- and the EU itself in the case of the Energy Charter Treaty- have entered into. The Commission has occasionally met with success: in Electrabel, a long learned discussion on the relationship between EU Law and the ECT was concluded with the bombshell that EU law ‘would prevail over the ECT in case of any material inconsistency’ (para. 4.191). Other times, it is summarily dismissed. ‘Should it ever be determined that there existed an inconsistency between the ECT and EU Law’, observed the Tribunal in RREEF Infrastructure, ‘the unqualified obligation in public international law of any arbitration tribunal constituted under the ECT would be to apply the former. This would be the case even were this to be the source of possible detriment to EU law. EU law does not and cannot “trump” public international law.’[i]
The most interesting point about these wide divergences between different Tribunals on rather fundamental points of EU and international law is how little they seem to matter. In both RREEF and Electrabel and numerous other intra-EU cases, the Tribunals disposed of the matter by pointing out that, in casu, there was no relevant material inconsistency, no conflict, no need to rule on matters of EU law, no incompatibility of obligations under different Treaties, and/or nothing that could not be solved by ‘harmonious interpretation.’ It might make sense to think of this Tribunal practice as devising conflicts-rules.
There are good reasons for the Court of Justice not to want to play this game. A case by case analysis of whether a particular award passes muster through national enforcement proceedings, or a Treaty-by-Treaty analysis of whether a particular dispute settlement or applicable law clause is compatible with EU law, is bound to be time consuming and labor-intensive, and will inevitably be unpredictable and lead to legal uncertainty. Continue reading →
A week has passed since the European Court of Justice (ECJ) rendered the landmark Achmea judgment. A number of posts analyzing the judgment have already appeared in the legal blogosphere (see e.g. here, here, here and here). Much of this commentary has focused on describing the Court’s reasoning and on analyzing the judgment’s broader implications. Most commentators agree that there was nothing unexpected in the Court’s conclusion that the arbitration clauses in the less than two hundred intra-EU BITs have, as the Court put it, an ‘adverse effect on the autonomy of EU law’ (para. 59).
The judgment’s reception has also varied in accordance with the view one has of the underlying purposes of investment treaties – do they promote the international rule of law or narrow corporate interests at the expense of the public interest? Accordingly, those critical of investment treaties and arbitration have welcomed the judgment, whereas the proponents of investment treaties have argued that the judgment leads to less ‘rule of law within the EU’. On a higher level of abstraction, the plausibility of the Court’s reasoning also depends on the view one has of the EU in general: is it an autonomous constitutional order based on the protection of fundamental rights and certain foundational values? Or should the EU demonstrate more openness towards other international law regimes, as it is just one such regime among others? Depending on the view one has over these two intertwined general questions, Achmea can either appear as a logical corollary of EU constitutionalism or as a breach of the EU’s commitment to the international rule of law.
What this blogpost strives to do is to take issue with the Court’s understanding that arbitral tribunals interpret and apply EU law in ways that pose a threat to its autonomy. The point is not to argue that the Court’s reasoning and conclusions are incorrect, but to shed light on the ways in which arbitral tribunals have actually ‘used’ EU law, and to show that the Court’s understanding (with which most commentators sympathize) that investment arbitration poses a threat to the autonomy of EU law is somewhat inflated. Continue reading →
After last week’s Achmea ruling of the Court of Justice (CJEU) Member States can no longer legally go ahead with ratifying CETA – the mixed Free Trade Agreement that the EU and its Member States agreed with Canada. Achmea casts serious doubts on the legality of CETA’s investment chapter, which allows investors from one Party to submit to an arbitral tribunal a claim that the other Party has breached an obligation under CETA. By simply going ahead with the ratification, they violate the principle of loyalty under European Union law.
On 6 March, the CJEU declared in its Achmea ruling that the investor-state-dispute-settlement (ISDS) mechanism in the bilateral investment treaty between the Netherlands and Slovakia (NL-SK-BIT) as incompatible with EU law. A request by Belgium is pending before the CJEU asking for clarification on the legality of the new Investor Court System in CETA (Opinion 1/17). Achmea is a clear indication that the CJEU in Opinion 1/17 is likely to find also the Investor Court System in CETA problematic for the autonomy of EU law.
No general obligation exists for Member States to halt national ratification of mixed agreements when their compatibility with EU is questioned before the CJEU. Yet, CETA is different. The clear indication of incompatibility in Achmea imposes an obligation on national Parliaments to halt the CETA ratification process and wait for Opinion 1/17. Continue reading →
The EU Treaty commits the Union to respect international human rights in both its internal and external action, and to always act as openly as possible. Despite this, the transparency of the EU institutions remains a hot-button issue, including in relation to the consummation of international agreements (or other international arrangements) that have potential human rights implications. This very issue was on display in the recent judgment of the General Court in Case T-851/16 Access Info Europe v Commission. Here, Access Info Europe, an NGO concerned about the 2016 compatibility of the EU-Turkey refugee deal with international human rights law, sought, through an access to documents request made to the Commission, to uncover the institution’s own legal analysis regarding the agreement’s legality.
The matter was no less urgent because of the General Court’s recent order in Cases T-192/16, T-193/16 and T-257/16 NF, NG and NM v European Council, which established that the deal does not count as measure adopted by one of the institutions of the EU for the purposes of judicial review under the Treaties. This leaves the matter in a legal limbo especially considering that the EU is not party to the European Convention of Human Rights and thus not subject to its external human rights scrutiny, a path effectively closed by the CJEU itself. To our knowledge, the EU Fundamental Rights Agency, the EU body that was established to provide expertise on fundamental rights, had not been consulted on the matter. It would be a clear concern to the public to uncover, if this indeed was the case, that an international arrangement that dealt with areas of fundamental importance, for example considerations of whether Turkey was a ‘safe third country’ for the purposes of the refugee regime, was concluded on the basis of hasty and incomplete legal advice—or, in the worst case, that advice that deemed the agreement illegal was ignored. It is hard to envisage a matter in which public access rules would be serving their constitutional function better.
The European Commission is about to gain a new investigative power through the Single Market Information Tool (SMIT). The SMIT will allow the Commission to request information (including factual market data or fact-based analysis) from private firms or trade associations when the Commission initiates or substantiates infringement proceedings against one or more Member State(s) that may have failed to fulfil an obligation under the applicable Single Market legislation. This post will discuss the background of the SMIT, its purported rationale, and critically reflect on the powers granted to the Commission under the SMIT.
The Commission is at pains to clarify that the SMIT initiative does not aim to create new enforcement powers allowing it to pursue infringements of Union law in the Single Market area against individual market participants. That said, the Single Market rules can be infringed by either Member States or private companies. Therefore, companies responding to such information requests will not only incur administrative and financial burdens, but they will also have to be careful not to incriminate themselves in doing so, as we will see below.
A few months ago, AG Wathelet delivered a remarkable defence of investor-state dispute settlement (ISDS) in international investment agreements between Member States in his Opinion in C-284/16 Achmea. The case concerned a preliminary reference by a German court (the Federal Court of Justice, or Bundesgerichtshof) regarding the validity of an award rendered by an ISDS tribunal under the Dutch-Slovak bilateral investment treaty (BIT). This monetary award against the Slovak government was the result of the partial reversal of the privatisation of the Slovak health care system. The Opinion is the latest development in the legal controversies surrounding ISDS and EU law after the Micula cases and, of course, the recent Request for an Opinion by Belgium (Opinion 1/17) on the compatibility of CETA with the EU Treaties. Although many aspects of this Opinion merit critical commentary, this post will focus on two issues:
the question whether ISDS tribunals set up under intra-EU BITs should be seen as courts common to the Member States and are therefore fully part of the EU’s judicial system.
whether the discrimatory access to ISDS in the Dutch-Slovak BIT is compatible with Article 18 TFEU and justified under EU internal market law. Continue reading →
A mere three years ago, the voluntary and non-binding nature of technical standards was still deemed self-evident. Standards, it was believed, would never be seen as parts of EU law. In the meantime, however, the James Elliott Construction case (C-613/14) caused a serious crisis of faith in this regard. Holding that it has jurisdiction to interpret a European harmonised technical standard adopted by the European Committee for Standardisation (‘CEN’), the EU Court of Justice (‘CJEU’) forewarned that it would play a more active role in the interpretation and legality assessment of harmonised technical standards. In the wake of that judgment, the European Parliament in July 2017 additionally also called for more control and accountability mechanisms to be put in place, albeit in ways diametrically opposed to what the CJEU had proposed just eight months earlier. This post will compare and contrast the Parliament’s proposals with the CJEU’s approach in James Elliott Construction, inviting the European Commission to reconcile both institutions’ positions as part of its on-going modernisation initiatives in this field.Continue reading →