Professor Steve Peers, University of Essex

Introduction and Overview

A crucial element of the ‘Brexit deal’, formally called the EU/UK Trade and Cooperation Agreement (TCA), is dispute resolution. This post provides a thorough analysis of the treaty’s dispute resolution mechanisms and offers a concise summary upfront. (An update on April 29, 2021, incorporates the final TCA article numbers).

This is the fourth post in a series examining the TCA. It follows an overview of the TCA, an analysis of its social security provisions by Professor Tamara Hervey, and an exploration of the connections between the TCA and human rights. (An additional post later addresses environment and climate change).

The TCA stands as a separate treaty from the withdrawal agreement, which remains applicable between the UK and the EU. Notably, the withdrawal agreement has its own distinct dispute resolution procedures. These procedures provide a valuable point of comparison for the TCA’s dispute resolution rules. It’s worth noting that a connection exists between the two treaties: non-compliance with a withdrawal agreement ruling could trigger retaliatory measures under the TCA.

Similar to the withdrawal agreement, the TCA dispute resolution framework mirrors the structure of the World Trade Organization (WTO) dispute resolution system. The basic premise is that if a disagreement arises, the parties engage in consultations. Should these consultations fail to reach a resolution, either party can initiate arbitration. If the arbitrators determine a breach has occurred, the breaching party is generally expected to comply within a reasonable timeframe. Failure to comply could lead to proportionate retaliatory measures by the winning party, such as withdrawing benefits outlined in the agreement.

Unlike the WTO system, neither the withdrawal agreement nor the TCA features an appeals body.

A significant difference between the withdrawal agreement and the TCA concerning dispute resolution lies in the role of the Court of Justice of the European Union (CJEU). During the transition period under the withdrawal agreement, the CJEU maintained its standard jurisdiction over the UK. Even after the transition period, the CJEU retains limited jurisdiction and remains linked to the dispute resolution process. This link is evident in the obligation of arbitrators to refer questions concerning the interpretation of EU law to the CJEU if a dispute involves an ‘EU law concept or provision’.

Conversely, the TCA restricts CJEU jurisdiction solely to matters related to UK participation in EU programs. The TCA arbitrators are not required to consult the CJEU on EU law, as there are no other direct references to EU law within the agreement. It is possible, however, that the CJEU might be involved in TCA disputes on the EU side, but its decisions wouldn’t be binding on the UK, except for matters concerning participation in EU programs.

Another key distinction is the complexity of the primary dispute resolution system. The withdrawal agreement, excluding the overlap with CJEU jurisdiction, provides a single, uniform dispute resolution framework without exceptions. The TCA, however, presents multiple variations and exclusions to its dispute resolution system, even incorporating entirely different dispute resolution mechanisms for specific matters.

Some special rules are directly embedded within the dispute resolution provisions annotated in this post, while others appear in separate sections of the TCA. This post includes two annexes examining these separate rules, which pertain to the ’level playing field’ and fisheries. The separate dispute resolution rules for criminal law are not examined because they rely solely on political processes, without any provision for arbitration.

Historically, the EU prefers informal dispute resolution within its Free Trade Agreements (FTAs) with non-EU countries, while actively utilizing the WTO dispute settlement system as both a complainant and a respondent. Whether the EU/UK relationship will mirror the informal political approach seen in EU FTAs or the more litigious nature of the EU’s WTO membership remains to be seen.

Annex I: The General Dispute Settlement Rules

PART SIX: DISPUTE SETTLEMENT AND HORIZONTAL PROVISIONS

TITLE I: DISPUTE SETTLEMENT

Chapter 1: General provisions

Article 734 (ex-INST.9): Objective

The goal of this Title is to establish an efficient mechanism for preventing and resolving disagreements between the Parties regarding the interpretation and application of this Agreement and supplementary agreements, with the intention of finding a mutually acceptable solution whenever possible.

Note: This closely resembles the objective of the withdrawal agreement’s dispute settlement provisions (see Article 167), but with subtle differences.

Article 735 (ex-INST.10): Scope

1. Subject to paragraphs 2, 3, 4, and 5, this Title applies to disagreements between the Parties regarding the interpretation and implementation of this Agreement or any supplementary agreement (“covered provisions”).

2. ‘Covered provisions’ include all provisions of this Agreement and any supplementary agreements, except:

(a) Article 32(1) to (6) and Article 36;

(b) Annex 12;

(c) Title VII of Heading One of Part Two;

(d) Title X of Heading One of Part Two;

(e) Article 355(1), (2), and (4), Article 356(1) and (3), Chapter 2 of Title XI of Heading One of Part Two, Articles 371 and 372, Chapter 5 of Title XI of Heading One of Part Two, and Article 411(4) to (9);

(f) Part Three, including when applying in relation to situations governed by other provisions of this Agreement;

(g) Part Four;

(h) Title II of Part Six;

(i) Article 782 of Part Seven; and

(j) the Agreement on security procedures for exchanging and protecting classified information.

3. A Party may refer a dispute to the Partnership Council for resolution if the dispute concerns obligations arising from the provisions listed in paragraph 2.

4. Article 736 applies to the provisions listed in paragraph 2.

5. Notwithstanding paragraphs 1 and 2, this Title doesn’t apply to disagreements regarding the interpretation and implementation of the Protocol on Social Security Coordination or its annexes in individual cases.

Note: This provision is absent in the withdrawal agreement due to its single, unified set of dispute settlement provisions (aside from those overlapping with the CJEU’s remaining jurisdiction within that agreement).

The first exclusion encompasses most of the provisions on trade remedies such as anti-dumping regulations, anti-subsidy measures, and economic safeguards, where WTO law is cross-referenced (allowing for WTO dispute settlement instead). It’s important to note that the TCA also has its own rules on subsidies and safeguards, which fall under TCA dispute resolution, although with variations for subsidies.

Cultural goods provisions are excluded from dispute resolution. Note that these rules solely apply to cultural items acquired after 1993 and would not apply, for example, to the Parthenon marbles. No alternative dispute resolution mechanism exists in this case.

The second exclusion pertains to the annex on medicinal products. No alternative dispute resolution mechanism is provided.

The third exclusion covers the relatively broad rules on small and medium-sized enterprises within the trade heading. Again, no alternative dispute resolution mechanism is specified.

The fourth exclusion deals with the more concrete title on regulatory cooperation, which is also part of the trade heading. Once again, no alternative dispute resolution process is outlined.

The fifth exclusion covers various elements of the level playing field (LPF) rules, including introductory rules, competition law, some subsidy rules, taxation, and the ‘future review’ part of the rebalancing clause on future divergences in labor, environmental, and subsidy laws. This implies that the remaining dispute resolution clauses generally apply to LPF clauses. It’s important to note that there are variations from the standard dispute resolution rules for specific LPF issues, either within the dispute resolution section or the LPF section of the treaty, discussed further below and in Annex II. For LPF issues entirely excluded from the dispute resolution process, no alternative dispute settlement mechanism exists.

The sixth exclusion encompasses Part Three of the agreement, which addresses criminal law. This part has its own dispute resolution mechanisms, which are essentially political.

The seventh exclusion is the entirety of Part Four, which focuses on health security and ‘cyber’ matters. It doesn’t have its own specific dispute resolution rules.

The eighth exclusion covers the list of elements forming the basis of the EU/UK relationship. However, the procedure for addressing certain elements, referred to as ’essential elements’ of the relationship, is not excluded from the dispute settlement provisions.

The ninth exclusion pertains to the short-term transition period (lasting a maximum of six months) during which EU data protection law still applies to the UK while the European Commission considers adopting an ‘adequacy decision’.

Lastly, the tenth exclusion relates to the separate UK/EU agreement on the exchange of classified information, which stipulates that disagreements will be settled through consultations (Article 18). The separate UK/Euratom treaty is not explicitly mentioned. It’s worth noting that it has its own simplified form of dispute resolution, potentially including arbitration (Article 21).

It’s important to highlight that political dispute resolution remains a possibility for these excluded issues (para 3). Furthermore, parties cannot resolve disputes related to these excluded provisions through any other dispute settlement mechanism outside the TCA (para 4). They are limited to addressing these disagreements within the Partnership Council or using the alternative dispute resolution mechanisms outlined in the treaty (such as those concerning criminal law).

A different exclusion approach applies to social security (para 5). While social security rules fall within the scope of dispute resolution, the mechanism cannot be utilized to resolve ‘individual cases’.

Note that, as discussed later, it’s not permissible to retaliate for a breach in, for instance, the trade provisions concerning any areas excluded from the scope of the dispute settlement procedures.

Article 736 (ex-INST.11): Exclusivity

The Parties agree not to submit a disagreement between themselves regarding the interpretation or implementation of provisions within this Agreement or any supplementary agreement to any resolution mechanism other than those provided for in this Agreement.

Note: This is fundamentally the same rule as outlined in Article 168 of the withdrawal agreement, albeit with slightly different wording.

Article 737 (ex-INST.12): Choice of forum in case of a substantially equivalent obligation under another international agreement

1. Should a disagreement arise regarding a measure allegedly violating an obligation under this Agreement or any supplementary agreement, and a substantially equivalent obligation under another international agreement to which both Parties are signatories, including the WTO Agreement, the Party seeking redress shall choose the forum for settling the disagreement.

2. Once a Party selects a forum and initiates dispute resolution proceedings under either this Title or another international agreement, that Party cannot initiate similar procedures under another international agreement concerning the specific measure mentioned in paragraph 1, unless the initially chosen forum fails to make a determination due to procedural or jurisdictional reasons.

3. For this Article:

(a) a Party’s request for the establishment of an arbitration tribunal under Article 739 is considered initiation of dispute resolution proceedings under this Title;

(b) a Party’s request for the establishment of a panel under Article 6 of the Understanding on Rules and Procedure Governing the Settlement of Disputes of the WTO is considered initiation of dispute settlement procedures under the WTO Agreement; and

(c) the initiation of dispute resolution proceedings under any other agreement is deemed to have occurred if initiated according to the relevant provisions of that agreement.

4. Without prejudice to paragraph 2, nothing in this Agreement or any supplementary agreement prevents a Party from suspending obligations authorized by the Dispute Settlement Body of the WTO or authorized under the dispute settlement procedures of another international agreement to which the Parties are signatories. The WTO Agreement or any other international agreement between the Parties shall not be invoked to prevent a Party from suspending obligations under this Title.

Note: The withdrawal agreement lacks an equivalent provision, and it remains unclear whether this provision applies to disagreements potentially falling within the scope of both the withdrawal agreement and the TCA (such as those related to goods trade or state aid concerning the Northern Ireland protocol of the withdrawal agreement). At first glance, the withdrawal agreement appears to be ‘another international agreement to which both Parties are party’. However, given the link between the withdrawal agreement’s dispute resolution system and the potential for retaliation based on the TCA (discussed further below), this distinction might not be practically significant.

Paragraph 1 allows the party seeking a remedy to choose the dispute resolution mechanism in cases of overlapping arguments under multiple treaties. To avoid violating the exclusivity clause, a party invoking a system other than the TCA must ensure their arguments within that other system explicitly avoid referring to the TCA. The WTO is specifically mentioned as one instance of an overlapping system, but the wording (‘including’) isn’t exhaustive. The most apparent example of an overlapping argument would be cases where the TCA’s trade in goods provisions directly incorporate a WTO provision.

Paragraph 2 prevents the complaining party from initiating multiple proceedings under different systems, requiring them to adhere to their initial choice of forum. However, multiple complaints can be filed if the first forum chosen refuses to rule on the merits of the initial complaint. Paragraph 3 defines the application of this rule. This likely prevents not only simultaneous, multiple proceedings but also attempts to bring a complaint to a second forum after the first forum has rejected a substantially similar complaint on its merits.

Paragraph 4 clarifies that the TCA doesn’t hinder either party from suspending its obligations after utilizing the WTO dispute resolution mechanism or another treaty (such as the agreement replacing the WTO appellate body, if the UK joins the EU as a signatory). This principle applies in reverse: the WTO dispute resolution process does not prevent either party from suspending its obligations according to the TCA’s dispute resolution rules.

Chapter 2: Procedure

Article 738 (ex-INST.13): Consultations

1. If one Party (’the complaining Party’) believes the other Party (’the respondent Party’) has breached an obligation under this Agreement or a supplementary agreement, the Parties should attempt to resolve the matter through good-faith consultations, aiming for a mutually acceptable solution.

2. The complaining Party may request consultations through a written request submitted to the respondent Party. This written request should clearly state the reasons for the request, including identification of the disputed measures, the legal basis for the request, and the applicable covered provisions.

3. The respondent Party should promptly respond to the request, no later than ten days after receiving it. Consultations should occur within 30 days of the request delivery date, either in person or through another communication method agreed upon by both Parties. Unless otherwise agreed, in-person consultations will be held in the respondent Party’s territory.

4. Unless both Parties agree to continue, consultations are considered concluded 30 days after the request delivery date.

5. For urgent matters, including those involving perishable goods, seasonal products, or services, consultations should occur within 20 days of the request delivery date. These consultations are deemed concluded within those 20 days unless both Parties agree to continue.

6. Each Party should provide adequate factual information to allow a thorough examination of the disputed measure, including how it might affect the implementation of this Agreement or any supplementary agreement. Each Party should strive to ensure the participation of relevantly skilled personnel from their competent authorities.

7. For disputes outside of Titles I to VII, Chapter 4 of Title VIII, Titles IX to XII of Heading One, or Heading Six of Part Two, consultations will be held within the framework of a Specialized Committee or the Partnership Council upon the request of the complaining party. The Specialized Committee may, at any time, refer the matter to the Partnership Council. The Partnership Council may also choose to address the matter directly. The Specialized Committee or, as applicable, the Partnership Council may resolve the dispute through a decision. The timeframes outlined in paragraph 3 apply. The venue for meetings adheres to the rules of procedure of the Specialized Committee or, as relevant, the Partnership Council.

8. Consultations, especially all information designated as confidential and positions adopted by the Parties during these consultations, are confidential and do not prejudice the rights of either Party in any subsequent proceedings.

Note: Paragraph 1 closely mirrors Article 169 of the withdrawal agreement. However, the subsequent paragraphs are considerably more detailed than those in the withdrawal agreement. The timeframe for consultations (deemed concluded after 30 days, or 20 days in urgent cases, unless extended by mutual agreement) is shorter than that under Article 170 of the withdrawal agreement, which allows for three months of dialogue before unilateral initiation of arbitration.

Article 739 (ex-INST.14): Arbitration procedure

1. The complaining Party may request the establishment of an arbitration tribunal if:

(a) the respondent Party fails to respond to the consultation request within ten days of receiving it;

(b) consultations are not held within the timeframes specified in Article 738(3), (4), or (5);

(c) both Parties agree to forgo consultations; or

(d) consultations conclude without reaching a mutually agreed solution.

2. A written request delivered to the respondent Party is required for the establishment of an arbitration tribunal. The complaining Party must explicitly identify the disputed measure in their request and clearly explain how that measure violates the covered provisions, presenting a clear legal basis for the complaint.

Note: As previously mentioned, the timeframes for initiating arbitration (see the cross-references in para 1) are shorter than the three-month period stipulated in the withdrawal agreement. Paragraph 2 resembles, but isn’t identical to, part of Article 170(1) of the withdrawal agreement. One notable difference (consistent throughout the TCA’s dispute resolution process) is that the TCA, unlike the withdrawal agreement, doesn’t include provisions for logistical support from the Permanent Court of Arbitration in The Hague.

Article 740 (ex-INST.15): Establishment of an arbitration tribunal

1. An arbitration tribunal consists of three arbitrators.

2. Within ten days of receiving the request for establishing an arbitration tribunal, the Parties should consult to agree on the tribunal’s composition.

3. If the Parties don’t agree on the tribunal’s composition within the timeframe specified in paragraph 2, each Party should appoint an arbitrator from their respective sub-list (established under Article 752) no later than five days after the period stipulated in paragraph 2 expires. Should a Party fail to appoint an arbitrator from its sub-list within this timeframe, the Partnership Council co-chair from the complaining Party will randomly select an arbitrator from the non-appointing Party’s sub-list no later than five days after that period’s expiry. The Partnership Council co-chair from the complaining Party may delegate this random selection of the arbitrator.

4. If the Parties can’t agree on the tribunal’s chairperson within the timeframe specified in paragraph 2, the Partnership Council co-chair from the complaining Party will randomly select the chairperson from the chairperson sub-list (established pursuant to Article 752) no later than five days after that period expires. The Partnership Council co-chair from the complaining Party may delegate this random selection of the chairperson.

5. If any lists outlined in Article 752 haven’t been established or lack sufficient names when a selection is required under paragraphs 3 or 4, the arbitrators will be randomly selected from individuals formally proposed by one or both Parties, as per Annex 48.

6. The date when the last of the three arbitrators informs the Parties of their appointment acceptance, in accordance with Annex 48, is considered the date of the arbitration tribunal’s establishment.

Note: A TCA arbitration tribunal comprises three arbitrators, compared to five under the withdrawal agreement (para 1, contrasted with Article 171(3) of the withdrawal agreement). The withdrawal agreement mandates establishing a panel within 15 days (Article 171(4)), while the TCA allows for ten days of consultations (para 2). The TCA outlines a process for quickly establishing the tribunal if the parties can’t agree on its members (paras 3 and 4). If the list of arbitrators remains undecided, the TCA defaults to randomly selecting names from a list proposed by one or both parties (para 5). The process if one party attempts to obstruct the proceedings by not proposing any candidates remains unclear. Would this block the arbitration process due to the requirement for a member from each party, or would the arbitration proceed with a second member from the other party? This possibility would certainly discourage attempts to impede the process.

In the withdrawal agreement, the default, should the parties fail to agree on or propose arbitrators, is to involve the Permanent Court of Arbitration in selecting them (Article 171(5) to (9)). The list of arbitrators for that agreement has been adopted through a Joint Committee decision.

Specific fast-track rules deviating from this clause exist in certain cases: see Article 760, discussed below.

Article 741 (ex-INST.16): Requirements for arbitrators

1. All arbitrators must:

(a) have proven expertise in law and international trade, including expertise in matters covered by Titles I to VII, Chapter 4 of Title VIII, Titles IX to XII of Heading One of Part Two, or Heading Six of Part Two, or in law and any other matter covered by this Agreement or supplementary agreements, and in the case of the chairperson, also have experience in dispute settlement procedures;

(b) not be affiliated with or take instructions from either Party;

(c) act in their individual capacities and refrain from taking instructions from any organization or government regarding matters related to the dispute; and

(d) comply with Annex 49.

2. All arbitrators must be undeniably independent, possess the qualifications necessary for appointment to high judicial positions in their respective countries, or be jurisconsults of recognized competence.

3. The Parties can agree to deviate from the requirements listed in point (a) of paragraph 1, considering the specific subject matter of the dispute.

Note: This Article shares similarities but isn’t identical to Article 171(2) of the withdrawal agreement, which more broadly referenced expertise in EU law and public international law. Refer also to Article 181(1) of the withdrawal agreement, which addresses requirements for independence.

Article 742 (ex-INST.17): Functions of the arbitration tribunal

The arbitration tribunal:

(a) must conduct an objective assessment of the matter before it, including an objective assessment of the case facts and the applicability of, and compliance of the disputed measures with, the covered provisions;

(b) must clearly outline the factual and legal findings and the rationale behind any findings within its decisions and rulings; and

(c) should regularly consult with the Parties and provide sufficient opportunities to reach a mutually agreeable solution.

Article 743 (ex-INST.18): Terms of reference

1. Unless the Parties agree otherwise within five days of the arbitration tribunal’s establishment date, the terms of reference for the arbitration tribunal shall be:

“to examine, considering the relevant covered provisions of this Agreement or a supplementary agreement, the matter referred to in the request for establishing the arbitration tribunal, to rule on the compliance of the disputed measure with the provisions outlined in Article 735, and to issue a ruling according to Article 745."

2. Should the Parties agree on terms of reference different from those outlined in paragraph 1, they should inform the arbitration tribunal of these agreed terms within the timeframe specified in paragraph 1.

Article 744 (ex-INST.19): Urgent proceedings

1. The arbitration tribunal, if requested by a Party, should determine whether the case involves urgent matters, no later than ten days after its establishment.

2. In urgent cases, the applicable timeframes outlined in Article 745 are reduced by half.

Note: This contrasts with Article 173 of the withdrawal agreement, which reduces the standard 12-month deadline for issuing a ruling to six months for urgent matters. Under the TCA, the final 160-day deadline is halved to 80 days for urgent cases. The tribunal has ten days to determine the urgency of a case (compared to 15 days under the withdrawal agreement).

Article 745 (ex-INST.20): Ruling of the arbitration tribunal

1. The arbitration tribunal should present an interim report to the Parties within 100 days of its establishment. If the tribunal anticipates being unable to meet this deadline, the chairperson should inform the Parties in writing, explaining the delay and stating the intended date for submitting the interim report. The tribunal cannot deliver its interim report later than 130 days after its establishment date under any circumstances.

2. Within 14 days of receiving the interim report, each Party may submit a written request to the arbitration tribunal for a review of specific aspects of the report. Parties can comment on the other Party’s request within six days of receiving it.

3. If no written review request is submitted within the timeframe specified in paragraph 2, the interim report becomes the arbitration tribunal’s final ruling.

4. The arbitration tribunal should deliver its ruling to the Parties within 130 days of its establishment date. If the tribunal anticipates being unable to meet this deadline, the chairperson should notify the Parties in writing, outlining the reasons for the delay and providing a revised date for delivering the ruling. The tribunal cannot deliver its final ruling later than 160 days after its establishment under any circumstances.

5. The ruling should include a discussion of any written requests from the Parties regarding the interim report and directly address the Parties’ comments.

6. For clarity, references to a ‘ruling’ or ‘rulings’ in Articles 742, 743, 753, 754 (1), (3), (4), and (6), also encompass the arbitration tribunal’s interim report.

Note: As noted above, this is different from Article 173 of the withdrawal agreement, which sets a standard 12-month deadline for issuing a ruling. The TCA sets a final deadline of 160 days. Unlike the withdrawal agreement, the TCA includes a step where an interim ruling is circulated for comments from the parties.

Specific fast-track rules that deviate from this clause exist in certain circumstances: see Article 760, discussed below.

Chapter 3: Compliance

Article 746 (ex-INST.21): Compliance measures

1. Should the arbitration tribunal determine that the respondent Party has violated an obligation under this Agreement or a supplementary agreement in its ruling referred to in Article 745(4), that Party must take the necessary steps to immediately comply with the tribunal’s ruling, bringing itself into compliance with the covered provisions.

2. No later than 30 days after the ruling is delivered, the respondent Party should notify the complaining Party of the measures it has taken or plans to take to achieve compliance.

Note: This aligns with the obligation to comply with an arbitration ruling, as outlined in Article 175 of the withdrawal agreement.

Article 747 (ex-INST.22): Reasonable Period of Time

1. If immediate compliance isn’t feasible, the respondent Party, within 30 days of receiving the ruling mentioned in Article 745(4), should notify the complaining Party of the reasonable period it requires to comply with the ruling. Both Parties should try to agree on the length of this reasonable period.

2. If an agreement on the reasonable period’s length isn’t reached, the complaining Party may request, in writing, that the original arbitration tribunal determines a timeframe, no sooner than 20 days after receiving the notification mentioned in paragraph 1. The tribunal should deliver its decision to both Parties within 20 days of receiving the request.

3. The respondent Party should provide the complaining Party with a written update on its progress in complying with the ruling referenced in Article 745(4) at least one month before the reasonable period expires.

4. Both Parties can mutually agree to extend the reasonable period.

Note: This is practically identical in substance to Article 176 of the withdrawal agreement, although the process is expedited. The 30-day timeframe for the losing party to indicate the time needed for compliance mirrors the withdrawal agreement (para 1; Article 176(1) of the withdrawal agreement). Unlike the withdrawal agreement, there’s a minimum 20-day period for the winning party to contest the losing party’s proposed timeframe (para 2; Article 176(2) of the withdrawal agreement sets a 40-day maximum). Arbitration on this matter is faster under the TCA (20 days under para 2; 40 or 60 days under Article 176(2) and (3) of the withdrawal agreement). Both treaties share the rule requiring the losing party to notify the winning party about its compliance progress one month before the deadline (para 3; Article 176(4) of the withdrawal agreement). Similarly, both agreements allow for a joint agreement to extend the reasonable period (para 4; Article 176(5) of the withdrawal agreement).

Article 748 (ex-INST.23): Compliance Review

1. No later than the expiry date of the reasonable period, the respondent Party should notify the complaining Party of any measures taken to comply with the ruling mentioned in Article 745(4).

2. If the Parties disagree on the existence or compliance of any measures taken to achieve compliance with the covered provisions, the complaining Party can submit a written request to the original arbitration tribunal for a decision. This request should identify the disputed measures and explain how they violate the covered provisions, clearly outlining the legal basis for the complaint. The tribunal should deliver its decision to the Parties within 45 days of receiving the request.

Note: This closely resembles Article 177 of the withdrawal agreement, with the exception that the timeframe for arbitrators to determine if the losing party has adhered to the ruling is 45 days under the TCA, compared to 90 days under the withdrawal agreement.

Certain cases have fast-track rules that deviate from this clause: see Article INST 34B, discussed below.

Article 749 (ex-INST.24): Temporary Remedies

1. The respondent Party, at the request of and following consultations with the complaining Party, should present an offer for temporary compensation if:

(a) the respondent Party informs the complaining Party of its inability to comply with the ruling stated in Article 745(4);

(b) the respondent Party doesn’t provide notification of any measures taken to comply by the deadline stated in Article 746 or before the reasonable period expires; or

(c) the arbitration tribunal concludes that no measures have been taken to comply or that the measures taken are incompatible with the covered provisions.

2. Under any of the conditions listed in points (a), (b), and (c) of paragraph 1, the complaining Party can submit a written notification to the respondent Party, stating its intention to suspend obligations under the covered provisions if:

(a) the complaining Party chooses not to submit a request under paragraph 1; or

(b) both Parties fail to agree on temporary compensation within 20 days after the reasonable period ends or the arbitration tribunal’s decision under Article 748 is delivered, if a request under paragraph 1 is submitted. This notification should specify the intended level of obligation suspension.

3. The suspension of obligations is subject to these conditions:

(a) Obligations under Heading Four of Part Two, the Protocol on Social Security Coordination or its annexes, or Part Five cannot be suspended under this Article;

(b) As an exception to point (a), obligations under Part Five can only be suspended if the ruling mentioned in Article 745(4) concerns the interpretation and implementation of Part Five;

(c) Obligations not covered by Part Five cannot be suspended if the ruling referenced in Article 745(4) concerns Part Five’s interpretation and implementation; and

(d) Suspending obligations under Title II of Heading One of Part Two concerning financial services is not permitted under this Article, unless the ruling stated in Article 745(4) pertains to interpreting and implementing obligations under Title II of Heading One of Part Two related to financial services.

4. If a Party continues to violate a ruling from an arbitration panel established under a prior agreement between the Parties, the other Party may suspend obligations under the covered provisions outlined in Article 735. With the exception of the rule in point (a) of paragraph 3, all regulations regarding temporary remedies in cases of non-compliance and reviews of such measures are governed by the earlier agreement.

5. The suspension of obligations should not surpass a level equivalent to the nullification or impairment caused by the violation.

6. If the arbitration tribunal identifies the violation within Heading One or Heading Three of Part Two, the suspension may be applied within another Title under the same Heading where the violation was found, particularly if the complaining Party believes doing so would effectively encourage compliance.

7. If the arbitration tribunal finds the violation within Heading Two:

(a) the complaining party should initially attempt to suspend obligations within the same Title where the tribunal identified the violation;

(b) if the complaining party deems it impractical or ineffective to suspend obligations concerning the same Title where the violation was found, they may attempt to suspend obligations within the other Title under the same Heading.

8. If the arbitration tribunal identifies a violation within Heading One, Heading Two, Heading Three, or Heading Five of Part Two, and the complaining party believes suspending obligations within the same Heading where the violation was identified is impractical or ineffective, and the circumstances are sufficiently serious, it may attempt to suspend obligations under other covered provisions.

9. For situations described in point (b) of paragraph 7 and paragraph 8, the complaining Party must provide justification for its decision.

10. Unless the respondent Party submits a request under paragraph 11, the complaining Party may suspend obligations ten days after delivering the notification referenced in paragraph 2.

11. If the respondent Party believes the notified level of obligation suspension exceeds a level equivalent to the nullification or impairment caused by the violation or that the principles and procedures outlined in point (b) of paragraph 7, paragraph 8, or paragraph 9 haven’t been followed, it can submit a written request to the original arbitration tribunal before the ten-day period outlined in paragraph 10 ends. This request would ask the tribunal to rule on the matter. The arbitration tribunal should deliver its decision on the obligation suspension level to the Parties within 30 days of receiving the request. Obligations will not be suspended until the tribunal issues its decision. The suspension of obligations should align with the tribunal’s decision.

12. The arbitration tribunal acting under paragraph 11 cannot examine the nature of the obligations to be suspended. It should only determine whether the suspension level is excessive compared to the nullification or impairment caused by the violation. However, if the matter referred to arbitration includes a claim that the principles and procedures outlined in point (b) of paragraph 7, paragraph 8, or paragraph 9 weren’t followed, the tribunal should examine this claim. If the arbitration tribunal concludes that those principles and procedures were not followed, the complaining party should apply them in accordance with point (b) of paragraph 7, paragraph 8, and paragraph 9. Both parties should accept the arbitration tribunal’s decision as final and should not seek further arbitration procedures. This paragraph does not, under any circumstances, delay the date from which the complaining Party is entitled to suspend obligations under this Article.

13. The suspension of obligations or compensation mentioned in this Article is temporary and ends when:

(a) both Parties reach a mutually agreed-upon solution according to Article 756;

(b) both Parties agree that the respondent Party has achieved compliance with the covered provisions through the measures taken; or

(c) any measures taken to comply, which the arbitration tribunal deemed incompatible with the covered provisions, are withdrawn or amended to bring the respondent Party into compliance with the covered provisions.

Note: Unlike the withdrawal agreement (Article 178(1)), imposing fines on a losing party that hasn’t fulfilled its obligation to comply with a ruling within a reasonable timeframe is not an option. Instead, the sole remedy, if an agreement on compensation isn’t reached (para 1), is to suspend obligations under the TCA, essentially enacting retaliation. This is also a possibility under certain circumstances within the withdrawal agreement (Article 178(2)). This difference means that retaliation can occur more swiftly under the TCA than under the withdrawal agreement.

The TCA also imposes more intricate limitations on retaliation than the withdrawal agreement, which only prohibits retaliation concerning citizens’ rights (Article 178(2)(a)). Firstly, retaliation can only target the ‘covered provisions’ of the TCA (para 2). This means it only applies to those parts of the TCA governed by the main dispute resolution rules (see Article INST.10’s definition of ‘covered provisions’, discussed above). This means, for instance, that a breach of the treaty concerning trade cannot result in the suspension of provisions related to criminal law because those are not considered ‘covered provisions’.

Secondly, provisions concerning social security, visas, and EU programs cannot be suspended (para 3(a)). This aligns with the withdrawal agreement’s exclusion of retaliation regarding citizens’ rights, implying no retaliation concerning social security is possible under the withdrawal agreement either.

_However,