Professor Steve Peers, University of Essex

Recent news suggests the UK may plan to violate the Brexit withdrawal agreement, with new Attorney-General Suella Braverman potentially seeking legal justification. This makes examining the repercussions of such a breach crucial. While the dispute resolution mechanisms within the agreement and the UK’s Withdrawal Agreement Act have been analyzed separately, this piece aims to provide a comprehensive overview, encompassing international law perspectives. This blog post summarizes the withdrawal agreement’s dispute resolution clauses and the international law principles concerning treaty termination, exploring their interplay. (Update, February 24, 2020: A summary of this post is available on Twitter.)

It’s crucial to establish that any potential breach of the withdrawal agreement would likely have both political and legal ramifications. Politically, it could trigger negative reactions from the EU and impact the US Congress’s willingness to approve a US/UK trade deal due to concerns over Ireland’s stability. Predicting which consequence would be more significant is challenging. The trajectory of political disputes is less predictable than legal ones, which generally follow established rules. The two are also interconnected, as pursuing legal action is ultimately a political decision.

International law emphasizes upholding treaties. A breach by one party doesn’t automatically void the treaty or justify reciprocal breaches. The focus is on resolving disputes, not abandoning agreements at the first sign of trouble.

It’s not only the perspectives of the UK and EU that hold weight. Individuals can initiate legal action in both jurisdictions alleging treaty violations. Even treaty termination could face challenges in national courts and the CJEU, at least from the EU’s side.

The withdrawal agreement stands apart from the non-binding political declaration on the future relationship. While the former mandates good faith negotiations for the future relationship, proving a violation of such a broad obligation might be difficult. The withdrawal agreement, particularly its provisions on citizens’ rights and the Northern Ireland protocol, is also separate from any potential failure to establish future treaties. Unsuccessful treaty negotiations wouldn’t inherently nullify the withdrawal agreement.

This analysis doesn’t presume a UK breach of the withdrawal agreement, but rather explores the potential legal consequences if one were to occur. Recent UK government statements about not implementing Irish Sea border checks haven’t been presented as an intention to violate the agreement, and the relevant treaty aspects aren’t yet in effect, making practical violations impossible currently. While this post centers on the UK due to recent concerns about its commitment to the withdrawal agreement, it’s equally applicable to any EU breaches.

The UK’s enactment of the Withdrawal Agreement Act, incorporating the agreement into domestic law, is significant. While an amendment could reflect an intention to breach the agreement, no such proposal currently exists. Courts could overturn any secondary legislation or government actions contradicting the agreement. Although the government has signaled an intention to limit judicial review of its actions, this hasn’t been implemented yet. Notably, the recent Withdrawal Agreement Act empowers the executive to guide the judiciary’s interpretation of retained EU law, but this doesn’t extend to the withdrawal agreement itself.

Dispute Resolution within the Withdrawal Agreement

The withdrawal agreement (and its corresponding UK legislation) has two distinct phases. During the transition period, lasting until the end of 2020 unless extended by mutual agreement (which the UK currently opposes), substantive EU law, including CJEU jurisdiction, applies to the UK. There’s no provision for shortening this period, unilaterally or bilaterally, as a penalty for non-compliance or any other reason.

After the transition, significant changes occur. Most EU law, along with CJEU jurisdiction, ceases to apply in the UK, with exceptions for pending cases, potential future litigation, citizens’ rights (for eight years), EU budget disputes, and aspects of the Irish border protocol and the UK’s Cyprus bases protocol.

The core dispute resolution system becomes active. It mandates arbitration for disagreements over the agreement’s interpretation if negotiations fail. This doesn’t preclude parallel cases in national or EU courts.

Article 168, effective from Brexit day, obliges parties to adhere to the agreement’s dispute resolution procedures.

Should a dispute remain unresolved after three months of consultation, either party can request arbitration, which can also commence earlier by mutual consent. A five-member arbitration panel, chosen from a jointly agreed list of 25 (yet to be finalized), must be formed within 15 days. Tie-breaker rules prevent stalling due to disagreements over panel composition. The panel has 12 months to deliver a ruling, reducible to six months for urgent cases.

If EU law is implicated (likely with citizens’ rights), the arbitrators must seek a binding ruling from the CJEU, pausing the arbitration deadline.

Arbitration decisions bind both sides. In case of a breach, the losing party has 30 days to propose an implementation timeline to the complainant. If this is unsatisfactory, the arbitration panel determines the compliance period.

If, after the deadline, the winning party remains unsatisfied, the arbitrators assess compliance, potentially involving the CJEU again for EU law aspects.

Non-compliance can lead to arbitrators imposing financial penalties, considering the severity and duration of the breach.

Further sanctions apply if payment isn’t received within one month or if compliance remains unfulfilled after six months. The winning party can suspend its obligations under the withdrawal agreement (excluding citizens’ rights) or other mutually agreed treaties, proportionally considering the breach’s severity. Disagreements regarding proportionality are resolved by the arbitrators within 10 days, suspending the sanctions until then.

Suspensions are temporary, intended to incentivize compliance or a negotiated settlement. The arbitrators decide if compliance is achieved, ending penalties and suspensions.

The system aims to resolve disputes, not terminate the agreement. Even suspension can’t affect citizens’ rights. Termination isn’t a remedy, reinforcing the requirement to resolve disputes within the agreement’s framework.

This system coexists with limited CJEU jurisdiction and potential national court cases. While the CJEU traditionally hasn’t integrated WTO dispute rulings into EU law due to the political dimension of compliance, the CJEU’s mandatory involvement in EU law aspects of the withdrawal agreement differentiates it.

The UK’s Withdrawal Agreement Act remains silent on whether dispute rulings are incorporated into UK law. The UK’s dualist system, requiring parliamentary action to integrate treaties, suggests they aren’t unless implied by the withdrawal agreement’s implementation. The CJEU’s approach to dispute settlement’s legal impact remains relevant to the UK regarding EU citizens’ rights, given its continued jurisdiction in this area.

Treaty Termination

International law governing treaties originates from customary international law and the Vienna Convention on the Law of Treaties (VCLT). While the VCLT aimed to codify customary law, differences exist. Not all EU countries, nor the EU itself (as it’s open to states only), have ratified it.

The VCLT dictates that only its provisions can challenge a treaty’s validity or a state’s consent to be bound. Treaty termination, suspension, denunciation, or withdrawal must adhere to the treaty’s provisions or the VCLT. Other international laws remain effective between parties even if the treaty doesn’t.

Denunciation, withdrawal, or suspension, as permitted by the treaty, must apply to the entire treaty unless stated otherwise. Invalidation, termination, withdrawal, or suspension under the VCLT applies to the whole treaty unless a “material breach” occurs, or the grounds are specific to severable parts that weren’t “essential” for consent. A state loses the right to invoke grounds for invalidating, terminating, withdrawing from, or suspending a treaty if it explicitly or implicitly accepts its validity or continued existence.

Treaty conclusion can be invalidated due to obvious violations of a state’s internal law during consent, essential errors, fraud by another state, corruption of a state’s representative by another state, or coercion. A treaty is void if it contradicts “peremptory norms of general international law.”

States can only terminate or withdraw from a treaty following its provisions or with all parties’ consent. Without specific provisions, denunciation or withdrawal is only possible if: “(a) it’s established that the parties intended to allow it; or (b) it’s implied by the treaty’s nature.” This requires twelve months’ notice.

Treaty suspension is possible “in conformity with the treaty’s provisions” or by unanimous consent. Both termination and suspension are options in case of a “material breach,” defined as “(a) repudiation not sanctioned by the VCLT; or (b) violation of a provision essential to the treaty’s object or purpose.” However, this doesn’t supersede any treaty-specific breach provisions and excludes “provisions protecting human persons in humanitarian treaties, particularly those prohibiting reprisals.”

“Impossibility” of performance, due to the permanent loss of an indispensable element, permits termination or withdrawal, except if caused by the party seeking to avoid obligations. A “fundamental change of circumstances” unforeseen by the parties, forming an “essential basis” for consent, and radically altering obligations, can also justify termination, withdrawal, or suspension. This is not applicable if the change is attributable to the party seeking to end its obligations.

The VCLT also outlines the process for ending a treaty. A party seeking termination must provide three months’ notice and can proceed unless objections arise. Objections trigger mandatory attempts to find a solution, without affecting existing dispute settlement mechanisms. The EU or UK could still invoke the withdrawal agreement’s dispute resolution provisions.

If no negotiated solution is reached within 12 months, a party can seek resolution from the International Court of Justice, initiate arbitration, or utilize the VCLT’s conciliation mechanism. Termination must be formally communicated in writing and can be revoked before taking effect.

An invalid treaty holds no legal force. Unless otherwise specified, termination ends obligations but doesn’t negate rights, obligations, or legal situations established before termination.

Suspension temporarily halts the treaty’s application without affecting existing legal relations. Parties must avoid actions hindering the treaty’s resumption. Notably, the withdrawal agreement has specific suspension provisions.

The VCLT’s references to suspension and termination “unless the treaty otherwise provides” are superseded by the withdrawal agreement’s rules, outlined in the dispute settlement section. These prioritize the agreement’s mechanisms, permit suspension except for citizens’ rights, and lack provisions for terminating the entire agreement, emphasizing the temporary nature of suspensions and penalties. The only termination clause relates to the Irish protocol (Article 18), allowing unilateral termination of that part (not the whole agreement) if Northern Ireland withdraws consent, following a specific procedure. This implies that terminating the entire agreement due to a breach is prohibited.

Alternatively, what if the EU or UK believe they can terminate the entire agreement based on VCLT grounds? Even if actions constitute a “material breach,” it’s crucial to remember that termination is optional. A breach doesn’t automatically void the treaty. For instance, if the UK breaches the Irish protocol, the EU might choose not to terminate the withdrawal agreement to protect EU citizens’ rights in the UK.

Individuals have a surprising role, at least in the EU. The CJEU has applied international law on treaty termination in cases brought by individuals. In Racke, the EEC terminated the EEC/Yugoslavia cooperation treaty immediately due to the Yugoslav war, citing a fundamental change in circumstances. An importer affected by the termination challenged this in German courts, prompting a CJEU ruling on its validity.

The CJEU acknowledged that while the VCLT didn’t bind the Community or all member states, several provisions, including Article 62 (change in circumstances), reflected customary international law on treaty termination due to changed circumstances. The International Court of Justice had affirmed this, stating that the VCLT “may in many respects be considered a codification of existing customary law.”

The Court asserted jurisdiction to review the EEC act’s validity under public international law, stressing that the invoked treaty provisions had to confer individual rights, which they did based on the “direct effect” test for international treaties in EU law. (This test likely applies to the withdrawal agreement’s citizens’ rights provisions).

International treaties concluded by the EU are integral to EU law. Invalid termination would uphold the company’s import rights. The EU must “respect international law” and “comply with customary international law when suspending trade concessions” granted under agreements with non-member countries. Thus, “customary international law on treaty termination and suspension due to fundamental change of circumstances binds Community institutions and forms part of the Community legal order.”

The CJEU highlighted that international law hinges on treaty compliance (pacta sunt servanda), a “fundamental principle of any legal order.” This necessitates good faith performance of treaty obligations (VCLT Article 26). The International Court of Justice emphasized that “pleading fundamental change of circumstances should be exceptional to ensure treaty stability.”

Therefore, individuals could challenge the EU’s treaty termination based on “obligations deriving from customary international law governing treaty termination and suspension.” Notably, this wasn’t limited to “fundamental change of circumstances.” However, due to the complexity of these rules, the CJEU restricted its review to “manifest errors of assessment” regarding the conditions for applying these rules, ultimately upholding the treaty termination due to the Yugoslav civil war.

Regarding the VCLT’s procedural requirements for treaty termination (notice and consultation), prior warnings were deemed sufficient. The CJEU stated that “even if such declarations don’t meet formal VCLT requirements,” “those specific procedural requirements aren’t customary international law.”

The CJEU revisited these procedural aspects in the Wightman case, concerning the UK’s ability to unilaterally revoke its Article 50 withdrawal notification. The Court found support in the VCLT’s provisions for “clear and unconditional” revocation before withdrawal takes effect, which had been considered during the Treaty establishing a Constitution for Europe (later Article 50 TEU), bolstering the case for revoking the Article 50 notification.

In the context of the withdrawal agreement, if the EU terminates or suspends it, individuals claiming infringement of their rights under the agreement (e.g., UK citizens in the EU, traders with Northern Ireland) could challenge the EU’s decisions, alleging violations of international law or the agreement itself. While direct challenges before EU courts might lack standing, national court challenges (as in Racke) could request preliminary rulings from the CJEU. Legal challenges concerning Brexit and the withdrawal agreement have been prevalent.

Even if suspension or termination is deemed valid, citizens’ rights face unique issues. Suspension cannot affect them. While the VCLT’s provisions on retaining rights after termination or prohibiting reprisals for terminating humanitarian treaties might not explicitly cover those under the citizens’ rights provisions, one could argue that, combined with the EU law principle of legitimate expectations, such rights cannot be revoked.

In the UK, public international law isn’t directly incorporated into domestic law. However, domestic legal and political considerations remain. If the government attempts to breach or terminate the withdrawal agreement through primary legislation, the House of Lords can delay it for up to a year. While rarely used, this power could be justified by a “reverse Salisbury convention” when the government contradicts its election manifesto commitments. If the government pursues a breach or termination through secondary legislation or executive action, legal challenges could arise, arguing that the legislation exceeds the Withdrawal Agreement Act’s authority or that executive action cannot override rights protected by an Act of Parliament. This could lead to further litigation. However, this circles back to the government’s reported intention to limit judicial power.

Barnard & Peers: chapter 27

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