The agreement signed between the European Union and the United Kingdom on 24 December provides for a dispute settlement mechanism which, according to the European Commission, must respond “effectively” by means of the possibility of unilateral measures. The agreement includes a general dispute settlement mechanism including an arbitration tribunal, but this does not apply to all sectors.
Procedure. Under the general dispute settlement mechanism, a referral procedure must first of all make it possible to reach an amicable agreement. The Joint Partnership Council, the supervisory body of the agreement, as well as specialised committees that are established in certain sectors, are competent to act as mediators.
Should the parties not reach a mutually agreed solution, the plaintiff appeals to the arbitration tribunal: this consists of three people chosen by both parties from a list of experts. The agreement provides that the Joint Partnership Council shall constitute a list of arbitrators who specialise in the sectors covered by the agreement. According to one expert, it would be necessary to include a more precise framework for arbitrators in the agreement to clearly identify criteria that define breaches and violations.
This panel of arbitrators will have to give a judgment within 130 days. This is, nevertheless, longer than what is provided for in other free trade agreements, although an accelerated procedure may be sought by one of the parties. Once the judgment has been rendered, the party which has failed to fulfil its obligations will have 30 days to implement the measures decided upon by the Arbitration Tribunal.
In the event of non-compliance by the party at fault, the plaintiff has the possibility to suspend its obligations under the trade agreement until compliance has been achieved. The plaintiff must do this in a proportionate manner, but may, nevertheless, suspend obligations in respect of economic sectors other than the one affected by the dispute. On behalf of the European Parliament, Stéphanie Yon-Courtin (Renew Europe, France) “welcomes the gradation of the means of recourse for both parties”.
Other mechanisms. There are, however, waivers for certain sectors where the General Regulation does not apply. In these cases, other measures are sometimes available, such as in respect of telecommunications services where there is a competent authority to decide a dispute.
In some cases, such as cooperation between judicial services, the agreement provides for the Joint Partnership Council to take a final decision at the referral phase. This judgment allows the complaining party to suspend obligations or preferential treatment with regard to the other party until compliance is achieved. As for private companies, they will be able to apply directly to the national courts in order to settle their disputes.
MEP Christophe Hansen (EPP, Luxembourg), the European Parliament rapporteur on the agreement, is of the opinion that the system will be “operational, forward-looking and responsive”. He regrets, however, that the Court of Justice of the European Union does not have jurisdiction to settle disputes. An initial exchange of views on the agreement will take place on 11 January during the Committee on International Trade. Christophe Hansen expects that some of his European Parliament colleagues will want to be involved in the appointment of arbitrators. (Original version in French by Léa Marchal)