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Financial Institutions Advisory & Financial Regulatory, Time and Money

Dec 11, 2018

Unilateral Revocation of Article 50 Notification is Possible

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On 10 December 2018, the Court of Justice of the European Union (“CJEU”) issued a judgment,[1] ruling that a Member State can unilaterally revoke its notice to leave the European Union under Article 50 of the Treaty on European Union. The court ruled that both a unilateral and consensual revocation are permitted. The ruling results from a reference for a preliminary ruling from the Scottish Court of Session and it follows the opinion of Advocate General Manuel Campos Sánchez-Bordona, published on 4 December 2018.[2] The consent of other EU Member States (or of the Commission or the Council) is therefore unnecessary to revoke an Article 50 notification. This judgment clarifies the process that may apply if the U.K. wishes to delay, suspend or cancel the process for Brexit. The U.K. Government has restated its position that it does not intend to revoke the Brexit notice.[3]

Background

The U.K. gave notice to the EU Council on 29 March 2017 of its intention to leave the EU, invoking Article 50. That notice will take effect on 29 March 2019, unless the EU and U.K. agree to extend the period or the U.K. revokes its notification.

At the request of various anti-Brexit MSPs, MPs and MEPs, the Scottish Court of Session was asked to consider whether the U.K.’s notice to leave the European Union can be revoked unilaterally. On 21 September 2018, it delivered an opinion allowing a reference to be made to the CJEU for a preliminary ruling.[4] It held that a ruling from the CJEU on whether revocation is possible is needed before it can issue a declaratory judgment, as this is primarily a matter of EU law.

The Court of Session considered that, for Parliament to make an informed decision on the proposed withdrawal agreement, it was correct for the courts to come to a conclusion on the revocability of the Article 50 notice. However, as the law in question is an EU law, the issue could only be authoritatively decided by the CJEU. A referral to the CJEU was therefore made by the Scottish court. It remains for the Scottish court to issue a declaratory judgment on this topic, based on the CJEU’s ruling, on the legal position. The Secretary of State for Exiting the European Union then attempted to challenge the reference to the CJEU on technical grounds. However, on 20 November 2018, this application was rejected and the reference was allowed to continue.[5] Following oral hearings before the CJEU on 27 November 2018, the Advocate General published his opinion on 4 December 2018, before the CJEU issued its judgment on 10 December 2018.

The Judgment

In its judgment, the CJEU ruled that:

“Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end.”

The ruling follows the Advocate General’s opinion, which set out a detailed analysis of the ability to unilaterally revoke a notification under Article 50.

Why the Article 50 Notification is Unilaterally Revocable

The CJEU followed the approach of the Advocate General’s opinion in its judgment by concluding that Article 50 allows the revocation of the intention to withdraw from the EU, provided that the revocation is constitutionally valid, does not involve an abusive practice and is formally notified to the European Council.[6] The CJEU agreed[7] with the Advocate General’s interpretation of Article 50 in light of Article 68 of the Vienna Convention of the Law of Treaties, on which it is partly based, which provides that a notification of withdrawal from an international treaty may be revoked at any time before it takes effect. Withdrawal from an international treaty is by definition a unilateral act by, and a manifestation of the sovereignty of, a state. Unilateral revocation is no different in this regard, in that it is also a manifestation of sovereignty.[8]

The CJEU agreed with the Advocate General regarding further reasons why the Article 50 notification is unilaterally revocable:

  • The wording of Article 50 states that a Member State which decides to withdraw from the EU is to notify the European Council of its intention, not its decision, to withdraw. Intentions are not definitive and may change.[9]
  • The rejection of a revocation would entail the forced exit from the EU of a Member State. A Member State which notifies of an intention to withdraw from the EU under Article 50 remains a Member State in all respects until such time as it has withdrawn.[10] The withdrawal procedure would therefore effectively be converted into a means of expelling a Member State.[11] It would be particularly illogical to do this to then have to negotiate that state’s accession.[12] Forcing the exit of a Member State would also be inconsistent with the aims and values of the EU.[13]
  • Not placing obstacles in the way of the continued EU membership of a Member State that initially decides to leave the EU but then decides, in accordance with its constitutional requirements, that it wishes to remain a member is an especially appropriate interpretative approach that helps with the objective of advancing integration.[14] It is also the most favourable interpretation of Article 50 for the protection of the rights acquired by EU citizens, which the withdrawal of a Member State will inevitably restrict.[15]

The Advocate General also argued that Article 50 should not be interpreted differently from other areas of law. When a party unilaterally issues a declaration of intent addressed to another party, in the absence of an express prohibition or a rule which provides otherwise, as with Article 50, that party may “retract that declaration until the moment at which, by the addressee’s acceptance, conveyed in the form of an act or the conclusion of a contract, it produces effects”.[16] This does not appear to be a strong argument. Under English contract law, for example, termination notices are generally irrevocable without consent.[17] However, the Article 50 notice is unusual, in being a notice of an “intention”. The CJEU did not refer to this argument in its judgment.

The CJEU therefore agreed with the Advocate General and rejected the contrary submissions of the European Commission, the European Council and the U.K. government that a revocation is only possible following a unanimous decision of the European Council, on the basis that this would be incompatible with the wording of Article 50.[18] Article 50 does specifically provide for a separate mechanism for “extending” the two-year period following a notice of withdrawal,[19] where there is unanimous consent of the European Council and agreement with the Member State concerned.

Conditions and Limits

The CJEU agreed with the Advocate General that unilateral revocation is subject to certain conditions and limits:[20]

  • The revocation must be notified by a formal act to the European Council, in the same manner as the original notification to withdraw under Article 50.[21]
  • The revocation must be constitutionally valid and therefore the Member State’s constitutional law requirements which applied to the adoption of the decision to withdraw should be respected and followed if the Member State decides to revoke that notification.[22] In light of Miller[23] and the European Union (Withdrawal) Act 2018, this means that a further U.K. Act of Parliament would be required.
  • The revocation should only be possible in the two-year period beginning with the notification of the intention to withdraw, unless the period has been extended.[24]
  • The principles of good faith and sincere cooperation should be observed in order to prevent abuse of the procedure laid down in Article 50.[25]

The CJEU also emphasised in its judgment that the revocation must be unequivocal and unconditional. Its purpose must only be to confirm EU membership of the Member State concerned under terms that are unchanged as regards its status as Member State, and the revocation must bring the withdrawal procedure to an end.[26]

Footnotes

[1]  The CJEU judgment is available here: http://curia.europa.eu/juris/document/document.jsf?text=&docid=208636&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1186545.

[2]  The opinion of Advocate General Manuel Campos Sánchez-Bordona is available here: http://curia.europa.eu/juris/celex.jsf?celex=62018CC0621&lang1=en&type=TXT&ancre=.

[3]  The statement by the Secretary of State: Statement to Parliament in response to the CJEU’s ruling on the Wightman Article 50 case, is available here:https://www.gov.uk/government/speeches/secretary-of-state-statement-to-parliament-in-response-to-the-cjeus-ruling-on-the-wightman-article-50-case?utm_source=5c838f09-7293-4a6a-8c7b-5b808bea490e&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate.

[4]  Wightman v Secretary of State for Exiting the European Union [2018] CSIH 62 (21 September 2018).

[5]  Secretary of State for Exiting the European Union (Appellant) v Wightman and others (Respondents) UKSC 2018/0209 (20 November 2018).

[6]  Judgment, paragraph 75.

[7]  Judgment, paragraph 70.

[8]  Judgment, paragraph 57; Opinion, paragraphs 63 to 85.

[9]  Judgment, paragraph 49; Opinion, paragraphs 99 to 102.

[10]  Opinion, paragraph 115.

[11]  Judgment, paragraph 66; Opinion, paragraphs 111 and 112.

[12]  Opinion, paragraphs 113 and 114.

[13]  Judgment, paragraph 67.

[14]  Judgment, paragraphs 67 and 68; Opinion, paragraph 133.

[15]  Judgment, paragraphs 63 and 64; Opinion, paragraph 134.

[16]  Opinion, paragraphs 97 and 98.

[17]  Riordan v War Office [1959] 3 All ER 552, [1959] 1 WLR 1046; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 2 All ER 216 at 235, [1971] 1 WLR 361 at 382, CA, per Buckley LJ; Harris and Russell Ltd v Slingsby [1973] 3 All ER 31, [1973] ICR 454, NIRC.

[18]  Judgment, paragraph 72; Opinion, paragraphs 117 to 124.

[19]  Treaty of European Union, Article 50(3).

[20]  Judgment, paragraphs 73 to 75.

[21]  Opinion, paragraph 143.

[22]  Opinion, paragraph 144.

[23]  R (Miller and Santos) (Respondents) v Secretary of State for Exiting the European Union (Appellant) [2017] UKSC 5 (24 January 2017).

[24]  Opinion, paragraph 147.

[25]  Opinion, paragraph 148.

[26]  Judgment, paragraph 74.

Authors and Contributors

Barnabas Reynolds

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5528

+44 20 7655 5528

London

Thomas Donegan

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5566

+44 20 7655 5566

London

Simon Dodds

Of Counsel

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5156

+44 20 7655 5156

London

Wilf Odgers

Associate

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5060

+44 20 7655 5060

London