More on Autonomy—Opinion 1/17 (CETA)

That this is the third editorial in this Review on the autonomy of EU law in the last year and a half may only be partly attributed to the lack of imagination of this Editor. It is Opinion 1/17 of the European Court of Justice on the EU-Canada Comprehensive Economic and Trade Agreement (CETA) that keeps the principle topical. Handed down by the Full Court on 30 April 2019, it held that the establishment of the CETA Tribunal and Appellate Tribunal for disputes between investors and the contracting parties would be consistent with EU law. In particular, it would not violate the principles of autonomy, equal treatment, and effectiveness. The Opinion was eagerly anticipated in the light of Achmea and the uncertainty, if not confusion, about the implications of that controversial judgment. Opinion 1/17 reads as if it is seeking to address some of the uncertainty. For instance, its analysis of autonomy is preceded by a section entitled “principles” that provides one of the most comprehensive statements on the topic in the Court’s case-law. Its conclusion is based firmly on the various CETA provisions which are unambiguous about their objective to define the jurisdiction of the CETA Tribunal as narrowly as possible (the Tribunal would not apply EU law, it could only examine it as a matter of fact, and would not have the power to examine the legality of EU or national acts in the light of EU law). These provisions read as if the drafters of CETA took utmost care to give as little ammunition as possible to any concern about impinging on the Court’s jurisdiction. The contrast, therefore, with the unusually broad jurisdiction clause that had been examined in Achmea was striking. What is central in the Opinion is the principle that the tribunal in question would not have the power to bind the CJEU on matters of EU law. Three interrelated threads emerge. The first is about pragmatism. A case in point: the jurisdiction of international courts to interpret international treaties concluded by the EU in a manner that would bind the EU itself is underlined. Whilst this was acknowledged in prior case-law, the Court has been distinctly reluctant to accept it as a matter of practice. Opinion 1/17, instead, is emphatic about the role of such tribunals, as well as the “reciprocal nature of international agreements”. In recognising the powers of other, non-EU, courts to interpret agreements concluded by the EU, the Court refers expressly to “the need to maintain the powers of the Union in international relations”. This is yet another illustration of pragmatism, given the ongoing effort of the Union to reform the traditional investment arbitration model and replace it, ultimately, with a Multilateral Investment Court, a matter that is currently under UNCITRAL negotiations. The Opinion, therefore, acknowledges the intense policy context of the underlying issues and the active role that the EU has assumed in the area: it would have been a remarkably bold decision for the Court to make the Union unravel its policy on this matter. The second theme is the leap of faith in relation to the jurisdiction of the CETA Tribunal. On the one hand, CETA is convincingly distinguished from past instances where autonomy trumped dispute settlement mechanisms brought before the Court: the CETA Tribunal would not have jurisdiction to interpret and apply EU law (as opposed to Opinion 1/09), it would not be set up by a treaty between Member States and, therefore, the principle of mutual trust would be irrelevant (as opposed to Achmea), and it would not have the power to determine whether the EU or a Member State would be responsible for a breach (as opposed to Opinion 2/13). On the other hand, there is a distinct shift of tone: the formalism and distrust that permeated Opinion 2/13 is absent, even though there are instances that would justify a more probing look. Thirdly, the Court adds another layer to the definition of autonomy by ruling that the CETA Tribunal would have no jurisdiction to call into question the level of protection that the EU institutions choose about fundamental interests such as public security and public morals. This conclusion is reached on the basis of various CETA provisions protecting the regulatory autonomy of the parties, as well as the circumscribed scope of the Tribunal’s jurisdiction. This is a substantive, rather than a jurisdictional/procedural, constraint on what autonomy dictates. As such, it is noteworthy, not only because in most previous cases autonomy had a self-referential dimension understood in terms of jurisdictional power, but also as it is accompanied by a number of references to the democratic process governing EU decisionmaking. The context within which the Opinion was rendered sheds some light on the emphasis on ensuring the choices of the EU institutions as to how to protect public interest. This part of the Opinion draws heavily on the Joint Interpretative Instrument, adopted in late 2016 in order to assuage the concerns that had fed and been fuelled by the Walloon Parliament’s approach to CETA. It is recalled that those concerns were about the potentially pernicious impact of the CETA dispute settlement mechanism on EU policy-making, about which Belgium asked a specific question in its request for an Opinion. Viewed against this context, the emphasis on the EU’s regulatory autonomy is a nod to the heavily politicised context within which the Opinion was handed down. The political astuteness illustrated by the above approach comes, however, at the expense of clarity. In dealing with the substantive dimension of autonomy, the Opinion oscillates between the circumscribed jurisdiction of the CETA Tribunal and the regulatory autonomy of the parties. There are also questions about the wider implications of autonomy. In the context of extra-EU agreements, few dispute settlement provisions are drafted as carefully as these in CETA. As for intra-EU BITs, the role of investment arbitration is also far from over, irrespective of the Member States’ Declarations that they would revoke such agreements by the end of 2019, and that they withdrew their consent to arbitration with immediate effect. It by no means follows that arbitral tribunals would accept such drastic and immediate effect. There is also the question of managing the claims that have already been brought under the relevant BITs. Finally, we are none the wiser about what autonomy means for the Energy Charter Treaty. This is an important question, not least because arbitral tribunals have consistently refused to accept the relevance of Achmea in that context. While, therefore, autonomy means different things in different contexts, its practical implications are still far from clear. They may even warrant another Editorial in this Review.

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