eSignature Legitimacy for Logistics in United Kingdom

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appeal in the matter of infrastructure Services Luxembourg s and another and the kingdom of Spain and appeal in the matter of Border Timbers limited and another and the Republic of Zimbabwe just as a point of information Mr GRE I raised with M Mr Justice TR who runs the cprc subcommittee for roles building the um f in point about CPR 6221 and the reference to 749 yes which should be three and is two and he looked at it and say you're absolutely right um what has happened surprise surprise surprise is what was originally A1 became one exactly and then it was removed completely by some brexit regulation and nobody bothers to change the numbering so so they will do something within the CPR season saw that I'm I'm very great with that very important point I'm very grateful um uh my lords before I sort of uh just press on can I pick up a few points i s of made big promises on yesterday um one of them was to my lord lord Justice neie about the European convention implementation there are various comments about it but the best one is in uh spena in the court of appeal um at paragraph 122 which we find if the court wants to turn to it just for a second uh it's in volume two tab 28 beginning at 973 says volume two tab 28 towards the back at 973 and that's the beginning of parl 122 foot of 973 and the passage the court wants is over the page at page 974 um we hope we do not appear disrespectful and then three lines down on the right hand side state immunity act 1978 the legislation with which we are concerned in this case was enacted to give effect to the European convention but it departed from the convention in certain respects particularly in section nine we have the benefit of access to the text invention parliamentary materials so it's absolutely correct and we get it also um in uh uh nml and there's another reference but it's absolutely right that it had in mind us being able to be signatories to the convention but it didn't precisely map it I just thought I might be able to very much um I'll couple of other uh quick followup points as well if I may um one of them was I made the reference to Lord sumption speech and the precise reference about the nature of sovereign immunity and the drafting Point um uh it was in benar as I suggested I just take Court to it briefly if I may it's quite a helpful General passage on sovereign immunity yeah it's in volume three my lords at tab 41 a tab 41 again towards the back and it's on 1553 and uh this is a obviously quite a well-known section about of sovereign immunity beginning at paragraph 37 uh it's quite extensive but the um paragraph 38 uh well perhaps at 37 starting the fundamental difference between the parties dis appeal concerns the starting point on the 13th C of international law must require the United Kingdom to treat Libya and Sudan as immune Secretary of State submits that it does this is because in his submission State immunity is absolute unless the case is brought within an internal rally recognized exception to it pausing there if I can describe that as a sort of brittle approach um this submission if it's correct would considerably broaden the scope of State immunity in custom international law by extending it to any group of claimants about whom there was diversity of State practice in my view it's not correct the rule of customer international law is that state is entitled to immunity only in respect of acts done in the exercise of sovereign immunity Sovereign Authority uh that Ure and Perry point and then uh 38 it's true that the state immunity act 1978 drop adopts the drafting technique of stating a presumptive immunity subject to exceptions and then he he looks at that and then four lines up from the bottom in the middle the words as applied if the court can see those as applied to international law the submission is lend to certain superficial plaus by the fact that the UN convention has adopted the same drafting technique and then if we go across to the and he mentions Jones and uh and other cases and then um 39 on page5 four at the top just above the top hold sorry um I do not regard these considerations decisive to the present issue no one doubts that it's a m matter of domestic law part one of the state immunity Act is a complete code which we touched on yesterday case does not fall with one of the exceptions state is immune present question is whether immunity is thus conferred as wider than customer international law and he says in the first place it's necessary couple lines down uh necessary by letter C uh to read the grant of immunity in article five of the Un Na the UN convention together with the exceptions as follow as an organic whole the exemptions are so fundamental in their character so consistent in their objective and so in their effect as to amountain reality to a qualification of the principle of immunity itself rather than a mere collection of special exceptions secondly it's important when doing this to distinguish between a drafting technique and a principle of law travo um show that the point was highly contentious um and so forth and then there are useful uh and I'm not going to take to to these passages ex uh extensively so that's the point on the drafting technique which is of course mirrored in the state immunity act uh itself and I'll return to that in a second but just while we're here can I just invite the court to note there is useful discussion of over the page on5 in the section it actually goes5 uh all the way through to 1562 but um it if we see it 1555 letter F just above letter F before the age of State Trading organizations there are few occasions for testing limits of State immunity States rarely act in peace time within the territory of other states other than cond conduct diplomatic relations and that was subject to older immunity law leaving aside the rather special case of the immunity of personal sovereigns visiting the Forum State uh the only other Act which Sovereign formed in the territory of another state involved presence of State own ships Etc and the what Lord assumption does is that he he traces the development of the law uh through and if we look at 1556 at letter c um just by the top hole punch halfway down that paragraph but it will be seen even in that context at its Origins the immunity was not conceived to be absolute it was to extend only to the property employed for public or government purposes so he he traces through the historical Genesis of what becomes the qualification in section 13 of the Saia and my I I only mention that point in passing because I think it may be an answer on the section two drafting point which is a a domestic judgment would always be subject to State immunity against execution on Sovereign assets at common law and the 66 act didn't disturb that so I thing that I say to take the point the 66 act drafting could have been more overt about it but I think the common law principle of immunity from execution against Sovereign assets is is apt to deal with the point in its entirety particularly when read with concept of pecuniary obligations fed in through the convention so I that may be an easy answer um the reason I uh mentioned it yesterday mentioned the initial point about drafting technique to the court yesterday was because of our friend ground one um and viewed through the prism of the structure of this the Sia being as a result of a drafting technique rather than substantive law it it does at least offer a little bit of flexibility in stat construction uh and my lord lord Justice Phillips put to me yesterday the two ways in which that might find expression in the Judgment of the court and and I readily recognize it may be quite a subtle difference maybe it's in terms of results it's obviously a a distinction without a difference but there are some commendable reasons for thinking that ground one actually is a analysis one that your lordship put to me it is actually a simpler and cleaner analysis in the sense that the 66 act did the work of changing the common law yeah to the extent necessary and then the siia announced itself as a complete code because it was designed absolutely not to interfere with what had already been done in the 66 act if that's right we would say that maybe we win on both ground one ground too um but they may all their Alternatives it's it's but in result it doesn't we respectfully suggest matter um so that was that was the point on Ben car which I adverted to yesterday um well I was just picking up uh where uh two summary to the two short points I wanted to make from yesterday one was uh Ben OB which at the end of the passage I've just given you also restates the par and Par proposition which I relied on yesterday about sovereign states agreeing between themselves and the short point is that because acts uh Ur and Perry were immune on any view that's why the convention was necessary and because as indeed the sovereign states themselves submit the common law itself didn't admit uh a way in itself didn't admit a waiver by treaty alone that's why the 1966 Act was necessary and that's the answer on those two uh short points there's one point on uh nml just to pick up if I may which is found in bundle three in a tab 33 at the beginning of bundle three in nml yeah and it's page18 sorry can I take you to page 1129 first if I may 1129 yes this was the uh the section M learned friends referred the court to paragraph 121 at the foot of the page um I just wanted to highlight the court the word prior contractual submission um to the jurisdiction being ineffective as what was thought then and then there's of course a helpful review of uh the uh the cases sulan of jeor and and so forth which in case it's helpful to have the bundle references alongside them on that page are ab1 tab six for jeor uh ab1 Tab 7 for duve development maybe one tab nine for Kahan but then we get the point I wish to make on on this page paragraph 125 which is only a small point and I don't think it's really contestable but it does support our submission in relation to the effect of the 1966 act which is that uh Lord Collins points out just between f and g that um uh Kahan had overlooked the fact that submission in the face of court was not the only form of valid submission since the introduction in 1920 of order 11 rule 2A and I I only mention it my lords just to show that even by a rule of Court there have been intrusions into uh sovereign immunity from 1920 onwards so we the idea that the 1966 act had the effect for which we contend is hardly a surprise primary legislation is rather more forceful than just a a rule change with the greatest respect of course to the rules um so so that's that point um my lords on on the authorities I'm afraid this is for for us this is a target-rich environment and I've only got so much time so there an exis in shot selection so if I may I just commend to the court my Lear of friend Mr Harris's analysis if one gets into the question of whether it's expressed and whether it's implied and and we look at the high court of Australia sensible question of what's expressed in the words uh and so they don't need to use a particular word to say which myar a friend Mr Harris has set out extremely clearly in his skeleton yes so I'm just going to rely on that if I may um that brings me just be clear in the context of section two or otherwise uh because the express implied point I thought was particularly significant in relation to section two yes yes yeah I mean in fact in fact friend need to have for submission to the Juris yeah M friend's done a very good analysis of two and nine if I going to adopt his industry and elegance uh at the same time um that that would be very helpful models that brings me back to where we left off yesterday um where we left off yesterday which was was meula um yes which we refined with anticipation in bundle four yes um and uh there is one it's obviously we have to bear in mind there's a head-on Clash uh between the EU and the UK in relation to um mikula which is at tab bundle for tab 45 and I'm and I'm going to anticipate a question I think may be coming from my lord lord Justice Nui about the perfect storm that may be said to have uh risen as a result of the cju judgment and its binding effect during the trans transition period that was rather a poor pun because my lord gave a leading judgment in the perfect case which dealt specifically with uh the effect of the withdrawal Act and the withdrawal agreement I'll deal with that quite briefly there's a high level answer and then there's rather a more difficult answer and the difficult answer is very difficult and the high level answer is very easy uh and invite the court to anticipate which while I'm going to urge upon you but I probably got to In fairness to the court at least to deal with both very well um so uh the decision in mular rested on there are three elements to it there's the element about what the uh exit convention means and the 66 act achieves that is Untouched by the cju judgment and we rely on that because we're we're not we're no longer in the EU and so that we say uh it explains what the convention and the 66 act did uh sovereign states are absolutely right to say it was a different case it was about to stay and so forth and equally the Learned judge Mr Justice Fraser as he then was was absolutely right to say what they don't face up to is the ratio of it is powerfully uh supports Lear a judge's decision yeah so that's the answer on part one part two was the Supreme Court's own careful uh word I'll return to analysis of the multilateral nature of the exit convention to which the United Kingdom is a party and to which the EU is not a party and uh Court reached the view and it does so particularly between paragraphs 104 and 108 which we find at page 1698 uh to uh 1700 it it reaches the view that these are not simply bilateral a bundle of bilateral obligations and I will in due course be submitting that the eu's attempt to characterize multilateral treaties as no more than a bundle of bilateral obligations is overreach and unjustified on the law by any conventional means treaty interpretation and by the means of treaty interpretation adopted by the Supreme Court Im meula so that's point two and that does clash with the cju decision which astonishingly criticizes the superficiality of the Supreme Courts analysis of international obligations undertaken by the United Kingdom prior to being members the European Community which were undertaken and no KN ly undertaken by the United Kingdom having understood what they were and whose ultimate meaning is to be determined by the international court of justice under the exit treaty the cju decision makes no reference to the Vienna convention on the Laural treaties uh makes no reference to the fact that the ultimate Arbiter of their meaning is the icj and uh holds that in fact the cju in this context is the only ultimate Arbiter of the extent and nature of international obligations undertaken by this country with other countries not the EU before we joined the European community and this is one of the reasons for which we say the eu's cju in particulars uh lack of commity in relation to this general area has been extreme uh it's also extreme because the Supreme Court in its reasoning carefully considered where there was a risk of conflict and foreshadowed that it that would be extremely unlikely because of the eu's duty of sincere cooperation with the United Kingdom as a member State and that's why the EU would not reach a contary view and not withstanding understanding that uh the cju did reach a cont view that does not the decision careful and thorough decision of the Supreme Court of the United Kingdom the respect which International commedy might normally be expected uh to attend so it's it's it's not easy but the short point I think and i' we we have got uh can I just hand up very slim with three elements you've given us two so so sorry one is yes sorry one is you're absolutely right my Lord the first one is uh IID and 96 act I'm time touched by the the second one is the meaning of our International treaty obligations which definely considered by the Supreme Court yes on that one the short point is there is a 0% chance of the Supreme Court now that now that supremacy of Eagle doesn't apply reaching a different conclusion on the nature and extent of our treaty obligations and the second point on that is it was in fact wholly without the CJ's competence because it was not a question of EU law and the reason that it there's even more extreme lack of Comedy is because the Supreme Court very carefully analyzed all the cases which show that it is a matter for the national Court to identify those obligations and that is what the court had consistently held prior to the Supreme Court's judgments and we can see the foundation for that if I can just show the court quickly the foundation for that is in uh Costa and enel which is in uh just find it there it's in tab five well I'm G to just pause because your lordship asked me a question I haven't actually answered it what was the third bit the third bit was Article 351 and the proper interpretation of article 351 which I I'll show the court uh originally accepted the conventions that were entered into on its face that language was finessed once down to the obligations arising under the conventions not the conventions themselves by the cju and then it's been finessed again down to break up multilateral treaties into bundles of bilateral obligations so that's the course that Journey has taken on 351 it was a course that they was not accepted by the uh Supreme Court and it is the point on which some difficulty AR Rises because the argument which I made before The Supreme Court in Micha on the con on the relevant constitutional principles which the court accepts were correct um was not pursued by the court because they had the argument on article 351 so the argument I made and I accept it was relatively extreme was simply to say that when Parliament enacted the 1972 act it had before it a treaty which said in perfectly clear terms this won't affect uh prior intern International obligations entered into before the treaty and that's what Parliament enacted and so it's a delineating provision of the conferral of competence which is a fundamental principle of the relationship between member states and the EU and I think was my only good point in the Gina Miller case was that was parliament's competence to confer parliament's competence to exercise legislation parliament's competence to confer on the EU and therefore parliament's competence to take back on the article 50 point and that's derived from the analysis in originally foundationally in Coster Andel and the argument the Supreme Court was if article 351 does not do the work that Parliament thought it did then the 1972 Act is limited and we know Never As a matter of domestic law agreed to the CGA unilaterally changing well article 351 meant so that's a that's a head-on clash with EU law it's a pretty serious submission to make the Supreme Court didn't doubt the principles which are set out um on page 1692 and I'll I'll show the court those just briefly if I may do you want to look at those now if if we may I'm not going to spend a huge amount of time on it because I think I've got a bit confused now because looking at two and you referred us to Costa now we're on three are we yeah my my Lord yes they overlap actually so are we we're not looking at Coster then or we're going to go back to I'm going I'm definitely going to Coster in a second because it just I thought it might be helpful to introduce the relevance of the conferral because you get from Costa you get both conferral on ground on point two and you get the division of responsibility between member states and the EU for article 351 on point three so I I'm sorry to have ducked between the two that was not a helpful way uh to present it I'll try and clarify putting putting putting it shortly if I may yes the submission you made in nucula which was accepted by the Supreme Court was that the that what is now article 351 had been I think I forgot what number it was now doesn't doesn't matter it start exactly in in the 1957 treaty uh was what was in it was in relation to that provision and how it was interpreted that Parliament enacted the the 1972 act and to the extent that the CGA has now said will it actually mean something more extensive they've overreached themselves it was never binding on the UK I mean that exactly put it yes I Lord yes and just that's what's CS the the Unholy Battle Royal between well I think UK and the EU because I'm sorry if I started the fight but I think it was going to happen anyway because of the investor treaty thing it's embarrassing for me I mean there are two points aren't there there's that point if you like the 351 point and there's also the fact they they clearly don't like investor treaties even though they they actually approved the yeah I I'm going to show the court the position on the ECT it's far worse than the court may think I mean it's bad um but just dealing with this point I just want to identify a point against myself and explain why it doesn't matter on this point your lordship summarized it correctly but it's right to just identify um quickly that there's a point within the argument that was against me at the bottom of paragraph 89 just above h in these circumstances if the court sees that yes in these circumstances there's no sound basis for concluding that the effect of section 21 of the ECA was impliedly excluded so far as the 1966 Act is concerned um and and and this is for two reasons one is that it just above that that's not a statute of fundamental constitutional importance is one reason and number two is because the 1972 act has already got article 351 which on the Supreme Court's analysis works correctly and my lords it just help maybe help for the court to understand that that those are two ways the point can the the potential 1972 Point can come up in the past cases which were referred to by the Supreme Court one way the Constitutional way is the cju makes a decision and it conflicts for example with the Bill of Rights so the decision they make is as a matter of subject matter within their competence but the decision they make conflicts with the fundamental constitutional principle that's the Constitutional objection if I can call it that which was in in hs2 yes identified by su Supreme Court in hs2 there's a different category now I don't Avail myself of that although I do say actually that the United Kingdom's ability to to interpret its own treaty obligations is a fundamental constitutional principle and now I have got a good point even if I didn't in mular so that's that point you've got a good point you mean a good point on the exit treaty on the exit treaty yes because theat the question now in issue is not a domestic piece of legislation enacting the exit convention the the question if it arises at all is whether the United Kingdom Supreme Court is competent to interpret our own prior existing treaty obligations constitutionally or whether we conferred that on the EU and the answer to that is that's important and it's not what happened so I I do say actually although I didn't have that in micula because of the way it arose I do have it now in the light of the cju decision so if push came to shove my Lord mod um that I would submit that's the position on the 1972 act uh but the the main way it arises is in relation to the delineating provisions so the the conferral of competence as we'll see in cost and enel conferred on the community certain exclusive competencies Reserve to the member states other competencies and allowed some joint competencies and it's in relation to those delineating Provisions that the 1972 act argument remains a good one and indeed the withdrawal act refers to the law as derived from the 1972 act so the withdrawal act can't go any further and wouldn't be construed to go any further than the 1972 act itself so push came to shove that is what I would say um but the simpler that's so this is this is the difficult answer right well this is the point the you addressed in Mich exactly B of accept exactly that it it wasn't for the cgu to put the United Kingdom in breach of pre-accession treaty obligations of which the the exit treaty obligations clearly are exactly and that's basic I think the ECT ones wouldn't be because they were post absolutely correct absolutely correct um so that that's the 's relation to that on 351 the can I show the court 35 uh Coster andl what I promised to take you I'm sorry for slightly bouncing between points two and three for a minute there they sort of overlap uh slightly so we find Costa in uh um uh tab five so sorry I Sor volume Five apologies um and at uh where are we 67 uh 67 exactly sorry um and the the the key um the key page well Pages really are start on 2570 ground of the Judgment so this is on um article 177 um so this is the preliminary reference procedure which is important because it's the procedure that is ultimately the one that the United Kingdom ing to cgu failed to use in nucular when it should have done ing to cju and it's just important for the C this court to understand how uh totally reasonable the Supreme Court's appreciation of its uh duties uh on the separation of functions was and the 2571 um top hole punch just below uh the top ho punch since however article 177 is based on a clear separation of functions between National courts and the court of justice it cannot empower the latter either to investigate the facts of the case or to criticize the grounds and purpose of the request for interpretation uh then bottom hole punch it makes the point of um not unlike ordinary treaties it's got its own legal system we'll come back to that later and then below immediately below that by creating a community of unlimited duration having its own institutions its own personality its own legal capacity and capacity of representation on the international plane or particularly real Powers stem from a limitation of sovereignty or a transfer of powers from the states to the community member states limited their Sovereign rights Al be it within limited fields and have thus created a body of law which binds both their Nationals and themselves so the uh the that's the sort of foundational example of the uh separation of the tasks of the national courts and the uh cju as it became which then found expression in the cases referred to by the Supreme Court in mikula such as Levy where the uh Supreme Court identified that it's for the national Court to identify the existence of any prior International obligations and against that background to uh reach its decision on whether or not there is a conflict under article 351 so in fact that doesn't article 351 doesn't impact on this appeal I thought right to set out why uh the Supreme Court might feel somewhat grieved at the treatment it's very careful treatment and Analysis of the multilateral nature of the exit convention which we rely on as untouched because it's quintessentially a matter of international law to be determined by this this country as a uh member of the exit convention and it's not uniquely to be determined by the cju on the basis of their own past B case law that predated the decision ofula which they then flipped in an imaginative way in order to be able to overturn the make decision you said a moment ago there doesn't arise on this appeal 351 doesn't is that because we're no long the ECT or is it because we're dealing we're no longer members of the European Union both yeah um because what said against you I think or one of the things that's said against you is well whatever was preserved by what's now 351 doesn't doesn't actually matter because what we're dealing with is a is a treaty which past post excession exactly and that's the treaty I'm going to take the court to now if I may um because it's pretty striking what actually happened very well um if I may so we need Coster anymore we don't need Coster and that that can go away I'm very grateful um so what do we need for so we now need uh probably the most popular bundle for this section which is bundle seven right which is useful because it's got um it's got both the ECT in it at 106 and it's also got the vclt in it yeah at uh tab 101 yeah so can I begin in tab 106 with the ECT because it's quite important to look at exactly what happened 106 yes and I don't know whether any me members of the Court managed to get to suran dashwood's second article tab 147 at all but he gives a coruscating criticism of Co of Conroy um in characteristically Charming language but it is pretty brutal um and particularly with regard to the ECT and in doing so he also refers to the opinion of the correct opinion of The Advocate General Advocate General W before the ACT May decision so he was the AG giving the opinion in act mayor saying I don't understand the problem uh and and gives good reasons which I'll show the court yeah and then the court does the opposite to the AG's opinion in act mayor and so sir Allen traces that through in in quite a helpful way but if we can start with the energy Charter treaty itself can I just understand moment where in the overall scheme of things are we now so we're now on section nine is it invalidated by reason of the ECT being a bundle of individual obligations not a multilateral treaty that everyone else thinks it is uh such that EU law overrides international law and there's no you said all that you're going to say about section two my Lord yes subject to a couple of points at the end to pull it together so there's any particular on I going to help you with on section two is it helpful to deal with those now can I just ask I don't want to stop you not at all can I ask you one thing which is slightly trouble me other night the argument which was advanced in relation to section nine yes is as I understand it because of EU law Primacy um there is this and this court must accept that there is no valid arbitration agreement yes and therefore no valid award my question is if that is right why is that limited to an article n problem why is it a problem for the whole Tre well say m we I agree um but M I think Spain's position tries to finesse it in a way which I think the court challenged they say they're not challenging the award they're just challenging the validity of the that City only seeking to set aside the registration of the award here I mean that that's a distinct distinction a different Mr B said more than once yesterday afternoon well of course we not stopping from seeking to enforce the award anywhere else in the world like Australia for example yes isn't a member of the EU but you we can't do is understood but I mean that if the argument's right the logic of that the logic is I mean at the time I was I wondered whether that was whether that attempt to as it were finesse the point as you put it yes really worked yes the truth is that the EU law is Prim it has Primacy is a matter of international law why isn't that binding on it goes everywhere the Australian court and the United States court and any other court well well that's the point either it's binding because we're no longer members of the European Union exactly so if it's binding on us yes why isn't it binding on everybody else yes I mean it's not an analysis which we would like to call except reasons are obvious but but your lordship's question is right I mean the the the the way it's put in terms of invalid consent under uh section nine is at least capable on one analysis of affecting the section two argument the difference though is it affects doesn't it it affects section one of the 1966 act well they they would have to say that yes any reason there were reward to enforce yes I think what they if I understood it correctly and it may be me if I if I didn't but if I understood it correctly I think the argument is it can't work under section nine because there isn't a valid agreement to arbitrate not that it doesn't work under section two if I've understood it correctly I think that's right but if there's no agreement of arbitrate There's No Award well that's the problem that's the problem with the trying to distinguish the two I mean I I can see that you could conf Le friend haard understanding conf find his argument that the impact of the invalid agreement to arbitrate is on section nine but your lordship's right to raise the difficulty that on on one view if you follow it through to a reason conclusion invalid if it in if it's said to invalidate the award in breach of the express terms of the exit convention if that's right then in one sense there isn't an award at all as a matter of international law because there isn't a valid agreement to arbitrate and everything that the exit tribunal's done has been undone for all purposes and for all times I it's it's a giant submission but my Lord I I hadn't actually thought that through because the way it was argued was really I thought confined section N I think Lord's right you know on one analysis it could feed through to section two I think there is another analysis I don't really so the other so that's I say what is the other analysis well I'm formulating it on the hoof slightly but I think that the answer might be said to be that the obligations undertaken under the exit convention are such they are freestanding obligations that the Contracting states are agreeing to submit or confer there's probably no difference um jurisdiction to the other Contracting states to enforce any award which is authentic and has been found to be authentic on the basis of a what the tribunal has decided is a valid arbitration agreement of which it is its own judge under article 41 and so that's a freestanding submission under the convention which is not actually analytically dependent at all upon the underlying validity of the agreement to arbitrate so if if there's if if there would be as a matter of English law an invalid agreement to arbitrate which is what thear friend contends uh or international law he contends um if the tribunal has itself found that it does have jurisdiction on the basis of a valid agreement to arbitrator it's an exit tribunal totally different the New York convention if the tribunal has found that under article 41 and the Contracting states of the convention have said it's for the tribunal to decide and if you decide against us and you make an award and it's authentic everyone can enforce it and that I think my Lord might be a complete answer the free standing uh nature of the exid convention and the obligations undertaken which are well known and well established to be a self-contained system does not admit the possibility of undoing any submission in the exid convention Itself by reference to a matter affecting the validity of the underlying arbitration cause so that that is the second analysis and I think it's a respectable one it's the analysis that says that article 41 makes it clear that the once the tribunal is ruled it has jurisdiction that's it that's it cour unlike in a New York convention context the context of the exit convention that there's no the only circumstance in which the court could as it were intervene would be possibly fraud yes um and an unspecified further but almost certainly extremely nrow that no one's identified IDI and Supreme Court wasn't quite prepared to Ru out completely no but but but Ian I think that is I think that would be in fact a conventional approach to the the answer on section two because it's a closed it's well understood to be a completely closed system and it's definitive the award is definitive of everything decided including the decision on jurisdiction of the arbitral tribunal the difficulty I have with all this if and maybe it's for Mr B to explain this in reply rather than for you to try and grapple with it but in a way it does affect you though because if the argument is right it affect also affects grounds one and two yes um which I haven't anticipated it did but now your lordship's raised it I think I can see logically why that's one analysis that it could but I think the answer to it is the convention what can I just say what yes where I'm struggling with it yes as I understand the argument of section nine it is well whatever exit says um when you come to apply section n this court has to accept that it's a matter of international EU premacy there is no valid arbitration agreement yes that's the argument of section yes I don't understand why we don't also have to accept that when applying section one of the 1966 act well because section one of the domestic legislation just tells the court what it has to do when presented with an authentic award it doesn't give you any that's all the bits that are missing from this 96 act and New York convention are very striking they're exactly the points that are covered by articles 50 52 on an analment application Spain argued this we can see in this case you've got the analysis of Lord Collins's tribunal in cavala um which I mentioned yesterday and is on the foot of the uh references sheet and you've got the analysis of the Spain tribunal rejecting it in this very case the argument being made on the ECT so my lords I I'm not saying it out loud each time but obviously we say they're completely wrong on the international law consequences of what's been said within the EU but my lord lord Justice Phillips's question is premised if they're right about that would it have the knock on effect on Grands one and two and in my respectful submission it can't um and it is that's why that's why the the question of whether our friend ground one matters or not might become quite important because the the the straightforward operation of the 1966 act should not really be a prisoner to any qualification by the 1978 act but but the point I mean the way in which the matter was argued yesterday yes as I understood it the the reason why there's a submission to the jurisdiction within section two of the siia yes is because the there is a prior written agreement agreement in the form of the of the exit convention exactly to which this country is parted so that's the submission confers jurisdiction on the English C in these circumstances yes where there's been an exit award yes which can't be challenged for all reasons we debated yeah and it's it's in a sense it's a self-contained point exactly and the and the the sort of the 351 European Court um overreach point Point um doesn't really doesn't whatever it overreaches to it doesn't overreach to that no it's it's completely self-contained point it's my Lord in in a sense your lordship's point to friend yesterday looking at article 54 they're agreeing on it and that's what they are doing in the exit convention entirely on its own on the basis that under article 41 jurisdiction will be determined by the tribunal itself it's a totally closed system and it's been referred to that by I think the Supreme Court in I think they say that and in lots of other decisions so I think that is the answer on section two and and actually ground one can I jump yes to a different aspect from just so I understand where you you're heading yes is it on your case right that the member states who are relevant to the these proceedings Spain and the countries from which your clients come are bound as a matter of international law by virtue of the EU treaty and the decisions of the cju to proceed on the basis that there is no arbitration agreement no it's not right even as a matter of international law as between themselves well as a matter of EU law inter say that they they may be but as a matter of uh international law judge from the perspective of the tribunal and this court absolutely wrong and that's of course what Calum analyzes and I can show the court why it doesn't absolutely does not work I I mean it may not work but I don't entirely understand why if you look at their international law obligations they are not to be found in the uh EU obligations that they have undertaken and have been interpreted in ance with them obligations by the cju yeah I'm of slightly running ahead I don't mind at all yeah I there are there are massive problems I think you better not run ahead you better wait I can give you a sort of helpful you know signpost because it why don't you give us a signpost and then go back to dealing with the ECT which is where he wants exactly um the short point is the ECT was uh agreed to by the EU as a Contracting party it has intern National obligations pacce and savander not just to agree but to perform the treaty in good faith which is in flagrant breach of by the way um uh so that's the starting point um it's particularly bad because the the EU tried to negotiate a disconnection clause on article 26 during the negotiations of the ECT and every said what on Earth are you talking about because there are 54 signatories to the ECT and this is a point made by professor dashwood in his article um and every said what on Earth are you talking about absolutely not you have to have uh the isds provisions for intern for dispute settlement on the arbitration clause in article 26 and there's there is a specific reservation made absolutely minute proportions made by the uh EU in relation to article 26 which is just the permissive reservation I'll show you in a minute um the permissive reservation that people can still go to the cju if they want to that's all there's absolutely no discon disconnection Clause at all they tried to negotiate it they didn't get it and then many years later they suddenly announced oh by the way we did get it after all well I mean that's an on the international law plane that's doesn't even part summary judgment it's hopeless and with the greatest respect the elegance and persuasiveness with which the Article Five Point was put about the internal vclt argument and that's totally hopeless as well all the vclt is saying in Article Five is it just says if you've got a treaty of Rome for your own internal purposes you interpret that inter say in the way that the Treaty of Rome says I mean that's what it does in relation to all other treaties as well the the governing treaty is the primary source of interpretation and the vclt carves out specifically in every provision almost that the governing underlying treaty is the first Port of Call that will become important when I develop the submissions on whether the unilateral Declarations of various different member states um we looked at yesterday make any difference at all because they completely fail to satisfy the requirements for the modification or disapplication of the ECT that are found in the ECT right and they also fail by the way as backup to satisfy the requirements for modifying a treaty in the vclt which also show the G so I mean it's it's it's it's absolutely appalling what's happened I'm sorry to to say that but it is and and I I did my star in dg4 which seemed to be pushing this so it's not a comfortable submission to make um but it it it it is appalling and uh it is astonishing to see the was driven by two things isn't it which with which Speaking from my side not totally unfamiliar over the years one is that the European the CGA EU it now is doesn't like arbitration and the other is that it it doesn't like the exit stuff because they think it's all state aid yes I mean so one it's a sort of the the basis of the two ex exactly well there's there's one chap at the commission who's rightfully keen on this on the state aid fond who's pushing I mean he quite extraordinary how we've ended up a fantastically unsatisfactory position and I mentioned yesterday to the court the the point in the michul case that arose about the Europe agreement requiring the members the the candidate States for the EU to enter into these bilateral investment treaties I mean that's not just a point I made it's a point made by Advocate General wle in the AG's opinion which I'll show you if I may because we that actually didn't make it into the bundle so got a tiny where where you were going to show CCT that's probably a better better thing to go back to what I was going to try and do but I hope you guys gives us a general signpost yeah on the international plane is a completely hopeless argument to say that uh the EU EU Primacy which is an inter Professor dashwood also points out is an internal principle of EU law binding member states has that effect on the international clae to Trump the terms of the very treaty that the tribunals are called to interpret and to apply in making their decisions I mean that that has never ever happened so it is completely hopeless but it's more hopeless when you look at the actual contents of the treaty for reasons that I'll come to so we're in tab 106 um at 3597 uh and there's the Preamble and that the two paragraphs that are worth um looking at there recalling that all signatories undertook to pursue the objectives of the European energy Charter and Implement and broaden their cooperation as soon as possible by negotiating in good faith an energy Charter treaty and protocols and Desiring to place the commitments contained in the charter on a secure and binding legal basis causing that this is a recital in the Preamble about an undertaking to negotiate this treaty in good faith and the point that Advocate General waay makes is that there was no disconnection clause in the ECT there's a specific provision which is later used by Belgium in opinion 120 which I'll show you to ask in advance whether a treaty that the EU is going to enter into is in ance with the treaties and they didn't use it and Advocate General wle said that's because no one for a moment thought it was in breach of the provisions of EU law so the we this the premise of the treaty is that it was negotiated in good faith and what all the international tribunals have said is if that's the case and you were going to disapply article 26 it would have required an Express statement in the treaty to that effect or an Express reservation and I'll show you there's neither so uh pushing on if I may um article one on page 3598 it's article one uh paragraph two Contracting party means a state or reio which is the EU um which has consented to be bound by this treaty and for which the treaty is in force that includes the EU um 300 36 two pages further on purpose of the treaty this treaty establishes a Le legal framework in order to promote long-term cooperation in the energy field based on complementarities and mutual benefits in ance with the objectives and principles of the charter um there are uh article 6 on 3601 competition each Contracting party shall work to alleviate market distortions and barriers to competition and economic activity in the energy sector just pausing there um it's it's right that as soon as you say um if the investor is an INT EU investors goes to my Lord's point yesterday about whe whether it makes a difference to what difference it makes if the the obligations are breached and the court I think was thinking about specific examples of joint Investments joint invest and that thing a completely different policy point at a high level is a massive Distortion in the market because if EU countries favor EU investors they know that they can treat them in breach of the fair and Equitable treatment standard in the ECT with total impunity so there is the effect of what is contended would lead to exactly the sort of distortion a market Distortion um which article six was designed uh and the treaty as a whole was designed to avoid but it sounds as though the market Distortion would be adverse to member states but my Lord that's still not all member states are very happy about this they've been forced by arm wrestled by the duty of sincere cooperation to go along with what the commission says so Mard friend says they speak with one voice that is quite a finesse and also parenthetically when he said the cju speaks on behalf of all of the member states I mean that's demonstrably wrong in relation to the echr opinion of the cju because the court will remember that the the EU was encouraged to become a signatory to the the European convention on human rights ducked it and then all of the member states put in a mandatory provision in the Treaty of Lisbon saying you shall and the cju went well no unfortunately autonomy and Primacy mean we can't do that sorry and so we then get the general principles in the charter in turn so let's just be clear that the re recently the cju has not been the mouthpiece exactly of the me member states in the ways suggested and the that example is the most striking example I think in in in the Union's history um anyway moving forward back the ECT you've got the facilitation of Transit Provisions through states to other states in article seven and the uh the no less favorable treatment 3603 article 73 second line third line these are all very important the the ability for energy to come through country B to Country C is super important to Country c not just country B this is a network of obligations which can't be disentangled and that's how the ECT has been understood it's not a bundle of pure bilateral obligations and it's nor is it fair to say that treating uh the uh dispute resolution procedure under article 26 in that way is is is bilateral either comes um article 9 is about the importance of open Capital markets and encouraging the flow of capital so that's all about the same Sovereign risk objective which exit is about um and then article 10 in part three is the fet standard and uh the expressed wish to promote and protect Investments and it's right just so the court knows I if if the if the investors in this case do not have recourse under exit because of what's happened by the EU they've got nothing I mean it's pretty striking and Le friend gave I think yesterday very helpfully some of the relevant dates I thought it might be helpful for the court to have just one sheet with the key dates of investment and so forth and the relevant treaties to hand to put it in context because what in fact happened was that um was that uh support was promised to encourage green energy investments in Spain yeah because Spain wanted to have green energy infrastructure and people raised funds and made enormous investments in the billions and then on on the basis of the promised support it was in the original Royal Decree and then once it was all built the Royal Decree was pulled effectively the support was taken away and that breached the fair and Equitable treatment standard in the ECT so you're left with absolutely no remedy not least because he it's as a matter of Spanish law that's what the law did and also because um the EU is contending that the awards made by exit tribunals are on lawful state aid as well because of the basis of calculation and that was a point I think I made um on the Security application in this case in front of your lordship which just a say you know pretty unusually Spain agreed with the Commission in the investigation of state aid when oh yeah absolutely state aid yeah no we don't have to pay0 million to them and the other 25 Awards plus the ones in the pipeline I mean normally States defend the legitimate uh Grant of support that they believe is lawful so it's an unusual situation in that respect as well um returning to the convention if I may there are a couple of other key uh points um probably the most important is uh obviously article 26 but I can go there and then come back to article 16 article 26 is on page 3618 and it's really important to look at the actual precise terms of article 26 262 if such disputes cannot be settled ing to the provisions of paragraph one within period of three months from the date on which each party to dispute requests amicable settlement the investor party to the dispute may choose to submit it for resolution to the courts administer tribunals of Contracting party um in ance with any applicable previously agreed dispute settlement procedure will see in ance with the following paragraphs and then 3A each Contracting party hereby gives its unconditional consent to the submission of a dispute to International arbitration for conciliation in ance of the provisions of this article and then the Contracting parties listed in 1D do not give such unconditional consent where the investors previously submitted the dispute under paragraph 2A or 2B um and are there countries in yes and I I'm I do need to give you this little extra bundle just to make that point good it's also got Advocate General W's opinion in it yeah okay um I hope you won't need to go to many of the many of the places um because it's just it's fair for me to take the point against me and then deal and show why it doesn't apply that actually the EU uh did have a the very small revision C contemplated in anex 1D um so the court will see that uh at uh tab tab 11 sorry yes noted it so tab 11 is the information that any Contracting part party in 1D has to provide about uh the extent to which um the consent is unconditional in any way and all it is referring to there is the uh circumstances in which the court of justice which is five paragraphs down between the two whole punches as the judicial institution of the community is competent to examine any question relating the application and interpretation of constituent treaties and acts adopted thereunder including International agreements concluded by the communities which under certain add conditions may be invoked before the court of justice any case before the court of justice by the of the European communities by an investor of another Contracting party in application of the forms of actions provided by the constituent treaties and communities falls under article 262a the energy chter treaty given that the community's legal system provides some means of such such action European Community have not given their unconditional consent of submission of dispute International arbitration or conciliation the short point is all they're saying is that any action before the cju is an action permitted under 2A even though the court even though the cju is not the court the same Contracting party it's a permissive option it is not the disconnection Clause they sought uh in negotiations so subject to that makes no difference the outcome but I sort it's right for the court see that when when they did appear in Annex 1D in 3 B1 um the the qualifications are in relation to sub paragraph 2 a or 2B above they're not in relation to 2C and uh the international arbitration Provisions then follow and we've got at 264 in the event that an investor chooses to submit the dispute for resolution under some sub paragraph 2C the investor shall further provide its consent in writing it's back in the ECT now for the dispute to be submitted to exid is A1 on page 3618 uh bottom of the page 264 little A1 exed uh and that's the case if the Contracting party of the investor and the Contracting party to the dispute of both party the exit convention and then uh six is important because 266 provides a tribunal established under paragraph four shall decide the issues in dispute in ance with this treaty with this treaty which is the ECT and applicable rules and principles of international law so that ECT itself specifically provides that the tribunal shall apply the treaty the ECT and the applicable rules of principles international law uh not EU law and there was no disconnection clause uh which could have that effect there's um before I go back to article 16 there's one at the back which the court needs to see 3631 article 46 there's there were no reservations were made to this treaty there was one specific external treaty the SL lad uh treaty which was uh had Primacy over the provisions of the ET and that was very carefully negotiated so you've got a specific example of another treaty it was very specifically negotiated which could have had the sort of effect that the EU is now contended for the EU treaty were not dealt with in that way and they tried to get a disconnection clause and it was refused and when we go back to article 16 on page 3611 uh the treat is pretty clear there too because it makes express provision for relation to other agreements where two or more Contracting parties have entered into a prior International agreement or enter into a subsequent International agreement whose terms in either case concern the subject matter of part three or five of this treaty so where you reading from sorry top of page 3611 apologies uh 3611 in the ECT yeah uh so it's 3611 at the top and we're looking at article 16 yeah it's really important it's a relation to other agreements provision in the ECT itself and it's where two or more Contracting parties have entered into a prior International agreement for a subsequent one whose terms in either case concern subject matter of part three or five and five is obviously dispute resolution procedures um nothing in part three or five of this treaty shall be construed to dagate for any provision of such terms of the other agreement or from any right dispute resolution with respect there to under that agreement and nothing in such terms of the other agreement should be construed to derogate from any provision in part three or five of this treaty or from any right to dispute resolution with respect there two under this treaty where any such provision is more favorable to the investor so the ECT makes within its own terms a totally conclusive provision where there is a parent treaty conflict of the type A Lear of friend was referring to that there's no effect if the other arrangements are better for the investor so there's a an immediate point on the bare work before we get into any of the EU arguments and international law arguments the ECT article 16 has total preclusive effect on its own terms to disadvantageous to investor alternative International agreements having that effect can can I just understand how far this goes so suppose you have a treaty between countries a b and c yes including a provision that uh if they agree anything different later it's not to have effect and then countries A and B agree between themselves something different in a later treaty yes what the consequence as between A and B so the the consequence between A and B if well the problem is that because because this is about investor protection there are two planes on which the analysis has to be undertaken with care there is the international law plane before the icj as between a b and c in fact where the the lawful compliance with treaty one in entering into treaty two will be litigated and decided that's a separate issue but the uniqueness of the isds provisions is that of course they confer what are effectively private international law rights on the investors so the whole point the reason you have article 16 is to stop the essential protection that's conferred on investors being fiddled around by what a few member states might later the answer my Law's question if you got to if a b and c parties to the ECT and a and b then later into into another treaty with its the terms of which are less favorable to investors than this treaty doesn't make any difference then then that can't be relied upon against the investor exactly and the all the parties to this treaty have agreed that they can't rely upon it against the investor as reducing the protection in the ECT that's the the entire point of the ECT was to give everyone an absolutely goldplated guarantee that the investor protection in order to stimulate the relevant Capital flows which are multilateral and complex in order to ensure energy security and and mitigate Sovereign risk to everyone's benefit including all the transition provisions going to different countries Etc yeah all of that is just just as in exit if you literally pull away the one pillar that the entire construct is resting on is totally fatal to the scheme and and and that's exactly why article 16 is there and so you've got an Express treaty provision which precludes any of those arguments adversely affecting an investor now there's a comp more complicated question about what happens between the you know whether one country country a can complain that countries B and C different an issue is totally different issue's looking at it in terms of the investor exactly that's why I asked the questiona what we're concerned with is a is a claim by investors against exactly one of the Contracting states of the ECT and your point I think then get yes is that whatever the European Union may have done ex amongst its own members which is detracts from this treaty yes and is therefore less favorable to investor the parties of this treaty have agreed as between themselves and the investor it will be of no effect exactly and it's literally the shortest answer to the incar entire EU problem which is not only have the Contracting parties agreed Spain's agreed but so is the EU and Inter international law it's absolutely bound you don't even need to look at the vclt pactice in sander that's an end of the case on I mean I'm obviously going to deal with the other points as well because they're almost even worse well let's do that let's have a break because I'm conscious we didn't have aak Mak no it says 52 there so if we say five minutes I'm sorry terrible I didn't y see right e ch [Music] speci f e El is the court ready always than C RIS able those are the key provisions of the ECT themselves yeah could I just deal very quickly with a few references to the disconnection issue yes because I think the point's good on the face of the treaty anyway but it is significant that the the EU sought to obtain by negotiation what it's now an Ed it's actually entitled to impose on everyone else or the EU parties and the consequences of that on all the investors um so the in relation to disconnection can I just start with um the article at the back of t uh volume eight the very back tab 147 which is this the article I mentioned uh to the court yesterday um um it's by Professor sound Ashwood he's obviously a member of my Chambers and has been an expert in a number of these cases I think even even in this case an EU law expert but um it it's uh the analysis which is uh the analysis of comro which is in of interest and um if we look at page 4405 I me I would commend this article as a whole to the court just because it's it's an impressively careful and arguably even generous reading to the cgu not withstanding some of the Striking conclusions reached um uh 4405 the intended scope of the international obligations accepted under article 26 EC t a Luna in the comro judgment is the failure to consider the intended scope of the international obligations accepted by the EU and the member State parties to the ECT in assenting to the inclusion of article 262c in the treaty it is submitted that interpreted in good faith in ance the already meaning given to the terms which is straight from the article 31 PT uh article 262c ECT provides for an arbitration mechanism it's intended to be available to investors of any one more Contracting parties uh in disputes with any other Contracting party hosting our investment including where the dispute between an investor of an EU member State and another EU member state that seems abundantly clear from the inclusive language of provisions of the ECT in particular article 261 combined the absence of an Express disconnection Clause uh 54 and uh the the combined with the absence of Express disconnection caus extreme care taken to Define any exceptions the availability of the arbitration mechanism um and the fact that in the single case of an agreement given precedence over the ECT treaty the spalart treaty was on I mentioned earlier this was spelled out in an Express decision there's no such decision for the EU the internal evidence was that as such that Contracting parties intention is reinforced consistently with article 32 of the bclt un supplementary means of interpretation by the trau as recalled by various arbitration tribunals an attempt by the commission to have a disconnection cause inserted into the Tex the treaty that would have excluded the interu application was rejected this is a clear indication that the int intra euu application of arbitration mechanism in article 26 was intended to be among the international obligations undertaken by the EU Contracting parties and I would say the EU itself uh just to be absolutely clear towards each other and Third Country Contracting parties and that it was insisted upon by the latter and then he deals with it it's not really a bundle of bilateral relationships and so forth so just just following that through um the it's it's important um for the court to have in mind the decision of the Swiss Supreme Court in relation to this case which we have in the bundle at um uh T volume six tab 93 as far as the dashwood article is concerned yes couldn't pick up anything that it says that you had already said to us what does it add well my my lord well I was just identifying that that he he gives specific reference to th