Today, the UK woke up to the news that the general election result was a hung Parliament with no political party gaining an overall majority in the House of Commons. The official election results were:
- Conservatives – 318 seats
- Labour – 261 seats
- Scottish Nationalist Party – 35 seats
- Liberal Democrats – 12 seats
- Democratic Unionist Party – 10 seats
- Others – 13 seats
The target number of seats for any party to form a Government in the UK is 326 seats in the House of Commons. The Conservatives with 318 seats will be forming a minority Government with the support of the Democratic Unionist Party (DUP). The DUP has worked with previous Conservative Governments although it will not be in a formal coalition. Theresa May has said that she will remain as Prime Minister.
Setting the scene to Brexit
The general election result is less than a year after the UK’s referendum on EU membership which took place on 23 June 2016. Inevitably questions have been raised this morning as to how the general election result will impact Brexit, including whether Brexit could be revoked.
What happens next to Brexit, whether the “hard Brexit” advocated by Prime Minister May is softened, will be a matter for the politicians which is outside the scope of this blog and something that the Sunday papers will, no doubt, discuss in detail. From a legal perspective the debate regarding whether or not Article 50 can be revoked has been rumbling for some time.
The text of Article 50 of the Treaty on European Union (TEU) provides that:
- Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
- A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
- The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
- For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
- If a State which has withdrawn from the Union asks to re-join, its request shall be subject to the procedure referred to in Article 49.
On 29 March 2017, the UK submitted its letter to the EU Council’s President Donald Tusk formally notifying him of the UK’s intention to withdraw from the EU pursuant to Article 50(2) of the TEU. Importantly, until a withdrawal agreement is concluded between the EU and UK or the negotiating period in Article 50(3) of the TEU expires, the UK remains a member of the EU.
The problem with Article 50
The problem with Article 50 is that it does not specify one way or the other as to whether or not a Member State can revoke an Article 50 notification once it has been submitted.
On 29 May 2017, it was reported in the press that a legal challenge in Ireland on whether Article 50 could be revoked was dropped. The papers were originally lodged in the High Court of Dublin earlier this year in a bid to seek a ruling on the issue from the European Court of Justice. But the claim was ultimately dropped given the length of time the legal challenge would take and the costs involved.
House of Lords
In the UK the House of Lords has been conducting a number of inquiries into Brexit. The Lords’ Constitutional Committee looked into the invoking of Article 50. In relation to a revocation of an Article 50 notification the Lord’s Constitutional Committee summed up the position:
“It is unclear whether the UK could, after triggering Article 50, unilaterally choose to withdraw its notification of withdrawal from the EU (thereby stopping the two year countdown to withdrawal). The House of Lords European Union Committee concluded in 2015 that “There is nothing in Article 50 formally to prevent a Member State from reversing its decision to withdraw in the course of the withdrawal negotiations. The political consequences of such a change of mind would, though, be substantial.” Others argue that once triggered, Article 50 may not be unilaterally revoked by the member state concerned, although it could be reversed by the unanimous agreement of all EU member states.
Participants at our seminar were also divided on this point. As one noted, “there is nothing in Article 50 itself one way or another; it does not say that you can retract or, once invoked, that you cannot retract. So it is left to the lawyers to have those enjoyable disputes to sort it out.” Should any attempt by the UK to unilaterally withdraw its notification under Article 50 be disputed by another member state, the matter would be decided by the European Court of Justice.”
Their Lordships concluded:
“It is unclear whether a notification under Article 50, once made, could be unilaterally withdrawn by the UK without the consent of other EU member states. In the light of the uncertainty that exists on this point, and given that the uncertainty would only ever be resolved after Article 50 had already been triggered, we consider that it would be prudent for Parliament to work on the assumption that the triggering of Article 50 is an action that the UK cannot unilaterally reverse.”
The European Parliament has taken a fairly hard line as regards the possibility of the UK revoking its Article 50 notification on the basis that it could possibly be used as a negotiating tactic. A European Parliament resolution of 5 April 2017 noted that a revocation notification should be subject to conditions set by the EU 27:
“whereas a revocation of notification needs to be subject to conditions set by all EU-27, so that it cannot be used as a procedural device or abused in an attempt to improve on the current terms of the United Kingdom’s membership”
The European Parliament briefing note on Article 50 TEU: Withdrawal of a Member State from the EU discusses revocation further:
“Some have proposed the use of the Article 50 procedure to force a renegotiation of a Member State’s membership of the EU. In this context, the question could be posed as to whether – once a Member State has notified the European Council of its intention to withdraw from the EU, and a withdrawal agreement has been negotiated – it can, depending on the results of the negotiations, unilaterally revoke its notification and suspend the withdrawal procedure. Most commentators argue that this is impossible or at least doubtful, from a legal point of view. Indeed Article 50 TEU does not expressly provide for the revocation of a notice of withdrawal and establishes that, once opened, the withdrawal process ends either within two years or later, if this deadline is extended by agreement.”
“Furthermore, it should be noted that the event triggering the withdrawal is the unilateral notification as such and not the agreement between the withdrawing state and the EU. The merely declaratory character of the withdrawal agreement for cancellation of membership derives from the fact that the withdrawal takes place even if an agreement is not concluded (Article 50(3) TEU).”
Interestingly, the European Parliament briefing note adds:
“This does not mean, however, that the withdrawal process could not be suspended, if there was mutual agreement between the withdrawing state, the remaining Member States and the EU institutions, rather than a unilateral revocation.”
A further discussion of revocation can be found in the European Parliament briefing note, UK withdrawal from the European Union. It states that:
One important question is whether a notification under Article 50 TEU can be withdrawn once it has been triggered. Article 50 TEU is silent on this matter. Although the Vienna Convention on the Law of Treaties provides that a notification of intention to withdraw from a treaty ‘may be revoked at any time before it takes effect’, the special arrangements of the TEU take precedence.
There is wide agreement that the withdrawal process could be suspended if all the other Member States agree to this, as the Member States are the ‘masters of the Treaties’. The European Council, perhaps on condition that the new decision to revoke the notification is taken in conformity with the constitutional requirements of the withdrawing Member State, could therefore decide by consensus to accept any revocation of the Article 50 TEU notification, although the agreement of other EU institutions could possibly also be required. Some commentators have suggested, at least theoretically, two other scenarios if the withdrawing state and the rest of the Member States reached an agreement that the former will not in the end leave the EU: either the future relationship between the EU and the withdrawing Member State, following the ending of the negotiations, merely reaffirms the application of the Treaties to that state; or, the parties could agree to extend the negotiations indefinitely and, possibly, insert a protocol into the Treaties to confirm that the notification of withdrawal under Article 50 has been revoked.
By contrast, the unilateral revocation of an Article 50 notification appears much more problematic. Some commentators argue that a Member State cannot unilaterally revoke its notification to leave the EU (in the sense of legally compelling the rest of the Member States to accept this revocation). The event triggering withdrawal proceedings is a Member State’s unilateral notification under Article 50(2) TEU, effectively starting a countdown to the deadline (which may be extended if the European Council, together with the withdrawing Member State, so agrees), by which the withdrawal process must end, unless a concluded withdrawal agreement provides otherwise (Article 50(3) TEU). For this reason, as well as in order to prevent any abuse on the part of the withdrawing Member State – for example, stalling the negotiations by withdrawing the notification, then re-notifying and re-starting the two-year period, thus bypassing the agreement of the other Member States – the possibility of a unilateral revocation of the notification at a later date is thought by these commentators to be legally doubtful.
Others, however, believe that the unilateral revocation of an Article 50 withdrawal notice is legally possible, if made in accordance with the national constitutional requirements of the withdrawing Member State. In this scenario, if the withdrawing state decided to stop the exit process, the other Member States would not be legally able to force that state to leave the EU. A state expresses its ‘intention’ to withdraw, and an intention may be withdrawn. Any other situation would amount to an expulsion from the EU, which would not have been the purpose of the drafters of Article 50. However, some commentators specify that this unilateral revocation is possible under certain constraints, notably if the Member State has genuinely and in good faith taken a new decision not to withdraw from the EU (a decision which must not be about the rejection of a specific agreement).
The Court of Justice of the EU (CJEU) might be called upon to rule on such a revocation’s compatibility with the Treaties; as it is a matter of interpretation of EU law, the CJEU would be the ultimate interpretative authority on the issue.
Financial institutions will be watching carefully how the politics of Brexit unfold in the next couple of days particularly as negotiations were to formally begin on 19 June. The European Parliament papers suggest that the withdrawal process under Article 50 of the TEU could be suspended if there is an agreement among Member States. Unilateral withdrawal is more problematic and may involve the Court of Justice of the EU. Whilst important legal questions, both are significantly greater political questions.