CJEU upholds opinion of Advocate General and rules that UK can unilaterally cancel Brexit by revoking Article 50

In a landmark decision delivered on an accelerated timetable, the Court of Justice of the European Union ("CJEU") has ruled that a Member State can unilaterally revoke its notice of intention to withdraw from the European Union ("EU") under Article 50 of the Treaty on the European Union ("TEU"), upholding the opinion given by the Advocate General last week (see post).

The CJEU, in Wightman and Others v Secretary of State for Exiting the European Union, held that an Article 50 TEU notification can be unilaterally revoked if (1) the revocation is submitted in writing to the European Council ("Council"), (2) the revocation is clear and unequivocal, (3) no withdrawal agreement has entered into force, or if no such agreement has been concluded, the two year (or extended) period has not expired, and (4) the revocation is made in accordance with the Member State's constitutional requirements.

Background

The CJEU's ruling arose from a petition for judicial review lodged in the Court of Session (Scotland) by a group of Scottish politicians and two Westminster MPs, who sought a declaration specifying whether, and if so, when and how an Article 50 TEU notification could be unilaterally revoked.

The Court of Session stayed proceedings in Scotland and referred the following question to the CJEU for a preliminary ruling:

"Where, in accordance with Article 50 [TEU], a Member State has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying Member State; and, if so, subject to what conditions and with what effect relative to the Member State remaining within the European Union?"

The UK government tried unsuccessfully to prevent a preliminary ruling from the CJEU on the ground that the issue was inadmissible because it was hypothetical. The CJEU ruled that the question was admissible, on the basis, among other things, that it related to a question of interpretation of primary EU law that was in dispute in proceedings before the referring domestic court. Accordingly, it was "in no way obvious" that the question referred concerned "a hypothetical problem".

However, the UK government did not take a position on the substantive matter in dispute, namely whether Article 50 TEU provided for a unilateral right of revocation. In contrast, the Council and the European Commission (the "Commission") both argued that the recognition of a right of unilateral revocation would open the way for abuse of Article 50 TEU. They claimed that a Member State could invoke Article 50 TEU but use its right of unilateral revocation shortly before the end of the two year period laid down in Article 50(3) TEU. It could then notify a new intention to withdraw immediately, thereby triggering a new two-year negotiation period. In doing this, the Member State would enjoy, de facto, a right to negotiate its withdrawal without any time limit, rendering the period laid down in Article 50(3) TEU ineffective. In order to guard against such risks, the Council and the Commission argued that revocation of an Article 50 TEU notification was possible only with the unanimous consent of the Council.

The CJEU's judgment on the substance

First, the CJEU noted that although Article 50 TEU does not explicitly address the subject, its wording impliedly provides for a right of unilateral revocation. Article 50(2) TEU states that a Member State which decides to withdraw shall notify the European Council of its "intention" to withdraw from the EU. An intention is, by its nature, neither definitive nor irrevocable. Therefore, the use of this word authorises the Member State to "retract" during the process if its intention changes.

Second, Article 50(1) TEU provides that any Member State may decide to withdraw from the EU "in accordance with its own constitutional requirements". Given that the decision to withdraw is for the Member State alone to take, in accordance with its constitutional requirements, so too should the decision to revoke an Article 50 TEU notification depend solely on a Member State's sovereign choice.

Third, the CJEU observed that forcing a Member State to leave the EU against its intention would be inconsistent with other EU principles, for example, the values of "liberty and democracy" (referred to in the second and fourth recitals of the preamble to the TEU), and noting the potential impacts of withdrawal on the rights of EU citizens. The EU is comprised of states which have freely and voluntarily committed themselves to union. Given that a state cannot be forced to accede to the EU against its will, neither should it be forced to withdraw from the EU against its will.

Fourth, the CJEU noted that the drafting history of Article 50 TEU supports an implied right to unilaterally revoke an Article 50 TEU notification. During the drafting of the provision, amendments were proposed to allow the expulsion of a Member State. However, to avoid the risk of abuse during the withdrawal procedure, such amendments were rejected on the ground, expressly set out in the comments of the draft, that the voluntary and unilateral nature of the withdrawal decision should be protected.

Fifth, the CJEU held that the right of unilateral revocation is corroborated by the provisions of the Vienna Convention on the Law of Treaties ("VCLT"). Article 68 of the VCLT expressly provides that a notification of withdrawal from an international treaty "may be revoked at any time before it takes effect". Although the CJEU's judgment does not consider this question in as much detail as the Advocate General's opinion (it does not discuss the question of whether Article 68 has the status of customary international law, for example), it finds clear support in these VCLT provisions.

As regards the proposal of the Council and the Commission that the right of the Member State concerned to revoke the notification of its intention to withdraw should be subject to the unanimous approval of the Council, the CJEU noted that such a requirement would transform a unilateral sovereign right into a conditional right subject to an approval procedure. Such an approval procedure would be incompatible with the principle that a Member State cannot be forced to leave the European Union against its will.

For these reasons, the CJEU held that a Member State has a unilateral right to revoke its Article 50 TEU notification. This right can only be exercised if:

1. The revocation is submitted in writing to the Council;
2. The revocation is unequivocal and unconditional, that is to say that the purpose of the 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;
3. Any withdrawal agreement between the Member State and the EU has not entered into force, or if no such agreement has been concluded, the two year period (or extended period) has not expired; and
4. The revocation is taken in accordance with the Member State's constitutional requirements.

Comment

The CJEU delivered its judgment in record time, reflecting its view of the significance of the decision in the context of the Brexit timelines. Its conclusion is that unilateral withdrawal is possible at any time until a withdrawal agreement enters into force or, in the absence of such an agreement, the two year period (or any agreed extension to this period) expires.

Furthermore, the judgment explicitly confirms that the consequence of a Member State's revocation is restoration to the status quo. This means that if the UK revoked its withdrawal, it would remain a member of the EU on exactly the same terms as it had been on previously, including the rebate and its various opt-in and opt-out arrangements.

In so deciding, the Court rejected the interpretation advanced by the Commission and the Council who argued, by analogy with the provision for extension of the two year period, that revocation required the unanimous consent of the Council. This position was motivated by the fear that the withdrawing Member State could use the possibility of revocation to improve its negotiating position (possibly by revoking its intention to withdraw and resubmitting it). The Advocate General had proposed to deal with this possibility of abuse with a proviso that the revocation must be in good faith. The Court did not refer to this aspect of its Advocate General's opinion and leaves the issue of good faith open, emphasising only the need for democratic legitimacy of the revocation and that it must be "unequivocal and unconditional, that is to say that 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 Court has therefore clarified the existence of a further option for the UK to remain in the EU by democratically expressing its will to do so.

For further information please contact Andrew Cannon, Partner, Lode Van Den Hende, Partner, Eric White, Consultant, Vanessa Naish, Professional Support Consultant, or your usual Herbert Smith Freehills contact.