Mark Brealey QC successful before Supreme Court of Mauritius as Court Awards Damages to Mobile Phone Operator

On 9 August 2017, the Supreme Court of Mauritius awarded Emtel, a mobile phone operator in Mauritius, £13 million damages in respect of loss suffered as a result of cross-subsidies granted by Mauritius Telecom (“MT”), the monopoly fixed line operator, to its mobile phone subsidiary, Cellplus.

The Claimant, Emtel, was the first mobile phone operator in Mauritius.  Several years after Emtel started operation, MT established Cellplus as a second mobile phone operator. The Court found that it was a condition of Cellplus’ licence that it would not benefit from any cross-subsidy from its parent. On its launch Cellplus significantly undercut Emtel’s tarrifs.  Emtel was forced to reduce its tariffs match to avoid losing market share. The Court found that Cellplus’ loss-making tariffs were funded by financial assistance from MT in the form of interest free inter-company debt and lease finance at non-commercial rates.

The Court concluded that the cross-subsidisation constituted unfair competition (concurrence deloyale) and amounted to a “faute” within the meaning of article 1382 of the Civil Code. The Court awarded damages to Emtel to compensate it for the difference between the reduced tariff actually charged and the tariff that would have emerged in a counterfactual where Cellplus competed without benefiting from cross-subsidies.

The Court further held that the regulator was jointly and severally liable for the loss suffered by the subsidised low tariff,  on the basis that it had committed a “faute lourde”. Emtel had complained to the regulator about Celllplus’ non-compliance, but the regulator had wilfully taken no action.

Mark Brealey QC appeared for Emtel (having been granted special dispensation by the Lord Chief Justice of Mauritius to appear in the Supreme Court). The trial lasted 8 weeks.

To read the judgment please click here.

Global Faculty Researcher at the European Inter-University Centre for Human Rights and Democratisation, Venice Lido; Evidence to Legal Affairs and Human Rights Committee of PACE

From October to December 2017 Piers Gardner will be a Global Faculty Researcher at the European Inter-University Centre for Human Rights and Democratisation, Venice Lido. He will be leading a number of seminars for practitioners and academics on Strategic Litigation with particular reference to cases before the European Court of Human Rights. [Piers remains in full time practice].

On 12 October 2017 Piers Gardner will give evidence to the Legal Affairs and Human Rights Committee of the Parliamentary Assembly of the Council of Europe in Strasbourg. The hearing concerns the case for drafting a European Convention on the profession of lawyer. Piers will participate as a spokesperson for the Council of the Bars and Law Societies of Europe (CCBE), having been joint Rapporteur of the CCBE’s position paper on the proposal for this new Convention. [Piers is the UK member of the CCBE’s Permanent Delegation to the European Court of Human Rights.]

Monckton and Des Voeux Chambers Symposium on Hong Kong competition law

Monckton Chambers and Des Voeux Chambers held a joint symposium on 13th September entitled “Mind The Gap: Valuable lessons from the EU and UK for Competition Litigation in Hong Kong” featuring Tim Ward QC, Philip Moser QC, Paul Harris QC, and George Peretz QC from Monckton and Catrina Lam, John Hui, Connie Lee, Kelvin Kwok, Jonathan YH Chan, and Cherry Xu from DVC. The keynote speaker was Stephen Ryan of the Hong Kong Competition Commission.

The event was held at HKUST Business School, Hong Kong Club Building, Hong Kong and attended by members of the Hong Kong legal and business communities and the Hong Kong Competition Commission.

To read Des Voeux Chambers’ news piece following the event “Mind the Gap: Valuable Lessons from the EU and UK for Competition Litigation in Hong Kong going forward” please click here, to read Tim Ward QC’s comment “Mind the Gap: The view from London” please click here.

Uber loses London licence due to lack of corporate responsibility – Julianne Kerr Morrison advises on GMB campaign

Julianne Kerr Morrison was instructed by Leigh Day, acting on behalf of the union GMB, which sent the TfL a letter before action which threatened TfL with a judicial review if it did not impose conditions on Uber’s Private Hire Vehicle (PHV) Operator’s licence. Today’s announcement that Uber has been stripped of its London licence is seen as an historic decision and a vindication of GMB’s campaign to ensure drivers are given the rights they are entitled to – and that the public, drivers and passengers are kept safe. For further information read news release issued by Leigh Day, coverage by The Guardian can be found here.

 

Peter Oliver elected as a member of the Aarhus Convention Compliance Committee

Peter Oliver has been elected at the behest of the EU to serve a three-year term as a member of the Aarhus Convention Compliance Committee, a tribunal of arbitration whose decisions acquire legal force when endorsed unanimously by the Contracting Parties. The Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters was concluded under the auspices of the UN Economic Commission for Europe. The EU and all its Member States are party to the Convention, as are eighteen other countries stretching from Iceland to Kazakhstan. The Convention has featured prominently in the Supreme Court’s judgments in several recent cases, including those concerning HS2 and Prince Charles’ “Black Spider memos”.

Is the EU (Withdrawal) Bill Deficient in the Context of Continued Access to the Aviation Single Market?

In the context of post-Brexit access to the EU’s Aviation Single Market, it is doubtful whether the introduction draft of the European Union (Withdrawal) Bill (EUWB) is adequate to serve its intended purpose of providing a clear, certain and reliable legal framework to enable businesses, individuals and regulators (in the UK and EU) to plan ahead for a long term future.

My purpose is to analyse a few illustrative aspects of the EUWB in an aviation context. It should be read with the texts to which links are provided below (presentations at the DFE in Copenhagen and at the FIDE Foundation in Madrid, as well as Julian Gregory’s post on the EUWB). Some of my points concerning retained EU law, retained EU case law and the use of enabling powers are of wider application. But this post is not a comprehensive survey. Nor does it purport to tackle the question of whether or not the CJEU’s jurisdiction should continue beyond Brexit.

The underlying assumptions are as follows:

  • The draft EUWB is chasing a moving policy target set by UK Ministers. It will undoubtedly be amended in the course of its parliamentary passage.
  • Different sets of domestic rules will be needed to implement the different outcomes that will result from the EU/UK negotiations. As the Queen’s Speech said, eight bills will be introduced to give effect to UK policy on exit from the EU. That will include a trade bill and an immigration bill. Those bills, which have yet to be introduced, may have a bearing on the problems which will be identified.
  • In any policy area, such as aviation, where the UK continues to seek access to the Single Market, the 27 other Member States (EU27) are likely to demand that the UK should continue to apply the substantive rules that apply to the EU27.
  • The UK is unlikely to wish (as it could do) to join the European Common Aviation Area in its own right in the long term  since it would require adherence to EU laws in the aviation sector.
  • Agreement on a post-Brexit future is urgent. For flight scheduling reasons, the practical deadline for a sustainable EU/UK agreement is far in advance of 29 March 2019.

A Mutual recognition of compliance standards has led to a thriving Aviation Single Market. Access to the Aviation Single Market is one of the key areas where the UK Prime Minister has said that the UK wishes to continue to have access to the Single Market (see point vi of the letter of 29 March 2017 from Mrs May to President Tusk). The central purpose of the Aviation Single Market is to create a mutual recognition system under which licences, authorisations and permissions granted to Community air carriers in one Member State are recognised in every other Member State of the EU, thus obviating the need for each carrier to meet regulatory compliance requirements in each Member State to and from which it flies. For present purposes, it suffices to say that this approach has resulted in a common EU framework for the protection of aviation safety and of aviation security, as well as for safeguarding of consumer interests. It is also a cost effective system, which has enabled the growth of “no frills” airlines.

Once the UK leaves the EU, its air carriers will no longer be able to benefit from this system unless either (a) relevant pre-existing bilateral air services agreements are said to have survived the advent of the Aviation Single Market and are capable of covering the necessary ground enacted in subsequent EU legislation or (b) the EU and the UK agree that UK air carriers should continue to have access (whether for a transitional period or longer) as if they were deemed still to be Community air carriers or otherwise by virtue of a mutually acceptable mechanism.

Initially there is little doubt that, at the point of exit, the UK domestic rules will in substance comply with the EU aviation acquis. But in order to benefit from continued access beyond the date of exit, the UK (including as necessary the devolved administrations) will have to demonstrate that its post-Brexit domestic rules are consistent with those that will continue to apply in the EU27. In their turn, the EU27 will have to demonstrate that they are in a position to honour their side of the bargain. That could be achieved by the adoption of a fresh interim EU regulation which imposes a fresh obligation to recognise UK licences, permissions and authorisations.

Will the EUWB, as drafted, fulfil its key objective of substantive legal certainty? The key relevant provisions of the EUWB to preserve EU-derived laws as national laws are clauses 2, 3 and 4. Together these provisions comprise a body of law to be called “retained EU Law”. Retained EU Law will comprise (a) preserved  legislation (in essence, domestic laws implementing EU obligations arising under directives) and (b) converted EU legislation (comprising directly applicable EU regulations and regulations adapted for EEA purposes , as well as rights that are recognised and available under the EU treaties). But retained EU laws will be frozen as at the date of exit.  Retained EU laws will no longer (clause 5) have primacy as EU law currently does. Moreover, all retained laws are subject to clause 7 (enabling powers to legislate to deal with deficiencies arising from Brexit), clause 8 (enabling powers to legislate to enable compliance with international obligations), clause 9 (enabling powers to legislate to implement the withdrawal agreement, available only up to exit day)and to Schedules 1 and 2/EUWB.

The UK Government’s hope is that fossilisation of EU law as UK domestic law will avoid the abyss of legal uncertainty. However, any seasoned EU negotiating team will question whether, from an EU27 perspective, the EUWB provides adequate assurance that the common rules underpinning the Aviation Single Market acquis would continue to be respected by the UK post-Brexit. Here are some examples of questions to be addressed:

  • The effect of the EUWB is to bring back future legislative control to the UK. Politically, that seems to be an imperative. But if the UK wishes to enjoy continuing  access to the Single Market, if only in a transitional period, the EUWB carries no guarantee that future changes by the EU27 to the fossilised EU rules would also be implemented in the UK.
  • The Bill confers enabling powers to make secondary legislation to correct deficiencies arising from withdrawal. The so-called Henry VIII powers allowing changes to primary legislation have come under heavy fire. But the availability as such of Henry VIII powers is not necessarily a fault line; rather it is the way in which the powers might be used.  After all, some amendments to primary legislation will be obvious – they will include defensible aims  such as amending references in retained EU law to the role of the European Commission which will no longer (at least from a UK Government perspective) have any jurisdiction  in a UK domestic context. Equally a deficiency would not exist simply because a UK Minister considered that pre-exit EU policy was itself flawed. But the terminology of “deficiency” is intended to be very wide. And, more importantly, what else might the definition permit?
  • It is fair to say that the power to amend retained EU law contains a sunset clause (and cannot be used after a date two years from Brexit). But, beyond the sunset clause, the UK Government has made clear that, as part and parcel of taking back legislative control, the Government will be able to review and amend in the longer term any laws on the UK statute book.
  • The UK Government would argue (paragraph 16 of its Enforcement and dispute resolution position paper) that, by virtue of clause 8 , it would implement its international obligations vis-a-vis the EU. That would in principle include compliance with any new aviation-related obligations adopted by the EU.  But it is debatable whether a government which favours deregulation (and has consistently criticised perceived EU overregulation) will in fact make any open-ended promises in respect of future EU legislative obligations arising in the aviation sector over whose content it will have no control.
  • It is clear that there can be no gaps in the coverage of the compliance system at the point of exit since the necessary rules will have to be applied seamlessly before and after exit if the UK is to be granted continued access to the Aviation Single Market.
  • It is debatable whether Clause 9 would  be available to avoid gaps in the system. It is limited to implementation of a withdrawal agreement under Article 50/TEU. Yet the content of rules on future access to the Aviation Single Market does not obviously fall within the scope of Article 50/TEU.

In summary, against this uncertain domestic legislative background, is it realistic to think that full access to the Aviation Single market is likely to be agreed by the EU27 unless the UK guarantees (which the EUWB does not) to play by the same rules as the EU27 are bound to do by virtue of their EU membership? Specifically, there is no obligation to implement new EU rules adopted after Brexit or to preserve retained laws in the long term or to give effect to continuing jurisprudence of the CJEU. On that basis, is the concept of retained law in the EUWB, if it is to be fossilised at the date of exit  but subject to amendment thereafter, going to guarantee the uniform application of the EU Aviation acquis post Brexit?

B Uniform interpretation of retained case law. If legal certainty is the aim of the EUWB, businesses, individuals and regulators will wish to have clarity not only about what substantive rules in a post-Brexit future will continue to apply but also about how the Courts will approach the interpretation of those rules. Uniform application of the law across all 28 States which adhere to the post-Brexit settlement is critical.

Under clause 5 (1), the principle of supremacy of EU law will only be applied in the context of the past, viz, it will not apply “to any enactment of rule of law passed or made on or after exit day”.

This approach is carried over into clause 6 which is the key provision on interpretation in the EUWB. In essence, as a matter of UK domestic law, any question as to the interpretation of retained EU law will be governed by retained CJEU case law and retained general principles of EU case law as they exist at the date of exit (clause 6(3)). But the Supreme Court will not be bound to adhere to retained CJEU case law (clause 6(4)). The UK courts may also apply future CJEU case law arising after exit day but need not do so (clause 6(2)).

Trust in the good sense and principled approach of the UK judiciary  is a reasonable stance to take. Thus, in the period prior to incorporation of the ECHR into UK domestic law in 1998, the UK courts took account of the jurisprudence of the Strasbourg court on the basis that their interpretation of the law ought not to be inconsistent with the UK’s international obligations under the Convention. But fossilisation of CJEU case law is a different concept altogether. Would it result in the legal certainty that is the UK’s goal in the context of the UK’s preferred, continued access to a future Aviation Single Market?

Four points arise. First it pre-supposes that CJEU case law as it applies to the EU aviation acquis at the point of exit is capable of being clearly articulated. The CJEU’s purposive approach to construction of EU Law in its judgments, as well as its forays, albeit infrequent, into judicial policy-making, do not always result in clarity. Secondly, the possibility that the Supreme Court will decide not to follow retained case law, even if the power is likely to be used sparingly, leaves open the possibility of divergence among the courts of the EU27 and of the UK. Thirdly, as Lord Neuberger has implied, the Supreme Court’s powers to depart from retained CJEU case law may amount to an abrogation of Parliament’s duty to legislate with clarity (“to blame the judges for making the law when parliament has failed to do so would be unfair” – BBC 8 August 2017). Fourthly, even if there remains a discretion to apply future CJEU jurisprudence (clause 6(2)), it is not obvious how the domestic courts will approach the discretion.

The EU position papers suggest that the protection of the CJEU’s role in the context of interpretation of the withdrawal agreement is near sacrosanct (see paragraph III.5 of the Annex to the Council Decision of 3 May 2017 authorising the commencement of negotiations with the UK). That is hardly surprising. The same approach is likely to apply in respect of a transitional agreement under which the Aviation Single Market rules continue to apply. The uniform application of the same legal rules should be the cornerstone of a legal system.

C Power to create new agencies. Clause 7 of the Bill contains enabling powers which will be of considerable importance in the aviation sector.  One such power is the power to “provide for functions of EU entities or public authorities in member States (including making an instrument of a legislative character or providing funding), to be …exercisable instead by a public authority (whether or not newly established for the purpose) in the United Kingdom…” The conferral  of enabling powers on the executive to create agencies with law-making powers is startling but a sign of the times.

Regulatory oversight in the EU aviation sector is split between the national designated bodies (the Civil Aviation Authority for the UK) and the European Aviation Safety Agency (EASA). On behalf of the Member States, EASA has the responsibility to certify each product used in aircraft manufacture for which a type certificate is required, as well as to certify each product for which an environmental certificate is required.

Taking the functions of the EASA as an illustration, there are four options available to the Government. One option would be for the UK to seek non-EU  membership of EASA, which would exclude voting rights at EASA. But such membership would require adherence to the EU aviation acquis. A second option would be to create a new agency by secondary legislation. But it is common ground that almost all the relevant home-grown expertise in the  certification of types of aircraft has relocated to Cologne, EASA’s current location. So there is a doubt about whether the relevant expertise could be home-grown in the available time scale. A related, third option would be for the Civil Aviation Authority to take on EASA functions, but they too would be hampered by the absence of home-grown expertise. But could the CAA (if powers permit) contract with EASA to continue to provide the type approval function that it currently does? The fourth option would be for a direct agreement to be reached at the interstate level in the proposed  transitional agreement and for the enabling power in clause 7(2)(c) to be used to make appropriate reciprocal arrangements in an interim period.

There is a stark question for Parliament in this kind of situation. The question who should provide type certification for the UK concerns grave questions about how to ensure aviation safety in a post Brexit future. Is it right for enabling powers to be used for the conferral of such a critical function as ensuring the safety of types of aircraft licensed to operate in the EU and, by extension, UK? Typically, issues such as this would have been properly considered as apt for the use of primary legislation. It is no answer to say that affirmative resolution procedure would adequately address the issue because even the affirmative procedure would not permit either House to amend the draft legislation. If of course a form of super scrutiny of the use of enabling powers were adopted by Parliament, this objection might fall away. But it seems that Parliament has not yet decided  how to exercise its duty to scrutinise secondary legislation under the EUWB  (see Recommendations in the 9th Report of the Session 2016/17 of the Parliamentary Select Committee on the Constitution).

In conclusion, the parliamentary process may result in amendments to the EUWB which have an impact on the points made above. Some deficiencies could be curable by the way in which secondary legislation under the EUWB’s enabling powers is framed. But the draft EUWB presently falls short of its stated aim of creating an adequate level of legal certainty for long term planning purposes.

Christopher Muttukumaru CB

Monckton Chambers

Formerly General Counsel to the UK Department for Transport.

Links

Danish Association for European Law : Monckton Chambers Brexit blog: 12 April 2017: Aspects of post-Brexit regulation in the Aviation sector: the last scene that ends this strange and eventful history.

FIDE Foundation, Madrid (Fundacion para la investigacion sobre el derecho y la impreso) 8 May 2017: Will this all end in tears (or how will this strange and eventful history end?)?

Julian Gregory’s Brexit blog post on the European Union (Withdrawal) Bill] The EU (Withdrawal) Bill: some initial thoughts

 

Daniel Beard QC successful in Court of Justice of the EU as Intel’s appeal in relation to €1bn fine is upheld

Court of Justice of the EU has upheld Intel’s appeal in relation to its €1bn fine and overturned the General Court decision against Intel. The CJEU has looked again at the case law on how abuse of dominance works and has remitted the case back to the General Court.

Daniel Beard QC acted for Intel Corporation Inc.

To read the judgment please click here.

Western Sahara Trade Dispute in the Court of Justice of the European Union

Today, in the Grand Chamber of the Court of Justice of the European Union (CJEU) oral submissions are being heard on behalf of the Western Sahara Campaign UK (WSCUK) in its challenge against the legality of the EU – Morocco Fisheries Partnership Agreement.

Conor McCarthy, led by Kieron Beal QC, represents the WSCUK.

WSCUK argue that the UK unlawfully allowed products, originating from or processed in Western Sahara, to be imported into the UK under a trade agreement with Morocco. Proceedings were issued against DEFRA and HMRC in the High Court.

For further information on the case please click here to read the press release by Leigh Day.

CPD Webinar : Anneli Howard discusses the implications of the European Union (Withdrawal) Bill 2017 with Practical Law – available free to view

In conjunction with Practical Law, Anneli Howard has produced a  42-minute video in which she examines the contents and implications of the European Union (Withdrawal) Bill 2017-19; commonly referred to as the Great Repeal Bill.  She concentrates on five areas:

  • What the repeal of the European Communities Act 1972 will mean in practice for acquired rights.
  • The practical effects of the Government’s “cut and paste” of existing European law into our domestic system
  • How judges are going to be expected to interpret and apply EU-derived law going forward and what relevance ECJ rulings and Commission decisions will have post-Brexit.
  • Explaining the role and scope of the Henry VIII clauses in the Bill to modify existing primary legislation
  • The potential for future challenges down the line

There is an accompanying transcript to select the various topics  and a CPD questionnaire if you want to earn CPD points.

You can access this video FREE content, by going to the Practical Law website.  Please click on the ‘Buy Now’ button and follow the instructions. You’ll need to register as a New User and then select ‘Invoice Me’, but you will NOT be charged.

The UT concludes that whether an excise duty point can arise in the UK’s control zone in France is a question that can only be determined in condemnation proceedings

The key question for the Upper Tribunal in the recent decision in Denley v HMRC was whether the Excise Goods (Holding, Movement and Duty Point) Regulations 2010  were in breach of the EU Excise Directive (Directive 92/12/EEC). The Appellant was stopped and questioned in Coquelles, the UK’s control zone by the entry to the Channel Tunnel in France, and found to have tobacco considerably in excess of the personal indicative levels. The goods were seized and an assessment to excise duty subsequently raised. The Appellant contended, in proceedings in the Tribunal, that as the Excise Directive indicated that a duty point only arose within the territory of another Member State, the UK and France could not, by bilateral international treaty, extend the scope of the UK’s territory for excess purposes as this was not permitted by the Excess Directive. HMRC argued that a conforming interpretation of the Excise Directive meant that the juxtaposed controls agreed between the UK and France in the Sangatte Protocol in fact gave effect to the aims of the Excise Directive rather than breaching it. In the event the UT agreed with HMRC’s prior point that the Appellant could not raise this argument in the FTT as the point should have been taken in the Magistrates Court by way of forfeiture proceedings, in accordance with the Decisions in Revenue and Customs Commissioners v Jones [2011] EWCA Civ 824 and HMRC Race [2014] UKUT 331. As the Appellant had not brought forfeiture proceedings, the UT considered that it should not express a view on the substantive question as to whether a duty point can arise when excise goods are held within the UK’s control zone in France. That will inevitably now be raised and considered by a Court in future forfeiture/condemnation proceedings.

Brendan McGurk was acting for the Respondents, instructed by the General Counsel and Solicitor to HM Revenue and Customs.

The full judgment can be found here.