Op-Ed: “CJEU finds it has no jurisdiction in the Slovenia/Croatia border case” by Edoardo Stoppioni
On Friday 31 January, the Court of Justice of the European Union (CJEU) rendered its decision in a case between Slovenia and Croatia (C-457/18), finding that it did not have jurisdiction to hear the case.
In 2009, Slovenia and Croatia had concluded an arbitration agreement to settle a dispute concerning delimitation of the maritime and land boundary between the two Member States. The agreement was set up with the help of EU institutions and was considered to be an important part of the progress in Croatia’s accession to the EU. In 2015, pending the arbitration proceedings administered by the Permanent Court of Arbitration, the Croatian press reported that the Slovenian arbitrator was secretly in contact with the Slovenian agent. From this point on, even though Slovenia replaced its arbitrator and changed the entire panel, Croatia considered that it could no longer be a party to the agreement to arbitrate and withdrew.
Slovenia and the European Commission opposed the abandonment of the arbitration, but Croatia did not submit any written response and did not appear before the tribunal for the hearings. Nevertheless, having confirmed its ability to adjudicate the claim in 2016, the newly formed tribunal rendered an award on the merits in 2017, settling the dispute under international law (PCA, Arbitration Between the Republic of Croatia and the Republic of Slovenia, Final Award of 29 June 2017).
Then, in 2018, Slovenia began proceedings against Croatia before the CJEU under Article 259 TFEU. It alleged six violations of EU law by Croatia.
- First, Croatia’s refusal to respect the award amounted to a breach of Article 2 TEU – the rule of law, and the principles of sincere cooperation and res judicata.
- Second, in refusing to comply with the obligations stemming from the award, Croatia was preventing Slovenia from exercising its sovereignty over its territory in conformity with EU law, in breach of Article 4(3) TEU and secondary legislation.
- Third, by disregarding the borders and territory of Slovenia, Croatia was breaching the rules of the common fisheries policy.
- Fourth, Croatia would be preventing Slovenia from respecting its obligations of surveillance and communication as a coastal State, established under Regulations 1224/2009 and 404/2011.
- Fifth, Croatia was breaching the Schengen Borders Code that applies to that border.
- Sixth, Croatia would be breaching different provisions of Directive 2014/89 establishing a framework for maritime spatial planning, while refusing to recognise the maritime delimitation settled in the award.
Croatia in turn considered that the CJEU had no jurisdiction to adjudicate the claim. It argued that Slovenia’s allegations were purely secondary as opposed to the dispute concerning the validity and the legal effects of the arbitration agreement and award. It referred to the 2010 decision Commission v Belgium (C-132/09), which held that the CJEU has no jurisdiction under Article 259 TFEU to decide on EU law obligations that are only ancillary to the settlement of a principal dispute that is not covered by that court’s jurisdiction. Moreover, the arbitration agreement and award were not instruments of EU law, and an indirect connection with EU law was not enough to establish jurisdiction under Article 259. The violations of EU law would be purely hypothetical and depend on a prior question of international law.
Advocate General Pikamäe delivered his Opinion on the matter, advising that the CJEU had no jurisdiction over the claim brought by Slovenia. He observed that any decision on breaches committed by Croatia would require examining the premise of the determination of the boundary between Croatia and Slovenia. As that was, by its very nature, a question of public international law, as shown by the arbitration agreement and the arbitral award, there were no acts of EU law. Therefore, Slovenia’s claims – even if prima facie based on EU law – had only an ancillary nature to the resolution of the dispute under international law.
The CJEU confirmed the approach of the AG.
First, the Court of Justice of the European Union struck out the legal arguments made by the Commission on the issue at stake, introduced by Slovenia without the Commission’s consent. It found that it would not be in the public interest to accept internal documents without authorisation or at the CJEU’s request, unless there was a greater public interest at stake(paragraphs 66 and 71).
The heart of the reasoning on jurisdiction lies in the idea, clarified in the Commission v Belgium decision, that the CJEU has no competence in infringement proceedings concerning an international agreement concluded by the Member States, which was not an integral part of EU law. As a corollary, the CJEU lacks jurisdiction when the violations of EU law invoked in an infringement action are only ancillary to the obligations stemming from an international agreement (paragraphs 91-92).
The arbitral award is a legal product of the international legal order and it cannot be considered that it forms part of EU law, despite the fact that the EU had offered its good offices and that the arbitration proceedings had been considered an important part of Croatia’s accession process to the EU (paragraph 102). Therefore, the alleged violations of EU law were ancillary, as opposed to the alleged violation of an international bilateral agreement to which the EU is not a party and whose subject matter does not belong to its competences (para 103).
As the Treaty does not provide rules on the definition of precise territorial delimitation, that is an area that remains under the sovereignty of Member States acting in conformity with public international law. The CJEU cannot evaluate the infringement claims without crossing the lines of the competences it has been granted by the treaties and impinging on the Member States’ competences regarding the geographical determination of borders (paragraphs 105-107).
The CJEU concluded nevertheless its analysis recalling that its decision is without prejudice to the obligation under Article 4(3) TEU that the two Member States owe to each other, but also to the EU and the other Member States. This obligation implies a sincere cooperation to strive towards a final legal resolution of the dispute, in conformity with international law, as recognised in the accession act, which would ensure an effective application of EU law in the concerned zones. It recalled that it could adjudicate on that kind of breach under Article 273 TFEU (paragraph 109).
Essentially, the CJEU clarified that infringement actions cannot be used to ask it to adjudicate on a dispute that is essentially based on international law and that has only indirect implications in the EU legal order. It nevertheless clarified that the EU law obligation of sincere cooperation includes an obligation to strive towards the settlement of international law disputes with other Member States, and that its violation could be adjudicated by the CJEU with the mutual consent of the Member States.
From a substantial perspective, the CJEU played with dualism and clarified its vision of the relations between legal orders in a sort of reverse-Kadi approach. It considered that whenever the heart of the dispute is located in the international legal order, the mirror effect of that dispute in the EU legal order is simply a secondary implication. Even if the internationally wrongful act leads to the materialisation of an EU law obligation to strive to solve the dispute in conformity with international law, the judicial function of the CJEU in the context of infringement proceedings does not allow any power of review of that primary violation. An action based on Article 259 TFEU is not possible based on the spillover effect in EU law of the principal internationally wrongful act.
From a procedural perspective, the CJEU confirmed that Articles 259 and 273 are mutually exclusive and, as AG Maduro had pointed out in his Opinion in Commission v Ireland (C-459/03) in footnote 9, ‘in practice it may be preferable to bring “hybrid disputes” between Member States – concerning both matters falling within and matters falling outside the scope of the Court’s jurisdiction – in their entirety before the Court under Article 239 EC or Article 154 EA’.
Edoardo Stoppioni is Senior Research Fellow at the Max Planck Institute for Procedural Law (Luxembourg). He recently published a critical discourse analysis of the Coman case in European Papers and a paper on the interactions between EU law and international investment law in the Hitotsubashi Journal of Law and Politics.