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31 December 20202 minute read

Boardroom Brexit: What the deal means for dispute resolution

This was one of the most contentious areas in the negotiations as both sides wanted assurances that the other party would honour the commitments contained in the TCA in the future.

The initial dispute resolution mechanisms is a consultation between the UK and EU, where each party can, in good faith, attempt to resolve the dispute. Such consultations can be requested by either party in writing. However, if the consultations are not successful, an independent arbitration tribunal can be established through a detailed procedure set out in the TCA, which will settle the matter through a ruling that will be binding on both parties.

The TCA contains enforcement and safeguard mechanisms to ensure parties continue to comply with their obligations under the TCA or with a ruling of the independent arbitration tribunal. Each party has the right to:

  • introduce tariff and/or quota countermeasures;
  • renegotiate parts of the TCA; and/or
  • terminate all or part of the TCA.

The key point to note here is that trading relations between the UK and EU will not be as ‘static’ as they were when the UK was a member of the EU. . The potential impacts of any trade dispute, as we have seen in the trade disputes between the EU and U.S., can have immediate consequences for commercial operations, which may include the imposition of tariffs by either the UK or EU.