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Dispute Settlement - Arbitration

Where either the UK or the EU believes the other party to be in breach of its obligations under the Withdrawal Agreement, the matter is be addressed using the dispute settlement procedure provided for in Articles 167-181 of the Withdrawal Agreement. The exception regarding the Protocol on Ireland/Northern Ireland is where the application of EU law is concerned. Here, EU dispute-settlement procedures apply and may involve referral to the Court of Justice.

Where use is made of the Withdrawal Agreement's dispute-settlement procedure, the issue may ultimately be referred to an Arbitration Panel.

The Withdrawal Agreement's dispute-settlement procedure has been invoked twice to date. On the first occasion, the EU in response to the UK government tabling its UK Internal Market Bill and in doing so acknowledging it would be in breach of its obligations under the Withdrawal Agreement. The European Commission issued a letter of formal notice on 1 October 2020. With the UK eventually removing the offending clauses from the UK Internal Market Bill, the proceedings against it were dropped.

The Withdrawal Agreement's dispute-settlement procedure were invoked in March 2021 when the European Commission issued a written notice in response to unilateral decisions of the UK to extend 'grace periods' for the implementation of certain provisions of the Protocol. The European Commission called on the UK to enter into bilateral consultations in the Joint Committee in good faith with a view to reaching a mutually agreed solution by the end of the month. Although no 'agreed solution' was reached before the end of March 2021, bilateral consultations were held and the European Commission held off issuing a formal written notice to commence consultations in line with the Withdrawal Agreement's dispute-settlement procedure.