Existing EU law at the end of the transition period will continue to be considered as EU law retained in the UK until a decision is taken to amend or repeal it. In interpreting this retained EU law, the European Union (Withdrawal) Act 2018, in its original version, provided that courts below the Supreme Court would apply pre-withdrawal EU case law; the Supreme Court would not be bound, but would have to follow the same procedure as when it decided to depart from its own jurisprudence. At first glance, the reference scheme of the Withdrawal Agreement seems excellent. However, this is not new for the EU. In fact, the reference mechanism of the Withdrawal Agreement is similar to the reference models of certain association agreements between the EU and the former Soviet states (see e.B. Article 403 of the EU-Moldova Association Agreement). In a broader sense too, there are, at least theoretically, dispute settlement clauses that would provide for the transfer from an arbitral tribunal to a permanent court. Section 5 of Section 5 of Part XI of the United Nations Convention on the Law of the Sea (`THE LOSC`) provides for a system for the settlement of disputes relating to mining in the international seabed area. Article 188, paragraph 2, of the LOSC provides that disputes concerning the interpretation or application of contracts governing activity in the seabed area may be subject to arbitration under the UNCITRAL Rules. The key element of Article 188(2)(C) is that the arbitral tribunal refers to the Seabed Disputes Chamber questions relating to the interpretation and application of the LOSC for a binding decision.
Given the numerous references to EU law, it is likely that a dispute under the Withdrawal Agreement will raise questions about the correct interpretation and application of EU law. For example, if the UK adopts a subsidy programme that includes support for the Northern Irish economy, the question would be whether the measures in question comply with EU state aid rules as interpreted by the CJEU. However, the need for referral might be less likely if the current disagreement over the UK Single Market Act were brought before an arbitration panel. The language of Article 174(1) of the Withdrawal Agreement follows that of Article 267 of the Treaty on the Functioning of the European Union (`TFEU`). Under the system provided for in Article 267 TFEU, the courts of last instance are required to make a reference, unless `the correct application of EU law is so obvious that there is no room for a reasonable doubt` (C-416/17). In view of the comparable wording of Article 267 TFEU and Article 174(1) of the Withdrawal Agreement, an arbitration panel may consider that there is no need to refer where one of the parties publicly admits a breach of the Withdrawal Agreement and leaves no room for reasonable doubt as to the proper application of EU law in the circumstances. The Withdrawal Agreement provides (in Article 127) that Union law applies to and on the United Kingdom during the transition period, unless otherwise provided for in the Withdrawal Agreement, and any reference to EU Member States in Union law shall be understood as including the United Kingdom. EU law includes the various EU treaties, the general principles of EU law, EU legislation such as regulations and directives and (in importance) international agreements to which the EU is adjacent. There is a specific provision (in Article 129) that, during the transition period, the United Kingdom is bound by the obligations arising from these international agreements and that the EU notes the other parties to these agreements that the United Kingdom must be treated as an EU Member State for the purposes of these agreements during the transition period. .