Case Study - Law Regarding EU Member States
Introduction
The European Union has established a comprehensive legal system in an effort to promote the development of a single market. One of the issues that the European Union advocates under the EU single market system entails the free movement of goods and people amongst the member states. The rationale of the single market system is to promote trade between the member states. The EU has also developed a comprehensive legal system aimed at governing trade between the member states. This paper entails an analysis of a scenario on the legal issues that might govern emergent issues in the course of trade between EU member states. The analysis focuses on the legal status of laws applied by member states, the possibility for application of judicial review and appeal on legal issues, and governance of breach of contract under international law.
Summary of the scenario
The case study depicts a situation whereby Denmark’s government restrict the entry of import of pork from the UK on the ground that it intends to protect the country from the swine flu outbreak documented in Oxfordshire despite the fact that swine flu cannot be contracted from pig or consuming pig products. In response to Denmark’s embargo, the UK responded by implementing the Meat Imports Retaliation (Denmark) Act 2016 and later the Meat Imports Regulation Act 2017, which completely banned the import and export of all meat products between the UK and Denmark. George, a UK farmer whose business entails transporting pigs to Denmark, is affected by the enactment of the two legislations. The trade restrictions subsequently affect the contract between George and Zippy Export Limited.
Legal status of the Meat Import Retaliation (Denmark) Act 2016 and the Meat Imports Regulation Act 2017
Laws implemented by a particular country can be characterized by diverse legal statuses. Legal status entails the position held by someone or something with reference to law. Legal status relates to the powers, obligations, restrictions, or set of rights related to law. Maggi is of the view that ‘an entity with international legal personality is usually considered as entity endowed with legal rights and or obligations and legal capacity conferred on it under international law.’ The case study depicts the implementation of two regulations on international trade between the UK and Denmark, viz. the Meat Imports Retaliation (Denmark) Act 2016 and the Meat Import Regulation 2017.
According to Shadikhodjaev, the World Trade Organization considers retaliation as an ineffective remedy to trade disputes because it goes against the free trade philosophy. The UK decision to enact the Meat Imports Retaliation (Denmark) Act 2016 (MIRDA 2016) arose from Denmark’s decision to ban all imports of pork from the UK. Under the MIRDA 2016, the Secretary of State had a duty to control the business activity of firms involved in trade between the UK and Denmark. Subsequently, the law constituted a domestic law that all businesses in the UK were required to adhere to. Additionally, the enactment of the MIRDA 2016, underlines UK’s commitment to respecting Denmark’s sovereign authority despite the fact that the two countries are members of the European Union. As members of the EU and the WTO, both Denmark and the UK were obliged to eliminate tariff and non-tariff barriers in order to facilitate trade between the member states. As a sovereign country, the UK acted legally in its response to Denmark’s decision to restrict the entry of pork imports from the UK.
As members of the European Union, Denmark, and the UK are obliged to adhere to the trade laws that require them to eliminate trade barriers between the two countries. The legality of the Meat Import Regulation Act 2017 is supported by the fact that Denmark acted in contravention of the European Union Neighborhood Policy. According to Steiner, Woods, and Watson, the EU Neighborhood Policy postulates that EU member states must focus on building common values amongst themselves by adhering to market economy principles such as promoting fair trade. In response to Denmark’s action, the UK further reacted by implementing the Meat Import Regulation 2017, which banned the import and export of all meat products between the UK and Denmark.
Similarly, the UK’s enactment of the Meat Imports Regulations 2017 was legal, under the concept of regulatory unilateralism. According to Cho, the concept of unilateralism postulates that a nation has the power to retaliate unilaterally against another country that discriminates against its products or firms rather than relying on an established international or multilateral framework for resolving trade disputes. Thus, the implementation of the Meat Imports Retaliation (Denmark) Act was a way of protecting the UK’s self-interests.
Thus, by restricting pork imports from the UK, Denmark acted in contravention of the principle of free movement of goods and services. By imposing trade restrictions on pork imports from the UK in spite of the fact that there was no health threat, Denmark engaged in unfair trade practices, which forms the foundation of the UK’s decision to enact the Meat Import Retaliation (Denmark) Act 2016. In addition to the above issue, UK’s decision to enact the Meat Imports Regulation 2017 was aimed at affirming the country’s sovereignty. Langet asserts that a country’s sovereignty may be limited or strengthened by international law such as law trade agreements. The UK’s legal right in enacting the Meat Imports Regulation Act 2017 is underlined by the case of the United States. According to Schaffer, Agusti, and Dhooge, the United States is committed to protecting the country against unfair trade practices by enacting the Trade Act of 1974 (p. 282). Section 301 of the Trade Act of 1974 mandates the US Trade Representative to implement retaliatory trade actions against trade partners which implement discriminatory trade practices towards the US. The US rationale in implementing the retaliatory trade law is to discourage countries from enacting trade laws that violate the trade agreement with the US.
Enactment of the MIRDA 2016 and the Meat Imports Regulation Act 2017 had a significant impact on George’s business considering the fact that he was involved in importing pigs to Denmark. However, considering the fact that there was no case of Swine Flu recorded in Kent, George acted within the law by transporting his pigs across the southern counties of England. Therefore, George was not in breach of the MIRDA 2016 nor the Meat Imports Regulation Act 2017. The Director of Animal Rights Group did not have the right to charge George under MIRDA 2016. This arises from the fact that George’s decision to transit his pigs to the Southern counties of England was informed by the fact that the government had not communicated the restriction of transporting pigs in the southern region. Additionally, George’s action was not in contravention of the MIRDA 2016 considering the fact that the Act largely focused on restricting trade in pork between the UK and Denmark. Similarly, the Meat Imports Regulations Act 2017 specifically focused on restricting trade between Denmark and the UK.
Distinction between an appeal and an application for judicial review
The country’s judicial systems should provide an opportunity for parties charged in a court of law to get redress in the event that such a party feels injured by a court ruling. Thus, court systems should provide a system through which parties can appeal against the ruling in either a lower or a higher court. The rationale of appeal is to seek modification, reversal, or setting aside a ruling made by a particular court in relation to a particular issue. Thus, an appeal is aimed at providing a remedy to possible errors that might be inherent in a court ruling.
In the process of lodging an appeal, it is imperative for the aggrieved party to understand the prevailing hierarchy in the court system and the applicable legal statute. For example, if the original ruling was made by an administrative tribunal, a party can lodge an appeal against the ruling in the Supreme Court. An appeal can either be a discretionary or a right.
Additionally, the party making the appeal must ensure that the appeal is within a particular operative judicial act. In relation to this act, a ruling that is made in light of the judge’s or the decision makers’ administrative capacity is not appealable. On the contrary, such a ruling can only be reviewed.
After receiving an appeal, the court can determine whether to provide a different ruling, modify the ruling of the lower court or affirm the lower court’s ruling. Modifying the lower court ruling entails partly agreeing with the lower court’s ruling while reversing the lower court ruling occurs if the court of appeal finds gaps in reference to the sustainability of the lower court’s decision. In such a situation, the appellant court sets aside the lower court’s ruling. Moreover, reversing the lower court’s ruling may also entail making new orders in relation to the issue under contention. In spite of the appellant court powers, Endicoff further argues that a court cannot review an issue if the question that requires to be answered is hypothetical in nature. This aspect has underlined the case of Bass v Permanent Trustee Co Limited, whereby the court ruled that an appeal is only possible if the judges are capable of reaching a final verdict in line with the judicial process.
In the process of making an appeal, the court may decide to alter the ruling on a different issue inherent in the application made by a court below despite the fact that the appellant might not have applied for an appeal on such an issue. This power is underlined in the cases of MAM Mortgages Ltd v Cameron Bros and Attorney General v Simpson. In spite of these powers, the judge in the case of Kyren Pty Limited v Cinema Place Pty Limited argued that it is unusual for an appellate court to provide a ruling on issues that are outside the issues raised by the appellant. On the contrary, the court can only provide advice to the appellant’s entitlements or rights in an abstract manner.
In addition to the appeal, the country’s legal systems should also be comprised of a procedure for review, which largely focuses on the legality of the court verdict. Thus, judicial review is concerned with determining whether the court conformed with statutory requirements or common law powers in making the decision or ruling. According to Alder, judicial review is mainly applicable to decisions made by executive arms of government such as tribunals and lower courts. Judicial reviews occur if the court acted in contravention breached the limits granted to its power or acted in an unauthorized manner. The power to undertake judicial review can be derived from diverse sources such as state and territory supreme courts. In common law, the party with the prerogative power can prohibit the arm of government to desist from acting outside the law.
In the event that George is convicted in a Magistrate Court for transporting his pigs, he can apply for both a judicial review and an appeal. In applying for a judicial review, George can argue that the government acted in contravention of the law by enacting the Meat Imports Regulations Act 2017. In the application for judicial review, George should argue that the legislation implemented by the UK government is in contravention of Articles 26 and 28 of the Treaty on the Functioning of the European Union (TFEU).
As a member of the European Union, the UK is obliged to promote the free movement of goods between the UK and other EU member states. In complying with this requirement, the UK is obliged to abolish all trade restrictions, tariffs, and non-tariff trade barriers in order to promote the success of the single market. Article 28 (1) of the TFEU prohibits EU member countries from enacting measures that are equivalent to customs duties no matter the form or how the charge is applied. However, a country has the right to impose trade restrictions on imports or exports under Articles 28 and 29 of the TFEU on grounds of morality, public security, or public policy. Additionally, EU member states may restrict the free movement of goods and services if they pose a health threat to humans, plants, or animals. Despite the fact that the UK had a duty to protect the country against the occurrence of Swine Flu by controlling the import of some meat products, there was no evidence that importing pigs to Denmark posed any health threat. This arises from the fact that despite the disease being highly contagious, humans cannot contract the disease from pigs or from eating pork. Therefore, George can make an appeal on the ground that the UK government erred by generalizing trade restrictions on the importation and exportation of all meat products between the UK and Denmark. According to Kauladis ‘restrictions on imports and exports should not constitute a means of arbitrary discriminating or disguising restriction on trade between member states’. Therefore, by applying for an appeal and judicial review on the basis of these grounds, George can succeed in compelling the court to rule the UK government’s enactment of the MIRDA 2016 and the Meat Imports Regulations Act 2017 illegal. George should apply for judicial review under the European Court of Justice (ECJ). The rationale for making his application for judicial review to the ECJ is underlined on the concept of supremacy. According to Ireland, ‘the supremacy of the ECJ is over both ordinary and national law and national constitutional law of member states, even when national constitutional law relates to the protection of fundamental rights or the internal structure of the member state.’ Through this move, George will be in a position to continue importing pigs to Denmark.
Review on the likelihood of Zippy Exports succeeding in any action brought against George for Breach of Contract
The case study underlines a situation whereby George may be unable to transport his pigs to Denmark because of the enactment of MIRDA 2016 and the Meat Imports Regulations Act 2017. This might trigger Zippy Exports Limited to commence legal proceedings for breach of contract against George considering the fact that George had entered into a contract with Zippy Exports involving the transportation of pigs to Denmark for a period of six months. In this case, George can be categorized as a buyer of Zippy Export Limited transport services while Zippy Export can be categorized as them. The Vienna Convention on International Sales law postulates that a fundamental breach of contract may occur if a seller fails to deliver or perform fundamental obligations of a contract. Additionally, a fundamental breach of contract may arise if the buyer fails to perform any fundamental obligation stipulated in the contract.
In this situation, the likelihood of Zippy Exports succeeding in bringing any legal action against George is minimal. This arises from the fact that George’s breach of contract was unintentional since it resulted from an executive order. The inability of Zippy Export Limited to seek legal liability for breach of contract is underlined by the fact that George can seek legal redress under the United Nations Convention on Contracts for International Sale of Goods (CISG), which provides for breach of contract in the event of one party’s non-performance of contractual obligation. If a party to a contract fails to deliver the contractual obligation, such a party may be liable for breach of contract. However, the CISG stipulates that the buyer is obliged to issue a notice to the seller within a reasonable time after discovering the possibility of the occurrence of a breach of contract.
Under the CISG, George should seek additional time in order to be able to perform the duties of the contract. Campbell asserts that Article 47 of the CISG ‘empowers the buyer to fix an additional period of reasonable length for the performance of the seller’s duties under the contract.’ By applying for additional time, George will not have avoided the contract despite the contract taking a substantial amount of time to be delivered. In the event that the seller does not deliver the goods within the additional period, George can declare the contract avoided in accordance with article 49 (1) b. On the basis of the CISG, George will be cautioned against breach of contract within the period which the court will take to make a determination regarding the legality of the Meat Imports Regulations Act 2017. This aspect indicates that George has the right to avoid the contract in a legal manner. In addition to this approach, George can apply for avoidance under article 25 of the CISG. In this situation, the court may make a declaration of avoidance without necessarily offering additional time to George for performance. On the basis of this approach, Zippy Export may fail to succeed in seeking legal redress against George for breach of contract.
Conclusion
The case study underlines a number of legal issues. First, the case study underlines the concept of a country’s sovereignty in making laws aimed at protecting the public and safeguarding the country against unfair trade practices by trade partners. However, the national laws made must be based on reasonable grounds such as health grounds. The case study further underlines the supremacy of the European Union’s international laws over national laws. The rationale for the supremacy of the EU laws is to govern trade relationships between EU member states. The case study further indicates that individuals are capable of seeking legal redress by applying for an appeal on a case ruling or seeking a judicial review. The review further underlines that parties involved in an international business transaction can be cautioned from breach of contract under the CISG. For example, parties to the contract may be provided additional time to perform their contractual obligation.
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