Article 302 Applies to the Provisions Referred to In Paragraph 2.
Notwithstanding paragraphs 1 and 2, of this Part shall not apply to disputes concerning the interpretation and application of the provisions of the Protocol on Social Security Coordination or its Annexes in individual cases.
This Part does not apply to any disputes with regard to sovereignty and jurisdiction. If the respondent Party submits a reasoned statement to the arbitration tribunal, to the effect that the request may affect the legal position of the United Kingdom or of the Kingdom of Spain or with regard to sovereignty and jurisdiction, the arbitration tribunal shall not decide on the dispute with regard to sovereignty and jurisdiction or on any matter that requires or implies a decision on sovereignty or jurisdiction and shall immediately declare its lack of jurisdiction on the matters regarding sovereignty and jurisdiction or having an effect thereon.
Any decision adopted in the framework of this Part, including decisions and rulings by an arbitration tribunal, shall not produce any legal effects direct or indirect, on the legal position of the United Kingdom or of the Kingdom of Spain with regard to sovereignty and jurisdiction.
Exclusivity
The Parties undertake not to submit a dispute between them regarding the interpretation or application of provisions of this Agreement or of any supplementing agreement to a mechanism of settlement other than those provided for in this Agreement.
Choice of forum
If a dispute arises regarding a measure allegedly in breach of an obligation under this Agreement or any supplementing agreement and of a substantially equivalent obligation under another international agreement to which both Parties are party, the Party seeking redress shall select the forum in which to settle the dispute.
Once a Party has selected the forum and initiated dispute settlement procedures either under this Title or under another international agreement, that Party shall not initiate such procedures under the other international agreement with respect to the particular measure referred to in paragraph 1, unless the forum selected first fails to make findings for procedural or jurisdictional reasons.
For the purposes of this Article:
dispute settlement procedures under this Part are deemed to be initiated by a Party's request for the establishment of an arbitration tribunal under Article 305; and
dispute settlement procedures under any other agreement are deemed to be initiated if they are initiated in accordance with the relevant provisions of that agreement.
Without prejudice to paragraph 2, nothing in this Agreement or any supplementing agreement shall preclude a Party from suspending obligations authorised under the dispute settlement procedures of another international agreement to which the Parties are party. Any international agreement between the Parties shall not be invoked to preclude a Party from suspending obligations under this Part.
Chapter 2. PROCEDURE
Article ARTICLE 304
Consultations
If a Party ("the complaining Party") considers that the other Party ("the respondent Party") has breached an obligation under this Agreement or under any supplementing agreement, the Parties shall endeavour to resolve the matter by entering into consultations in good faith, with the aim of reaching a mutually agreed solution.
The complaining Party may seek consultations by means of a written request delivered to the respondent Party. The complaining Party shall specify in its written request the reasons for the request, including the identification of the measures at issue and the legal basis for the request, and the covered provisions it considers applicable.
The respondent Party shall reply to the request promptly, and in any case no later than 10 days after the date of its delivery. Consultations shall be held within 30 days of the date of delivery of the request in person or by any other means of communication agreed by the Parties. If held in person, consultations shall take place in the territory of the respondent Party, unless the Parties agree otherwise.
The consultations shall be deemed concluded within 45 days of the date of delivery of the request, unless the Parties agree to continue consultations.
Consultations on matters of urgency, including those regarding perishable goods or seasonal goods shall be held within 20 days of the date of delivery of the request. The consultations shall be deemed concluded within those 20 days unless the Parties agree to continue consultations.
Each Party shall provide sufficient factual information to allow a complete examination of the measure at issue, including an examination of how that measure could affect the application of this Agreement or any supplementing agreement. Each Party shall endeavour to ensure the participation of personnel of their competent authorities who have expertise in the matter subject to the consultations.
The consultations referred to in paragraph 1 shall be held in the framework of the Cooperation Council, except for disputes relating to Chapters 3, 4 and 5 of Title I of Part Three. The Cooperation Council may resolve the dispute by a decision. The time periods referred to in paragraph 3 shall apply. The venue of meetings shall be governed by the rules of procedure of the Cooperation Council.
Consultations, and in particular all information designated as confidential and positions taken by the Parties during consultations, shall be confidential, and shall be without prejudice to the rights of either Party in any further proceedings.
Arbitration procedure
The complaining Party may request the establishment of an arbitration tribunal if:
the respondent Party does not respond to the request for consultations within 10 days of the date of its delivery;
consultations are not held within the time periods referred to in Article 304(1), (2) or (3);
the Parties agree not to have consultations; or
consultations have been concluded without a mutually agreed solution having been reached.
The request for the establishment of the arbitration tribunal shall be made by means of a written request delivered to the respondent Party. In its request, the complaining Party shall explicitly identify the measure at issue and explain how that measure constitutes a breach of the covered provisions in a manner sufficient to present the legal basis for the complaint clearly.
Establishment of an arbitration tribunal
An arbitration tribunal shall be composed of three arbitrators.
No later than 10 days after the date of delivery of the request for the establishment of an arbitration tribunal, the Parties shall consult with a view to agreeing on the composition of the arbitration tribunal.
If the Parties do not agree on the composition of the arbitration tribunal within the time period provided for in paragraph 2, each Party shall appoint an arbitrator from the sub-list for that Party established pursuant to Article 319 no later than five days after the expiry of the time period provided for in paragraph 2. If a Party fails to appoint an arbitrator from its sub-list within that time period, the co-chair of the Cooperation Council from the complaining Party shall select, no later than five days after the expiry of that time period, an arbitrator by lot from the sub-list of the Party that has failed to appoint an arbitrator. The co-chair of the Cooperation Council from the complaining Party may delegate such selection by lot of the arbitrator.
If the Parties do not agree on the chairperson of the arbitration tribunal within the time period provided for in paragraph 2, the co-chair of the Cooperation Council from the complaining Party shall select, no later than five days after the expiry of that time period, the chairperson of the arbitration tribunal by lot from the sub-list of chairpersons established pursuant to Article 319. The co-chair of the Cooperation Council from the complaining Party may delegate such selection by lot of the chairperson of the arbitration tribunal.
Should any of the lists provided for in Article 319 not be established or not contain sufficient names at the time a selection is made pursuant to paragraphs 3 or 4, the arbitrators shall be selected by lot from the individuals who have been formally proposed by one Party or both Parties in accordance with Annex 29 on the Rules of Procedure for Dispute Settlement.
The date of establishment of the arbitration tribunal shall be the date on which the last of the three arbitrators has notified to the Parties the acceptance of their appointment in accordance with Annex 29 on the Rules of Procedure.
Requirements for arbitrators
All arbitrators shall:
have demonstrated expertise in law, including international law, and in any matter covered by this Agreement or by any supplementing agreement and, in the case of a chairperson, also have experience in arbitration procedures;
not be affiliated with or take instructions from either Party;
serve in their individual capacities and not take instructions from any organisation or government with regard to matters related to the dispute; and
comply with Annex 30 on the Code of Conduct for arbitrators.
All arbitrators shall be persons whose independence is beyond doubt, who possess the qualifications required for appointment to high judicial office in their respective jurisdictions or who are jurisconsults of recognised competence.
Functions of the arbitration tribunal
The arbitration tribunal:
shall make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of, and conformity of the measures at issue with, the covered provisions;
shall set out, in its decisions and rulings, the findings of facts and law and the rationale behind any findings that it makes; and
should consult regularly with the Parties and provide adequate opportunities for the development of a mutually agreed solution.
Terms of reference
Unless the Parties agree otherwise no later than five days after the date of the establishment of the arbitration tribunal, the terms of reference of the arbitration tribunal shall be:
"to examine, in the light of the relevant covered provisions of this Agreement or of a supplementing agreement, the matter referred to in the request for the establishment of the arbitration tribunal, to decide on the conformity of the measure at issue with the provisions referred to in Article 301 and to issue a ruling in accordance with 311".
If the Parties agree on terms of reference other than those referred to in paragraph 1, they shall notify the agreed terms of reference to the arbitration tribunal within the time period referred to in paragraph 1.
Urgent proceedings
If a Party so requests, the arbitration tribunal shall decide, no later than 10 days after the date of its establishment, whether the case concerns matters of urgency.
In cases of urgency, the applicable time periods set out in Article 311 shall be half the time prescribed therein.
Ruling of the arbitration tribunal
The arbitration tribunal shall deliver an interim report to the Parties within 100 days after the date of establishment of the arbitration tribunal. If the arbitration tribunal considers that this deadline cannot be met, the chairperson of the arbitration tribunal shall notify the Parties in writing, stating the reasons for the delay and the date on which the arbitration tribunal plans to deliver its interim report. The arbitration tribunal shall deliver its interim report no later than 130 days after the date of establishment of the arbitration tribunal under any circumstances.
Each Party may deliver to the arbitration tribunal a written request to review precise aspects of the interim report within 14 days of its delivery. A Party may comment on the other Party's request within six days of the delivery of the request.
If no written request to review precise aspects of the interim report is delivered within the time period referred to in paragraph 2, the interim report shall become the ruling of the arbitration tribunal.
The arbitration tribunal shall deliver its ruling to the Parties within 130 days of the date of establishment of the arbitration tribunal. When the arbitration tribunal considers that that deadline cannot be met, its chairperson shall notify the Parties in writing, stating the reasons for the delay and the date on which the arbitration tribunal plans to deliver its ruling. The arbitration tribunal shall not under any circumstances deliver its ruling later than 160 days after the date of establishment of the arbitration tribunal.
The ruling shall include a discussion of any written request by the Parties on the interim report and clearly address the comments of the Parties.
For greater certainty, a "ruling" or "rulings" as referred to in Articles 308, 309, 320 and Article 321(1), (3), (4) and (6) shall be understood to refer also to the interim report of the arbitration tribunal.
Disputes raising issues of interpretation on Union law
Where a dispute submitted to arbitration in accordance with this Part raises a question of interpretation of a concept or a provision of Union law contained in a Union act referred to in this Agreement, the arbitration panel shall not decide on any such question. In such case, it shall request the Court of Justice of the European Union to give a ruling on the question. The Court of Justice of the European Union shall have jurisdiction to give such a ruling which shall be binding on the arbitration panel.
The arbitration panel shall make such request after having heard the Parties.
Without prejudice to the first sentence of the first subparagraph of paragraph 1, if the Union or the United Kingdom, in respect of Gibraltar, considers that a request in accordance with paragraph 1 is to be made, it may make submissions to the arbitration panel to that effect. In such case, the arbitration panel shall submit the request in accordance with paragraph 1 unless the question raised does not concern the interpretation of a concept or a provision of Union law contained in a Union act referred to in this Agreement. The arbitration panel shall provide reasons for its assessment. Within 10 days following the assessment, either Party may request the arbitration panel to review its assessment, and a hearing shall be organised within 15 days of the request for the Parties to be heard on the matter. The arbitration panel shall provide reasons for its assessment.
In the cases referred to in paragraphs 1 and 2, the time limits laid down in Article 311 shall be suspended until the Court of Justice of the European Union has given its ruling. The arbitration panel shall not be required to give its ruling less than 60 days from the date on which the Court of Justice of the European Union has given its ruling.
Chapter 3. COMPLIANCE
Article ARTICLE 313
Compliance measures
If, in its ruling referred to in Article 311(4), the arbitration tribunal finds that the respondent Party has breached an obligation under this Agreement or under any supplementing agreement, that Party shall take the necessary measures to comply immediately with the ruling of the arbitration tribunal in order to bring itself in compliance with the covered provisions.
The respondent Party, no later than 30 days after delivery of the ruling, shall deliver a notification to the complaining Party of the measures which it has taken or which it envisages to take in order to comply.
Reasonable period of time
If immediate compliance is not possible, the respondent Party, no later than 30 days after delivery of the ruling referred to in Article 311(4), shall deliver a notification to the complaining Party of the length of the reasonable period of time it will require for compliance with the ruling referred to in Article 311(4). The Parties shall endeavour to agree on the length of the reasonable period of time to comply.
If the Parties have not agreed on the length of the reasonable period of time, the complaining Party may, at the earliest 20 days after the delivery of the notification referred to in paragraph 1, request in writing that the original arbitration tribunal determines the length of the reasonable period of time. The arbitration tribunal shall deliver its decision to the Parties within 20 days of the date of delivery of the request.
The respondent Party shall deliver a written notification of its progress in complying with the ruling referred to in Article 311(4) to the complaining Party at least one month before the expiry of the reasonable period of time.
The Parties may agree to extend the reasonable period of time.
Compliance review
The respondent Party shall, no later than the date of expiry of the reasonable period of time, deliver a notification to the complaining Party of any measure that it has taken to comply with the ruling referred to in Article 311(4).
When the Parties disagree on the existence of, or the consistency with the covered provisions of, any measure taken to comply, the complaining Party may deliver a request, which shall be in writing, to the original arbitration tribunal to decide on the matter. The request shall identify any measure at issue and explain how that measure constitutes a breach of the covered provisions in a manner sufficient to present the legal basis for the complaint clearly. The arbitration tribunal shall deliver its decision to the Parties within 45 days of the date of delivery of the request.
Temporary measures
The respondent Party shall, at the request of and after consultations with the complaining Party, present an offer for temporary compensation if:
the respondent Party delivers a notification to the complaining Party that it is not possible to comply with the ruling referred to in Article 311; or
the respondent Party fails to deliver a notification of any measure taken to comply within the deadline referred to in Article 313 or before the date of expiry of the reasonable period of time referred to in Article 314; or
the arbitration tribunal finds that no measure taken to comply exists or that the measure taken to comply is inconsistent with the covered provisions.
Under any of the circumstances referred to in paragraph 1, the complaining Party may deliver a written notification to the respondent Party that it intends to suspend the application of obligations under the covered provisions if:
the complaining Party decides not to make a request under paragraph 1; or
the Parties do not agree on the temporary compensation within 20 days after the expiry of or the delivery of the arbitration tribunal decision under Article 315 if a request under paragraph 1 is made.
The notification shall specify the level of intended suspension of obligations.
Obligations under the Protocol on Social Security Coordination or its Annexes may not be suspended under this Article.
The suspension of obligations shall not exceed the level equivalent to the nullification or impairment caused by the violation.
The complaining Party may suspend the obligations 10 days after the date of delivery of the notification referred to in paragraph 2 unless the respondent Party made a request under paragraph 6.
If the respondent Party considers that the notified level of suspension of obligations exceeds the level equivalent to the nullification or impairment caused by the violation, it may deliver a written request to the original arbitration tribunal before the expiry of the 10 day period set out in paragraph 5 to decide on the matter. The arbitration tribunal shall deliver its decision to the Parties within 30 days of the date of the request. Obligations shall not be suspended until the arbitration tribunal has delivered its decision. The suspension of obligations shall be consistent with that decision.
The suspension of obligations or the compensation referred to in this Article shall be temporary and shall not be applied after:
the Parties have reached a mutually agreed solution pursuant to Article 323;
the Parties have agreed that the measure taken to comply brings the respondent Party into compliance with the covered provisions; or
any measure taken to comply which the arbitration tribunal has found to be inconsistent with the covered provisions has been withdrawn or amended so as to bring the respondent Party into compliance with those covered provisions.
Review of any measure taken to comply after the adoption of temporary measures
The respondent Party shall deliver a notification to the complaining Party of any measure it has taken to comply following the suspension of obligations or following the application of temporary compensation, as the case may be. The complaining Party shall terminate the suspension of obligations within 30 days from the delivery of the notification. In cases where compensation has been applied, the respondent Party may terminate the application of such compensation within 30 days from the delivery of its notification that it has complied.
If the Parties do not reach an agreement on whether the notified measure brings the respondent Party into compliance with the covered provisions within 30 days of the date of delivery of the notification, the complaining Party shall deliver a written request to the original arbitration tribunal to decide on the matter. The arbitration tribunal shall deliver its decision to the Parties within 46 days of the date of the delivery of the request. If the arbitration tribunal finds that the measure taken to comply is in conformity with the covered provisions, the suspension of obligations or compensation, as the case may be, shall be terminated. When relevant, the level of suspension of obligations or of compensation shall be adjusted in light of the arbitration tribunal decision.
Chapter 4. COMMON PROCEDURAL PROVISIONS
Article ARTICLE 318
Receipt of information
On request of a Party, or on its own initiative, the arbitration tribunal may seek from the Parties relevant information it considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the arbitration tribunal for such information.
On request of a Party, or on its own initiative, the arbitration tribunal may seek from any source any information it considers appropriate. The arbitration tribunal may also seek the opinion of experts as it considers appropriate and subject to any terms and conditions agreed by the Parties, where applicable.
The arbitration tribunal shall consider amicus curiae submissions from natural persons of a Party or legal persons established in a Party in accordance with Annex 29 on Rules of Procedure.
Any information obtained by the arbitration tribunal under this Article shall be made available to the Parties and the Parties may submit comments on that information to the arbitration tribunal.
List of arbitrators
The Cooperation Council shall, no later than one year after the date of entry into force of this Agreement, establish a list of individuals with expertise in sectors covered by this Agreement or its supplementing agreements who are willing and able to serve as members of an arbitration tribunal. The list shall comprise at least 15 persons and shall be composed of three sub-lists:
one sub-list of individuals established on the basis of proposals by the Union;
one sub-list of individuals established on the basis of proposals by the United Kingdom, in respect of Gibraltar; and
one sub-list of individuals who are not nationals of either Party who shall serve as chairperson to the arbitration tribunal.
Each sub-list shall include at least five individuals. The Cooperation Council shall ensure that the list is always maintained at this minimum number of individuals.
The list referred to in paragraph 1 shall not comprise persons who are members, officials or other servants of the Union institutions, of the Government of a Member State, or of the Government of the United Kingdom or of Gibraltar.
Replacement of arbitrators
If during dispute settlement procedures under this Part, an arbitrator is unable to participate, withdraws, or needs to be replaced because that arbitrator does not comply with the requirements of the Code of Conduct, the procedure set out in Article 306 shall apply. The time period for the delivery of the ruling or decision shall be extended for the time necessary for the appointment of the new arbitrator.
Arbitration tribunal decisions and rulings
The deliberations of the arbitration tribunal shall be kept confidential. The arbitration tribunal shall make every effort to draft rulings and take decisions by consensus. If this is not possible, the arbitration tribunal shall decide the matter by majority vote. In no case shall separate opinions of arbitrators be disclosed.
The decisions and rulings of the arbitration tribunal shall be binding on the Union and on the United Kingdom. They shall not create any rights or obligations with respect to natural or legal persons.
Decisions and rulings of the arbitration tribunal cannot add to or diminish the rights and obligations of the Parties under this Agreement or under any supplementing agreement.
For greater certainty, the arbitration tribunal shall have no jurisdiction to determine the legality of a measure alleged to constitute a breach of this Agreement or of any supplementing agreement, under the domestic law of a Party. No finding made by the arbitration tribunal when ruling on a dispute between the Parties shall bind the domestic courts or tribunals of either Party as to the meaning to be given to the domestic law of that Party.
Each Party shall make the rulings and decisions of the arbitration tribunal publicly available, subject to the protection of confidential information.
The information submitted by the Parties to the arbitration tribunal shall be treated in accordance with the confidentiality rules laid down in Annex 29 on Rules of Procedure.
Suspension and termination of the arbitration proceedings
At the request of both Parties, the arbitration tribunal shall suspend its work at any time for a period agreed by the Parties and not exceeding 12 consecutive months. The arbitration tribunal shall resume its work before the end of the suspension period at the written request of both Parties, or at the end of the suspension period at the written request of either Party. The requesting Party shall deliver a notification to the other Party accordingly. If a Party does not request the resumption of the arbitration tribunal's work at the expiry of the suspension period, the authority of the arbitration tribunal shall lapse and the dispute settlement procedure shall be terminated. In the event of a suspension of the work of the arbitration tribunal, the relevant time periods shall be extended by the same time period for which the work of the arbitration tribunal was suspended.
Mutually agreed solution
The Parties may at any time reach a mutually agreed solution with respect to any dispute referred to in Article 301.
If a mutually agreed solution is reached during panel proceedings, the Parties shall jointly notify the agreed solution to the chairperson of the arbitration tribunal. Upon such notification, the arbitration proceedings shall be terminated.
The solution may be adopted by means of a decision of the Cooperation Council. Mutually agreed solutions shall be made publicly available. The version disclosed to the public shall not contain any information either Party has designated as confidential.
Each Party shall take the measures necessary to implement the mutually agreed solution within the agreed time period.
No later than the date of expiry of the agreed time period, the implementing Party shall inform the other Party in writing of any measures thus taken to implement the mutually agreed solution.
Time periods
All time periods laid down in this Part shall be counted in days from the day following the act to which they refer.
Any time period referred to in this Part may be modified by mutual agreement of the Parties.
The arbitration tribunal may at any time propose to the Parties to modify any time period referred to in this Part, stating the reasons for the proposal.
Costs
Each Party shall bear its own expenses derived from the participation in the arbitration tribunal procedure.
The Parties shall share jointly and equally the expenses derived from organisational matters, including the remuneration and expenses of the members of the arbitration tribunal. The remuneration of the arbitrators shall be in accordance with Annex 29 on Rules of Procedures.
Annexes
Dispute settlement procedures set out in this Part shall be governed by the rules of procedure set out in Annex 29 on Rules of Procedure and conducted in accordance with the Annex 30 on Code of Conduct.
The Cooperation Council may amend the Annex on the Rules of procedure and the Annex on Code of Conduct.
Special procedures for remedial measures
For the purposes of Article 209, this Title applies with the modifications set out in this Article.
By way of derogation from Article 306 and Annex 29, if the Parties do not agree on the composition of the arbitration tribunal within two days, the co-chair of the Cooperation Council from the complaining Party shall select, no later than one day after the expiry of the two-day time period, an arbitrator by lot from the sub-list of each Party and the chairperson of the arbitration tribunal by lot from the sub-list of chairpersons established pursuant to Article 319. The co-chair of the Cooperation Council from the complaining Party may delegate such selection by lot of the arbitrator or chairperson. Each individual shall confirm their availability to both Parties within two days from the date on which they were informed of their appointment. The organisational meeting referred to in Rule 10 of Annex 29 shall take place within two days from the establishment of the arbitration tribunal.
By way of derogation from Rule 13 of Annex 29, the complaining Party shall deliver its written submission no later than seven days after the date of establishment of the arbitration tribunal. The respondent Party shall deliver its written submission no later than seven days after the date of delivery of the written submission of the complaining Party. The arbitration tribunal shall adjust any other relevant time periods of the dispute settlement procedure as necessary to ensure the timely delivery of the report.
Article 311 Does Not Apply and References to the Ruling In this Title Shall Be Read as References to the Ruling Referred to In Article 209(10).
By way of derogation from Article 315, the arbitration tribunal shall deliver its decision to the Parties within 30 days from the date of delivery of the request.