How to circumvent EU’s procedural obstacles to secure EU’s fishing rights in Svalbard
Published on the Blog of the European Journal of International Law (EJIL: Talk!) on 31 July 2020
The conflicting interpretations as to the territorial scope of the 1920 Treaty of Paris have sparked some tensions between certain EU Member-States and Norway over the fishing rights to catch snow-crabs in the Svalbard archipelago. This post reports the failed attempts made by the affected EU Member-States to channel their disgruntlement through the EU Institutions against Norway’s violations of the Treaty of Paris. Secondly, this post suggests how these States may directly take international legal actions by using bilateral instruments respectively entered into with Norway.
EU’s failure to take a strong stance
In 2016 a Lithuanian trawler holding an EU license to catch snow-crab in Svalbard waters was seized by Norwegian Coastguard and fined by Norway’s Supreme Court, because it did not possess a Norwegian licence. This again happened the following year in 2017 to a Latvian trawler. Consequently, most of EU trawlers have been deterred from catching snow-grabs and so remained docked at their harbours, while unobstructed Norwegian snow-crabs’ trawlers are flourishing with no foreign competition.
On 22 December 2017, the Republic of Latvia sent to the EU Commission an expressed invitation to act in defence of EU fishing rights within a pre-determined period of time. However, the EU Commission failed to take a strong stance on this issue. So, on 10 May 2018, Latvia submitted an application to the Court of Justice of the European Union (CJEU) against the EU Commission pursuant to Article 263 of the Treaty on the Functioning of the European Union (TFEU) for failing to act under Article 265 TFEU. Namely, Latvia complained that the EU Commission did not arrange official negotiations with Norway, nor it brought international judicial proceedings against Norway – as requested by Latvia – with the aim of securing EU’s fishing rights within the pre-determined time period.
On 27 June 2018, also the EU Parliament manifested its concerns for the EU vessel owners who had invested heavily in snow-crab business based on the EU legislation and the Treaty of Paris and are now prevented from fishing in Svalbard by the Norwegian authorities, despite holding valid EU licences. Therefore, the EU Parliament demanded from the EU Commission a solution to safeguard the legitimate rights of the EU vessels and Member States.
On 16 August 2018, also the Kingdom of Spain applied for leave to intervene in support of Latvia in the action against the EU commission before the CJEU.
The EU Commission replied to Latvia by stating that it would continue to participate in the negotiations with Norway without fixing a final date for the end of those negotiations and that procedural obstacles were in the way for allowing the EU to bring international judicial proceedings against Norway. The EU Commission specified these procedural impediments:
firstly, the Treaty of Paris does not provide for a dispute-settlement mechanism and the dispute-settlement mechanisms provided for by the UNCLOS are not applicable, since the issue at hand is not about the interpretation and application of the UNCLOS, but rather about the interpretation and application of the Treaty of Paris;
secondly, international arbitration is subject to finding an agreement with Norway, which is currently highly unlikely in the prevailing circumstances;
thirdly, the default dispute-settlement mechanism that remains is the International Court of Justice (ICJ), however, the EU has no legal standing before the ICJ;
fourthly, whilst a number of Member States are Party to the 1920 Treaty of Paris, the EU is not.
On 30 January 2020, the CJEU issued an order declaring Latvia’s application inadmissible as the EU Commission is not obliged to act upon a request made by a Member-State, nor it would have been able to do so in light of the procedural obstacles.
Possible instruments to solve the diplomatic stalemate
While the EU may be facing procedural obstacles to bring international judicial proceedings against Norway, the affected EU Member-States may rely on bilateral instruments to circumvent such obstacles and bring international judicial proceedings against Norway.
Among the EU States that have issued snow crabs-catching licenses, with the prior authorization of the EU Commission, and that are a Party to the Treaty of Paris, Norway has Bilateral Investment Treaties (BITs) with four of them (Estonia, Lithuania, Latvia, Poland).
All four BITs impose on Norway certain international obligations, specifically applicable also to the continental shelf over which Norway exercises – in accordance with international law – sovereign rights for the purpose of exploration and exploitation of natural resources. Pursuant to these obligations, Norway shall accord fair and equitable treatment (FET) and the most favored nation's treatment (MFN) to the other State Parties’ investors, and shall compensate in case of expropriation.
Arguably, Norway breached all these obligations towards EU snow-crabs’ trawlers in Svalbard, by implementing a creeping nationality-oriented jurisdiction over Svalbard waters which ultimately resulted into a creeping expropriation of the licences of the EU trawlers.
Among the remedies available for Norway’s violations of its BITs is the launching of a State-to-State arbitration (Article 10 of Norway-Latvia/Lithuania/Estonia/Poland BIT). So, these EU Member-States may leverage Norway’s consent to arbitrate an investment dispute contained in these BITs to file an international arbitration against Norway with the aim of securing the fishing rights of their respective national investors, as a form of diplomatic protection. In this way, the EU Member-States may contend also the violation of the Treaty of Paris by virtue of Article 31(3)(c), according to which any relevant rules of international law applicable in the relations between the parties shall be taken into account.
The resourcefulness of these bilateral instruments in such circumstances has been corroborated by a Latvian fishing company that has recently launched an investment arbitration under the Latvia-Norway BIT against Norway arising out the expropriatory measures over the company’s licence to catch snow-crabs in Svalbard’s waters. The investment claim filed by the Latvian investor with the International Centre for Settlement of Investment Disputes (ICSID) may prevent the Latvian Republic from following suit because of Article 27(1) of the ICSID Convention. Indeed, this Article precludes a State from bringing an international claim in respect of a dispute which one of its nationals and another Contracting State of the ICSID are currently arbitrating before the ICSID itself (unless, of course, such other Contracting State fails to abide by the ICSID award rendered in such dispute). Yet, it is debatable whether this preclusion would apply to any arbitrations or only to ICSID arbitrations, as such limitation is enshrined in the ICSID Convention only (if this were the case, then Latvia may still initiate an ad hoc arbitration under the UNCITRAL Rules, which indeed do not contain this preclusion). In any case, Lithuania, Estonia, Poland may still commence any sort of arbitration against Norway under their respective BITs, as none of their nationals have submitted an ICSID arbitration yet.
Spain is also a Party to the Treaty of Paris, but it does not have a BIT with Norway. Nevertheless, in 1929 Spain and Norway entered into a Treaty on conciliation, judicial settlement and arbitration. Such bilateral instrument provides for a general compromissory clause to settle future disputes between the Contracting Parties by way of arbitration. Therefore, also Spain may threaten recourse to an international arbitration by invoking this 1929 instrument against Norway and thus protecting its fishing rights stemming from the 1920 Treaty of Paris.
International arbitral tribunals established under Norway’s BITs and the Spain-Norway Treaty on conciliation, judicial settlement and arbitration may determine the width of the territorial scope of the Treaty of Paris, thus putting an end to the contentious issue. An international, independent and neutral adjudicator may indeed solve this issue, by determining whether the Treaty of Paris shall apply either up to the 4 (or 12 nautical miles) from the baseline of the archipelago (as maintained by Norway) or up to the 200 nautical miles of the economic zone (as contended by the EU). Such finding, in the form of enforceable and binding awards, may provide the affected EU Member-States with the effective solution they are looking for against Norway’s discriminatory and expropriatory measures, which are inconsistent with the Treaty of Paris.