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Treatment afforded by the Union
1. The Union shall act as the respondent where the dispute concerns treatment afforded by the institutions, bodies, offices or agencies of the Union. 2. Where the Commission receives a request for consultations from a claimant or a notice by which a claimant states its intention to initiate arbitration proceedings in accordance with an agreement, it shall immediately notify the European Parliament and the Council.
Treatment afforded by a Member State
This Section shall apply in disputes concerning, fully or partially, treatment afforded by a Member State.
Cooperation and consultations between the Commission and the Member State concerned
1. In accordance with the principle of sincere cooperation referred to in Article 4(3) TEU, the Commission and the Member State concerned shall take all necessary steps to defend and protect the interests of the Union and of the Member State concerned. 2. The Commission and the Member State concerned shall enter into consultations on the management of disputes pursuant to this Regulation, bearing in mind any deadlines laid down in this Regulation and in the agreement concerned, and shall share with each other information where relevant to the conduct of disputes.
Request for consultations
1. Where the Commission receives a request for consultations from a claimant in accordance with an agreement, it shall immediately notify the Member State concerned. Where a Member State has been made aware of or has received a request for consultations, it shall immediately inform the Commission. 2. Representatives of the Member State concerned and of the Commission shall form part of the Union’s delegation to the consultations. 3. The Member State concerned and the Commission shall immediately provide to each other relevant information for the case. 4. The Commission shall inform the European Parliament and the Council of any such requests for consultations.
Notice of intention to initiate arbitration proceedings
1. Where the Commission receives notice by which a claimant states its intention to initiate arbitration proceedings, in accordance with an agreement, it shall immediately notify the Member State concerned. When a claimant states its intention to initiate arbitration proceedings against the Union or a Member State, the Commission shall inform the European Parliament and the Council, within 15 working days of receiving the notice, of the name of the claimant, the provisions of the agreement alleged to have been breached, the economic sector involved, the treatment alleged to be in breach of the agreement and the amount of damages claimed. 2. Where a Member State receives notice by which a claimant states its intention to initiate arbitration proceedings, it shall immediately notify the Commission. 3. The Commission shall inform the European Parliament and the Council of any such notices of intention to initiate arbitration proceedings.
Respondent status
1. The Member State concerned shall act as the respondent except where either of the following situations arise: (a) the Commission, following consultations pursuant to Article 6, has taken a decision pursuant to paragraph 2 or 3 of this Article within 45 days of receiving the notice or notification referred to in Article 8; or (b) the Member State, following consultations pursuant to Article 6, has confirmed to the Commission in writing that it does not intend to act as the respondent within 45 days of receiving the notice or notification referred to in Article 8. If either of the situations referred to in point (a) or (b) arise, the Union shall act as the respondent. 2. The Commission may decide by means of implementing acts, based on a full and balanced factual analysis and legal reasoning provided to the Member States, in accordance with the advisory procedure referred to in Article 22(2), that the Union is to act as the respondent where one or more of the following circumstances arise: (a) the Union would bear all or at least part of the potential financial responsibility arising from the dispute in accordance with the criteria laid down in Article 3; or (b) the dispute also concerns treatment afforded by the institutions, bodies, offices or agencies of the Union. 3. The Commission may decide by means of implementing acts, based on a full and balanced factual analysis and legal reasoning provided to the Member States in accordance with the examination procedure referred to in Article 22(3), that the Union is to act as the respondent where similar treatment is being challenged in a related claim against the Union in the WTO, where a panel has been established and the claim concerns the same specific legal issue, and where it is necessary to ensure a consistent argumentation in the WTO case. 4. In acting pursuant to this Article, the Commission shall ensure that the Union’s defence protects the financial interests of the Member State concerned. 5. The Commission and the Member State concerned shall immediately after receiving the notice or notification referred to in Article 8 enter into consultations pursuant to Article 6 on the management of the case pursuant to this Article. The Commission and the Member State concerned shall ensure that any deadlines set down in the agreement are respected. 6. When the Union acts as the respondent in accordance with paragraphs 2 and 5, the Commission shall consult the Member State concerned on any pleading or observation prior to the finalisation and submission thereof. Representatives of the Member State concerned shall, at the Member State’s request and at its expense, form part of the Union’s delegation to any hearing and the Commission shall take due account of the Member State’s interest. 7. The Commission shall immediately inform the European Parliament and the Council of any dispute in which this Article is applied and the manner in which it has been applied.
Conduct of arbitration proceedings by a Member State
1. Where a Member State acts as the respondent, in all phases of the dispute, including possible annulment, appeal or review, the Member State pursuant to Article 6 shall: (a) provide the Commission in a timely manner with relevant documents relating to the proceeding; (b) inform the Commission in a timely manner of all significant procedural steps, and upon request enter into consultations with the Commission with a view to taking into due consideration any point of law or any other element of Union interest raised by the dispute and identified by the Commission in a non-binding written analysis provided to the Member State concerned; and (c) permit representatives of the Commission, at its request and its own expense to form part of the delegation representing the Member State. 2. The Commission shall provide the Member State with relevant documents relating to the proceedings, so as to ensure as effective a defence as possible. 3. As soon as an award is rendered, the Member State shall inform the Commission. The Commission shall inform the European Parliament and the Council.
Conduct of arbitration proceedings by the Union
1. Pursuant to Article 6, the following provisions shall apply throughout arbitration proceedings, where the Union acts as the respondent in any disputes in which a Member State would be liable to bear all or part of the potential financial responsibility: (a) the Commission shall take all necessary measures to defend and protect the interests of the Member State concerned; (b) the Member State concerned shall provide all necessary assistance to the Commission; (c) the Commission shall provide the Member State concerned with relevant documents relating to the proceeding, keep the Member State informed of all significant procedural steps and enter into consultations with the Member State in any event when requested by the Member State concerned, so as to ensure as effective a defence as possible; (d) the Commission and the Member State concerned shall prepare the defence in close cooperation with each other; and, (e) the Union’s delegation to the proceedings shall comprise the Commission and representatives of the Member State concerned, unless the Member State concerned informs the Commission that it intends not to form part of the Union’s delegation to the proceedings. 2. The Commission shall regularly inform the European Parliament and the Council of developments in the arbitration proceedings referred to in paragraph 1.
Acceptance by the Member State concerned of potential financial responsibility where the Union is the respondent
Where the Union acts as the respondent in any disputes in which a Member State would be liable to bear all or part of the potential financial responsibility, the Member State concerned may, at any time, accept any potential financial responsibility arising from the arbitration. To this end, the Member State concerned and the Commission may enter into arrangements dealing with, inter alia: (a) mechanisms for the periodic payment of costs arising from the arbitration; (b) mechanisms for the payment of any awards made against the Union.
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Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.