Judicial Independence and the EU-Switzerland Framework Treaty

The European Union is about to finalise a package of sectoral treaties with Switzerland. Its goal is to institutionalise five existing treaties and to conclude three new ones. At the core of these agreements lies the dispute settlement mechanism, modelled after the EU’s agreements with the post-Soviet states of Armenia, Georgia, Moldova and Ukraine. This mechanism would grant the European Commission the unilateral right to bring Switzerland before an ‘arbitration tribunal’. If the dispute involves EU law or treaty law with the same content, the tribunal would be required to seek a binding interpretative judgment from the Court of Justice of the European Union (CJEU). The CJEU would thus have the decisive say in practically all important matters concerning the sectoral agreements covered.

In the case of the post-Soviet developing and newly industrialising countries, this paternalising approach has been justified with the argument that it serves to gradually introduce these states to the ideas of democracy, the rule of law, and a market economy. Whether this justification is convincing may be left open. However, applying the same rationale to Switzerland would be simply absurd.

The Swiss Federal Supreme Court would play no role in this dispute resolution framework.  And yet, through the ‘arbitration tribunal’ the EU Commission could bring any judgments of the Federal Supreme Court that do not suit it before the CJEU. The Swiss judge at the European Court of Human Rights, Andreas Zünd, has rightly criticised this. It would mean that the Federal Supreme Court would no longer be ‘the supreme judicial authority of the Confederation’, as stipulated in Article 188(1) of the Federal Constitution.

National courts in Europe must be independent

The EU Treaty lays down the conditions and principles that any country wishing to become a Member State must fulfil. Accession is contingent upon meeting specific requirements, known as the ‘Copenhagen criteria’. These criteria include institutional stability as a guarantee of democracy and the rule of law; respect for human rights and respect for and protection of minorities; a functioning market economy; and the ability to withstand competitive pressure and market forces within the EU.

A fundamental component of the rule of law is judicial independence. Courts must decide free from instructions. The European Court of Human Rights (‘ECtHR’) made important statements on this in its Grand Chamber judgment of 1 December 2020 in Ástráðsson v. Iceland (No. 26374/18). In particular, the Court reaffirmed that judicial independence is the only way to ensure compliance with Article 6 (right to a fair trial). The judgment concerns judges in the 47 contracting states of the ECHR (including Switzerland).

Both the rule of law and the concept of judicial independence must be interpreted in the same way under the ECHR and under EU law. The Ástráðsson judgment is directly relevant to the EU. This is not a problem because the CJEU advocates the same concept of independence of national courts within EU Member States (see, e.g. judgment of the Grand Chamber C-64/16 Associação Sindical dos Juízes Portugueses of 27 February 2018).

However, in their approach against Switzerland, the Council and the Commission are violating a fundamental principle of the EU legal order, namely the independence of the judiciary. One may even speak of an abuse of law in the broader sense (‘venire contra factum proprium’). You cannot emphasise the importance of the independence of national courts on every occasion and at the same time place the highest court of one of the oldest democracies in the world, which is a party to the European Convention on Human Rights, under the tutelage of an extraterritorial court of an organisation to which this democracy does not belong.

It cannot be argued against this that the highest courts of the Member States are also subject to the CJEU’s jurisdiction. These courts participate in shaping CJEU case law through the preliminary ruling procedure, a mechanism absent from the proposed EU-Switzerland treaty package. By excluding the Federal Supreme Court from the dispute settlement procedure, the treaty package would, moreover, deprive it of the ability to assert «counter-limits» in response to potential judicial overreach by the CJEU. This strategy has been employed by the Italian Constitutional Court and many other constitutional and supreme courts across the EU and EEA/EFTA states. In Italian legal doctrine, the term ‘controlimite’ is used. The concept of counter-limits was first developed in international law as a response to decisions by international courts and was later transferred to EU law. The ruling of the Grand Chamber of the ECJ in Case C-105/04 Taricco of 8 September 2015 has become of central importance. Counter-limits reinforce the capacity of a national constitution to resist developments in the case law of the CJEU that are deemed to go against crucial principles of the respective national legal order. (I owe this reference to the Italian lawyer Maurizio Lo Gullo, one of the most knowledgeable experts on the relationship between the EU and Switzerland).

The CJEU is, moreover, an EU body that is neutral towards the Member States. However, it would not be neutral towards Switzerland in cases where the vital interests of the EU are at stake. The old Roman law phrase must apply here: ‘nemo iudex in causa sua.’ In addition, unlike say, the Czech Republic or France, Switzerland would not be present through a judge.

A fragile legal basis

The Swiss Federal Council is trying to sell the treaty package to the Swiss public and cantons as a means of stabilizing relations with the EU. Such stabilization, so the argument goes, is necessary to prevent Swiss industries from losing preferential access to the EU’s single market.

Since the tenure of Jean-Claude Juncker, the European Commission has become increasingly politicised (while the Council has always been guided by political considerations). In the case of the treaty package, it should be noted that the Federal Council itself originally sought a dispute resolution mechanism involving only the European Commission and the CJEU. When this proved to be unsaleable from a domestic political point of view, the EU proposed the interposition of the pro forma arbitration tribunal, and the Federal Council accepted this. However, this does not change the fact that the “Ukraine model” is incompatible with both the ECHR and EU law. The situation evokes parallels with the ‘unequal treaties’ imposed by the imperialist powers on China and Japan in the 19th century. One of the main characteristics of these agreements was the establishment of extraterritorial courts on Chinese or Japanese soil. Although the CJEU is based in Luxembourg, it would still function as an extraterritorial court for Switzerland. Consequently, the claim that this treaty framework provides a “stable” legal foundation is unfounded.

The autonomy of Union law

Of course, the Federal Council is aware that it is treading on thin ice with the Ukraine mechanism. This explains its longstanding effort to portray the CJEU as a mere auxiliary body while showcasing the arbitration tribunal as the actual decision-maker. When presenting the treaty package at a news conference on 20 December 2024, Switzerland’s Foreign Minister Ignazio Cassis contended that the arbitration tribunal may (“pourra”) ask the CJEU for an opinion (“un avis”). However, based on everything we know about the status of the negotiations, this is incorrect. Even if it were as the Federal Council claims, the autonomy of EU law would undoubtedly be violated. It is inconceivable that a parity arbitration tribunal would interpret EU law or treaty law with the same content as EU law (see, in particular, CJEU Opinion 1/91 of 14 December 1991 on the Draft EEA Agreement).