On 1 April 2020, the UK Supreme Court, in the case of Zipvit Ltd v Commissioners for Her Majesty's Revenue and Customs, referred four questions regarding the interpretation of the EU's Principal VAT Directive to the Court of Justice of the European Union (CJEU), asking for a "preliminary ruling".

Post-Brexit, why is it still possible for UK courts to refer cases to the CJEU?

The UK formally left the EU on 31 January 2020; however, under the Withdrawal Agreement (WA) nearly all EU law still applies in and to the UK until the end of the transition (or implementation) period which currently runs to the end of December 2020. The jurisdiction of the CJEU also mostly continues during transition as it did when the UK was still a Member State.

Particularly relevant to the Zipvit case, Article 86(2) of the WA states that: "The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period."

What is a preliminary ruling?

Under Article 267 of the Treaty on the Functioning of the European Union (TFEU), a court of a Member State can ask the CJEU for advice on the interpretation and validity of EU law where a decision is necessary for the national court to give judgment, and where there is no judicial remedy under national law.

The function of preliminary rulings is to ensure uniform interpretation and validity of EU law across all the Member States (and, during transition, also the UK). Preliminary rulings are binding both on the referring court and on all courts in EU countries. This means that the CJEU's ruling in the Zipvit case will be relevant for the interpretation of the Principal VAT Directive in all remaining EU Member States, not just in the UK.

The CJEU does not itself apply EU law to a dispute brought by a referring court, as its role is to help resolve it; the role of the national court is to draw conclusions from the CJEU's ruling. You will remember when in December 2018, the CJEU ruled that the UK could unilaterally decide to stay in the EU and withdraw its "Article 50 notice". The CJEU only gave a ruling on how to interpret relevant EU law not on what should actually be done (as we all know, the UK has not withdrawn its "Article 50 notice").

What will the situation be after the end of the transition period?

In general, the CJEU may only give a ruling if EU law applies to the case in the main proceedings. EU law will cease to be applicable in and to the UK post-transition and the CJEU will therefore no longer have general jurisdiction over the UK in relation to any acts that take place on or after 1 January 2021. However, in some areas, the CJEU's jurisdiction relating to the UK will continue beyond the end of the transition period.

For example, Article 86(1) WA makes it clear that any cases pending before the CJEU at the end of the transition period will fall within the CJEU's jurisdiction until they are finalised. For the Zipvit case this will mean that if the CJEU does not give a ruling before 31 December 2020, the UK will still be bound to accept and implement any ruling made after the end of the transition period.

Another example for the continuous jurisdiction of the CJEU on the matter of preliminary rulings beyond 2020 is Article 158 WA which extends the availability of preliminary rulings on questions of interpretation of Part Two of the Withdrawal Agreement (Citizens' rights) for a further 8 years from the end of the transition period. Questions about EU citizens' rights in the UK can thus continue to be submitted to the CJEU until at least the end of 2028.

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