on the position to be taken on behalf of the European Union within the Partnership Committee established by the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part, as regards the list of individuals to serve as arbitrators in dispute settlement proceedings

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Partnership Committee established by the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part ("the Agreement"), in connection with the envisaged adoption of a decision establishing the list of individuals to serve as arbitrators in dispute settlement proceedings.

2.Context of the proposal

2.1.The Agreement

The Agreement aims to expand the existing wide bilateral cooperation in economic, trade and political areas, and on sectoral policies, thus providing a long-term basis for further developing EU-Armenia relations. By intensifying political dialogue and improving cooperation in a broad range of areas, the Agreement lays the foundations for a more effective bilateral engagement with Armenia.

Council Decision (EU) 2018/104 of 20 November 2017 approved the signing and provisional application of the Agreement and pursuant to Article 385 of the Agreement. The Agreement is applied on a provisional basis since 1 June 2018.

2.2.The Partnership Committee

The Partnership Committee meeting in a specific configuration to address all issues related to Title VI (Trade and Trade-related Matters) of the Agreement is specified in Article 363(7) of the Agreement. Pursuant to Article 363(1) and (6) of the Agreement, the Partnership Committee assists the Partnership Council in the performance of its duties and functions. It has the power to adopt decisions in areas in which the Partnership Council has delegated powers to it and in the cases provided for in the Agreement. Those decisions are binding upon the Parties to the Agreement, which shall take appropriate measures to implement them.

2.3.The envisaged act of the Partnership Committee

The arbitration procedure set out in Chapter 13 of Title VI of the Agreement provides that where the Parties fail to resolve a dispute by recourse to consultations, the Party that sought consultation may request establishment of an arbitration panel. The purpose of the envisaged act is to define the Union's position relating to the adoption by the Partnership Committee of a list of individuals willing and able to serve as arbitrators in dispute settlement proceedings.

Article 339(1) of the Agreement requires the Partnership Committee to establish, on the basis of proposals made by the Parties, a list of at least 15 individuals who are willing and able to serve as arbitrators. The list shall be composed of three sub-lists: one sub-list for each Party and one sub-list of individuals who are not nationals of either Party and who shall serve as chairperson of the arbitration panel. Each sub-list shall include at least five individuals.

Accordingly, a draft list has been discussed with the Republic of Armenia, providing for five candidate arbitrators from the Union, five candidate arbitrators from the Republic of Armenia and five third-country nationals who may serve as chairpersons of an arbitration panel.

The candidate arbitrators and chairpersons proposed by the Union and by the Republic of Armenia have specialised expertise in law, international trade and other matters concerning the provisions of Title VI of the Agreement and are expected to meet the requirement of independence as specified in Article 339(2) of the Agreement.

3.Position to be taken on the Union's behalf

The position to be adopted on behalf of the Union aims at establishing a list of individuals who are willing and able to serve as arbitrators in dispute settlement proceedings.

The decision constitutes the legal instrument establishing the Union's position to be adopted on its behalf in the Partnership Committee.

This decision implements the Union’s common commercial policy towards an Eastern Partner country, based on the provisions of the Agreement. The establishment of a list of arbitrators is a legal requirement for setting up the institutional structures which enable the Union and the Republic of Armenia to effectively address bilateral disputes concerning the application and interpretation of the trade title of the Agreement. It is consistent with the Union's approach to dispute settlement disciplines negotiated or implemented within free trade agreements with other trade partners.

4.Legal basis