BREXIT – EFFECT ON PRIVATE INTERNATIONAL LAW REGIME AND INDIA By Swati Bisen from GNLU
For more than forty years, the European Union has provided the focus for the development of private international law in Europe. The fact that the United Kingdom has been part of the common regime established by various conventions and treaties has made London the hub of various trade and investment activities, dispute resolutions centres etc.
The exit from this age old unification, is sure to have its own implications on not only UK’s economy but also economies of other such countries which have been connected with the UK in terms of partnerships in various sectors.
The current philosophies and opinions however, state that the consequences are going to be more disadvantageous to the future of UK than being beneficial. However how right or wrong the prophecies are, can only be decided in due course of time.
The Brexit, despite not being officially put in black and white has already started impacting global economies and foreign relation policies of countries.
This may easily be regarded as one of the boldest steps in terms of Private International Law and is consequently sure to have the deepest impact in the upcoming two years, hopefully in the right direction.
The existing laws governing EU are unclear as to if the EU and the UK don’t achieve success in their negotiations within two years of notice[i], then the Treaties, including the freedom of movement, would cease to be in force. The likelihood that access might be lost to the European single market and different certifications given by essential EU law puts the UK under monetary and political weight that may debilitate their arranging position against the EU. English voters were likely not mindful of this thought before the referendum.
With regards to this, the idea is to pen down a few of the existing international law regimes which shall bear the consequence of UK leaving the European Union.
We shall deal with the intricacies of private international law which may be put into a state of disarray due to the change in law and regulations and its alleged impact on India.
The cause of immigration has been one of the largest causes of the rift between the two stakeholders. And in fact is most likely believed to be the major cause for voting in favour of the Brexit. However it is to be pointed out that while the referendum was being propagated, EU had agreed to offer David Cameron a so-called "emergency brake" which would have allowed the UK to withhold social benefits to new immigrants for the first four years after they arrived; this brake could have been applied for a period of seven years. That offer was still on the table at the time of the Brexit referendum but expired when the vote determined that the UK would leave the EU. UK’s take on refugees as well has been a cause of problem, and this in fact is mostly likely to cause disappointment on the international forefront and might at some point prove to be a cause of change in the relations between countries in terms of Private International Law.
- Internal fallout- Post this decision, Scotland and Ireland have come out and protested strongly against it emphasizing on how they have been forced to exit from EU as well despite not wanting to. As a of an internal turmoil, this may lead to other referendums on them wanting to stay as a part of EU or not.
- Implementation of International Treaties- At several levels, international treaties entered into by the EU have always been on behalf of its Member States. However Brexit would mean that all these treaties are put into question in terms of UK being a signatory to it or not. All these treaties will have to be looked at in detail to present a clear stance of UK on it. Whereas bilateral treaties might not be affected in this manner. But several countries may wish for re consideration as this exit has not really been welcomed by a lot of states. For example, non EU states like Israel at some point had entered into a treaty with EU for promoting research and development etc as a result of which several UK colleges were given funding of a considerable amount. This exit might render negative consequences on such consortiums as well.
- The Jurisdictional Issue- Under the EU regime, all judicial decisions, whether Civil or Commercial, were to have the same effect in all Member States. However, this decisions on UK, might pose a problem not only with regards to future cases but also in regards to the ones which have already been decided. What changes are and can be brought would require a deeper analysis on the part of the United Kingdom.
What will the outcomes of Brexit be for India? It's anything but difficult to consider destructing scenarios, as the chances of disentangling of the European Union (EU) and the euro, have expanded strongly. Brexit could simply be the start of the end for Europe, as George Soros has said[ii].
Instability and hazard avoidance will rise. Capital streams will be in peril and focused coin debasements more probable. World financial development, which was in any case sputtering, will be further hosed. Politically, Brexit might be viewed as a blow against globalization.
No one knows how it will all work out. Be that as it may, a few things are sure: a) The dangers have expanded; b) The standpoint for worldwide development has become more terrible; c) European leaders haven’t covered themselves in glory in the way they have handled the continent’s problems; d) with loan costs at absolute bottom, some of them even negative, there is a point of confinement to how much further jolt national banks in created markets can give their economies;
To pin point some major changes that can be foreseen are[iii]:
- Rupee may depreciate because of the double effect of foreign fund outflow and dollar rise;
- Increase in petrol and diesel prices to an extent;
- The government then may want to reduce additional excise duty imposed on fuel when it was on a downward trajectory. This will increase fiscal deficit, unless revenue increased;
- Prices of gold, electronic goods, among others will increase;
- Cheaper rupee will make Indian exports, competitive.
[i] http://conflictoflaws.net/2016/basedow-on-brexit-and-private-international-law/ Last accessed on 21 July, 2017.
[ii] http://www.livemint.com/Money/iltjhLLPBTuAFyYNt3H83O/Brexits-impact-on-India-when-elephants-fight-the-grass-su.html Last accessed on 22 July 2017.
[iii] http://www.business-standard.com/article/international/what-is-brexit-and-how-does-it-impact-india-116062000026_1.html Last accessed on 22 July 2017.
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