The London Steam-Ship Owners' Mutual Insurance Association Limited v The Kingdom of Spain

On 21 December 2020, shortly before the end of the implementation period of the United Kingdom’s exit from the European Union (“IP completion day”) (Footnote: ¹), Butcher J (“the Judge”) referred three questions as to the proper interpretation of Regulation (EU) No 44/2001 (“the Brussels I Regulation”) to the Court of Justice of the European Union (“the CJEU”). The reference was made pursuant to Article 267 of the Treaty on the Functioning of the European Union (“the TFEU”) which provides, so far as relevant, as follows:

The Judge had announced his decision to make the referral on 18 December 2020, the day closing oral arguments had concluded at the end of a seven-day trial of an appeal brought by the appellant (“the Club”) against the registration of a judgment under the Brussels I Regulation, giving his reasons in a judgment delivered orally (“the Judgment”). The Judge did not, at that time, determine a further issue of English public policy in respect of which no reference was made and which, if decided in favour of the Club, would have determined the appeal in favour of the Club, regardless of the answers to the questions he referred to the CJEU.

The Club appeals that decision, with permission granted by Males LJ, on the ground that a ruling on the questions referred to the CJEU was not “necessary to enable [the Judge] to give judgment” within the meaning of Article 267. The Club contends that the referral was therefore outside the Judge’s jurisdiction, wrong in principle and/or irrational when it was made. Although the Judge subsequently (on 12 May 2021) determined the further issue against the Club (so that a decision on the questions referred to the CJEU is, in the event, required), the power to make a referral to the CJEU would not then have been available, having ended on IP completion day (Footnote: ²). The Club contends that the Judge wrongly advanced the decision to make a referral to the CJEU (and the referral itself) in order to avoid that situation.

If the Club’s challenge is well-founded, it is also necessary to consider the extent of the jurisdiction of this Court in respect of an appeal against the decision of a judge to refer questions to the CJEU. The parties were agreed that the appeal could be entertained, and a reasoned judgment delivered, but there was disagreement as to whether the Court has jurisdiction to allow the appeal and set aside the referral and/or to direct the Judge to withdraw it.

These proceedings concern the enforcement in England and Wales of an “execution order” issued by the Provincial Court of Coruña of the Kingdom of Spain on 1 March 2019, declaring that the Club (among others) was liable to numerous claimants, including the Respondent (“Spain”) for circa €2.355 billion but, in the case of the Club, subject to a global limit of €855,493,575.65, the Euro equivalent of US$1 billion less the fund deposited with the Spanish Courts in respect of the Club’s compulsory insurance liability under the International Convention on Civil Liability for Oil Pollution 1992 (see footnote 3 below) (“the Spanish Judgment”).

The Spanish Judgment, reflecting decisions of the Spanish Supreme Court on both liability and quantum, related to the sinking of the MT Prestige (“the Vessel”) off Cape Finisterre on 19 November 2002 and the extensive pollution and massive damage caused along the Atlantic coastline of northern Spain and southern France by the escape of its cargo of 70,000 tonnes of fuel oil.

The Club was the Protection and Indemnity (P&I) insurer of the Vessel at the time the Vessel sank pursuant to a contract of insurance concluded by a Certificate of Entry dated 20 February 2002 (“the Contract”). The Contract was subject to a maximum aggregate amount of US$1 billion for any one occurrence and incorporated the Club’s Rules of Class 5 – Protection and Indemnity (“the Club’s Rules”). The Rules contained a “pay to be paid” clause, provided that the Contract was governed by English law and contained a London arbitration clause, any arbitration being subject to English law and the Arbitration Act 1996 (“the 1996 Act”).

The Spanish Judgment was obtained in respect of a direct civil claim against the Club under Article 117 of the Spanish Penal Code brought in June 2010 (“the Spanish Claim”) in on-going criminal proceedings against (among others) the Master, Chief Officer and Chief Engineer of the Vessel (“the Spanish Proceedings”). The Club has at all times contended that that Spanish Claim was brought in breach of the arbitration clause in the Contract requiring Spain to bring claims against the Club by way of London arbitration (Footnote: ³).

In January 2012 the Club commenced arbitration proceedings against Spain. On 13 February 2013 the arbitrator, Alistair Schaff QC, made an award declaring that (1) Spain is bound by the arbitration clause contained in the Club’s Rules and its claims must be referred to arbitration in London and (2) pursuant to the “pay to be paid” clause in the Club’s Rules, the Club is not liable to Spain in respect of such claims in the absence of any prior payment.

Spain challenged the award pursuant to sections 67 and 72 of the 1996 Act on the ground that there was no arbitrable dispute and Mr Schaff had no jurisdiction, but that challenge was dismissed by Hamblen J on 22 October 2013. At the same time Hamblen J granted the Club permission to enforce the award pursuant to section 66(1) and entered judgment in terms of the award pursuant to section 66(2) of the 1996 Act, holding that Spain did not have state immunity because it was taken to have agreed in writing to arbitrate within section 9 of the State Immunity Act 1978: The Prestige (No. 2)[2013] EWHC 3188 (Comm), [2014] 1 Lloyd’s Rep 309. The Court of Appeal dismissed Spain’s appeal: [2015] EWCA Civ 333, [2015] 2 Lloyd’s Rep 33, holding that Spain had also waived state immunity by making its applications under sections 67 and 72 of the 1996 Act. (Footnote: ⁴)

On 26 March 2019 Spain made an application for the registration of the Spanish Judgment as a judgment of the High Court pursuant to Article 33 of the Brussels I Regulation. Following standard practice, the application was made without notice to the Club. On 28 May 2019 Master Cook made a registration order on the papers.

On 26 June 2019 the Club appealed the registration order pursuant to Article 43 of the Brussels I Regulation and the former CPR 74.8(2). The Club contended that the Spanish Judgment should not be recognised:

under Article 34(3) of the Brussels I Regulation, because the Spanish judgment was irreconcilable with the prior judgment entered by Hamblen J dated 22 October 2013, enforcing an arbitration award which declared that the Club was not liable to Spain;

under Article 34(1) of the Brussels I Regulation, because recognition was manifestly contrary to English public policy in respect of (a) the rule of res judicata (applicable by virtue of the arbitration award and/or the judgment entered by Hamblen J); or (b) human and fundamental rights, the Club contending that the proceedings in Spain breached the rights of the Master to a fair trial, and therefore those of the Club.

The appeal was fixed for a two-week trial from 2 December 2020 to determine (i) as a matter of law, whether the judgment entered by Hamblen J constituted a judgment within the meaning of Article 34(3) and, if not, whether that judgment and the arbitration award (and the res judicata to which they give rise as a matter of English law) could be relied upon and (ii) as a matter of fact and law, whether the Spanish Proceedings had breached the human rights of the defendants, including the Club. There was no application, or order, for any of the issues raised by the Club’s appeal to be determined as a preliminary issue. The trial was intended to determine all the issues in a single hearing. In respect of the human rights issues the parties exchanged witness statements and expert reports.

On 3 November 2020 Spain made an application seeking the reference of six questions to the CJEU (later adding a seventh). Spain invited Butcher J to determine that application at the hearing of the appeal in order to be in a position to lodge any request with the CJEU before “the Brexit cut off”. It is unnecessary to list the questions proposed by Spain; it suffices to record that they included the questions which the Judge ultimately considered suitable for a reference, as reduced and refined by him, as follows:

The trial lasted for seven days, the first five of which were devoted mainly to witness evidence and the last two days to closing submissions, including argument as to whether a reference should be made to the CJEU and, if so, in what terms. Further written submissions were to be made by the parties on the human rights issue. As prefaced above, the Judge nevertheless proceeded the next day to deliver judgment on the question of whether to make a reference.

At paragraph 16 of the Judgment the Judge identified that the relevant jurisdictional threshold for referring a question under Article 267 was that there is an issue of interpretation or validity which it is necessary for the national court to decide in order for it (i.e. the national court) to give judgment, not that a decision of the CJEU is necessary for the national court to give judgment. At paragraph 21 the Judge cited a passage from the judgment of Chadwick LJ in Trent Taverns Limited v Sykes [1999] EU LR 492 in support of that conclusion, ending with the explanation that “Once it is clear that the question has to be decided by this court, whether or not to seek the assistance of the Court of Justice is a matter of discretion”.

Having identified that threshold, the Judge foreshadowed his decision at paragraph 24 of the Judgment as follows:

The Judge recorded (at paragraph 28) the Club’s submission that, given that the court was not in a position to say that the Club would not succeed in its human rights argument under Article 34(1), it was impossible to say that it was necessary to answer the questions the Judge proposed to refer to the CJEU. The Judge rejected that argument in the following terms:

As for the imminence of Brexit, the Judge referred at paragraph 9 of the Judgment to the submission by Spain that the end of the implementation period (and the inability to make a reference thereafter) was a relevant consideration in the timing of the argument. The Judge stated that he would consider later in the Judgment what relevance, if any, the ending of the implementation period had to the decision he was going to make. The Judge did not, however, go on to explain why he considered it appropriate to accelerate the decision to make a reference (if indeed he considered that he was doing so), nor to indicate why he was making the decision prior to determining the human rights issue. The further consideration of the relevance of the end of the implementation period in the Judgment was limited to the following:

In paragraph 46 the Judge rejected the Club’s submission that the fact that the United Kingdom would cease to be a Member State at the end of the year meant that the question of whether a judgment under section 66 of the 1996 Act could be invoked to prevent the enforcement of a judgment from a Member State would not be important. The Judge stated that similar issues could arise in relation to the legal system of a continuing Member State and would remain germane for parties to the Lugano Convention if the UK accedes to it in its own right.

In paragraph 52 the Judge stated that he had not taken into account as being in favour of making a reference that, unless he made a reference, no appellate court would be able to do so because of the imminent end of the implementation period. Nevertheless, the Judge added the following:

The Court of Appeal first considered (and gave guidance as to) the making of a reference to the CJEU under Article 267 (then Article 177 of the Treaty of Rome) in H.PBulmer Ltd v J. Bollinger SA [1974] Ch 401. Lord Denning MR explained (at 421D) that, before making a reference to the CJEU, there was a condition precedent to be fulfilled, namely, that the English court (as opposed to the CJEU) considers it necessary, emphasising that if the English judge considers it necessary to refer the matter, no one can gainsay it save the Court of Appeal. As for whether a decision is necessary, Lord Denning stated at 422D as follows:

In further guidance at 423C, Lord Denning emphasised that, as a rule, it was best to decide the facts of the case before making a reference:

Stephenson LJ (with whom Stamp LJ agreed) explained the test of necessity at 428C as follows:

Applying that principle to the case before the court, Stephenson LJ upheld Whitford J’s decision not to accede to a request to refer at a preliminary stage a question to the CJEU which might not require determination after hearing the evidence, explaining at 428G as follows:

Because Stamp LJ agreed with the judgment of Stephenson LJ without expressing agreement (or for that matter disagreement) with the judgment of Lord Denning MR, it is the judgment of Stephenson LJ which must be taken as authoritative. However, there is no disagreement between them so far as the passages set out above are concerned and those passages of Lord Denning’s judgment have been followed in later cases.

In Polydor Ltd v Harlequin Record Shops Ltd[1980] 2 CMLR 413, this Court allowed an appeal from the grant of an injunction to restrain the importation of records of a particular song from Portugal in alleged breach of the plaintiffs’ copyright; and at the same time made a reference to the European Court of Justice of the question whether European law precluded any infringement (which the Court held it clearly did). The plaintiffs advanced an argument, relying on Lord Denning MR’s judgment in Bulmer, that the test of necessity was not fulfilled on the grounds that (i) there were other defences advanced, unrelated to the European law point, which might render it academic, and (ii) there was a factual issue which also remained to be resolved in relation to the importation of the records of the particular song which formed the subject matter of the action. Both members of the Court rejected the first ground on the basis that the defendants had abandoned all other defences. Templeman LJ rejected the second on the basis that the factual issue was precluded by the evidence. Ormrod LJ rejected it on the basis that it was “peripheral”. He observed that the European law issue was of enormous importance to the record industry and was the “broad issue” on which they should deal with the case, being the issue on which all parties wanted a decision; in those circumstances the sooner the European Court gave a definitive ruling the better. In that context he said at [70]:

In my view this dictum of Ormrod LJ, when viewed in its context, is not inconsistent with Lord Denning MR’s test in Bulmer, that the answer to a question referred must be “conclusive”. The factual issue in relation to the one record which was the subject matter of the existing proceedings was essentially irrelevant to the “broad issue” between the parties, which was as to the legality of importation into the United Kingdom of records manufactured in Portugal more generally. On the broad issue, the European law question was conclusive.

Bulmer and Polydor were considered by the Divisional Court (Lord Lane CJ, Woolf J) in R v Plymouth Justices ex pte Rogers[1982] 1 QB 863. In that case the master of a Spanish trawler was prosecuted for breaching regulations restricting access of Spanish fishermen to UK waters. On a submission of no case to answer at the conclusion of the prosecution case, the magistrates referred to the European Court of Justice the question whether the regulations were invalid. On the appeal by way of judicial review, the Divisional Court considered an argument that a reference was not necessary on the grounds that the defence had intimated an issue of fact which would afford a defence if the regulations were lawful, upon which the magistrates had not yet heard evidence, and that therefore a decision on the validity of the regulations was not necessarily determinative of the outcome of the case. In rejecting the argument, Lord Lane CJ treated it as tantamount to a submission that there could never be a reference before the facts had been found, and said that such an approach was inconsistent with the general approach articulated by the European Court to Article 177, citing Rheinmuhlen-Dusseldorf v Einfur- und Vorratsstelle fur Getreide und Futtermittel (Case 166/73)[1974] ECR 33 at 38. He went on to refer to the “more generous interpretation” given to Article 177 in Polydor, citing the dictum of Ormrod LJ in that case. The reasoning of this decision, too, is consistent with the approach of Lord Denning MR in Bulmer, in recognising a distinction between the outcome of the issue which the court is being called on to decide, and the outcome of the case or dispute between the parties as a whole. The Divisional Court held at 870B-C that the submission of no case to answer required the magistrates to decide whether the regulations were valid; if they were, the outcome of the submission would be that the case would continue, and the factual issue would arise; if the regulations were invalid, the outcome of the submission would be a verdict of not guilty. Therefore the validity of the regulations was determinative of the outcome of the application the magistrates were deciding (i.e. whether there was a case to answer), albeit not necessarily determinative of the outcome of the case as a whole. In this sense the referred issue was conclusive. The Court went on at 870E-F to treat the factual issue as one on which the defendant was almost bound to fail so that there was no real distinction between the position at the close of the prosecution case and that which would have obtained after the defence case; and to emphasise that although the magistrates had jurisdiction to make a reference on a submission of no case to answer, it would not usually be a proper exercise of their discretion to do so.

Lord Denning MR’s test in Bulmer was referred to in Customs and Excise Commissioners v ApS Samex [1983] 1 All ER 1042, where Bingham J identified two questions to be answered:

At 1054G Bingham J regarded the necessity test as satisfied where an answer to the question unfavourably to one party would have been the end of its case, whereas a favourable answer would have been “substantially, if not totally, determinative of this litigation”. In R (ex parte Else) v International Stock Exchange [1993] QB 534 Sir Thomas Bingham MR, again referencing Bulmer, stated at 545D that the correct approach was quite clear, namely that a reference may be made: “if the facts have been found and the Community law issue is critical to the court’s final decision…”.

In Trent Taverns the question arose as to whether a reference should be made by the Court of Appeal hearing an appeal from an interlocutory order striking out an amendment to the defence and counterclaim of a lessee of a tied public house. The amendment added an Article 85 Community law ground, which was additional to domestic law grounds for rescission for misrepresentation which were already pleaded. Chadwick LJ stated that the test of necessity was met because a decision on the question of Community Law was necessary to enable the court to give judgment on the appeal. However, even in those circumstances the court declined to make a reference as a matter of discretion as the point might become academic following the trial, Chadwick LJ explaining at 499E as follows:

In Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] 1 WLR 2295, [2003] EWCA Civ 327 Chadwick LJ again recognised that the test of necessity was met in relation to the jurisdictional issues which arose on appeal from a decision on a strike out application, but declined to make a reference as the matter would proceed to trial in any event, explaining as follows:

It is apparent that the decisions in Trent Taverns and Prudential do not lessen or detract from the approach established in Bulmer, and consistently applied thereafter, if the test of necessity is applied to the decision the court is being invited to reach, rather than to the outcome of the dispute as a whole. In both cases the strict test of necessity was met in relation to the appeal before the court (that is to say, a decision on the question was necessary for the court to give judgment on the appeal), because the issue in each case arose on a strike out application and the European law question was critical to the determination of that application. The further question posed by Chadwick LJ in each case was whether, even then and as a matter of discretion, a referral should be made where the question, although conclusive of the appeal, might become academic to the outcome of the dispute between the parties. That explains why that further consideration was expressed in discretionary terms rather than in the language of a “condition precedent” as established by Lord Denning MR in Bulmer.

The strict approach to necessity was again apparent and applied in R (Shirley) v Secretary of State for Housing, Communities and Local Government [2019] PTSR, [2019] EWCA Civ 22, where a reference was sought of questions arising in relation to the first of three grounds of appeal. In rejecting the request, Lindblom LJ stated at [63] as follows:

It is also established that the court considering making a reference can only do so where a decision on the question to be referred is necessary for that court to give judgment, not for another court (such as an appeal court) to do so: see the judgment of the CJEU in Pardini v Ministero del Commercio Con L’Estero (Case C-338/85) at [10].

As the Judge noted in his Judgment, the question of whether a different approach could be taken to the test of necessity in the lead up to Brexit was considered in Eli Lilly v Gentech. The Judge correctly recorded that Arnold J had referred a question to the CJEU, even though it did not arise based on his decision, because the Court of Appeal, on an appeal against his decision, might not be able to make a reference following Brexit. However, the Judge was not informed that, by the time of the Judgment, the CJEU had already ruled, in a reasoned order dated 5 September 2019, that Arnold J’s request for a preliminary ruling was “manifestly inadmissible” because the test of necessity was not met. The Court explained as follows:

Provided that the condition precedent of necessity is satisfied, the timing of any reference to the CJEU is a matter for the national court, as emphasised by the CJEU itself in Irish Creamery Milk Suppliers Association v Government of Ireland [1981] 2 CMLR 455, pointing out at [8] that the decision must be dictated by considerations of procedural organisation and efficiency to be weighed by that national court. The ability of national courts to achieve procedural efficiency is not compromised by a strict test of necessity once it is recognised that the test falls to be applied to the outcome of the issue which the court is called on to decide, not the outcome of the dispute between the parties. So in both Trent Taverns and Prudential, the necessity test was satisfied because the issue before the court arose on a strike out application, notwithstanding that the issue might prove to be academic to the outcome of the dispute between the parties. So too in ex pte Rogers, the European law issue was determinative of the application to dismiss, albeit not necessarily determinative of the outcome of the prosecution as a whole. It is open to a national court, if it considers it appropriate in the interests of procedural efficiency, to isolate for separate determination the question upon which European law is determinative, even if that involves a question which will not necessarily be determinative of the outcome of the dispute between the parties because, for example, that outcome will depend upon subsequent fact-finding, the delay and expense of which will be avoided if (but only if) the issue is resolved in one way. Sometimes a decision on a question of EU law may be necessary to enable a national court to give judgment even though the proceedings will continue however the question of EU law is decided. An example is the Factortame litigation, where a question of EU law as to the court’s power to grant interim relief was referred to the Luxembourg court (see [1990] 2 AC 85). An answer to the question referred was critical to whether an injunction should be granted. But whatever the answer, the proceedings would continue.

Providing the European law question is conclusive of the issue which the national court has to decide on a particular occasion in accordance with its national procedure, the necessity test will be fulfilled. Under our domestic procedure, an order for the determination of a preliminary issue is one obvious means of achieving that result. Applying the test of necessity in this way is not, therefore, tantamount to saying that there can never be a reference before determination of the facts, and is not inconsistent with the European Court approach articulated in Rheinmuhlen and Irish Creamery. In the present case, however, there was no order that a preliminary issue to be determined and accordingly the question which the Judge had to decide was whether to dismiss the Club’s appeal or to allow it and set aside the order for registration of the Spanish Judgment.

The timing at which to get a ruling was one of the matters addressed by Lord Denning MR in the guidelines he established in Bulmer, referring in particular to the delay which may be caused in the progress of the case by a reference to the CJEU. The same point was addressed by Stephenson LJ, who said at 430C that “the basic requirement” is “that the decision of the question raised must be necessary at the time the reference is requested…”

In my judgment it is entirely clear that a decision on the questions referred to the CJEU in the present case was not necessary for the Judge to give judgment on the appeal before him as that term has been interpreted in the authorities referred to above. Unless and until the Judge had determined the human rights public policy issue against the Club, the questions referred could not be said to be conclusive or even substantially determinative of the appeal and it remained entirely possible that the questions referred would, in the end, be academic: the questions could have been resolved entirely in Spain’s favour, yet the Club could have won on the human rights issue. In paragraph 32 of the Judgment the Judge expressly recognised that the Club could win solely by reference to the human rights issue, a point he was not in a position to decide at that time (and, indeed, in respect of which he was yet to receive further submissions from the parties).

It follows that the Judge recognised that a decision on the questions referred was not necessary in the sense described above. It is apparent from paragraphs 24 and 31-33 of the Judgment that the Judge instead relied (i) on the fact that a decision on the questions referred was necessary for him to give “judgment on the issues before him” and (ii) on the fact that, even if the Club were to win on the human rights issue, the questions would arise for decision on an appeal, meaning that the points should be regarded as critical to making a proper decision.

With respect to the Judge, that approach was flawed and failed to take into account the applicable legal principles and authorities:

In referring to giving “judgment on the issues” the Judge meant his reasons delivered on the issues, being the justification of the order he would ultimately make. However, the term “judgment” in Article 267 is not referring to the giving of reasons, but to the order or determination resulting from those reasons. It is also clear that the authorities discussed above had in mind that meaning of “judgment” in formulating the test of necessity: see for example Lord Denning MR’s explanation that a decision being necessary to give judgment meant that the judge must have got to the stage where he could enter judgment for one party or the other based on the outcome.

The Judge therefore considered that a decision was “necessary” on a question, even if a decision on the relevant point was ultimately not strictly required, so that his reasoning in that regard would be obiter. That approach falls foul of the approach established in Bulmer and applied consistently by the Court of Appeal up to and including Shirley. Even in cases where a decision on an issue was strictly necessary at an interlocutory stage, the court has exercised its discretion not to refer the question if it may ultimately be academic.

Taking into account the possibility that a point may need to be decided in a different court is impermissible and cannot, on a proper application of the test of necessity, make a decision on a question “critical” when it would not otherwise properly be so regarded.

Mr Young QC, on behalf of Spain, whilst accepting that the authorities laid down a “materiality test” for making references to the CJEU, argued that that test was not one of jurisdiction, but was a matter relevant to the Judge’s discretion. He argued that the test in Article 267 focused on the perception of the Judge as to what was necessary and that he was best placed to make that assessment in the context of the appeal he was hearing. The Judge had looked at the matter broadly and judged it by appropriately wide criteria: it could not be said that he had “rushed to make a reference” when it was being made at the conclusion of a trial. In summary, Mr Young argued that the Judge exercised his discretion on the right principles and did not act irrationally, seeking help from the CJEU on relevant issues at the right time.

I do not accept those submissions for the following reasons:

A decision to make a reference under Article 267 is not a purely discretionary matter, there being a legal test of necessity that must first be satisfied. The Judge himself referred to the necessity test as being one of “jurisdiction”. Lord Denning MR described it in Bulmer as a condition precedent, arising before the exercise of discretion.

Whilst consideration of whether that test is satisfied is a matter for the English judge in the first place (rather than the CJEU), it is not a purely discretionary exercise and may be reviewed by the Court of Appeal (per Lord Denning MR in Bulmer) and may be overturned by the CJEU (as in Eli Lilly).

The judge’s discretion as to whether to make a reference only arises once the test of necessity has been satisfied. The cases referred to above where the Court of Appeal exercised a discretion not to refer were ones in which it was recognised that the necessity test had been met (Trent Taverns and Prudential).

In any event, the Judge applied the wrong test in considering the issue of necessity.

Mr Young next argued that the Judge was effectively treating the issues which gave rise to the questions referred as preliminary issues which he wished to decide, therefore justifying a reference as the answers to the questions were necessary for him to do so. I recognise, of course, that a court may need to decide matters on a preliminary or interlocutory basis which will justify a reference. That, however, was not the situation in the present case. The Judge had heard all of the issues on the appeal together and was proposing to give judgment on them all together. There is no doubt (as he recognised) that his determination of the human rights issues might render the answers to the questions unnecessary in a strict sense, relevant only on an appeal.

Mr Young further argued that the test of necessity cannot be applied too rigidly, as to do so would sometimes prevent the reference of multiple questions even if cumulatively decisive, as would have been the case here but for the human rights issue. If each question had to be decisive, he argued, none of the questions in the present case could properly be referred. Again, I see no merit in that point. The reference to the singular “question” in Article 267 must include the plural, and I see no difficulty with the necessity test if the answers to all the questions referred will cumulatively be conclusive of the case before the referring judge.

It follows that I am satisfied that the test of necessity under Article 267 was not met on 21 December 2020, with the result that the Judge did not have a discretion to make a reference to the CJEU on that date. Unless and until the Judge had decided that the Club would not succeed on its human rights ground, the time to consider referring the questions of EU law had not arrived.

It follows that I consider that the Judge was wrong to make the reference to the CJEU. In the ordinary course I would allow the appeal, but in this case it is necessary to go on to consider the jurisdiction of the Court in that regard.

The Court of Appeal has consistently exercised jurisdiction to entertain appeals from decisions to make (or not to make) a reference under Article 267 (or its predecessors), including Bulmer, cited above. In both Else and R (A) v Secretary of State for the Home Department [2002] 3 CMLR 14 the Court of Appeal set aside references made at first instance on the ground that the question referred was acte claire.

Spain contends that approach cannot be followed in the light of the decision of the CJEU in Cartesio Oktato es Szolgaltato bt (Case 210/06) [2009] Ch 354 (considering Article 234 EC, the predecessor to Article 267), a decision which remains binding in this jurisdiction by virtue of sections 4 and 6 of the European Union (Withdrawal) Act 2018. The CJEU, referring to itself as “the Court”, explained as follows:

Spain contended (Footnote: ⁵) that the meaning and effect of Cartesio is that, whilst an appellate court can entertain an appeal and can deliver an “advisory” judgment (if that is possible as a matter of English law, which it disputed), such a court cannot set aside or vary the order making the reference below.

I do not agree that the judgment in Cartesio is to be read in that way. The CJEU stated expressly in each of paragraphs 89 and 93 that Article 267 does not preclude a decision to make a reference for a preliminary ruling from being subject to the remedies available on appeal under national law. It is also clear that the remedies the Court had in mind included setting aside the reference (see in particular paragraph 92). It could not be clearer, in my judgment, that as a matter of national law a reference can be set aside on appeal.

The qualification is that, even if an order is made by the national appellate court to set aside the order, the reference will continue because the Court (that is to say, the CJEU) will continue to abide by the decision of the referring court to make the reference and it will have full effect unless and until withdrawn by the referring court (see paragraph 97). Whilst as a matter national law and procedure the decision to refer may have been set aside, as a matter of EU law the reference is considered to have been validly made unless withdrawn.

The position is further clarified by the reference in paragraph 96 to the need for the referring court “to draw the proper inferences from a judgment delivered on an appeal against its decision to refer”: this cannot be read as being limited to an “advisory” judgment as the CJEU has made plain throughout this section of its judgment that it has in mind an appeal seeking the usual remedies available in the national court.

I therefore conclude that this Court has all of its usual powers on this appeal and that it may, if appropriate, set aside the Judge’s order. Making such an order would not stop the CJEU from entertaining the reference, which has been lodged and (we were informed) has been allocated a hearing date. The CJEU will continue to regard the reference as having been made within the Judge’s jurisdiction (subject to itself ruling it manifestly inadmissible as in Eli Lilly) and would only cease to do so if the Judge, on consideration of this Court’s judgment, decided to withdraw the reference himself (having considered this Court’s judgment). This Court also has the power, without setting aside the decision to remit the matter to the Judge to consider whether to withdraw the reference in the light of the Court’s judgment.

I should add that we were referred to IS v Hungary (Case C-564/109), a decision of the CJEU which post-dates IP Completion Day and therefore is not binding on us, but to which we can have regard. The decision concludes at [82] that Article 267 precludes the supreme court of a Member State from declaring, following an appeal, that a request for a preliminary ruling by a lower court is unlawful on the grounds that the questions referred are not relevant and necessary and that the principle of the primacy of EU law requires that lower court to disregard such a decision. On its face, that decision appears to be inconsistent with Cartesio in a number of respects, and is perhaps explicable by the extreme facts, the Hungarian supreme court adopting the position that conformity of Hungarian law with EU law could not be the subject of a reference for a preliminary ruling. In my judgment it should not change the approach of this Court informed by the decision in Cartesio.

For the reasons set out above I would allow the appeal and, being satisfied that the Court has its usual powers and that there is no good reason to refrain from exercising them, would set aside the Judge’s order referring the questions to the CJEU. Consistently with the approach referred to in paragraph 96 of Cartesio, I would also refer to the Judge, pursuant to CPR 52.20(2)(b), the question of whether, in the light of this Court’s judgment, the reference he made to the CJEU on 21 December 2020 should be withdrawn by him.

Following the circulation of the draft of this judgment, the parties informed the Court that the reference was heard by the CJEU on 31 January 2022 and that the opinion of the Advocate General is expected on 5 May 2022, with the judgment of the CJEU to be delivered at any time thereafter. The Club applied for an order that the determination of the question I propose be referred to the Judge should be expedited to ensure that any decision to withdraw is communicated as soon as possible and in any event prior to the judgment of the CJEU (withdrawal being permitted and effective at any time until notice of the date of delivery of judgment has been served). For my part, I consider that it is sufficient for this Court to indicate that the hearing before Butcher J should take place as soon as possible, and in any event in time for any decision to withdraw the reference to be effective.

I agree.