B. Alleged Irrelevance of Customary International Law as a Parameter of Validity of EU Secondary Legislation

The questions posed by the High Court of Justice were the following. The first question concerned the existence of rules of international law capable of being relied upon by an individual to challenge the validity of the Directive. The High Court distinguished between rules of customary international law (CIL) and rules of treaty law. With regard to the first, the High Court detected four such rules: (a) the principle that each state has complete and exclusive sovereignty over its air space; (b) the principle that no state may validly purport to subject any part of the high seas to its sovereignty; (c) the principle of the freedom to fly over the high seas; and (d) the principle that aircraft overflying the high seas are subject to the exclusive jurisdiction of the country in which they are registered, save as expressly provided for by an international treaty. With regard to treaty law, the High Court mentioned some articles of the 1944 ICAO Chicago Convention, articles of the US/EU Open Skies Agreement of 2007, and one article of the 1997 Kyoto Protocol.

To the extent that question one might be answered in the affirmative, the referring Court asked whether the Amended Directive was invalid in so far as it applies the ETS to parts of the flights which take place outside the EU airspace and are contrary to any article of the previously mentioned conventions.

One omission in the list of these conventions catches the eye: why not the United Nations Convention on the Law of the Seas of 1982? The answer is quite obvious, after the Court's Intertanko decision of 2008, a preliminary ruling referred to by the same High Court of Justice. It will be recalled that in that unfortunate decision, the Court had stated that UNCLOS's ‘nature and broad logic’—whatever it meansFootnote ⁴—barred the Court from recognizing direct effect to any norm contained in it.Footnote ⁵ Be as it may with the coherence of the Intertanko decision, on which we will shortly come back, the Court adopted a similar approach in the present case, when dealing with the fundamental question to what extent may a CIL rule be relied upon by an individual to challenge the validity of an EU secondary norm. The Court set three requisites: the rule must form part of customary international law; it must be able to call into question the competence of the EU institutions to adopt such an act; and finally, the act in question must be liable to affect individual rights.

The Court found that some of the CIL rules referred to by the High Court indeed satisfied the three requisites. This could be seen as a major statement by the Court, one which will surely be remembered in the history of EU law as a significant testimony of the ‘monistic’ outlook and openness of the ECJ towards international law. It will be recalled that in the Racke judgment of 1998 the Court had already had the opportunity to answer in the affirmative whether an individual could rely on CIL rules. However, in that case it had specified that its ruling did not concern the direct effect of those rules, since they were relied upon only ‘incidentally’, in order to challenge the validity of a Regulation which had suspended the application of a treaty provided of direct effect.Footnote ⁶ The present judgment now accomplishes that further step, but it shares the character of quite a few of other ECJ's leading cases, of being ‘grandiose on principle without being of much help for the individual concerned’.Footnote ⁷ The Court aptly takes advantage of the alleged imprecision of the CIL rules at issue, to repeat what it had already stated in the Racke case, ie that judicial review must ‘necessarily be limited to the question whether … the Council made manifest error of assessment’.Footnote ⁸

With this caveat in mind, the subsequent enquiry of the Court to assess the existence and content of the four CIL rules previously mentioned resembles little more than an academic exercise. As regards the first three principles referred to, the Court has no difficulty in seeing them well anchored in CIL, and with regard to the first—state's exclusive sovereignty over its own air space—the Court ventures to quote the Nicaragua judgment of the International Court of Justice. It is noteworthy that in order to assess the CIL quality of these rules, the Court does not shy back from referring to UNCLOS as evidence, as it had actually already done in the Poulsen and Diva Navigation case of 1992.Footnote ⁹ It was exactly the Poulsen precedent, which had led the Advocate General in her conclusions in the Intertanko case to argue for the capability of UNCLOS to produce direct effects.Footnote ¹⁰ The Court is apparently unaware of the methodological contradiction in which it manoeuvres itself. Given the fact that UNCLOS was discarded as a whole as a parameter of legitimacy of a Directive four years ago, how is it possible that an analogical application of the same UNCLOS may now serve as a mould for the existence of an international customary norm to that same effect? Furthermore, it will be recalled that the reason why the Court had denied direct effect to UNCLOS, was that the rights therein inscribed do not directly accrue to individuals, but are those of registered ships, depending in last resort on the rights of the flag state. Now it is not at all clear why the Court did not draw the same conclusion with regard to aircraft, as the Advocate General had suggested in her conclusions,Footnote ¹¹ unless one regards the ATA decision as an implied reversal of the Intertanko precedent.

However, it is with regard to the fourth CIL norm, the principled exclusive jurisdiction of the flag state over aircraft flying over the high sea that the Court decided to break the parallelism between the UNCLOS and CIL. As is known, Article 92(1) UNCLOS codifies the rule that vessels on the high sea are subject to the exclusive jurisdiction of the flag state, but for the Court there is no evidence that such a rule analogically applies to aircraft. This is allegedly not the case in the framework of the UNCLOS, and even less so in CIL. One may wonder whether the Court did really investigate the matter or was rather too ready in endorsing the negative opinion expressed by the Advocate General,Footnote ¹² as well as by the British and, ‘to a certain extent’ by the German government, which the Court expressly refers to.Footnote ¹³

Having conveniently disposed of the fourth, annoying customary international principle, the Court proceeds to investigate how the remaining three may affect the EU competence to legislate. Here the Court's reasoning assumes ubuesque features in order to deny any extraterritorial effect of the Directive. The first principle, territorial state's exclusive jurisdiction, is not violated—says the Court—because the aircraft are subjected to the allowance emission trading only when voluntarily present in the territory of an EU Member State, hence subjected to the ‘unlimited’ territorial jurisdiction of the latter.Footnote ¹⁴ The second principle, absence of sovereignty over the high seas, is not violated because the EU does not impose its normative will on foreign aircraft just for the fact of overflying the high sea, but for the fact of their presence in the territory of EU Member States at a certain moment. The third principle, freedom of overfly, is not violated to the extent that the mere fact of high seas overfly, as such, does not make the aircraft subject to the allowances trading system.

The Court's strenuous attempt to be faithful to its previous jurisprudence hostile to extraterritorial legislative jurisdiction is remarkable for its ingenuity,Footnote ¹⁵ but fails to convince. The Court quotes two precedent cases, the Ahlström Osakeyhtiö (better known as Wood Pulp) case of 1988 and the Commune de Mesquer case of 2008, in order to demonstrate that the territorial principle is not put into question by the fact that ‘certain matters […] originate in an event which occurs partly outside the territory’.Footnote ¹⁶ Unfortunately, they both do not support the Court's thesis. In the celebrated Wood Pulp case, the Court had said that ‘the decisive factor’ was the place where the anti-competitive agreement was ‘implemented’,Footnote ¹⁷ meaning the place where the agreement was intended to display its effects. The case at hand is completely different: the fact that a flight lands or takes off from a certain aerodrome is an inevitable technical necessity in order to transport passengers or goods from point A to point B of the earth, but this does not mean that an intercontinental flight is ‘implemented’ in Europe. In the Commune de Mesquer case, which dealt with coastal pollution having had its origin in an oil spill in the exclusive economic zone of a Member State, the Court even expressly said that it had not to judge on the applicability of the Directive ‘at the place where the ship sank’, since ‘the hydrocarbons thus accidentally spilled drifted along the coast until they were washed up on it, so being discharged on the member State's land territory’.Footnote ¹⁸ In this case too, the relevant facts, ie the actual pollution, entirely occurred on the territory of a Member State.

Albeit in the different context of the EU's competence to adopt the Directive, the Court refers also to the Mondiet case of 1993.Footnote ¹⁹ This is a very interesting, and very telling, reference. What was at issue in that case was to decide whether the Community had competence, alongside the Member States, to adopt technical measures for the conservation of fishery resources in maritime waters that were not under the sovereignty or jurisdiction of the Member States, and the Court rightly affirmed such competence. In that context the Court affirmed that ‘the Community has the same rule-making authority in matters within its jurisdiction as that conferred under international law on the State whose flag the vessel is flying or in which it is registered’.Footnote ²⁰

To mention the Mondiet precedent in the present case amounts to an implied confession of sin. Undoubtedly international law confers wide-ranging powers to the flag state, but does international law confer similar powers to the port state as well? It is remarkable that neither the Advocate General nor the Court (but for that matter, nor the High Court itself) thought to draw the most obvious analogy between Directive 2008/101 and the port state control theory.

As is well known, Article 218 UNCLOS introduced an innovative rule, when it extended some of the customary powers of the flag state to the port state as well. Under Article 217 UNCLOS the flag state shall ensure the compliance of the ships flying its flag not only with international rules and standards but also with its own laws and regulations adopted in conformity with the Convention, and ‘shall provide for an effective enforcement of such rules, standards, laws and regulations irrespective of where the violation occurs’. Differently from the enforcement powers of the flag state, Article 218(1) makes clear that the port state may institute proceedings with regard to any discharge from a vessel outside its internal waters, territorial sea or exclusive economic zone, but only when it occurred ‘in violation of applicable international rules and standards established through the competent international organization or general diplomatic conference’. Furthermore, Article 218(2) specifies that no proceedings pursuant to paragraph 1 may be instituted by the port state in respect of a discharge violation in the internal waters, territorial sea or exclusive economic zone of another State unless requested by that State or by the flag State, or ‘unless the violation has caused or is likely to cause pollution’ in the internal waters, territorial sea or exclusive economic zone of the port State. It is generally understood that the international standards referred to are those set forth in the IMO Convention for the prevention of pollution from ships (Marpol Convention) of 1973/78.Footnote ²¹

This helps to understand the Advocate General and the Court's strategy. In the Intertanko decision the Court had already excluded that the EU, which is not a party to Marpol, is bound by its rules. For its part, the EU had already showed its preparedness to act unilaterally in defiance of Marpol Rules, when, after the disaster of the Prestige oil tanker's massive pollution of the coast of Galicia in October 2002, it decided to permit transport of heavy grade oil only by double-hull oil tankers.Footnote ²² In that case the EU's muscle flexing was successful, because a few months after the adoption of Regulation 1726/2003, the Assembly of the Parties decided to amend the Rules of Annex I to Marpol, in order to impose a worldwide ban of single hull oil tankers from 2005.

But, even if it is understandable that in the present case the Court preferred not to tread the impervious terrain of the port state control theory, also in order to avoid the risk of being perceived as a complicit in the art of political brinkmanship, it is striking that the Court did not use any other of the arguments either, which the Advocate General had advanced in order to buttress the credibility of the ‘territoriality approach’.

The Advocate General tried indeed to anchor the Directive's choice on the apparently more solid legal ground of general principles, but her attempt is not convincing. She argued that ‘taking account of the whole length of the flight is ultimately an expression of the principle of proportionality and reflects the “polluter pays” principle of environmental law’.Footnote ²³ One can concede that the fact to hold an aircraft operator liable for the whole of the emissions of the entire flight corresponds to the principle of proportionality, in abstract terms, as well as to the principle of ‘polluter pays’. The mention of ‘proportionality’ in this context, however, can be understood only if one posits himself on a universal plane, in a supposed civitas mundi, but then the question inevitably pops up of why should the EU assume the role of legislator, fee collector, and lastly exclusive beneficiary of the revenues, for the sake of the entire world. A common-sense understanding of proportionality would rather demand that the EU imposes its ETS only to the percentage of emissions, which are actually discharged in the European airspace, not on the high seas, and even less in the airspace of other states. The Advocate General's arguments seem to implicitly endorse a new doctrinal trend, which aims at redefining the extraterritoriality issue in terms of a rational allocation of ‘international public authority’. The purpose of this doctrine is to shift the focus from a formalist approach based on territorial factors to a ‘cosmopolitan pluralist’ theory of jurisdiction based on new forms of community affiliation with a focus on the elaboration of adequate standards such as transparency, participation, reasoned decision-making, accountability and effective review mechanisms.Footnote ²⁴ However, even some sympathetic observers have warned against a too ready enthusiasm in finding operational solutions.Footnote ²⁵

The Advocate General's main thrust is condensed in the following statement: ‘Such an approach reflects the nature as well as the spirit and purpose of environmental protection and climate change measures’.Footnote ²⁶ This is self-explanatory, as well as it is self-absolutory, but it is lastly also self-defeating. The legal crux of the issue resides in the difficulty to demonstrate that international law has progressed so far as to impose on each and all an obligation to abate Greenhouse Gases (GHG) emissions. The only conceptual tool would be to raise the environmental ‘common interest of mankind’ to an erga omnes obligation,Footnote ²⁷ but it is understandable that the Advocate General shies away from spelling out or even hinting at such a daring idea.

From its very silence it can be inferred that the Court did not share the Advocate General's commitment and universalistic common-good approach. But, without that strong political underpinning, the legal arguments of the Court look scant and shaky. It is interesting to see how the Court skips the major hurdle of the proportionality issue. For the Court ‘the goal of ensuring a high level of protection of the environment’, inscribed in Article 191(2) TFEU, coupled with the alleged lack of legal relevance of the fact that parts of the events take place outside the EU territory, are sufficient arguments to state ‘the full applicability of EU law in that territory’.Footnote ²⁸ The Court's approach is even more tautological that the Advocate General's efforts to found the Directive's validity on general principles, and lays on the presupposition of a supremacy of EU environmental law in comparison with any other legal source.

If it is only understandable that the Court shies away from such a radical statement, it is true that the time should by now be ripe for the Court to embrace more openly the extraterritorial ambition of EU law. It is a commonly held wisdom that only powerful and self-assured states, such as the US, do not hesitate to assume the extraterritorial scope of their legislation or adjudicatory powers, whenever they think that this is necessary to hold their ground, and possibly globally impose their views.Footnote ²⁹ European tradition is obviously a different one, but one can question how much this depended on a legal perspective rather than on a strategically political choice. The Court is not even prepared to acknowledge its jurisprudence on the territorial reach of the EU's competition rules as an application of the so-called ‘effects doctrine’, which could still be disguised as a variation of objective territorial jurisdiction. It is therefore more than doubtful whether the Court, without a major cultural change on its bench, would now be prepared to assume the effects doctrine, if reframed as an expression of the protective principle, ie the principle permitting a state to protect itself against serious detrimental repercussions from abroad.Footnote ³⁰ Obviously a problem would arise about how to circumscribe interests of states worth to be protected, and this consideration would not hinder such jurisdiction from still being labelled extraterritorial anyway.Footnote ³¹ Yet the EU's determination in ‘combating climate change’ is now inscribed in Article 191(1) TFEU, and the global dimension of climate warming lends a universalistic clout to the EU concerns. If in the present case the Court had openly supported this perspective, instead of hopelessly clinging to traditional but misplaced legal concepts, it would have rendered the EU and its environmental policy a better service.

By the way, the Advocate General's enthusiasm in embracing a ‘one common planet, one common responsibility’ philosophy makes place for some very pragmatic, down-to-earth considerations. At a later point, dealing with some aspects of the Open Skies Agreement, the Advocate General candidly stated what she could as well have uttered at an earlier point, namely that ‘[i]f the EU legislature had excluded airlines holding the nationality of a third country from the EU emissions trading scheme, those airlines would have obtained an unjustified competitive advantage over their European competitors’.Footnote ³² Once again, but here not unjustified, the Court decided to ignore the suggestion.Footnote ³³

C. Alleged irrelevance of international treaty law as a parameter of the validity of EU secondary legislation

If the part of the judgment dealing with questions of international customary law leaves the international law scholar with an alternate sense of incredulity and irritation, the part dealing with treaty law is better engineered but not more convincing.

The first treaty to deal with is the ICAO Chicago Convention. The obstacle would seem weighty, if one considers that it is in the ICAO framework that for the last 65 years all legal policies regarding international civil air traffic have been discussed, negotiated and decided upon. The point is that, whereas all Member States are parties, the EU is not. Both the Advocate General and the Court swiftly dismiss the applicability of the Convention, with the argument that there has not been any functional succession. As for the hurdle of Article 351 TFEU, it has by now become routine to circumvent it with the formalistic argument that the respect due to former treaties of EU members does not mean that the EU is bound by them. Therefore the Court can ignore Article 12 of the Chicago Convention (Rules of the Air), which foresees that ‘over the high seas, the rules in force shall be those established under this Convention’.

The Court is not any more impressed by Article 2(2) of the Kyoto Protocol, to which the EU is a Party alongside its Member States, and which imposes on the Parties included in Annex I to pursue limitation or reduction of GHG emissions from aviation and marine bunker fuels, and not controlled by the Montreal Protocol, ‘working through the International Civil Aviation Organization and the International Maritime Organization, respectively’. Here the Court does not follow the path of a restrictive interpretation suggested by the Advocate General, and resorts to the well-tried and true argument of the (alleged) lack of direct effect of the Protocol.Footnote ³⁴

By these partly rhetorical devices the Court hopes to have warded off the spectre of an international organization intruding into the realm of EU law. As we will later see, most probably this will not be the case. Article 84 of the Chicago Convention offers a dispute solution mechanism, which although not judicial, is far from being ineffective, as the EU itself experienced 13 years ago in the so-called ‘noise war’ dispute with the US.Footnote ³⁵ That dispute had striking similarities with the present one. In the late 1990s, the issue of aircraft noise was actively dealt with in the ICAO's Committee on Aviation Environmental Protection. However, the EU, impatient with the slow pace of negotiations, adopted engine noise standards stricter than those specified in Annex 16 of the ICAO Convention. Most US airlines thought to comply with the stricter standards by retrofitting aircraft engines with ‘hush-kits’, instead of purchasing new aircraft. The EU Commission, dissatisfied with this perspective, submitted a proposal to the EU Council to adopt a new regulation, in which the parameter of engine performance would substitute that of decibel level. Regulation 925/1999Footnote ³⁶ was adopted, but its implementation was delayed one year pending negotiations with the US. US airline companies, which had already invested considerable sums in hush-kitting their airplanes, filed a complaint with the US Department of Transportation against the then 15 EU Member States, and the US Government brought the dispute to the ICAO Council under Article 84 of the ICAO Convention. The EU tried unsuccessfully to raise preliminary objections against the ICAO's Council competence, and the Member States had no other choice than to look for a consensual settlement within the ICAO. In June 2001 the ICAO Council adopted new noise standards, adhering in substance to the US position, and in October 2001 the parties reached an agreement by which the US would withdraw the complaint and the EU would repeal the engine parameter noise regulation. And so it was done: in March 2002 Regulation 925/1999 was repealed and substituted by Directive 30/2002 ‘on the establishment of rules and procedures with regard to the introduction of noise-related operating restrictions at Community airports’.Footnote ³⁷

Even more than the Chicago Convention, the real challenge for the Court was the 2007 US–EU Open Skies Agreement (OSA). Here we have a recent treaty, directly negotiated by the EU, with the main purpose to liberalize air traffic between the US and the EU. Its very essence relies on the mantras of growth, liberalization, deregulation and it is prima facie at odds with the regulatory twist displayed by the Directive. The Court was faced with a daunting task to overcome the hurdle. After the burning defeat of Intertanko, where she had unsuccessfully tried to defend the direct effect of some UNCLOS norms, the Advocate General thought to interpret the Court's mind by suggesting it to make the amplest use of its cherished lethal weapon of a purported lack of direct effect of annoying treaties. But here again she did not touch the right chord. There is a consistent pattern in the Court's jurisprudence in recognizing direct effect to treaties, which were directly concluded by the EC/EU, viewing them as ‘an integral part of Community law’.Footnote ³⁸ The ATA Judgment, insofar as it concerns the OSA, is no exception. In order to fully appreciate the Byzantine sophistication, which the direct effect jurisprudence of the Court has reached over time,Footnote ³⁹ it is interesting to notice the subtle degrees of agreement and disagreement between the Advocate General and the Court on the issue.

Not surprisingly the Advocate General and the Court were in agreement in recognizing direct effect to the rules of the OSA, which would not be determinative to the outcome of the case. This is true, for instance, for Article 7, which provides that ‘aircraft engaged in international transport are subjected to the laws and regulations of the contracting party regarding admission, departure, operation and navigation, when they enter, depart from or are within its territory’.

To the contrary, it is noteworthy that the Court was willing to confer direct effect to some norms, which could well endanger the position of the EU institutions. In this regard one of the most worrying provisions of the OSA is Article 11, whose paragraphs 1 and 2 provide that fuel introduced into or supplied in the territory of the EU for use in aircraft of an airline established in the US and engaged in international air transportation will be exempted from taxes, duties fees and charges ‘on the base of reciprocity’. The Advocate General had thought to get rid of the provision, by maintaining that the express mention of reciprocity in the text of the treaty would exclude direct effect, as it can be inferred from the ECJ's jurisprudence on the WTO rules.Footnote ⁴⁰ The Court did not follow her advice, and did not hold the condition of reciprocity as an obstacle to direct effect. The Court, however, was attentive to specify that this was ‘in particular’ true in circumstances such as those of the present case, in which the condition of reciprocity had been so far satisfied.Footnote ⁴¹ Once again the Court is not unequivocal in telling us whether it considers the element of reciprocity relevant or not for the purpose of recognizing direct effect to international treaties, revealing, if need be, its difficulty to openly endorse political considerations in its legal assessment of the thorny issue of direct effect.Footnote ⁴²

As for the merit of the argument drawn from Article 11 OSA, the claimant had an apparently fair chance to demonstrate the nature of ‘charge’ of the ETS, recalling the Court's precedent of the 1999 Braathens case. As it will be recalled, in that case the Court had reached the conclusion that a Swedish statute from 1988, which imposed the levy of duties and other indirect taxes on the consumption of fuel for the purpose of civil aviation was incompatible with Directive 92/81 on the harmonization of the structures of excise duties on mineral oils, which excluded any such charges in the EC single market.Footnote ⁴³

Although with some uneasiness the Court was eventually able to distinguish the precedent and to deprive the norm of any relevance in the present case. The Court held that in contrast to the defining feature of obligatory levies on the possession and consumption of fuel, which constituted the subject matter of that previous case, in the present case there is ‘no direct and inseverable link’ between the quantity of fuel held or consumed by an aircraft and the pecuniary burden on the aircraft's operator in the context of the allowance trading scheme's operation.Footnote ⁴⁴ This is so, because the actual cost for the operator will not entirely depend on fuel consumption, but also on other variables, such as ‘the number of allowances initially allocated to the operator and their market price when the purchase of additional allowances proves necessary in order to cover the operator's emissions’. The Court even ventured to say that an aircraft operator, despite its fuel consumption, could ‘even make a profit by assigning its surplus allowances for consideration’.

Here the reasoning of the Court reaches a sublime degree of surrealism.Footnote ⁴⁵ Either the ETS is intended to make polluters pay or it is a big joke. Undoubtedly operators are granted a start bonus, by receiving a very large amount of free allowances, but if the reduction target must have any credibility, it is unthinkable that the subsequent scarcer amount of free allowances and the subsequent rising market prices for the purchase of additional allowances would not come at a cost. The precedent of the US emission trading scheme for dioxide sulfates emissions in the 1990s, which is often presented as a success, and as a model for the European ETS, is ambivalent. In that case many factors, such as the generosity of free allowances, trading mechanisms such as banking and netting, as well as the agreed strategies of the most important industries to desert the allowances auctions in order to bring the prices down, make it difficult to assess the impact that the US ETS had on actual industrial behaviour. Doubts are voiced from time to time as to the effectiveness of the current EU ETS as well.Footnote ⁴⁶ At any rate, the Court's considerations do not help in making the ETS look any more effective.

Another norm which the Advocate General tried to strip off of direct effect was Article 15(3), first sentence, which provides the obligation to follow the aviation environmental standards set out in annexes to the Chicago Convention, ‘except where differences have been filed’. For the Advocate General this last sentence meant that the individuals could never rely upon certain environmental standards, the power of the EU to file different standards being always unfettered.Footnote ⁴⁷ Here again the Court made a display of magnanimity and held that the mere possibility of a future derogation is not ‘an element defining the obligation’ and does not deprive it of its present efficacy. Nevertheless, in the event the Court dismissed the relevance of the norm, by relying on ICAO Res. 37A-19, adopted by the ICAO Assembly of the Parties in October 2010. An Annex of that Resolution had indeed laid down a set of guiding principles for the design and implementation of market-based measures, but the Court aptly forgot to quote the entire paragraph 14 of the Resolution, in which the Assembly urged State Parties ‘to engage in constructive bilateral and multilateral consultations and negotiations with other States to reach an agreement’, or paragraph 19, in which the Assembly had indeed recognized that ‘in the short term voluntary carbon offsetting schemes constitute a practical way to offset CO2 emissions'.

On the extremely frail basis of that ResolutionFootnote ⁴⁸ the Court felt assured to uphold the international legality of the European ETS as against the ICAO legal framework. The Court's move is particularly daring. Taken its good faith for granted, it is still very amazing that the Court's interpretation of a single non-binding statement, extrapolated from its context, should so openly run counter to what the same ICAO Parties actually intended to say, and made it later abundantly clear. The key elements of the Resolution were clearly enunciated in the following terms: (1) to work through ICAO to achieve a global annual average fuel efficiency improvement of 2 per cent until 2020; (2) to work through ICAO to achieve an aspirational global fuel efficiency improvement rate of 2 per cent per annum from 2021 to 2050; (3) to favour state cooperation in reaching the aspirational goal of keeping the global net carbon emissions from international aviation from 2020 at the same level; and (4) to explore the feasibility of a global market-based scheme. As it is easy to see, each of these points stresses the importance of cooperation and consent, and leaves no place for unilateral measures.

D. Out There in the Cold: International Law Strikes Back

The perspective of a dispute with non-European countries is looming. All non-EU members of the ICAO Council, with the exception of Australia, tabled in 2011 a Draft Resolution condemning the EU's unilateral move.Footnote ⁴⁹ In particular the Governments of the US, China and India have strongly criticized the EU decision. The two latter governments have even prohibited national air companies operating in Europe to submit by 31 March 2012 to the EU Commission the detailed statistics of their 2011 emissions. US airlines have so far complied with this preliminary requirement, in order not to be excluded from the distribution of free allowances, but are vociferous in asking the support of the US Government to take all necessary steps to convince the EU to repeal or radically modify the Directive. The US House of Representatives has already passed a bill prohibiting air carriers from complying with the EU ETS, which is now pending at the Senate.Footnote ⁵⁰

The ways to bring the dispute before an arbitral tribunal are various, but each may present some pitfalls. To start with the US, it could activate the Joint Committee provided for in Article 15 of the OSA, and eventually submit the dispute to the arbitration procedure provided for in Article 19. The probability that an arbitration panel would interpret OSA Articles 7, 11, 15 differently than the Court has is fairly high. However, if this were ultimately not the case, the US would lose the leverage and the comparative advantages, which a multilateral forum such as the ICAO offers. Choosing ICAO for the settlement of the dispute could present a risk as well, given the fact that the EU is not a Party to it. The spectre of a non-cooperating EU would drag the dispute for a long time without any prospect of a reasonably quick, clear-cut solution. Finally, there is the possibility that third states bring the dispute to the negotiations and arbitration mechanisms provided for in their bilateral air service agreements with individual EU Member States, by considering that the ETS enforcement affects the operation of international scheduled air services bilaterally agreed upon.Footnote ⁵¹ Given the absence of any coordination among the different plaintiffs and between the different arbitration tribunals, this would be the worst scenario, both in terms of an overall clarity of the applicable legal standards, and of the enforceability of each judicial solution.

It is in this light that Article 16 of the Amended Directive displays its entire meaning. By assuming the competence to order flight bans in case of non-compliance with the Directive, the EU Commission seems to have already taken into account the high probability of this scenario. In case of an arbitration between the third state and a Member State, or for that matter in case of an arbitration in the framework of the ICAO, the Member State would advance the defence of the non-attribution of the alleged illegal act, and the arbitral tribunal would have to tackle the irksome question of the responsibility of Member States for an act of an international organization in the case of circumvention of their own obligations.Footnote ⁵² Even in the event of a favourable award for the third state, this could not affect the effectiveness of EU sanctions. The possibility for the air company to directly challenge the Commission's ban decision on the basis of the bilateral air service agreement does not seem to augur a better result. If it is true that in the 1980 Burgoa decisionFootnote ⁵³ the Court held that the then Article 234 TEC, now Article 351 TFEU obliges the EU institutions to respect the rights directly conferred to third states individuals by previous treaties concluded by Member States, it is more than doubtful than the Court, applying the Intertanko reasoning, would detect any such individual rights in any bilateral air service agreement.

Of course, one could think that the EU Commission had strategically decided to push through Directive 2008/10 as a bargaining tool in the ICAO negotiations towards a global market-based mechanism for aviation emissions reduction, which would rendered moot any such bilateral dispute.Footnote ⁵⁴ The comparison with the EU's bargaining position at the IMO is instructive. After extensive negotiations, in July 2011 the IMO amended Annex VI of the Marpol, concerning prevention of air pollution from ships, by adding a new chapter, which imposes energy efficiency measures for all ships of 400 gross tonnage and above. It remains to be seen whether the EU will be as successful at the ICAO. On the one hand, the substantial debacle of the hush-kits dispute does not forebode well for such strategy. On the other hand, even a cooperative posture by the EU Commission through the action of Member States in the ICAO framework would not necessarily guarantee a positive outcome, if the other EU institutions were not obliging as well. If called upon by the European ParliamentFootnote ⁵⁵ the Court could be tempted to repeat, mutatis mutandis, what it had said in the Mox Plant litigation, namely the prohibition to submit instruments of EU law to an Arbitral Tribunal to which the EU is not a party for purposes of their interpretation and application.Footnote ⁵⁶ The stalemate would then be complete.