LONDON

The top EU court on Thursday ruled that the UK infringed EU law as a result of a judgment of its Supreme Court in 2020. 

The Supreme Court of the UK "seriously compromised" the EU legal order, the European Court of Justice ruled in its judgment by default as the UK declined to submit observations in the proceedings.


"Furthermore, the Court finds that there has been a breach of the obligation of sincere cooperation," the Luxembourg-based court said in a statement.

The ruling was related to the case brought by the European Commission against the UK over a 2020 Supreme Court ruling (Micula v Romania), which the Commission argues, violated EU law since it was delivered during the Brexit transition period.

The Supreme Court delivered the judgment, authorizing the enforcement of an arbitral award made in the International Centre for Settlement of Investment Disputes (ICSID) case.

By that arbitral award, Romania was ordered to pay Swedish investors a compensation of approximately €178 million ($193.7 million) on account of the early repeal of a regional investment aid scheme.

The European Court of Justice noted that the judgment of the top UK court was delivered despite the fact that the European Commission, which considered that compensation to be “State aid incompatible with EU law,” had prohibited Romania from paying it.

The court reminded that infringement proceedings against Britain for possible breaches of EU law committed before the end of the transition period (Dec. 31, 2020) are possible in the four years following.

In the judgment, the court declared that the UK has “failed to fulfil its obligations” under EU law as a result of the judgment of its Supreme Court.

"The Court finds a breach of the prohibition on implementing State aid until the Commission has taken a final decision on that measure, in that the judgment at issue ordered Romania to pay the compensation to investors even though the Commission’s decision was the subject of proceedings before the Court," the statement added.