U.K. Can Still Unilaterally End Brexit, EU Top Court Indicates

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The U.K. should be allowed to reverse Brexit, according to an advisory opinion from the European Union's top court that will fuel the campaign to thwart the divorce.

The opinion, which isn't binding, comes at a crucial moment for Prime Minister Theresa May who's trying to convince Parliament to back the deal she brought back from Brussels but faces opposition on all sides.

The advice will embolden those who are fighting to reverse Brexit -- a campaign that's gathering momentum. But May could also use it to her advantage as the country heads into uncharted Brexit territory. The possibility that the U.K. can go back on its decision will be alarming to Brexit hardliners and could encourage them to grudgingly support May's much-maligned roadmap for how the country should quit the bloc.

Still, a decision saying that the so-called Article 50 notice can be unilaterally revoked favors those who want to remain in the EU and could help those campaigning to thwart Brexit with a second referendum. It could also encourage some wavering pro-EU lawmakers to vote against May's deal.

It would put “the decision about our future back into the hands of our own elected representatives -- where it belongs,” pro-Remain lawyer Jolyon Maugham, who brought the lawsuit, said on Twitter. “On this critical issue, I'm sure MPs will now search their consciences and act in the best interests of our country.”

The pound jumped as high as $1.284 after the news.

Sterling “is really taking the Article 50 news well,” said Jordan Rochester, an analyst at Nomura International Plc. The pound “had been trading on the soft side due to concerns about the vote and how Labour plan to table a vote of no confidence if or when it falls through. This doesn't change that, but the market had gotten overly short,” he said.

After the opinion, a U.K. spokesperson reiterated that “it remains a matter of firm Government policy that Article 50 will not be revoked.”

Purely Advisory

While Advocate General Manuel Campos Sanchez-Bordona's opinion is purely advisory, the Luxembourg-based court usually follows such advice. A date for a final rulings hasn't been set yet but could still come this month, potentially even before the U.K. Parliament's Dec. 11 vote on May's Brexit deal.

The opinion comes after the U.K.'s failure to kill the case and prevent it reaching the EU court. It lost a final attempt last month to derail the case after the country's Supreme Court refused to hear an appeal on blocking the referral to the EU judges, whose power over British law many pro-Brexit supporters want to sever.

The “ECJ says the U.K. can revoke Article 50 without permission,” Nigel Farage, the man who spearheaded the Brexit campaign, said on Twitter. “Every effort is being made on both sides of the Channel to stop Brexit.”

A Scottish court decided in September to seek the EU tribunal's guidance in a case brought by Maugham, along with a group of Scottish and English lawmakers seeking to reverse the so-called Article 50 process.

Unanimous Backing

Sanchez-Bordona on Tuesday rejected the arguments by the European Commission and EU governments, that revocation of Article 50 can only happen with the unanimous backing of the remaining 27 nations. This would be “incompatible” with Article 50, he said.

He also rejected the U.K. government's position that the case is purely hypothetical and therefore inadmissible.

“The dispute is genuine, the question is not merely academic, nor premature or superfluous, but has obvious practical importance and is essential in order to resolve the dispute,” Campos Sanchez-Bordona said.

The issue is so complicated because while Article 50 of the EU's Lisbon Treaty tells member states how to start the process of leaving the bloc, it offers no help on what to do it they change their mind.

At the Nov. 27 hearing before the full EU court, lawyers for the lawmakers behind the case argued that legal certainty needs to come before politics and that the U.K. Parliament, which has the power to decide, needs to have certainty about the law.

--With assistance from Tim Ross and Charlotte Ryan.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, Stuart Biggs

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