‘Pacta sunt servanda’ (agreements must be kept) is a fundamental principle of law that has its source in Roman law, and remains an essential and longstanding principle of Scots law. It was declared by Lord Hope of Craighead from the bench as late as 2013:
“[T]he proposition that the court can equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that which was originally contemplated is not part of Scots law. To hold otherwise would be to undermine the principle enshrined in the maxim pacta sunt servanda which lies at the root of the whole of the law of contract. I see no need for this and, as there is no need for it, I would reject the suggestion that the court should assume that function”.
(Quoted by Professor Hector MacQueen, ‘The COVID-19 Pandemic, Contracts, and Change of Circumstance: still room for equitable adjustment?’; in, ‘Scottish Legal News’, 25 June 2020; from Lord Hope, ‘Lloyds TSB Foundation for Scotland v Lloyds Banking Group plc  UKSC 3, 2013 SC (UKSC) 169’; para., 48).
The court case referred to by Lord Hope and the issue raised by Professor MacQueen were matters of the law of contract, but the principle behind ‘pacta sunt servanda’ is so fundamental it extends through contract law, generally to domestic law and through to international law. The United Kingdom Internal Market Bill (UKIMB) has been acknowledged by the British Government itself (in weasel words) to breach international law, an extraordinary position to be taken by a British Government, and a decision if/when ratified that will radically change Britain’s status in the world.
European Commission president Ursula von der Leyen has already used the phrase ‘pacta sunt servanda’ to underscore the severity of the breach of law and of trust that has been undertaken by the UK, so unexpectedly from an EU perspective, whom appear genuinely shocked. The EU should not be, this is the measure to be expected of this louche, seedy British government. Note that this piece of legislation in the form of the present UKIMB, which is so fundamental in its effects, is nevertheless currently barrelling its way through second reading in the House of Commons already, at the greatest speed possible; as if it was a minor amendment to some obscure, uncontroversial Act. Think about that; if only because the speed is itself an invitation to the public not to think too hard about it. One of the excuses for Boris Johnson signing the Withdrawal Agreement (WA) was that it was all done too quickly. It wasn’t, it was calculated and deliberate; as is the UKIMB. That excuse was yesterday. Today we are in a hurry just in case anybody on the Government benches thinks about it too much.
The defence of this constitutional and legal position is itself bizarre and has created serious controversy. Now we are debating whether the fact that it is a pre-emptive breach of law can be corrected simply by turning the Bill into two Acts; so presumably that as an alternative to pre-emption, a second Act that ex-post an EU no-deal still leaves the original WA in breach of international law, but somehow this mere technical bifurcation makes the whole thing perfectly legitimate. It doesn’t. This is a Government and Parliament that only talks to itself; it is now failing in its capacity to conduct responsible agreements even with third parties over which it has no ability to force submission. This should act as a sober warning, however to all devolved administrations, about what is coming their way in the UKIMB.
This Prime Minister and Government, in this Parliament passed this WA, not with some odd provisional status; they agreed that it would be in force, if all else failed and there was no deal with the EU. That is what was meant by the term ‘backstop’. The British, in crude and obvious fashion are now backstopping the backstop with a new backstop that overturns the backstop. That isn’t negotiating, and it isn’t legal; it is no better than a very shabby scam. We have just passed through the looking-glass. This controversy, however is not the purpose of this article; indeed it is just the focus on international law and the NI protocol and Good Friday Agreement that has absorbed all the attention and energy of opposition to the UKIMB. I wish to look elsewhere in the UKIMB: for its effect on Scotland and the Scottish Parliament.
Absolutely critical features of the UKIMB are being overlooked, and that is very, very dangerous; especially for Scotland and devolved government. You need not rely on my judgement of what is at stake here. Jessica Simor QC, who is one of the UK’s leading specialists in public law, regulatory, EU and human rights law has resorted to Twitter today to make clear the fundamental issues at stake, and it isn’t an abstruse fine point in law:
“Much attention has been paid to the fact that the Internal Market Bill puts the UK in breach of international law. It also however, raises extremely serious questions of domestic law with far reaching implications outside of this specific legislative context”.
The context is specifically, Section 42, 43 and 45 (2). of the UKIMB (pages 33-36). Jessica Simor is concerned with domestic law throughout the UK, but the context that requires special focus of the public, politicians, and no least Scotland’s lawyers is the impact of the UKIMB on the Scottish Parliament, the Scottish Government, and on Scots law. I have extracted some of the key sections (clauses) of the UKIMB, for perusal by readers, but there is no substitute for reading the original.
UKIMB Section 42 is the ‘Power to disapply or modify export declarations and other exit procedures’.
Section 42 (1) is as follows: “(1) A Minister of the Crown may by regulations make provision about the application of exit procedures to goods, or a description of goods, when moving from Northern Ireland to Great Britain.”
A number of regulations follow, including Section 42 (5) “Such provision may include provision for rights, powers, liabilities, obligations, restrictions, remedies and procedures that would otherwise apply,
as a result of relevant international or domestic law, not to be recognised, available, enforced, allowed or followed.”
Section 43 covers “Regulations about Article 10 of the Northern Ireland Protocol” .
Section 43 (1) is as follows: “The Secretary of State may by regulations make provision for the purposes of domestic law in connection with Article 10 of the Northern Ireland Protocol (State aid)”.
Section 43 (3) adds that “Such provision may, for example, include provision for—“ a list of regulatory procedures and interpretations, and including:
Section 43 (3) (e) “rights, powers, liabilities, obligations, restrictions, remedies and procedures that would otherwise apply in relation to aid, as a result of relevant international or domestic law, not to be recognised, available, enforced, allowed or followed.”
Section 45 covers “Further provision related to sections 42 and 43 etc”
Critically this means:
Section 45 (1) “The following have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent—
(a) section 42;
(b) any regulations made under section 42(1);
(c) section 43;
(d) any regulations made under section 43(1);
(e) this section;
(f) any other provision of this Act so far as relating to the provisions in
paragraphs (a) to (e).”
Section 45 (2) “Accordingly (among other things)—
(a) regulations under section 42(1) or 43(1) are not to be regarded as
unlawful on the grounds of any incompatibility or inconsistency with
relevant international or domestic law;
(b) all rights, powers, liabilities, obligations, restrictions, remedies and
procedures which are, in accordance with section 7A of the European
Union (Withdrawal) Act 2018, to be recognised and available in
domestic law, and enforced, allowed and followed accordingly, cease
to be recognised and available in domestic law, or enforced, allowed
and followed, so far and for as long as they are incompatible or inconsistent with a provision mentioned in paragraphs (a) to (f) of
(c) section 7C of that Act ceases to have effect so far and for as long as it would require any question as to the validity, meaning or effect of any
relevant separation agreement law to be decided in a way which is
incompatible or inconsistent with a provision mentioned in paragraphs
(a) to (f) of subsection (1);
(d) any other provision or rule of domestic law that is relevant
international or domestic law ceases to have effect so far and for as long as it is incompatible or inconsistent with a provision mentioned in
paragraphs (a) to (f) of subsection (1).”
The effect of this appears to be that it is very likely that the UKIMB will simply disempower the Scottish Parliament comprehensively, centralise control in London and pass enormous power over Scottish domestic law directly, not just to the Westminster Parliament, or the British Government, but to the mere decision of a delegated Minister of the Crown.