Bilateral investment treaties and EU law

Abstract

Recent developments have highlighted the complexity and potential for conflict in the relationship between bilateral investment treaties (BITs) and EC law. This article attempts to explore the intersection between these two norms. Its first part examines the division of powers between the EC and the Member States with regard to the conclusion of such treaties, both under the regime which would be introduced by the Lisbon Treaty and the present legal framework for external relations. The second part looks at the relationship between these agreements and the internal law of the EC. It seeks to identify those types of EC law provisions which, at least potentially, interfere with specific investment protection guarantees typically contained in bilateral investment treaties, and it then suggests rules for the resolution of such conflicts. In this regard a distinction between Member State BITs with third countries (which are considered to prevail over conflicting EC law), and BITs concluded between two Member States (which, both under relevant EC law and International Law principles, are subject to the supremacy of EC law) is made.