Challenges to International Investment Law Within the European Union

Abstract

The following chapter considers the challenges facing international investment law and investor–State arbitration within the European Union. Particular attention is paid to two aspects, firstly the Court of Justice of the European Union’s decision in the case of Achmea which held that investor–State arbitration clauses contained within bilateral investment treaties are contrary to EU law and therefore invalid; and secondly the decisions of the European Commission in which it held that awards paid out by States to investors constitute a form of illegal State aid under EU law with the result that all of the sums along with interest must be recovered from the investor. These developments, when taken together, have broad ramifications for the sustainability of international investment law within the European Union and create wider concerns both for States and investors situated outside of the EU but who have a business presence within Europe or who may look to enforce arbitral awards within the domestic courts of Member States. The majority of the developments in this area have occurred over the course of the past 18 months in 2018 and 2019, the chapter therefore compiles and analyses all of the relevant investment awards, domestic court decisions, judgments and opinions of the European Union, along with proclamations and statements made by the Member States and the European Commission in order to provide timely analysis on contemporary issues facing practitioners acting on behalf of States and investors.