Opinion 1/17 and the Future of Investment Dispute Settlement: Implications for the Design of a Multilateral Investment Court

Abstract

On 30 April 2019, the Court of Justice of the European Union (CJEU) rendered Opinion 1/17 declaring the institutionalized dispute settlement mechanism in the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) compatible with EU law. Opinion 1/17 is a domestic, if sui generis, decision. In principle, it should have no impact on international dispute settlement, at least to the extent that the European Union or its member states are not involved. But the political and legal reality reveal otherwise. Since the Treaty of Lisbon, the European Union has progressively become a major player in international investment law with the power to shape negotiations. Currently, it pursues the establishment of a multilateral investment court in Working Group III of the United Nations Commission on International Trade Law (UNCITRAL). This chapter critically reviews Opinion 1/17, and explores its implications for the future of investment dispute settlement and, in particular, for the prospective multilateral investment court. It assesses the conditions that Opinion 1/17 sets for the Statute of such a court in terms of the applicable law, the right to regulate, independence and impartiality of adjudicators, and costs. The Opinion supports the EU’s negotiating template and, through findings of conditional constitutionality, encourages selective amendments, such as in order to ensure that the court is financially accessible to small and medium-sized investors. The chapter also considers Opinion 1/17 in light of existing member state investment treaties but ultimately dismisses any potential consequences it might have in their respect. Its overarching argument is that Opinion 1/17 is an authoritative, if imperfect, decision that will impact the design of future provisions on the settlement of investment disputes well beyond the confines of the European Union.