Permanent Investment Courts and the EU Legal Order

Abstract

In the external action of the Union, the establishment of permanent investment courts is not only part of the common commercial policy, but also an expression of the objective to promote the rule of law and to act as an influential actor in international procedural law. Through its participation in agreements that establish a bilateral investment court system (ICS) and in the negotiation of the convention establishing a Multilateral Investment Court (MIC), the Union aims to promote its own standards of judicial protection while preserving the constitutional framework at the basis of the principle of autonomy. The present paper deals with the question of division of competences, especially in the context of the establishment of a MIC and the allocation of international responsibility in Investor-State Dispute Settlement (ISDS) mechanisms. Moreover, it discusses the scope of fundamental principles of the EU legal order through the position of the Court of Justice in Opinion 1/17 and the analysis of the compatibility of the ICS with primary EU law. While the principles of conferral and of the autonomy of the EU legal order impose constraints to the external action of the Union, their scope is at the same time interpreted in a way to accommodate their guarantee with the EU’s objective to contribute to the major reform of the ISDS. In that way, the guarantee of the EU legal order’s constitutional requirements is not necessarily a limit to the efficiency of the Union’s external action.