intra-EU Investment Treaties Research Articles

Does the cjeu Misunderstand Investment Treaty Arbitration in Commission v Micula?

This article focuses on the recent judgment of the Court of Justice of the EU (CJEU) in European Commission v Micula (C-638/ 19 P) concentrating on two paragraphs in particular, namely paragraphs 144–145. These passages lead us to believe that the Court of Justice’s more recent and hostile attitude towards intra-EU investment treaty arbitration (in Achmea, Komstroy, and PL Holdings) might be a result of several misunderstandings by the Court on how investor-state arbitration and bit s work. The first concerns the nature of consent to arbitrate under an investment agreement. The second concerns the purpose of investor-state dispute settlement (ISDS), and the third relates to the retroactive effects of the Court’s judgment in relation to Romania’s consent to arbitrate under the Romania-Sweden BIT. From these three issues the fourth misunderstanding follows, which is a lack of clarity on the relationship between EU law and the Member States’ existing obligations under the ICSID Convention. This discussion is relevant because it shows that when a court which is foreign to a system and uses the features of that system to define and develop its own legal system, the chances that the foreign system will be potentially misunderstood or mischaracterised are very high. This in turn will not only cause legal problems, such as issues with legal certainty and the finality of decisions for already concluded arbitrations, but it will also set in motion other unexpected consequences.

Jurisdiction of Tribunals to Settle Intra-EU Investment Treaty Disputes

Abstract The European Court of Justice (ECJ) made a ground-breaking shift away from the current system of investor–State dispute settlement (ISDS) by rendering its judgment in the matter of Achmea v Slovak Republic. However, since March 2018, a large and ever-growing number of investment tribunals have found that the Achmea judgment does not deprive them of arbitral jurisdiction. Against this background, the aim of the present article is to analyse the effects of the Achmea judgment on the jurisdiction of tribunals to settle intra-European Union (EU) investment treaty disputes. By taking due account of the reasoning conducted by the ECJ, the scope of the Achmea jurisprudence will be clarified. It is concluded that the incompatibility of intra-EU ISDS with EU law concerns all intra-EU investment treaties, including article 26 of the Energy Charter Treaty (ECT). On this basis, we ask whether, and to what extent, the applicability of the Achmea judgment is relevant to arbitral jurisdiction. Considering the law applicable to the arbitration agreement, we conclude that International Centre for Settlement of Investment Disputes (ICSID) tribunals and those seated outside the EU remain competent to settle intra-EU investment disputes. In contrast, the Achmea judgment renders ISDS clauses contained in intra-EU investment treaties inoperable if the tribunal is seated within the EU. The article closes with an outlook that puts these conclusions into perspective by considering recent developments such as the EU Member States’ ratification of a multilateral termination treaty.

El derecho de los tratados en el arbitraje de inversión intra-Unión Europea

This article addresses certain issues of public international law arising in the realm of intra-EU investment treaty arbitration. That is, when an investor with the nationality of a Member State of the European Union initiates Investor-State arbitration proceedings against another Member State. The Court of Justice of the European Union ruled recently that Intra-EU investment treaty arbitrations are incompatiblewith EU Law. This reinforced the arguments advanced by Member States when objecting the jurisdiction of investment treaty tribunals in charge of settling disputes lodged against them, especially under the arbitration clause of the Energy Charter Treaty. When dealing with these objections, arbitrators apply the provisions of the Vienna Convention on the Law of Treaties. The article thus describes the role of some of those provisions in Intra-EU investment treaty arbitration.

The setting aside and enforcement of intra-EU investment arbitration awards after Achmea

Abstract By rendering its preliminary ruling in Achmea v Slovakia, the European Court of Justice (ECJ) declared intra-EU investment treaty arbitration to be incompatible with fundamental principles of the European legal order. This decision does not only illustrate the challenge of regime interaction in international economic law but is also of highest practical relevance. Diverse and critical reactions from arbitral practice and legal scholarship suggest that it will ultimately be up to the courts within and outside of the EU to clarify how the ECJ’s findings in Achmea relate to the legal fate of arbitral awards. Against this background, the aim of the present contribution is to shed light on the judgment’s legal consequences on the post-award phase. As a starting point, an analysis of the judgment finds that the ECJ’s reasoning in Achmea is applicable to investor–State dispute resolution (ISDS) clauses contained in all intra-EU investment treaties, including the Energy Charter Treaty (ECT) when applied in an intra-EU context (Section 2). Based on these findings, we evaluate how the incompatibility of intra-EU investment treaty arbitration with the law of the European Union (EU law) affects setting aside proceedings (Section 3) and applications for recognition and enforcement of awards (Section 4) within and outside of the EU. We show that possible solutions may range from fully enforcing intra-EU investment awards to completely disregarding any legal effect. Evaluating the complex legal landscape applicable to both types of proceedings clearly illustrates that there is no simple ‘yes-or-no’ rule. Instead, factors such as the applicability of the ICSID Convention, the seat of the arbitral tribunal or the jurisdiction in which enforcement is sought are relevant but should not be considered in isolation. Instead, it is concluded that these factors must be considered as inter-related aspects of an analytical framework which may lead to a coherent understanding of the relationship between the European legal order and the settlement of intra-EU investment disputes (Section 5).

The Incompatibility of Intra-EU Investment Treaty Arbitration With European Union Law – Assessing the Scope of the ECJ’S Achmea Judgment

In March 2018, the European Court of Justice rendered its Achmea judgment, by which the Court considered the investor-State dispute settlement (ISDS) clause contained in the Dutch-Slovakian investment treaty to be incompatible with EU law. Even though the judgement is considered to be a landmark decision, its potentially far-reaching consequences remain, due to a rather obscure legal reasoning, difficult to assess. The aim of the present contribution is to assess the scope of the Achmea judgment in order to shed light on its relevance for pending and future intra-EU investment arbitrations. In view of the ECJ’s Opinion 1/17 rendered in April 2019 and in consideration of recent arbitral practice it is concluded that the scope of the Achmea judgement concerns the incompatibility of intra-EU investment treaty arbitration with EU law. This means on the one hand that the reasoning in Achmea is transferable not only to ISDS clauses in other intra-EU BITs, but also to Art. 26 of the Energy Charter Treaty. On the other hand, the analysis shows that contract-based investment arbitrations are not concerned by the ECJ’s findings. Finally and in view of its clarified scope of application, the relevant factors for analyzing the consequences of the Achmea judgement are identified.

Conflicting Conceptions of Constitutionalism: Investment Protection from the European Union and International Perspectives

International investment law as it is currently being transformed in the European Union (EU) proves to be an ideal test case for assessing global constitutionalism—whether it is in fact occurring and, if so, the direction of this process. While economic rights are protected by the laws of the EU, many of these rights were protected by bilateral treaties before internal mechanisms existed. The EU is now disregarding the protections that exist outside of the normative framework of the EU treaties, resulting in conflicting ‘constitutional’ rights. Following the decision by the Court of Justice of the European Union in Achmea, the dispute resolution provisions in intra-EU investment treaties are now considered incompatible with the laws of the EU. The decision was based on ‘mutual trust’ and ‘sincere cooperation’ between the Member States, pointing to formalized constitutional values. These ideals and their reflection in the changing internal and external positions of the EU towards investor-state disputes speak to perceptions of investors’ rights, and thus imply transforming ideas of constitutionality with respect to those rights. Investment tribunals, convened under international treaties, however, have continued to uphold a different position regarding the specific rights of investors. An inevitable conflict emerges in the protection of similar rights, namely the right to certain standards of treatment and dispute resolution for private investors, revealing an incongruence in the realization of constitutional values. The following article examines more closely the incompatibility of these positions and analyses the consequences of these actions for the progression of a globally-relevant constitutionalism.

The Incompatibility of Intra-EU Investment Treaty Arbitration With European Union Law – Assessing the Scope of the ECJ's Achmea Judgment

Abstract: In March 2018, the European Court of Justice rendered its Achmea judgment, by which the Court considered the investor-State dispute settlement (ISDS) clause contained in the Dutch-Slovakian investment treaty to be incompatible with EU law. Even though the judgment is considered to be a landmark decision, its potentially far-reaching consequences remain, due to a rather obscure legal reasoning, difficult to assess. The aim of the present contribution is to assess the scope of the Achmea judgment in order to shed light on its relevance for pending and future intra-EU investment arbitrations. In view of the ECJ's Opinion 1/17 rendered in April 2019 and in consideration of recent arbitral practice it is concluded that the scope of the Achmea judgment concerns the incompatibility of intra-EU investment treaty arbitration with EU law. This means on the one hand that the reasoning in Achmea is transferrable not only to ISDS clauses in other intra-EU BITs, but also to Article 26 of the Energy Charter Treaty. On the other hand, the analysis shows that contract-based investment arbitrations are not concerned by the ECJ's findings. Finally, and in view of its clarified scope of application, the relevant factors for analysing the consequences of the Achmea judgement are identified.

Investor Rights under EU Law and International Investment Law

Are investors entitled to the same level of protection under investment treaties and EU law? This article will examine some of the principal differences and overlaps in the level and scope of protection which foreign investors can enjoy under intra-EU international investment agreements (IIAs) and EU law. The primary focus of analysis will be on key substantive protection standards which intra-EU IIAs offer and their counterparts in EU law. Comparative analysis of intra-EU investment treaties with EU rules on investment protection offers a fresh opportunity to revisit the origins and history of international investment agreements, trace their recent transformation and analyse their interactions with other international and supranational rules to which investors can also resort to protect their economic rights vis-à-vis host states.

The jurisdiction of the arbitral tribunal in intra-EU investment treaty disputes after the decision in Electrabel v Hungary

Energy Charter Treaty (1994) Treaty on the Functioning of the European Union (2008) Electrabel SA v The Republic of Hungary , ICSID Case No ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability (2012) Eastern Sugar BV v The Czech Republic , SCC Case No 088/2004, Partial Award (2007) Achmea BV v The Slovak Republic ( formerly Eureko BV v The Slovak Republic) , PCA Case No 2008 -13, Award on Jurisdiction, Arbitrability and Suspension (2010)

Investment Protection and EU Law: The Intra- and Extra-EU Dimension of the Energy Charter Treaty

The interaction of investment treaty law with European Union (EU) law is a growing concern not only for policy makers but also for investors and arbitral tribunals, especially in the energy sector. This article sketches the existing and potential legal problems between the regimes with the aim of drawing conclusions on the impact of those tensions on the future of the Energy Charter Treaty (ECT). In the first part, the article discusses the problem of the compatibility of investment treaty law with EU law in general that may require EU member states to renegotiate their existing agreements. The second part is dedicated to the more controversial issues of the continuing applicability of intra-EU investment treaties, discussing their far-reaching overlap with the protection afforded by EU law and the resulting complications. Most of these problems also arise under the ECT, in addition to the specific complications that are analysed in the third part. The article also outlines the consequences of the entry into force of the Lisbon Treaty and finishes with a summary and outlook of the general importance of these European developments for the future of the ECT.

The Next 10 Year ECT Investment Arbitration: A Vision for the Future – From a European Law Perspective

The interaction of investment treaty law with European law is a growing concern not only for policy makers but also for investors and arbitral tribunals, especially in the energy sector. This paper sketches the existing and potential legal problems between the regimes with the aim of drawing conclusions on the impact of those tensions on the future of the Energy Charter Treaty (ECT). In a first part, the paper discusses the problem of the compatibility of investment treaty law with European law in general that may require European member states to renegotiate their existing agreements. A second part is dedicated to the more controversial issues of the continuing applicability of intra-EU investment treaties, discussing their far-reaching overlap with the protection afforded by European law and the resulting complications. Most of the previously discussed problems also arise under the Energy Charter Treaty, in addition to the specific complications that are analysed in a third part. The paper also outlines the consequences of the entry into force of the Lisbon Treaty and finishes with a summary and outlook of the general importance of these European developments for the future of the Energy Charter Treaty.