EU Law and International Investment Arbitration

The compatibility of ISDS in Bilateral Investment Treaties (BITs) and the Energy Charter Treaty (ECT) with the autonomy of EU law

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The EU’s participation in international dispute resolution mechanisms presents particular problems owing to its multilevel governance and its autonomy from international and national law. The inclusion of foreign direct investment in the Common Commercial policy in the Treaty of Lisbon, expanded those to investment arbitrations under Member States’ BITs, as the Court of Justice ruled in Achmea. EU Law and International Investment Arbitration, examines the impact of that inclusion beyond Achmea, from the perspectives of international and EU law, to the remaining extra-EU BITs of the Member States and the Energy Charter Treaty.

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Michael De Boeck, Ph.D. (2020), Ghent & Luxembourg University, is academic doctor-assistant at the College of Europe and attorney in Ghent, BE (2014), New York, USA (2017). He publishes regularly on EU law and international commercial and investment arbitration.
Acknowledgements

Acronyms

Introduction
1The Contemporary State of isds and International Investment Law Conflicts Among Calls for Reform
 1 The Turbulent Global Context of Investment Arbitration

 2 The European Union as an Emerging Actor in International Investment Policy

 3 Conflict between EU Law and International Investment Law
 3.1 Substantive Conflict

 3.2 Jurisdictional Conflict


2Beyond Achmea The Open Question in EU Law and isds
 1 Towards Consolidation under the Common Commercial Policy?
 1.1 Extra-EU BITs

 1.2 The Energy Charter Treaty


 2 The ‘Frame of Reference’ Problem


part 1
isds and EU Law from the Perspective of International Law
3Harmonious Interpretation between iia’s and the EU Treaties
 1 The Public International Law Framework of Harmonious Treaty Interpretation

 2 The ect Implied Disconnection Clause as Harmonious Treaty Interpretation?
 2.1 The Scope of ‘Investor’ and ‘Contracting Parties’ of the ect

 2.2 Context of the ect’s Conclusion


 3 The Limits of Contextual and Systemic Treaty Interpretation


4The Principles and Norms of Treaty Conflicts
 1 The Foundations of Treaty Law: Pacta Sunt Servanda and Relativity of Treaty Obligations

 2 EU Accession as a Fundamental Change of Circumstances?

 3 iia’s and the EU Treaties under Conflict Norms of Same Subject Matter Successive Treaties:
 3.1 Implied Treaty Termination by Conclusion of a Successive Treaty
 3.1.1 The Notion of ‘Successive Treaties’ Relating to the ‘Same Subject Matter’

 3.1.2 Article 59(1) vclt: Intention to Terminate the Prior Treaty

 3.1.3 The Failure of Express Notification by the EU Member States under Article 65 vclt


 3.2 Conflict between Successive Same Subject Treaty Provisions
 3.2.1 The Notions of ‘Successive Treaties’ Relating to ‘the Same Subject Matter’ and Treaty ‘Conflict’

 3.2.2 Increasing Successive Treaty Membership: Article 30(3) vclt

 3.2.3 Decreasing Successive Treaty Membership and Diversity of Contracting Parties: Inter se Modification (Article 41 vclt) or Successive Conflict (Article 30(4) vclt)


 4 Conventional Treaty Conflict of Laws Clauses
 4.1 Member State bit s: Lack of Express Conflict Clauses

 4.2 The EU Treaties

 4.3 Energy Charter Treaty: Article 16 ect

 4.4 Express Disconnection Clauses


Conclusions on Part 1


part 2
isds and EU Law from the Perspective of the European Union
5EU and Member States’ Competence on Foreign Direct Investment
 1 The Common Commercial and Investment Policy

 2 Scope of the Common Commercial and Investment Policy
 2.1 Substantive Investment Protection Standards

 2.2 Arbitration Provisions: isds


6The Status of International Agreements in the EU Legal Order The EU Law Effects of Extra-EU BITs and the Energy Charter Treaty
 1 EU Law and Member States’ Legal Orders

 2 EU Law and Member States’ International Agreements
 2.1 The icsid Convention in EU Law

 2.2 Extra-EU BITs


 3 EU Agreements in the Member States’ Legal Orders

 4 The Special Case of EU Mixed Agreements
 4.1 The Rationales and Problems of Mixity

 4.2 The Energy Charter Treaty
 4.2.1 The Irrelevance of the EU as a Contracting Party to the Determination of Its Compatibility with the EU Treaties

 4.2.2 The EU’s Involvement in the Conclusion of the Energy Charter Treaty: a Particular Focus on (In)stability of the Central Eastern Neighbours

 4.2.3 EU Law Effects of the ect



7Conflict Norms of EU law
 1 Limited Conflict Rules in the EU Treaties
 1.1 Primacy as Implicit Conflict Rule

 1.2 Express Conflict Rules: Articles 350 and 351 tfeu


 2 Article 351 tfeu: Member States’ International Obligations as Derogations from EU Law
 2.1 The Scope of Article 351 tfeu
 2.1.1 Article 351 (1) tfeu: Derogations from EU Law for Pre-existing Member State Agreements.

 2.1.2 Article 351(2) tfeu: Obligation to Take All Necessary Measures

 2.1.3 Outer Limits to Derogable Obligations of EU Law


 2.2 Conclusion on Article 351 tfeu


 3 EU Primacy over Member States’ Posterior International Agreements
 3.1 International Investment Agreements Concluded between EU Member States

 3.2 International Investment Agreements between EU Member States and Third States


Conclusions on Part 2


part 3
The Autonomy of EU Law and isds
8The Particularity of Autonomy in Relation to the EU

9The Lacking Definition of EU Law Autonomy
 1 The Sui Generis Claim:

 2 The Rule of Law Claim

 3 The Integrity Claim


10The Compatibility of isds Provisions in the ect and Extra-EU BITs with the Autonomy of EU Law
 1 The Division of Competences between the Member States and the EU
 1.1 Compatibility of the ect with the EU’s Division of Competences

 1.2 Compatibility of Extra-EU BIT with the Division of Competences between the EU and the Member States
 1.2.1 The Grandfather Regulation

 1.2.2 Conclusion


 2 The Allocation of Tasks and Powers to the EU Institutions Including the System of Judicial Review
 2.1 Allocations of Responsibility, Attribution and the Impermissible Interpretation of the Division of Competences under EU Law
 2.1.1 The Determination of Respondents and the Allocation of Responsibility under the ect Binds the EU to an Interpretation of EU Law

 2.1.2 Irrelevance to Intra- and Extra-EU BITs


 2.2 The Uniform Interpretation of EU Law and Allocation of Judicial Powers
 2.2.1 The Haegeman Track: Binding Interpretations of EU Law

 2.2.2 The ‘Allocation of Powers’ -Track

 2.2.3 Combining Both: Articulation of the EU Judicial System

 2.2.4 Conclusions on the ect

 2.2.5 Conclusion on the (Extra-EU) BITs


 3 Compatibility with the Principle of Equal Treatment and Non-discrimination
 3.1 Equal Treatment in National Courts and isds? The Benefit of “Choice”

 3.2 Extra-EU BITs
 3.2.1 Outbound perspective

 3.2.2 Inbound Perspective


 3.3 The ect


11Excursus: The Consolidation of Member States’ fdi Policies Termination and Succession
 1 The Fate of Intra-EU BITs Post-Achmea
 1.1 The Road to the Political Agreement on Termination

 1.2 The Intra-EU BIT Plurilateral Termination Treaty
 1.2.1 Objectives, Structure and Entry into Force

 1.2.2 Termination of intra-eu bit ‘Sunset’ or ‘Survival’ Clauses


 1.3 Towards an Intra-EU Investment Court?


 2 The Fate of Extra-EU BITs: Consolidation and Succession

 3 The Energy Charter Treaty: Future Outlook?
 3.1 Opinion 1/20: A Prior Opinion on the Modernised ect Treaty


Conclusions on Part 3


  Final Conclusions and Outlook


Bibliography

Index