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Investment Law

June 16, 2022 In Energy Charter Treaty, Intra-EU BIT, Investment Law By Quentin Decleve

CJEU finds Belgium’s request for an Opinion on the compatibility with EU law of the draft modernized ECT inadmissible

The Court of Justice of the European Union (the CJEU) delivered today (16 June 2022), its Opinion on the issue put forward by the Belgian government on whether the draft modernized Energy Charter Treaty (the ECT) (and the investor-State arbitration (ISDS) clause contained in Article 26 of the ECT) was compatible with EU law (check our former article).

The CJEU found this request for an Opinion to be inadmissible.

According to the CJEU, it “does not have sufficient information on the content and, more particularly, on the scope of Article 26 which will appear in the modernised ECT, even though that scope is the subject of the present request for an Opinion“.

The CJEU also reminded that it has already ruled on the question of the compatibility of Article 26 of the ECT with the EU Treaties and that it is clear from the judgment in Komstroy that “compliance with the principle of autonomy of EU law, enshrined in Article 344 TFEU, requires Article 26(2)(c) of the ECT to be interpreted as meaning that it is not applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State“.

The Opinion of the CJEU is available here.

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September 28, 2021 In Energy Charter Treaty, Intra-EU BIT, Investment Law By Quentin Decleve

Can EU Member States Replicate Plurilateral Agreement on Intra-EU BITs to Implement Komstroy Judgment?

On 2 September 2021, the Court of Justice of the European Union (the CJEU) handed down a judgment in Republic of Moldova v. Komstroy LLC, in which it ruled that intra-EU investment arbitration under the Energy Charter Treaty (ECT) was incompatible with EU law.

As a consequence of that judgment, the European Union and the EU Member States will soon need to take appropriate actions to implement and manage the legal consequences of that decision.

In this short blog post, I share some of my thoughts that I developed when preparing for my presentation at the 2020 EFILA Conference and where I specifically discussed the possibility for EU Member States to exclude intra-EU ISDS arbitral proceedings from the scope of the ECT through the adoption of a plurilateral inter se agreement (the Plurilateral Agreement) similar to the one they adopted to terminate their respective intra-EU BITs. READ MORE

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February 23, 2021 In Investment Court System, Investment Law By Various authors

EU and Canada Adopt Rules for Implementation of Investment Court System in CETA

This article has been co-authored by Quentin Declève together with Nicholas Lawn (Partner at Van Bael & Bellis) and Isabelle Van Damme (Partner at Van Bael & Bellis)

On 29 January 2021, the European Union and Canada adopted four decisions (the Decisions) aimed at further implementing the Investment Court System (the ICS)  in the Comprehensive Economic and Trade Agreement between Canada, of one part, and the European Union and its Member States, of the other part (CETA). The Decisions will enter into force upon ratification of CETA by the EU Member States.

Following certain concerns expressed in relation to older models of investor-State dispute settlement (ISDS), the European Union has designed a new model for resolving disputes between foreign investors and States (or the European Union) which seeks to address such concerns. In particular, in recent years some have argued that the traditional form of ISDS does not guarantee fundamental rights and values relating to the independence of arbitrators, legitimacy, access to courts and transparency. In addition, traditional ISDS has been seen by some as failing to result in a coherent body of case-law regarding the interpretation and application of investment protection standards. The ICS aims to resolve these perceived shortcomings by establishing a permanent tribunal composed of independent and publicly appointed members of a first instance Tribunal and, in case of an appeal, an Appellate Tribunal.

Although the main characteristics of the ICS were already established in CETA (see Chapter 8 on Investment), some specific features and procedural mechanisms still had to be agreed by the EU and Canada. These details were therefore agreed in the Decisions of the CETA Joint Committee which (i) set out rules and procedures regarding the functioning of the Appellate Tribunal (the Decision on the Appellate Tribunal); (ii) establish a code of conduct for mediators and judges (the Decision on the Code of Conduct); (iii) provide rules for mediation (the Decision on Mediation); and (iv) establish rules for adopting binding interpretations of CETA (the Decision on Binding Interpretations).READ MORE

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January 13, 2021 In Brexit, Investment Law By Various authors

Investment Protections Implications of Brexit and of EU-UK Trade and Cooperation Agreement

This article has been co-authored by Quentin Declève together with Nicholas Lawn (Partner at Van Bael & Bellis) and Adriana Pérez-Gil (Associate at Van Bael & Bellis)

On 24 December 2020, the European Union (the EU) and the United Kingdom (the UK) agreed a Trade and Cooperation Agreement (the TCA) intended to settle their future relationship, with provisional application from 1 January 2021.

Following the UK’s exit from the EU on 31 January 2020 and the end of the transition period under the Withdrawal Agreement, the UK is no longer a member of the EU single market or the EU customs union. Whilst the TCA does not change this fact, it sets out separate terms for the new on-going relationship between the EU and the UK.

Title II of Part Two, Heading One (Trade) of the TCA includes provisions relating to “services and investment” (“SERVIN“). Yet, as explained below, the provisions are minimal and are limited to dealing with investment liberalisation, establishment, operation, market access and non-discriminatory treatment. In respect of investment protection, the TCA is more notable for what is out than what is in.READ MORE

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November 19, 2020 In Intra-EU BIT, Investment Law By Quentin Decleve

CJEU’s Advocate General Hints at Invalidity of Intra-EU ISDS Disputes Based on Energy Charter Treaty

I wanted to publish a short note on an Opinion handed down by Advocate General Saugmandsgaard Øe in which he provides his own personal answer to one of the most highly debatable questions among EU and arbitration practitioners. Namely, the impact of the Achmea judgment on intra-EU Investor-State disputes (ISDS) conducted pursuant to the Energy Charter Treaty (ECT).READ MORE

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January 27, 2020 In Investment Court System, Investment Law, Uncategorized By Julian Arato

ISDS Reform: Designing Permanent Institutions at Working Group III

Last week, the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WGIII) turned squarely to designing permanent adjudicative institutions for the resolution of investment disputes. As readers of this blog may be aware, WGIII is charged with developing multilateral reforms to the current ad hoc system of investor-state dispute resolution (ISDS). This government-led process involves delegations from around a hundred States, with active participation by dozens of observer delegations from international organizations, arbitral institutions, NGOs, business associations, and learned societies. Beginning in WGIII’s 34th Session in 2017, this work has continued through biannual sessions in Vienna and New York. From 2017 to 2018, delegations registered substantial concerns with ISDS, relating to fragmented arbitral outcomes; arbitrator independence, impartiality, and diversity; duration and cost; multiple proceedings; and third-party funding (Phase 1). In the fall of 2018, WGIII decided to work multilaterally to reform such concerns within UNCITRAL (Phase 2). As of its 37th Session in 2019, WGIII has moved firmly into working on concrete reform options (Phase 3) (discussed here).

WGIII’s 38th Session in Vienna marked a key transition into detailed discussion of reform options. Meeting initially in October 2019, the WGIII held discussions on a series of reform options according to a pre-determined project schedule. This work was grounded in proposals by over forty-five governments, across twenty-three submissions (here); complemented by several Secretariat papers; submissions by observer delegations (here); and concept papers by the Academic Forum on ISDS Reform (here). In this initial meeting, WGIII focused on (i) developing a multilateral advisory center; (ii) a code of conduct; and (iii) reforms to third-party funding (discussed here). Discussions centered on high level values, trade-offs and prioritization, with the goal of guiding the Secretariat as it turns to developing more concrete reform options.

Resuming its 38th Session in Vienna last week (January 2020), WGIII turned squarely to designing permanent institutions: (iv) a standing appellate mechanism; and (v) a multilateral investment court (MIC); as well as the cross-cutting question of (vi) selecting and appointing adjudicators. As with the discussions last fall, the goal was to discuss each reform option at a high level, to provide guidance to the Secretariat. The Working Group is not yet taking firm decisions on the desirability or ultimate form of any reforms, although some States are already revealing their preferences. Later this year, WGIII will develop a new project schedule and begin circling back to each topic, seriatim, with the benefit of new responsive work by the Secretariat, the Academic Forum, and other organizations (such as the OECD, ICSID, the PCA, and several NGOs).READ MORE

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