Multilateral Investment Court – Belgium Seeks Opinion to CJEU while EU Commission Requests Authorisation to Open Multilateral Negotiations - international litigation blog
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Multilateral Investment Court – Belgium Seeks Opinion to CJEU while EU Commission Requests Authorisation to Open Multilateral Negotiations

Multilateral Investment Court – Belgium Seeks Opinion to CJEU while EU Commission Requests Authorisation to Open Multilateral Negotiations

As we already discussed in several posts before (here, here, here and here), the European Commission (the Commission) has been pushing forward the establishment of a multilateral investment court (Multilateral Investment Court) in order to address the numerous criticisms concerning the existing investor-State dispute resolution (ISDS) mechanisms.

In essence, the Commission’s proposal aims at dealing with procedural issues arising in the context of ISDS. In this vein the Commission proposes:

(i) The creation of a permanent investment court which would have exclusive jurisdiction to rule on investment claims and would therefore render forum-shopping and multiple parallel proceedings impossible;

(ii) That this permanent court would be composed of a First Instance Tribunal and an Appellate Tribunal;

(iii) That judgments would be made by publicly appointed judges; and

(iv) That proceedings would be transparent and a right to intervene for all interested countries would be provided.

The original idea of the Commission was to institutionalise the system for the resolution of investment disputes within each bilateral investment treaty concluded by the European Union (the EU). Such a system (called the Investment Court System (ICS)) was the method followed during the negotiations for the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The Commission, however, has since realised that, in the long run, this approach would lead to a duplication of the system (since there would be one ICS for each of the different investment treaties entered into by the EU) as well as further administrative and budgetary complexities. In order to address this issue, the EU decided to push its proposal one step further and suggested that, instead of negotiating bilateral ICS, it would seek the establishment of an international court which would have jurisdiction to hear investment disputes.

The idea has received a positive echo from the United Nations Commission on International Trade Law (UNCITRAL) in July 2017. Indeed, UNCITRAL has agreed to consider a possible reform of the existing ISDS mechanisms and to act as a forum for negotiations in order to consider a reform of the existing systems.

In anticipation of those negotiations (which are scheduled to begin shortly), the Commission published, on 13 September 2017, a Recommendation (the Recommendation) for a Council Decision authorising the opening of negotiations for a Convention establishing a Multilateral Investment Court.

This Recommendation (adopted pursuant to Article 218 of the Treaty on the Functioning of the EU) aims (i) at allowing the Council of the EU to authorise the opening of negotiations for the establishment of a Multilateral Investment Court; and (ii) at appointing the Commission as EU representative during those negotiations.

In any case, even if the Council of the EU allows the opening of such negotiations on behalf of the EU, the Commission will need to work closely with the EU Member States. Indeed, in its Opinion 2/15, the Court of Justice of the EU (the CJEU) has made clear that the EU did not enjoy an exclusive competence over ISDS. Instead, the competence is shared with the EU Member States. A close collaboration between the Commission and the Member States will therefore be necessary (as already discussed here).

In the meantime, Belgium has, on 6 September 2017 submitted its long-awaited request for an opinion on the compatibility of the ICS provided for in the CETA with respect to EU law. As you certainly know, this request for an opinion was one of the conditions put forward by the regional parliament of Wallonia last year when it was considering whether to authorise the signature of CETA.

In its request for an opinion, Belgium essentially asks the CJEU to provide an opinion regarding the compatibility of the ICS with respect to: (i) the exclusive competence of the CJEU, pursuant to Article 267 of the Treaty on the Functioning of the EU, to give a binding interpretation of EU law; (ii) the general principle of equality and the practical effect (‘effet utile‘) of EU law; (iii) the right of access to courts; and (iv) the right to an independent and impartial judiciary.

Despite the official statement published by Belgium, it remains difficult at this stage to understand precisely the exact issues that have been put forward before the CJEU. The official press release however clarifies that, regarding the right to an independent and impartial judiciary, a special focus is put on:

(i) the conditions of remuneration of the members of the Tribunal and of the Appellate Tribunal;

(ii) the procedure regarding the appointment of those members;

(iii) the disqualification of those members;

(iv) the application of the International Bar Association’s Guidelines on conflicts of interest in international arbitration and the introduction of a code of conduct for the members of the Tribunal and of the Appellate Tribunal; and

(v) the external professional activities related to investment disputes of members of the Tribunal and the Appeals Body.

This is definitively a fast moving area. So stay tuned.

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