By Giorgia Sangiuolo, Fellow at the Centre of European Law, King’s College London
On 2 September 2021, the Court of Justice of the European Union (the CJEU or the Court) rendered its decision in Case C-741/19 (République de Moldavie). The decision was given in the context of a reference for a preliminary ruling received from the Paris Court of Appeal on the interpretation of the Energy Charter Treaty (the ECT) in proceedings to set aside an international arbitral award rendered in a dispute between a Ukrainian investor and Moldova.
Following the conclusions reached by Advocate General Szpunar last March, the Court concluded that:
– it had jurisdiction to issue a preliminary ruling interpreting an international treaty to which the EU and some Member States are a party in a case which involved neither of them; and
– the application of the Investor State Dispute Settlement (ISDS) mechanism under Article 26 of the ECT between Member States is incompatible with EU law.
On this basis, the Court then moved to provide the referring French court with an interpretation of the concept of “investment” in Article 1(6) of the ECT.
This post sets out some initial thoughts on the decision of the CJEU to assume jurisdiction. After setting out the background of the dispute (section 1) and the reasoning of the CJEU on this point (Section 2), the post maintains that the judgment, and Advocate General Szpunar’s Opinion that the Court closely followed, seem to go well beyond judicial precedents and appear decoupled from any concerns regarding the risk of fragmentation of EU law (Section 3).
The post then concludes that the judgment seems to suggest that any link, however small, with EU law may be relied upon by the Court to interpret international treaties to which the EU is a party, together with its Member States, even when they have a merely potential, future relevance for EU law (section 4). It is argued that the Court’s decision in République de Moldavie seems to be guided by practical aims and seems to reveal that the Court intends to take an active role in shaping the external relations of the EU. The post finally observes that the Court’s decision may have some relevant practical consequences: parties to future ISDS proceedings under EU agreements, whether mixed or exclusive, regardless of their ties with the EU, will want to keep this case in mind if they wish to avoid the involvement of the CJEU in follow on proceedings before the national courts of the Member States.READ MORE