EU Plurilateral Agreement on Termination of Intra-EU BITs Enters Into Force – What consequences for Sunset Clauses?
This article has jointly been co-authored by Isabelle Van Damme and Quentin Declève
With some delay, we wanted to discuss the latest developments on intra-EU BITs that took place during the last couple of months.
As we already discussed, instead of the EU Member States agreeing, on a bilateral basis, to amend or terminate their respective intra-EU BITs, most of the EU Member States have elected, as envisaged in their declarations of January 2019, to negotiate a single plurilateral agreement that will terminate all of the intra-EU BITs (the Plurilateral Agreement). That agreement received the political consensus of all EU Member States in October 2019. Twenty-three Member States (with the notable exceptions of Austria, Sweden, Finland, the United Kingdom and Ireland) signed the agreement on 5 May 2020 which entered into force on 29 August 2020.
Purposes of the Plurilateral Agreement
The use of a Plurilateral Agreement to terminate, amend, interpret or complement a series of existing agreements is not novel. This method – which relies on Article 30(3) of the Vienna Convention on the Law of Treaties (the VCLT) (“When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty“) – has been used in the past to, for example, modify bilateral tax treaties and conclude the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (the “Mauritius Convention on Transparency”). It is currently being contemplated within the UNCITRAL Working-Group III as a possible method for establishing the Multilateral Investment Court, which is the preferred option of the European Union for ISDS reform. Such a method is typically preferred because, instead of concluding a high number of separate agreements whereby State parties amend or terminate existing agreements between themselves on a bilateral basis, it allows for the conclusion of a single multilateral agreement whereby the parties agree to amend all their respective (bilateral) treaties having the same subject-matter at once.READ MORE