Intra-EU Bilateral Investment Treaties and EU Law AfterAchmea: “Know Well What Leads You Forward and What Holds You Back”

Author:

Nagy Csongor István

Abstract

This paper analyzes the compatibility of intra-EU bilateral investment treaties—intra-EU BITs—with EU law. The status and validity of intra-EU BITs gave rise to a heated debate in Europe, which culminated in the CJEU's recent controversial judgment inAchmea.This Article demonstrates that although the CJEU approached intra-EU BITs from the angle of federalism—where they are both redundant and illegitimate—the reality is that EU law does not provide for the kind of protection afforded by BITs. The paper gives both a positivist and a critical assessment of theAchmearuling. It argues that the judgment should be construed in the context of the underlying facts and, hence, notwithstanding the CJEU's apparently anti-arbitration attitude, its holding is rather narrow. It gives an alternative theory on intra-EU BITs' fit in the EU internal market—based on European reality—showing that the complete invalidation of intra-EU BITs is flawed because the overlap between BITs and EU law is merely partial: BITs address a subject EU law does not. This Article's central argument is that intra-EU BITs accelerate the internal market and, hence, their suppression does not lead the European integration further, but holds it back. Finally, this Article argues that the prevailing pattern of investment protection is a global scheme that cannot be arrested through regional unilateralism as essayed by the CJEU.

Publisher

Cambridge University Press (CUP)

Subject

Law

Reference179 articles.

1. Id.; Cf. Moskvan, supra note, at 118 (“To remedy this conflict, one option would be European-level legislation which extends the benefits of the free transfer of funds, FET, and other privileges contained in BITs to all European investors.”); Contra Clodfelter, supra note 80, at 181–82: In the view of some, this conclusion does not mean the BITs' arbitration provisions should be considered inoperative, since these discriminatory effects can be cured by each offending State by extending the obligations it owes to the other State and to its investors to all Member States and their investors. However, quite apart from the practical and legal obstacles to unilateral extension—which, as established in the jurisprudence of the ECJ, would not undo the incompatibility in the meantime—the extension of dispute settlement mechanisms would certainly aggravate the concerns regarding the preservation of the nature of EU law.

2. Cf. Epiney, supra note 102, at 618–19:

3. See Dimopoulos, supra note 71, at 82.

4. Most-Favoured-nation Treatment in Direct Taxation: Does EC Law Provide for Community MFN in Bilateral Double Taxation Treaties?;Kofler;Houston Bus. Tax L. J.,2005

5. Ruth Masona, Flunking the ECJ's Tax Discrimination Test, 46 Columbia J. Transnat'l L. 72, 107 (2007) (noting that the CJEU “managed to dispose of the tax treaty most-favored nation question without any substantive discussion of whether the EC Treaty implies a most-favored nation entitlement.”).

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