A Treaty Law Perspective on Intra-EU BITs

Abstract

The Commission of the European Union (EU) sees intra-EU bilateral investment treaties (BITs) as incompatible with the overall structure of European Union law. Against this background, certain Member States have started to terminate their treaties. Also, some of the new Member States have, in their role as Respondents in intra-EU BIT arbitrations, asserted inter alia that the intra-EU BITs had been automatically terminated upon their accession to the EU and that BIT provisions were inapplicable because of the operation of EU law. This contribution deals with these questions from a treaty law perspective and examines the alleged conflict between EU law and intra-EU BITs in investment cases as well as the consensual termination of intra-EU BITs, including the sunset clauses incorporated therein. It argues that if intra-EU BITs are already ‘in action’, their protection usually persists. On the other hand, investors enjoy only limited protection when States agree to terminate an intra-EU BIT by consent.