75
Second working session — The impact
2. Arbitration Clauses in Bilateral Investment
Agreements
In recent times, investor-state arbitration clauses in so-called bilateral in-
vestment treaties of the Member States with other Member States (so-called
intra-EU BITs) (
66
) and between Member States and third countries (third-
country BITs) (
67
) are broadly discussed in terms of their compatibility with
EU law. In particular it is questioned whether they are reconcilable with the
prerogatives of the ECJ and, thus, the autonomy of the European legal order.
In a recent staff working paper the Commission summarizes the concerns as
follows:
‘Such agreements clearly lead to discrimination between EU inves-
tors and are incompatible with EU law. In particular, most Intra-EU
BITs provide for the possibility of investor-to-State arbitration proce-
dures of a binding character, which is not subject to review by the CJEU
on issues of interpretation of EU law. This form of international arbi-
tration is incompatible with the exclusive competence of EU courts to
rule on the rights and obligations of Member States under EU law. In
contrast to national courts, arbitral tribunals are not bound to respect
the primacy of EU law and, in case of doubt, are neither required nor
in a position to refer questions to the CJEU for a preliminary ruling. In
any case, such investor-to-State arbitration is very costly and thus not
easily accessible to SMEs’ (
68
).
(
66
) For a the discussion see: Claus Dieter Classen, Der EuGH und die Schiedsgerichtsbarkeit in
Investitionsschutzabkommen, Europarecht (2012) 611; Steffen Hindelang, Circumventing
Primacy of EU Law and the CJEU’s Judicial Monopoly by Resorting to Dispute Resolution
Mechanisms Provided for in Inter-se Treaties?The Case of Intra-EU Investment Arbitration,
39 Legal Issues of Economic Integration (2012) 179 et seq.; focussing more the intra-EU-
BIT’s: Konstanze v. Papp, Clash of ‘autonomous legal orders’: Can EU Member State courts
bridge the jurisdictional divide between investment tribunals and the ECJ? A plea for direct
referral from investment tribunals to the ECJ, 2013 Common Market Law Review, 1039-
1081, with some references also to new EU-agreements ibid., paragraph 9, available at:
.
(
67
) Steffen Hindelang, Member State BITs — There’s Still (Some) Life in the Old Dog Yet —
Incompatibility of Existing Member State BITs with EU Law and Possible Remedies, in: Karl
P. Sauvant (ed.), Yearbook on International Investment Law & Policy 2010-2011 (Oxford
University Press, 2011) 217 et seq., 238.
(
68
) Commission Staff Working Document on the free movement of capital in the EU, SWD
(2013) 146 final, p. 11, at:
market-monitoring-working-document_en.pdf.
