Arbitration, investment, and the EU legal order

Abstract

The divide between EU law and investment arbitration, which, following the Achmea judgment, led to the end of intra-EU bilateral investment treaties, is deepening. The Court of Justice shut the door further in its decisions in Komstroy and PL Holdings, regarding intra-EU arbitration under the Energy Charter Treaty (ECT) and ad hoc replacing treaty-based arbitration, respectively. The responsibility for juggling EU and international law obligations now rests with the courts and tribunals of the Member States, which need to make use of EU-conform interpretation of arbitration laws under appropriate guidance from the Court of Justice. Regarding extra-EU investment arbitration, the main actor is the EU, which took on the task of alleviating public distrust in investment arbitration by way of reformed investment chapters in modern trade agreements. The EU’s challenge will be to live up to this and ensure that non-economic interests will find sufficient consideration in future disputes under these agreements.