The Relationship of EU Law and Bilateral Investment Treaties of EU Member States

This dissertation analyses the relationship of EU Law and International Investment Law from a number of different perspectives. These perspectives relate to two distinct debates that concern the future of investment treaties in Europe. The first debate relates to the formal relationship of EU law and bilateral investment treaties (BITs) of EU member states. The Commission has argued that BITs concluded between two EU member states (so called intra-EU BITs) are incompatible with EU law and have to be terminated. The Commission has raised these arguments not only before the European Court of Justice (ECJ) but also before arbitral tribunals presiding over investment disputes raised under intra-EU BITs. The ECJ will take issue with the Commission's arguments in the near future, but arbitral tribunals have rejected them in each case. The first purpose of the thesis is to examine whether the Commission's arguments hold water by analysing the relevant case law of the ECJ, and to explain why arbitral tribunals have consistently rejected the arguments. The discussion highlights the reasons behind the different perspectives of the Commission and arbitral tribunals as well as analyses a number of related issues, such as applicable conflict rules, the role of party intent, and the (limited) role that courts and tribunals can play in the resolution of treaty conflicts. The second relevant debate relates to the broader political and economic implications of investment treaties. This debate is relatively polarised and centres on the ability of investors to challenge host state measures in ad hoc arbitration. The critics argue that investment arbitration constrains the regulatory autonomy of host states, as investors are able to challenge measures adopted in sensitive areas of public policy, such as public health. As the EU is now competent to negotiate investment agreements with its major trade and investment partners, such as the United States and Canada, the critics fear that the inclusion of investment protection provisions in EU-level agreements will expose the member state to a high number of investor claims challenging legitimate public interest measures. On the other side of the argument, the proponents argue that the critique is based on misunderstandings and hyperbole, with arbitral tribunals showing a high measure of deference to the public interests of host states. The second purpose of the thesis is to understand the plausibility of these opposing arguments by analysing both the assumptions that undergird them as well as the materials on which they rely. The analysis shows that the arguments are based on anecdotal evidence and contested assumptions, rather than on empirically proven hypotheses or on rigorous analyses of the case law that arbitral tribunals have hitherto produced. My analysis also shows that the disagreement is ultimately political, as the opposing arguments rely on contrasting understandings about how state-market relations should be arranged in the global economy. The broad argument of the thesis is that the relationship of EU law and member states' investment treaties should not be decided on the basis of the Commission's formal arguments, but by discussing the different political visions upon which the opposing arguments depend. The same argument applies with equal force in respect of the EU's external investment policy.

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