¹ See Anderer, Carrie E., Bilateral Investment Treaties and the EU Legal Order: Implications of the Lisbon Treaty, 35 Brooklyn J. Int'l L. 851, 864–65 (2010).Google Scholar

² See Teynier, Eric, L'applicabilité des traités bilatéraux sur les investissements entre Etats membres de l'Union européenne, 1 Paris J. Int'l Arb. 12 (2008).Google Scholar

³ Vertrag zwischen der Bundesrepublik Deutschland und dem Königreich Griechenland über die Förderung und den gegenseitigen Schutz von Kapitalanlagen [Treaty Between the Federal Republic of Germany and the Kingdom of Greece on the Promotion and Mutual Protection of Investments], Apr. 11, 1963, BGBl II at 216 (Ger.).Google Scholar

⁴ Vertrag zwischen der Bundesrepublik Deutschland und der Portugiesischen Republik über die Förderung und den gegenseitigen Schutz von Kapitalanlagen [Treaty Between the Federal Republic of Germany and the Portugues Republic on the Promotion and Protection of Capital Investments], Jan. 21, 1982, BGBl II at 56 (Ger.).Google Scholar

⁵ See Shan, Wenhua & Zhang, Sheng, The Treaty of Lisbon: Half Way Toward a Common Investment Policy, 21(4) Eur. J. Int'l L. 1049, 1065 (2010); Dominik Moskvan, The Clash of Intra-EU Bilateral Investment Treaties with EU Law: A Bitter Pill to Swallow, 22 Colum. J. Eur. L. 101, 103 (2015).Google Scholar

⁶ See Teynier, Eric, L'applicabilité des traités bilatéraux sur les investissements entre Etats membres de l'Union européenne, 1 Paris J. Int'l Arb. 12 (2008).Google Scholar

⁷ The enlargement of 2004 increased the number of intra-EU BITs to 150, the enlargement of 2007 increased the number to 191. Wenhua Shan & Sheng Zhang, The Treaty of Lisbon: Half Way Toward a Common Investment Policy, 21(4) Eur. J. Int'l L. 1049, 1065 (2010).Google Scholar

⁸ Cecilia Olivet, EU Investment Policy and Intra-EU BITs: The Case of Czech Republic 2 (Transnational Institute 2012).Google Scholar

⁹ Both intuition and empirical evidence suggest that BITs stimulate, to varying degrees, the cross-border movement of capital. See, e.g., Eric Neumayer & Laura Spess, Do Bilateral Investment Treaties Increase Foreign Direct Investment to Developing Countries?, 3(1) World Dev. 31 (2005) (using quantitative evidence to demonstrate that “a higher number of BITs raises the FDI that flows to a developing country.”); Niti Bhasin & Rinku Manocha, Do Bilateral Investment Treaties Promote FDI Inflows? Evidence from India, 41(4) The J. for Decision Makers 275 (2016) (demonstrating the “the positive role of BITs in attracting FDI inflows into India.”); Sarah Bauerle Danzman, Contracting with Whom? The Differential Effects of Investment Treaties on FDI, 42(3) Int'l Interactions 452 (2016) (noting that the effects of this stimulus depend on several circumstances. Investors may have “heterogeneous responses to ratification of investment treaties.”). Danzman further points out that BITs are best equipped to increase FDI into activities that require a strong contract between governments and investors, such as infrastructure and utility service privatization. BITs, however, do not ameliorate investment risks related to private commercial contracts and are thus less able to overcome uncertainties that matter most to other foreign investors, such as manufacturers.Google Scholar

Id. See Also The Effect of Treaties on Foreign Direct Investment Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows (Sauvant, Karl P. & Sachs, Lisa E. eds., 2009) (providing an overview of the arguments for and against the significance of BITS in stimulating cross-border investments).Google Scholar

¹⁰ See Csongor István Nagy, Free Trade, Public Interest and Reality: New Generation Free Trade Agreements and National Regulatory Sovereignty 9 Czech Y.B. of Int'l L. (2018).Google Scholar

¹¹ U.N. Comm‘n on Int‘l Trade L., Articles III—V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) 9–10 (2015) (providing an overview of articles III through V of the 1958 Convention on the Recognition and enforcement of Foreign Arbitral Awards).Google Scholar

¹² It is to be noted that arbitral proceedings under the ICSID Additional Facility Rules do not benefit from this protection.Google Scholar

¹³ Cf. Thomas Eilmansberger, Bilateral Investment Treaties and EU Law, 46 Common Mkt. L. Rev. 383, 427–28 (2009).Google Scholar

¹⁴ See Micula, Ioan, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. Arb/05/20 (Dec. 11, 2013); Commission Decision (EU) 2015/1470 of 30 March 2015 on State Aid SA.38517(2014/C) (ex 2014/NN) Implemented by Romania—Arbitral Award Micula v. Romania of 11 December 2013, 2015 O.J. (L. 232/43) [hereinafter EU Micula Decision]; European Commission Press Release IP/15/4725, State Aid: Commission Orders Romania to Recover Incompatible State Aid Granted in Compensation for Abolished Investment Aid Scheme (March 30, 2015) [hereinafter EC Micula Press Release]; Case T-624/15, European Food and Others v. Comm'n; Case T-694/15, Micula v. Comm'n; Case T-704/15, Viorel Micula v. Comm'n (pending).Google Scholar

¹⁵ See EU Micula Decision: Article 1: The payment of the compensation awarded by the arbitral tribunal established under the auspices of the International Center for Settlement of Investment Disputes (ICSID) by award of 11 December 2013 in Case No ARB/05/20 Micula a.o. v Romania … constitutes State aid within the meaning of Article 107(1) of the Treaty which is incompatible with the internal market. Article 2: 1. Romania shall not pay out any incompatible aid referred to in Article 1 and shall recover any incompatible aid referred to in Article 1 which has already been paid out ….Google Scholar

¹⁶ Id.; EC Micula Press Release, supra note 14. The claimants—beneficiaries—appealed to the General Court, so the EU judiciary will sooner or later have to put an end to this headache-producing controversy. Case T-624/15, European Food and Others v Commission, Case T-694/15, Micula v Commission, Case T-704/15 Micula e.a. v Commission (pending).Google Scholar

¹⁷ An ex parte petition was filed in the District of Columbia. See Micula v. Government of Romania, 104 F. Supp. 3d 42 (D.D.C. 2015) (dismissing voluntarily without prejudice). Afterwards, an ex parte petition was filed in the United States District Court for the Southern District of New York. See Micula, et al. v. Government of Romania, Case No. 15 Misc. 107(LGS), 2015 WL 4643180 (S.D.N.Y. Aug. 5, 2015) (resulting in an order and judgment recognizing the award). Romania appealed the decision and the United States Court of Appeals for the Second Circuit held that the Foreign Sovereign Immunities Act (FSIA) provided the only and exclusive means for the enforcement of an ICSID arbitration award against a sovereign and the summary ex parte proceeding utilized to convert the award into a judgment did not meet the requirements of the FSIA, including service of process on the sovereign; furthermore, New York was not an appropriate venue. See Micula, et al. v. Government of Romania, 714 F. App'x 18 (2d Cir. 2017). Accordingly, a petition to confirm the ICSID arbitration award and enter judgment was submitted to the US District Court for the District of Columbia (Civil Action No. 17-CV-2332).Google Scholar

¹⁸ Arbitration Institute of the Stockholm Chamber of Commerce, Partial Award in the Matter of UNCITRAL Ad Hoc Arbitration in Paris SCC No. 088/2004 (Mar. 27, 2007).Google Scholar

¹⁹ Id. at para. 167.Google Scholar

²⁰ Id. at para. 170.Google Scholar

²¹ Award on Jurisdiction Rendered on June 6, 2007 on Issues of Jurisdiction (Binder v. Czech Republic), para. 62 (June 6, 2007).Google Scholar

²² Id. at para. 63.Google Scholar

²³ Id. at para. 65.Google Scholar

²⁴ Eureko B.V. v. the Slovak Republic, PCA Case No. 2008-13, Award on Jurisdiction, Arbitrability, and Suspension (Oct. 26, 2010).Google Scholar

²⁵ Id. at paras 271–72, 283.Google Scholar

²⁶ Id. at para 273.Google Scholar

²⁷ Id. at para. 274.Google Scholar

²⁸ P.O. No. 2, ICSID Case No. ARB/14/24.Google Scholar

²⁹ European Commission Press Release IP/15/5198, Commission Asks Member States to Terminate their Intra-EU Bilateral Investment Treaties (June 19, 2015): Since enlargement, such ‘extra’ reassurances [provided by BITs] should not be necessary, as all Member States are subject to the same EU rules in the single market, including those on cross-border investments (in particular the freedom of establishment and the free movement of capital). All EU investors also benefit from the same protection thanks to EU rules (e.g. non-discrimination on grounds of nationality). By contrast, intra-EU BITs confer rights on a bilateral basis to investors from some Member States only: [I]n accordance with consistent case law from the European Court of Justice, such discrimination based on nationality is incompatible with EU law.Google Scholar

³⁰ Oberlandesegericht [OLG] Frankfurt am Main [Frankfurt am Main Higher Regional Court] Dec. 18, 2014, 26 SC 3/14, http://openjur.de/u/753594.html.Google Scholar

³¹ BGH Mar. 3, 2016, I ZB 2/15, http://juris.bundesgerichtshof.de/cgibin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2016&Sort=3&nr=74612&linked=bes&Blank=1&file=dokument.pdf. In its reference, the BGH posed questions as to the compatibility of BITs with Articles 344, 267 and 18 TFEU. Case C 284/16, Slowakische Republik v. Achmea BV, 2018 O.J. C 161, paras. 14–23 [hereinafter Achmea].Google Scholar

³² Achmea, paras. 7–9.Google Scholar

³³ Id. at para. 32.Google Scholar

³⁴ Id. at para. 39.Google Scholar

³⁵ Carola Glinski, Achmea and its Implications for Investor Dispute Settlement, 21(1) Zeitschrift für Europarechtliche Studien 47, 60 (2018)Google Scholar

Thus, the ruling can only be understood in such a way that every dispute settlement mechanism in an area which is already covered by EU law bears at least the hypothetical risk of an interpretation or application of EU law and is incompatible with the autonomy of EU law — which is particularly true for intra-EU economic relations.Google Scholar

³⁶ Achmea, at paras 40–2.Google Scholar

³⁷ Id. at paras 43–9.Google Scholar

³⁸ Id. at paras 53.Google Scholar

³⁹ Id. at paras 52.Google Scholar

⁴⁰ Id. at paras 54.Google Scholar

⁴¹ Id. at para. 55.Google Scholar

⁴² See e.g., Csongor István Nagy, Hungarian Cases Before ICSID Tribunals: The Hungarian Experience with Investment Arbitration, 58(3) Hungarian J. of Legal Stud. 291, 306–08 (2017) (analyzing Vigotop Limited v. Hungary, ICSID Case No. ARB/11/22).Google Scholar

⁴³ See the opinion of AG Wathelet in Case C-284/16 Achmea, para. 180: I do not know what the Commission means by ‘full protection’, but a comparison between the BIT and the EU and FEU Treaties shows that the protection afforded to investments by those Treaties is still a long way from being ‘full’. In my view, intra-EU BITS, and more particularly the BIT at issue in the main proceedings, establish rights and obligations which neither reproduce nor contradict the guarantees of the protection of cross-border investments afforded by EU law.Google Scholar

⁴⁴ Id. at para. 42 (“It follows that on that twofold basis the arbitral tribunal referred to in Article 8 of the BIT may be called on to interpret or indeed to apply EU law, particularly the provisions concerning the fundamental freedoms, including freedom of establishment and free movement of capital.”) (emphasis added).Google Scholar

⁴⁵ The Court further provided thatGoogle Scholar

[I]t must be considered that, by concluding the BIT, the Member States parties to it established a mechanism for settling disputes between an investor and a Member State which could prevent those disputes from being resolved in a manner that ensures the full effectiveness of EU law, even though they might concern the interpretation or application of that law. Google Scholar

Id. at paras. 56 (emphasis added).Google Scholar

⁴⁶ Id. at para. 60.Google Scholar

⁴⁷ See Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1, paras. 678–83 (distinguishing Achmea from cases based on the Energy Charter Treaty).Google Scholar

⁴⁸ Achmea, para. 52.Google Scholar

⁴⁹ Case C-55/94 Reinhard Gebhard v. Consiglio dell'Ordine degli Avvocati e Procuratori di Milano, 1995 E.C.R. I-04165, para. 25.Google Scholar

⁵⁰ Case 283/81Srl CILFIT and Lanificio di Gavardo SpA v. Ministry of Health, ECR 03415; See Tamás Szabados, ‘Precedents’ in EU Law — The Problem of Overruling, 3(1) ELTE L. J. 125, 131—33 (2015).Google Scholar

⁵¹ Case C-112/00, Schmidberger, 2003 E.C.R. I-5659, para. 32; Joined Cases C-94/04 and C-202/04, Cipolla and Others, 2006 E.C.R. I-11421; Case C-478/07, Budejovický Budvar, 2009 E.C.R. I-7721, para. 64; Joined Cases C570/07 and C571/07, Blanco Pérez and Chao Gómez, 2010 ECR I-0000, para. 36; Case C-384/08 Attanasio Group, 2010 E.C.R. I-2055, para. 28; Case C-197/10, Unió de Pagesos de Catalunya v Administración del Estado, 2011 E.C.R. I-08495.Google Scholar

⁵² Case C-144/96. ONP v. Maria Cirotti, 1997 E.C.R. I-05349, paras. 21, 25–8.Google Scholar

⁵³ Case 130/79, Express Dairy Foods Limited v. Intervention Board for Agricultural Produce, 1980 E.C.R. 1887, paras. 5-8.Google Scholar

⁵⁴ Joined opinion of AG Warner in Case 112-76, Renato Manzoni v. Fonds national de retraite des ouvriers mineurs, Case 22-77, Fonds national de retraite des ouvriers mineurs v. Giovanni Mura, Case 37-77, Fernando Greco v. Fonds national de retraite des ouvriers mineurs, Case 32-77, Antonio Giuliani v. Landesversicherungsanstalt Schwaben, 1997 E.C.R. 1647, at 1662.Google Scholar

⁵⁵ Case 10/61, Comm'n v. Italy, ECR 1 (Feb. 27, 1962); Case 235/87, Annunziata Matteucci v. Communauté française of Belgium and Commissariat général aux relations internationales of the Communauté française of Belgium, 1988 E.C.R. 05589; Case C-3/91, Exportur SA v. LOR SA and Confiserie du Tech SA, 1992 E.C.R. I-05529.Google Scholar

⁵⁶ See e.g., Maupin, Julie A., Where should Europe's investment path lead? Reflections on August Reinisch, “Quo vadis Europe?”, 12 Santa Clara J. Int'l L. 183, 217 (2013) (stating that intra-EU BITs violate the fundamental principles of the common market; they discriminate on the basis of nationality.).Google Scholar

⁵⁷ At first glance, the question may appear to be strange, because under Article 207 TFEU the EU has the competence to conclude BITs with third countries.Google Scholar

⁵⁸ See, e.g., Douglas, Zachary, The Hybrid Foundation of Investment Treaty Arbitration, 74 British Y.B. Int'l L. 182 (2003); Campbell McLachlan, Laurence Shore & Matthew Weininger, International Investment Arbitration: Substantive Principles 61.2 (2007); Martin Paparinskis, Investment Treaty Interpretation and Customary Investment Law: Preliminary Remarks, in Evolution in Investment Treaty Law and Arbitration 81–5 (Chester Brown & Kate Miles eds., 2011); Anthea Roberts, Clash of Paradigms: Actors and Analogies Shaping the Investment Treaty System, 107 Am. J. Int'l L. 45 (2013); Anthea Roberts, State-to-State Investment Treaty Arbitration: A Hybrid Theory of Interdependent Rights and Shared Interpretive Authority, 55(1) Harv. Int'l L. J. 1 (2014); Voon, Tania S., Mitchell, Andrew D. & James Munro, The Impact of Mutual Termination of Investment Treaties on Investor Rights, 9(2) ICSID Rev. - Foreign Inv. L. J. 455 (2014).Google Scholar

⁵⁹ See Harrison, James, The Life and Death of BITs: Legal Issues Concerning Survival Clauses and the Termination of Investment Treaties, 13 J. World Inv. Trade 935 (2008); Anthea Roberts, Triangular Treaties: The Extent and Limits of Investment Treaty Rights, 56 Harv. Int‘l L. J. 353, 386–88 (2015); Giovanni Zarra, The Arbitrability of Disputes Arising from Intra-EU BITs, 25 Am. Rev. Int‘l Arb. 573, 585 (2014); Voon, Tania S., Mitchell, Andrew D. & James Munro, The Impact of Mutual Termination of Investment Treaties on Investor Rights, 9(2) ICSID Rev. -Foreign Inv. L. J. 455, 465 (2014).Google Scholar

⁶⁰ See e.g., Case 17/67, Firma Max Neumann v. Hauptzollamt Hof/Saale, 1967 E.C.R. 441; Case 98/78, Racke, 1979 E.C.R. 69; Case 14/81, Alpha Steel Ltd. v Commission, 1982 E.C.R. 749; Case C-248/89, Cargill BV v. Comm'n, 1991 E.C.R. I-2987; Case C-365/89, Cargill BV v. Produktschap voor Margarine, Vetten en Olien, 1991 E.C.R. I-3045.Google Scholar

⁶¹ For a concise summary on compensation for taken property see Zoltán Vig & Slobodan Doklestić, Requirements of Lawful Taking of Foreign Property in International Law 41–70 (2016).Google Scholar

⁶² See Nelson, Timothy G., Human Rights Law and BIT Protection: Areas of cCnvergence, 12(1) J. World Inv. & Trade 27 (2011) (analyzing the convergence between human rights protection and BITs).Google Scholar

⁶³ See Moskvan, supra note 5, at 106 (“EU law and intra-EU BITs clearly do not offer the same substantive rules in the area of private property rights, specifically with regards to expropriation should the owner's property be frustrated.”).Google Scholar

⁶⁴ The respect of human rights is a precondition of membership—Copenhagen criteria—established by the European Council in Copenhagen on June 21 through 22, 1993 (Conclusions of the Presidency), and is listed among the core values of the Union; according to Article 2 TEU, the EU “is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities.”Google Scholar

⁶⁵ See, e.g., András Jakab, Application of the EU Charter by National Courts in Purely Domestic Cases (October 21, 2014); Michael Dougan, Judicial Review of Member State Action Under The General Principles and the Charter: Defining the “Scope Of Union Law,” 52 Common Mkt. L. Rev. 1201 (2015).Google Scholar

⁶⁶ Charter of Fundamental Rights of the European Union art. 17, 2010 O.J. C 83/02 [hereinafter Charter of Fundamental Rights].Google Scholar

⁶⁷ The scope of the Charter is based on the principle that the federal bill of rights applies to the federal government and the national bill of rights applies to the national government. According to Article 51(1) of the Charter, “[t]he provisions of this Charter are addressed to the institutions and bodies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law.” Id. art. 51(1). Article 51(2) emphasizes that the “Charter does not establish any new power or task for the Community or the Union, or modify powers and tasks defined by the Treaties.” Id. art. 51(2). See also Lenaerts, Koen, Exploring the Limits of the EU Charter of Fundamental Rights, 8(3) Eur. Const. L. Rev. 375, 377 (2012) (“However, from the fact that the Charter is now legally binding it does not follow that the EU has become a ‘human rights organi[z]ation’ or that the ECJ has become ‘a second European Court on Human Rights’ (ECtHR).”).Google Scholar

⁶⁸ See Eeckhout, Piet, The EU Charter of Fundamental Rights and the Federal Question, 39 Common Mkt L. Rev. 945, 958–69 (2002).Google Scholar

⁶⁹ See Fontanelli, Filippo, The Implementation of European Union law by Member States Under Article 5 1(1) of the Charter of Fundamental Rights, 20(2) Columbia J. Eur. L. 193, 197–198 (2014).Google Scholar

⁷⁰ See, e.g., Case C617/10, Åkerberg Fransson 2013 E.C.R. 105.Google Scholar

⁷¹ Angelos Dimopoulos, The Validity and Applicability of International Investment Agreements Between EU Member States Under EU and International Law, 48 Common Mkt. L. Rev. 63, 66 (2011): As a result, the only area covered by intra-EU BITs and the investment chapter of the ECT where EU law does not provide relevant substantive rules appears to be the protection of private property rights against expropriation and other political risks which result from purely national measures. However, even in such cases, the Court of Justice has ruled that national law on property protection must be compatible with the Treaty provisions, and more specifically that it shall be applied in a non-discriminatory manner.Google Scholar

⁷² Case C-206/13, Siragusa, 2014 E.C.R. 126.Google Scholar

⁷³ See id. para. 30.Google Scholar

⁷⁴ See id. paras. 31–3.Google Scholar

⁷⁵ See Lavranos, Nikos, Member States' Bilateral Investment Treaties (BITs): Lost in Transition?, Hague Y.B. Int'l L. 281, 305 (2012).Google Scholar

⁷⁶ Giovanni Zarra, The Arbitrability of Disputes Arising From Intra-EU BITs, 25 American Rev. Int'l Arb. 573, 580–81 (2014).Google Scholar

⁷⁷ Article 59 of the Vienna Convention on the Law of Treaties (VCLT) states: A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter and: (a) It appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or (b) The provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time.Google Scholar

Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331.Google Scholar

⁷⁸ Giovanni Zarra, The Arbitrability of Disputes Arising from Intra-EU BITs, 25 American Rev. Int'l Arb. 573, 583 (2014).Google Scholar

⁷⁹ August Reinisch, Articles 30 and 59 of the Vienna Convention on the Law of Treaties in Action: The Decisions on Jurisdiction in the Eastern Sugar and Eureko Investment Arbitrations, 39 Legal Issues of Econ. Integration 157, 167–72 (2012): In fact, the intra-EU BITs and the EU accession treaties of new members do not relate to the ‘same subject matter’. The EU accession treaty made EU law applicable to them. It provides for a highly integrated economic union based on a customs union and is enriched by a vast set of additional common policies, whereas the BITs provide for a limited number of very specific investment protection standards, which may be enforced, among others, but most importantly, by direct investor-state arbitration. While there may be some partial overlap between BITs and EU law, this cannot change the fact that they are addressing different subject matters.Google Scholar

Id. Google Scholar

⁸⁰ For arguments that the two regimes have the same subject-matter, see Clodfelter, Mark A., The Future Direction of Investment Agreements in the European Union, 12 Santa Clara J. Int'l L. 159, 178 (2013): Both the BITs and the EU legal order govern the free movement of capital under uniform principles of non-discrimination and treatment, with a constant recognition of rights in property. Thus, they address the same subject matter, even if the scope of EU law is much wider, and thus qualify for the threshold application of tests of incompatibility found in the international law principles reflected in Articles 59 and 30(3)78 of the Vienna Convention on the Law of Treaties.Google Scholar

Id.; see also Dimopoulos, supra note 71, at 73–4 (2011): Adopting a broad definition of the notion of the ‘same subject matter’, in the sense that two treaties have the same subject matter to the extent that ‘the fulfilment of the obligation under one treaty affects the fulfilment of the obligation of another’, then it can certainly be argued that intra-EU BITs cover the same subject matter as the EU Treaties, to the extent that such conflicts occur. However, even if a narrow definition of ‘same subject matter’ were adopted, intra-EU BITs can still be considered as having the same subject matter as EU law…. EU law provides rules for the post-establishment treatment and operation of foreign investment, the transfer of assets and the imposition of limitations on the rights of individuals resulting from EU or Member States' measures. Hence, both intra-EU BITs and the EU Treaties deal with foreign investment activity, and provide rules for the same aspects of foreign investment regulation, namely their post-establishment treatment and operation, capital movements/ transfers and limitations on private property rights.Google Scholar

Id. Google Scholar

⁸¹ See, e.g., C-367/98, Comm'n v. Portugal, 2002 E.C.R. I- 4731, para. 45; Case C-483/99, Comm'n v. France, 2002 E.C.R. I-4781, para. 41; Case C-463/00, Comm'n v. Spain, 2003 E.C.R. I 4581, para. 61; Case C-98/01, Comm'n v. United Kingdom, 2003 E.C.R. I 4641, para. 47; Case C-174/04, Comm'n v. Italy, 2005 E.C.R. I-4933, paras. 30–1; Case C-112/05, Comm'n v. Germany, 2007 E.C.R. I-08995, para. 19; Joined Cases C 105/12 to C 107/12, Staat der Nederlanden v. Essent NV et al., ECLI:EU:C:2013:677, para 41.Google Scholar

⁸² C-418/11 Texdata Software GmbH (not published yet).Google Scholar

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⁸⁷ Case 10/61, Comm'n v. Italy, 1962 E.C.R. 1; Case 235/87, Annunziata Matteucci v. Communauté française of Belgium and Commissariat général aux relations internationales of the Communauté française of Belgium, 1988 E.C.R. 05589, para. 22.Google Scholar

⁸⁸ Opinion of AG Poiares Maduro in Case C402/05 P Yassin Abdullah Kadi v Council and Commission, 2008 E.C.R. I-06351, para. 24.Google Scholar

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⁹² Opinion 1/09, 2011 E.C.R. I-01137, para. 89.Google Scholar

⁹³ The CJEU noted thatGoogle Scholar

The system set up by Article 267 TFEU therefore establishes between the Court of Justice and the national courts direct cooperation as part of which the latter are closely involved in the correct application and uniform interpretation of European Union law and also in the protection of individual rights conferred by that legal order … [and] the tasks attributed to the national courts and to the Court of Justice respectively are indispensable to the preservation of the very nature of the law established by the Treaties.Google Scholar

Id. paras. 84–5.Google Scholar

⁹⁴ See id. para. 86.Google Scholar

⁹⁵ See id. paras 87–8.Google Scholar

⁹⁶ Cf. Clodfelter, supra note 80, at 180 (“The CJEU observed that the envisaged patent court system would be called upon, inter alia, to interpret and apply provisions of EU law, effectively stripping Member States courts of their jurisdiction over the same disputes”).Google Scholar

⁹⁷ See Opinion 1/09, 2011 E.C.R. I-01137, para. 74.Google Scholar

⁹⁸ Id. para. 78.Google Scholar

⁹⁹ Id. para. 198.Google Scholar

¹⁰⁰ Id. paras. 197–98.Google Scholar

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[The CJEU] rather bases itself significantly on the effect, the reference or the connection of the particular regularisation of the Member State with the fundamental freedoms. In other words, it does not matter whether the particular regulation itself falls within the scope of application of the Treaty, but it is decisive that the exercise of the right of free movement is regulated by the Community.Google Scholar

Id. Furthermore, “[a]ccording to case-law, there has to be a connection to the fundamental freedoms or the right of free movement of Union citizens.” Id. It does not hinder the application of Article 18 TFEU that the matter comes under by exclusive national legislative competence. Case C-73/08, Bressol & Chaverot, 2009 E.C.R. I-2735, paras. 28–9.Google Scholar

¹⁰³ Case C-43/95, Data Delecta Aktiebolag and Ronny Forsberg v. MSL Dynamics Ltd., 1996 E.C.R. I-04661, para. 15; Case C-323/95, David Charles Hayes and Jeannette Karen Hayes v. Kronenberger GmbH, 1997 E.C.R. I-01711, para. 17.Google Scholar

¹⁰⁴ Case 186/87, 1989 E.C.R. 00195.Google Scholar

¹⁰⁵ Id. at paras. 17, 20.Google Scholar

¹⁰⁶ Id. at para. 19.Google Scholar

¹⁰⁷ Case C-122/96, Stephen Austin Saldanha and MTS Securities Corporation v. Hiross Holding AG, 1997 E.C.R. I-05325.Google Scholar

¹⁰⁸ See id. at para. 23.Google Scholar

¹⁰⁹ See Wehland, Hanno, Intra-EU Investment Agreements and Arbitration: Is European Community Law an Obstacle?, 58(2) Int'l Comp. L. Q. 297, 315–17 (2009); European Parliament, The Impact of the Rulings of the European Court Of Justice in the Area of Direct Taxation 2010 89–90 (2011), http://www.europarl.europa.eu/document/activities/cont/201203/20120313ATT40640/20120313ATT40640EN.pdf. For an analysis of the pros and cons of a comparison to double taxation treaties see Glinski, supra note 35, at 53–4.Google Scholar

¹¹⁰ Case C-376/03, D. v. Inspecteur van de Belastingdienst/Particulieren/Ondernemingen buitenland te Heerlen, 2005 E.C.R. I-05821.Google Scholar

¹¹¹ Id. Google Scholar

¹¹² See id. paras. 54–5.Google Scholar

¹¹³ Case C-374/04, Test Claimants in Class IV of the ACT Group Litigation v. Commissioners of Inland Revenue, 2006 E.C.R. I-11673.Google Scholar

¹¹⁴ Id. at paras 90–92.Google Scholar

¹¹⁵ The CJEU departed from the AG's Opinion, who argued that double taxation treaties were discriminatory. Opinion OF AG Ruiz-Jarabo Colomer in Case C-376/03, Inspecteur van de Belastingdienst/Particulieren/Ondernemingen buitenland te Heerlen, 2005 E.C.R. I-05821, paras. 90–106.Google Scholar

¹¹⁶ 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.”).Google Scholar

¹¹⁷ Cf. Hanno Wehland, supra note 109, at 317.Google Scholar

While some aspects of these cases may have been specific to the field of direct taxation, the ECJ's main line of argumentation should also apply to BITs. There is no question that the facilitation of investment between the Member States is as much in line with the objectives of the TEC as is the avoidance of double taxation and that there are no harmonization measures at the Community level in this regard. True, the scope of application of BITs is typically defined by nationality rather than residency – but would that be relevant for the ECJ's assessment? After all, the ECJ's reliance on the inherent incomparability of the situation of residents of a contracting state with that of the residents of a non-contracting state was not much more than an expression of the Court's unwillingness to adopt the MFN approach suggested by the Advocate-General. If this reading is correct, the ECJ could also be expected to treat the limitation of scope to a Member State's own nationals as ‘an inherent consequence’ of BITs. As a consequence, the fact that BITs grant advantages only to investors from selected Member States would not appear to be incompatible with EC law.Google Scholar

Id. Google Scholar

¹¹⁸ As to the operation and limits of the most-favored nation principle in EU law, see Kofler, Georg W., Most-Favoured-nation Treatment in Direct Taxation: Does EC Law Provide for Community MFN in Bilateral Double Taxation Treaties?, 5 Houston Bus. Tax L. J. 1, 31–87 (2005).Google Scholar

¹¹⁹ See Masona, supra note 116, at 104–05.Google Scholar

¹²⁰ See Dimopoulos, supra note 71, at 82.Google Scholar

¹²¹ Cf. Epiney, supra note 102, at 618–19:Google Scholar

[I]n cases where the freedom to move is concerned, the scope of application of the Treaty is already engaged if the regulation in question relates to the residence. This is valid in as much as the regulation concerns the basic conditions of this stay or in as much as the regulation facilitates or complicates the management of the stay, even if it is only indirectly. An indirect or potential reference is hereby sufficient.Google Scholar

Id. Furthermore, it is thus “clear that the requirement of a connection with the (legal) stay can hardly limit the scope of application of the Treaty in terms of Article 12 EC, since a very broad palette of state regulations have a direct or indirect effect.” Id. Google Scholar

¹²² See contra Hindelang, Steffen, Member State BITs–There's Still (Some) Life in the Old Dog Yet, Y.B. Int‘l Inv. L. Pol‘y 217, 223 (2011).Google Scholar

¹²³ See Dimopoulos, supra note 71, at 82: Considering firstly the substantive provisions of intra-EU IIAs, any incompatibilities that arise can be remedied without affecting the validity or applicability of intra-EU IlAs …. [G]iven that this incompatibility can be remedied by extending unilaterally these rights to all other EU nationals, the incompatibility of substantive intra-EU BITs provisions with the EU law principle of equal treatment can be resolved without affecting the applicability of such intra-EU BITs provisions.Google Scholar

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.Google Scholar

Id. Google Scholar

¹²⁴ See Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1, paras. 678–83.Google Scholar