Revue - Les Cahiers de l'Arbitrage N°1-2023 - 66

ARTICLES - DEBATES
would otherwise be possible. 13
The underlying notion was the usual one: foreign
nationals will be readier to invest in the territory of a State if the State undertakes
legally binding guarantees of investor protection. While these agreements could
properly have been called " extra-EU BITs " in the pre-accession period in which
they were concluded, they in fact came to be known, once accession occurred, as
" intra-EU BITs. " 14
A key feature of BITs, not only within Europe but worldwide, is
the submission of these disputes to settlement pursuant to the arbitration provisions
specifically provided for by the BITs. 15
Importantly, disputes may be intra-EU in nature without necessarily arising
under BITs. All EU Member States - and the European Union itself - have been
parties to a multilateral treaty, namely the Energy Charter Treaty (ECT), 16
their withdrawal from it is recently underway. 17
though
The ECT not only regulates the
international energy sector but extends BIT-like protection to nationals of one
Contracting State who invest in that sector in the territory of another Contracting
State, again making arbitration available for the resolution of disputes that arise. 18
The accession States soon enough began offering investors from Western
Europe a variety of incentives to invest, and those incentives largely had their
intended effect. However, they also, not unexpectedly, gave rise to investment
disputes, since such disputes were bound to arise on the EU landscape, a territory
in which the EU, through its institutions, had for some fifty years been building
an economically integrated internal or common market as part of its raison
d'etre. While most countries do not particularly view the conduct of arbitration
over investment disputes arising on their territory as a threat to their sovereignty,
the EU did, precisely because fostering intra-EU investment was in principle a
component of the EU's market integration project. 19
Small wonder that the EU
came to view the adjudication of claims by an investor from one Member State
targeting the public acts of another as an intrusion into its own cross-border
13. See, e.g., Stabilisation and Association Agreement between the European Communities and
their Member States, of the one part, and the Republic of Croatia, of the other part entered into
force on Feb. 1, 2005, 2005 O.J. (L 26) 3, art. 85(2) ( " [t]he particular aims of cooperation [between
Croatia and the EU Member States] shall be: ... the conclusion, where appropriate, with Member
States of bilateral agreements for the promotion and protection of investment " ).
14. TFEU, supra note 8, art. 351 (Member States have an obligation to remove incompatibilities
between agreements concluded before their accession to the EU and the TFEU); Regulation (EU)
No. 1219/2012 of the European Parliament and of the Council of 12 December 2012 establishing
transitional arrangements for bilateral investment agreements between Member States and third
countries, 2012 O.J. (L 351) 40.
15. Gary Born, International Arbitration Law and Practice 492 (3rd ed. 2021) ( " [BITs] generally
provide ... specialized dispute resolution mechanisms - in particular, provisions for international
arbitration of investment disputes. " ).
16. Although all EU Member States were party to the ECT, multiple Member States have since
withdrawn from the treaty. See Lisa Bohmer, France Notifies ECT Depositary of its Withdrawal
Decision, Inv. Arb. Rep. (Dec. 22, 2022), https://www.iareporter.com/articles/france-notifies-ectdepositary-of-its-withdrawal-decision/
(mentioning that France's notification follows denunciations
of the ECT by Germany, Luxembourg, the Netherlands, Poland, Slovenia, and Spain) (last visited
Mar. 9, 2023).
17. Several EU Member States to withdraw from the Energy Charter Treaty despite progress on
modernization, Van Bael & Bellis (Oct. 25, 2022), https://www.vbb.com/insights/several-eu-memberstates-to-withdraw-from-the-energy-charter-treaty-despite-progress
(last visited Feb. 18, 2023).
18. Energy Charter Treaty art. 26(3), Dec. 17, 1994, 2080 U.N.T.S. 100 [hereinafter ECT].
19. See supra note 13.
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The Paris Journal of International Arbitration 2023‑1

https://www.iareporter.com/articles/france-notifies-ect-depositary-of-its-withdrawal-decision/ https://www.iareporter.com/articles/france-notifies-ect-depositary-of-its-withdrawal-decision/ https://www.iareporter.com/articles/france-notifies-ect https://www.vbb.com/insights/several-eu-member-states-to-withdraw-from-the-energy-charter-treaty-despite-progress https://www.vbb.com/insights/several-eu-member-states-to-withdraw-from-the-energy-charter-treaty-despite-progress https://www.vbb.com/insights/several-eu-member

Revue - Les Cahiers de l'Arbitrage N°1-2023

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