Revue - Les Cahiers de l'Arbitrage N°1-2023 - 79

DOCTRINES - DÉBATS
If Article 307 EC provides that treaty rights between Non-EU Members cannot
be jeopardised by the subsequent entry of a Non-EU State into the European
Union, it appears logical, taking into account the integration processes of the
European Union, that the opposite consequence should be implied, i.e. the nonsurvival
of rights under an earlier treaty incompatible with EU law as between
EU Member States. 79
Under this reasoning, since Hungary's accession to the EU postdates the ECT,
in case of conflict its requirements would prevail over Hungary's obligations under
the ECT.
This argument nevertheless encounters a problem, namely that Article 351 of the
TFEU is law internal to the EU. It is not apparent why a contracting Party to a treaty
should escape liability under the treaty by invoking its internal law, in this case,
Article 351 of the TFEU. The VCLT suggests the contrary: " [a] party may not invoke
the provisions of its internal law as justification for its failure to perform a treaty. " 80
By no means have all tribunals understood the ECT's relationship with EU
law as the Electrabel tribunal did. For example, the tribunal in RREEF v. Spain 81
rejected the notion that relations between EU Member States under the ECT were
governed by EU law rather than the ECT in case of a conflict between them.
According to the tribunal, in order for that to be the case, the ECT would have had
to contain a so-called " disconnection clause, " the purpose of which, according to
the tribunal, would be " to make clear that EU Member States will apply EU law in
their relations inter se rather than the convention in which it is inserted " 82
and the
ECT, unlike other treaties entered into by the EU, contains no such provision. The
tribunal also noted that " [a]bsent such a [disconnection] clause in a multilateral
treaty, it is intended to be integrally applied by the EU and its Member States. " 83
The tribunal put the matter even more squarely:
[S]hould it ever be determined that there existed an inconsistency between the
ECT and EU law ... and absent any possibility to reconcile both rules through
interpretation, the unqualified obligation in public international law of any
arbitration tribunal constituted under the ECT would be to apply the former.
This would be the case even were this to be the source of possible detriment
to EU law. EU law does not and cannot " trump " public international law. 84
While tribunals have not been entirely consistent on this issue, the prevailing
view among them is that there is no such thing as an EU law defense under the ECT
and arguably under any investment agreement giving rise to an intra-EU dispute. 85
79. Electrabel, supra note 71, ¶¶ 4.180, 4.183.
80. VCLT, supra note 26, art. 27.
81. RREEF Infrastructure (G.P.) Limited & RREEF Pan-European Infrastructure Two Lux S.à r.l. v.
Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Jurisdiction (June 6, 2016) [hereinafter RREEF].
82. Id. ¶ 82.
83. Id.
84. Id., ¶ 87. See Charanne B.V. and Construction Investments S.A.R.L. v. Spain, SCC Case
No. 062/2012, Award, ¶¶ 433-438 (Jan. 21, 2016), which the tribunal cited in support of its
position in RREEF.
85. Even after Komstroy, supra note 47, at least two ICSID tribunals have rejected EU
law defenses under the ECT. See Infracapital F1 S.a.r.l. and Infracapital Solar B.V. v. Kingdom
of Spain, ICSID Case No. ARB/16/18, Decision on Respondent's Request for Reconsideration
Regarding the Intra-EU Objection and the Merits (Feb. 1, 2022); Mathias Kruck and others v.
Les Cahiers de l'Arbitrage 2023‑1
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Revue - Les Cahiers de l'Arbitrage N°1-2023

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