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International Investment Law: A Self-Proclaimed Ally in Commission’s Rule of Law Endeavors

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Handbook of International Investment Law and Policy

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Abstract

The aim of this chapter is to analyze whether and to what extent international investment law (IIL) is capable of contributing to the development of the rule of law within the European Union (EU), as suggested by some arbitration practitioners. Arguably, placing greater emphasis on the ISDS’s alleged beneficial effect thereon could provide the so much needed legitimation boost, by placing IIL into the broader framework of institutional safeguards against the democratic backsliding. Upon closer scrutiny, however, it turns out that due to its systemic flaws, the ISDS-mechanism could hardly be seen as a suitable tool to this end. In particular its detachment from national legal systems and fixation on pecuniary remedies make it much less attractive in this context. This is particularly visible in comparison to European Convention of Human Rights. The possibility of ISDS assisting EU in its rule of law endeavors is further diminished by the fact that, at least from EU’s point of view, there are reasonable doubts as to the conformity of essential features of the ISDS framework with the rule of law standards set by the EU.

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Notes

  1. 1.

    C-284/16, The Slovak Republic v. Achmea BV, ECLI:EU:C:2018:158, 6 March 2018.

  2. 2.

    The literature dedicated to the relationship between EU law and IIL is relatively opulent. Nonetheless, arguably, it is centered around the issues of the conformity of the IIAs’ ISDS clauses and material provisions with EU law (or lack thereof), rather than an in-depth analysis of the IIL’s capabilities to influence legal developments within EU. In any case, only rarely do endeavors of such kind reach beyond statements of general nature, e.g., concerning the alleged concordance between the goals of EU-internal market and facilitating cross-border investments by the intra-EU BITs. See Chaisse J (2012) Promises and pitfalls of the European Union policy on foreign investment – how will the new EU competence on FDI affect the emerging global regime. J Int Econ Law 15(1):51–84.

  3. 3.

    For further reading in this respect see, e.g., Kriebaum U (2008) Eigentumsschutz im Völkerrecht. Eine vergleichende Untersuchung zum internationalen Investitionsrecht sowie zum Menschenrechtsschutz. Duncker & Humblot, Berlin; Stirk P (2014) Shaping the single European market in the field of foreign direct investment. Hart Publishing, Oxford u.a.; Sattorova M (2016) Investor rights under EU law and international investment law. J World Invest Trade 17(6):895–918. https://doi.org/10.1163/22119000-12340021; Fanou M, Tzevelekos VP (2018) The shared territory of the ECHR and international investment law. In: Radi Y (ed) Research handbook on human rights and investment. Edward Elgar, pp 93–136.

  4. 4.

    Providing the possibility of enhancing the rule of law on domestic level by the investment law is put forward by Živković V (2019, forthcoming) Contribution to the national rule of law as a legitimating factor for international investment law – is it a potential or the outcome that matters? In Leal-Arcas R, Wouters J (eds) International trade, investment and the rule of law. Edward Elgar. Indeed, one could think particularly about the fair and equitable treatment standard or the protection of legitimate expectations as containing useful guidelines to national authorities. Nonetheless, as shall be demonstrated below, there is an observable lack of empirical evidence that would support this view. Besides, in the European context, this elusive ground for legitimation would not seem to outweigh the problems caused by the threat posed by BITs to the autonomy of EU law. Lastly, in the specific context of the EU rule of law problems, one could assume that States disagreeing with the European Commission about the assessment of their internal developments from the point of view of EU law to the point of bringing the case before the CJEU would not show too much willingness to treat an investment arbitral award as a learning opportunity and, thus, voluntarily introduce far-reaching institutional changes.

  5. 5.

    See Dolzer R, Schreuer Ch (2012) Principles of international investment law. OUP, Oxford [et al], pp 24–25; more detailed; van Harten G (2010) Investment treaty arbitration, procedural fairness, and the rule of law. In: Schill SW (ed) International investment law and comparative public law. OUP, Oxford [et al], p 627 ff., and the literature invoked in fn 1 on p. 627; Schill SW (2017) International investment law and the rule of law. ACIL research paper 2017-15. Available at https://www.ilsa.org/ILW/2018/CLE/Panel%20%2320%20-%20Schill-%20International%20Investment%20law%20and%20the%20rule%20of%20law.pdf, for critical assessment of the concept’s genesis see Miles K (2013) The origins of international investment law. Empire, environment and the safeguarding of capital. CUP, Cambridge, p 334 linking the investment law rule of law concept to the nineteenth century minimum treatment doctrines. For a more nuanced version of the argument, taking into account lack of empirical evidence regarding the effects of IIL on national developments see Živković V (2019, forthcoming).

  6. 6.

    See, e.g., an analysis in Hallward-Driemeier M (2009) Do bilateral investment treaties attract FDI? Only a Bit … and they could bite. In: Sauvant KP, Sachs LE (eds) The effect of treaties on foreign direct investment: bilateral investment treaties, double taxation treaties, and investment flow. OUP, Oxford [et al], p 364 ff.; Yackee JW (2016) Do BITs ‘Work’? Empirical evidence from France. J Int Dispute Settle 7(1):55–71. https://doi.org/10.1093/jnlids/idv033. For a view more favorable to IIAs’ impact on the inflow of foreign direct investment see an earlier UNCTAD study The Role of International Investment Agreements in Attracting Foreign Direct Investment to Developing Countries. New York and Geneva, 2009, https://unctad.org/en/Docs/diaeia20095_en.pdf.

  7. 7.

    See particularly ILA (2018) Sydney conference rule of law and international investment law report. http://www.ila-hq.org/images/ILA/DraftReports/DraftReport_Investment_RuleofLaw.pdf, containing opulent references to the parallels between investment and European law.

  8. 8.

    See the Declarations of the Member States of 15 January 2019 on the legal consequences of the Achmea judgment and on investment protection. https://ec.europa.eu/info/publications/190117-bilateral-investment-treaties_en, and Commission communication on the protection of investments of 19 July 2018 COM(2018) 547 final, expressing Commission’s and Member States’ unequivocal position on the irreconcilability of the whole intra-EU BITs with EU law in the consequence of Achmea judgment. Currently, Member States are finishing preparations for termination of the agreements, see leaked draft agreement on termination of intra-EU BITs available at: http://arbitrationblog.kluwerarbitration.com/wp-content/uploads/sites/48/2019/12/a-draft-agreement-has-been-leaked.pdf. An overview of the more sceptic positions as to the judgment’s (immediate) effects adopted by the representatives of the widely understood arbitration community may be found in Trade Lab report prepared by Virginia-Motoc I, Tujakowska A, Yilmaz A. The effects of the Achmea judgment on intra-EU BIT claims, law firms, and third-party funders. https://www.tradelab.org/single-post/2019/04/08/The-Effects-of-the-Achmea-Judgment-on-Intra-EU-BIT-Claims-Law-Firms-and-Third-Party-Funders.

  9. 9.

    See, e.g., Wernicke S (2018) Autonomie und Häresie – Investitionsschiedsgerichte in der Rechtsunion. NJW 71(23):1644–1647.

  10. 10.

    Sadowski W (2018) Protection of the rule of law in the European Union through investment treaty arbitration: is judicial monopolism the response to illiberal tendencies in Europe. Common Mark Law Rev 55:1036.

  11. 11.

    Sadowski W (2018), 1047.

  12. 12.

    Sadowski W (2018), 1058.

  13. 13.

    This reasoning seems to have been adopted (though in a more condensed form) also by some other authors, see, e.g., Papp M, Varju M (2019) Hungarian economic patriotism. In: Rauchegger C, Wallerman A (eds) The Eurosceptic challenge: national implementation and interpretation of EU law. OUP, Oxford (et al), p 94 or Novy Z, Warwas B (2019) The recent developments in arbitration and the European regulatory space. In: de Almeida L, Cantero M et al (eds) The transformation of economic law: essays in honour of Hans-W. Micklitz. OUP, Oxford [et al], p 252.

  14. 14.

    For the history of elevating the rule of law to the role of (written) EU constitutional principles see Sadurski W (2010) Adding a bite to a bark? A story of Article 7, the EU enlargement, and Jörg Haider. In: Sydney law school legal studies research paper no. 10/01. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1531393##.

  15. 15.

    von Danwitz T (2014) The rule of law in the recent jurisprudence of the ECJ. Ford Int Law J 37:1311–1344.

  16. 16.

    Konstadinides T (2017) The rule of law in the European Union. The internal dimension. Hart, Oxford [et al], p 109 ff.

  17. 17.

    Konstadinides T (2017), p 109 ff.

  18. 18.

    Oppermann T, Classen CD, Nettesheim M (2016) Europarecht, 7th edn. Beck, München. § 23 par. 23 ff.

  19. 19.

    See, e.g., Middeke A (2014) Das Vorabentscheidungsverfahren. In: Rengeling HW, id., Gellermann M (eds) Handbuch des Rechtsschutzes in der Europäischen Union, 3rd edn. Beck, München, §10 paras 9–10.

  20. 20.

    See the statistics for years 2013–2017 contained in CJEU 2017 Annual Report. Available at: https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-04/_ra_2017_en.pdf, p 102.

  21. 21.

    See, e.g., Weiler JHH (2013) Revisiting Van Gend en Loos: subjectifying and objectifying the individual. In: 50th anniversary of the judgment in Van Gend en Loos, 1963–2013: conference proceedings, Luxembourg, 13 May 2013, pp 11–22; Broberg M, Fenger N (2014) Preliminary references to the European Court of Justice, 2nd edn. OUP, Oxford (et al), pp 2–3.

  22. 22.

    Jaremba U (2016) The role of national courts in the process of legal integration in the European Union: retrospective and prospective In: Goudappel FANJ, Hirsch Ballin EMH (eds) Democracy and rule of law in the European Union – Essays in honor of Jaap W. de Zwaan. Springer, The Hague, pp 49–62.

  23. 23.

    See in particular C-619/18, Commission v. Poland, ECLI:EU:C:2019:531, 24 June 2018 paras 46–47 and an analysis in Bogdanowicz P, Taborowski M (2018) Brak niezależności sądów krajowych jako uchybienie zobowiązaniu w rozumieniu art. 258 TFUE (Cz. I-II), Europejski Przegląd Sądowy (1):4–11 and (2):15–24.

  24. 24.

    Annex no. 1 to Communication from the Commission to the European Parliament and the Council. A new EU Framework to strengthen the Rule of Law of 11 March 2014 COM(2014) 158 final, pp 1–2.

  25. 25.

    Communication from the Commission to the European Parliament, the European Council and the Council Further strengthening the Rule of Law within the Union State of play and possible next steps COM/2019/163 final, p 2.

  26. 26.

    See Commission’s official webpage dedicated to the rule of law issue. Available at https://ec.europa.eu/info/policies/justice-and-fundamental-rights/effective-justice/rule-law/rule-law-framework_en#documents.

  27. 27.

    Commission Recommendation (EU) 2016/1374 of 27 July 2016 regarding the rule of law in Poland, OJ L 217/53.

  28. 28.

    Reasoned Proposal in Accordance with Article 7(1) of the Treaty on European Union regarding the Rule of Law in Poland, 20 December 2017, COM(2017) 835 final.

  29. 29.

    C-619/18, see also C-192/18 Commission v. Poland, ECLI:EU:C:2019:924, 5 November 2019. This conclusions equally pertains to most recent proceedings in case C-791/19 (pending).

  30. 30.

    See in particular the CJEU judgment of 6 November 2012 in case C-286/12 Commission v. Hungary.

  31. 31.

    See joinded cases C-585/18, C-624/18 and C-625/18,ECLI:EU:C:2019:982, 19 November 2019; C-623/18; C-824/18; C-522/18 (pending); joint cases C-668/18; C-558/18 and C-563/18 (pending, AG opinion).

  32. 32.

    C-216/18 PPU LM v. Minister for Justice, ECLI:EU:C:2018:586, 25 July 2018.

  33. 33.

    C-64/16, Juízes Portugueses v. Tribunal de Contas, ECLI:EU:C:2018:117, 27 February 2018 para 35.

  34. 34.

    C-216/18 PPU paras 33 and 57.

  35. 35.

    Paras 117, 167. See also para 71 of AG Tanchev Opinion C-619/18.

  36. 36.

    Paras 34, 36.

  37. 37.

    See AG Øe Opinion C 64/16 reconstructing the EU concept of judicial independence on the basis of existing Strasbourg case law, similarly AG Tanchev Opinion C 216/18 PPU (in general, both opinions were followed by the CJEU judgments).

  38. 38.

    Barcik J (2019) Ochrona praworządności w Radzie Europy i Unii Europejskiej ze szczególnym uwzględnieniem niezależności sądów i niezawisłości sędziów. Beck, Warszawa, p 225 ff.

  39. 39.

    Since, as already explained in more detail above, the aim of this analysis is to compare the usefulness of frameworks provided by IIAs and ECHR to the aim of enhancing national instutions, the issue of whether explicit references to ECHR should be interpreted as a sign of the Convention’s special normative position, within EU, shall not be thematized.

  40. 40.

    Helfer LR (2008) Redesigning the European Court of Human Rights: Embeddedness as a Deep Structural Principle of the European Human Rights Regime. Eur J Int Law 19:125–159. https://doi.org/10.1093/ejil/chn004

  41. 41.

    Declaration of High-level Conference of Committee of Ministers in Brighton, United Kingdom, from 19 to 20 April 2012. Available at: https://www.echr.coe.int/Documents/2012_Brighton_FinalDeclaration_ENG.pdf, para 9. The declaration was followed by many further political and legal commitments made over span of several years, their description, however, is not necessary at this place.

  42. 42.

    Protocol 16 itself is not unproblematic, particularly from the point of view of possible jurisdictional clashes between EU law and ECHR. Regardless of these legitimate concerns, the protocol is likely to further contribute ti the dialogical relationship between the ECHR and national courts. For further references see Paprocka A, Ziółkowski M (2015) Advisory opinions under protocol no. 16 to the European Convention on Human Rights. Eur Const Law Rev 11:274–292. https://doi.org/10.1017/S1574019615000176

  43. 43.

    ECHR Advisory Opinion, P16-2018-001, 10 April 2019.

  44. 44.

    See especially the recent debate surrounding the Copenhagen Declaration and the deep concern related to its content expressed with regard to its first draft versions by i.a. several European NGOs (Joint NGO Response to the Draft Copenhagen Declaration of 13 February 2018. Available at https://amnesty.dk/media/3931/joint-ngo-response-to-the-copenhagen-declaration-13-february-2018-with-signatures.pdf); academics (Andreas Follesdal, Geir Ulfstein (2018) The Draft Copenhagen Declaration: Whose Responsibility and Dialogue?, https://www.ejiltalk.org/the-draft-copenhagen-declaration-whose-responsibility-and-dialogue/); It seems however, that despite some doubts as to the final content of the declaration expressed in the CoE Parliamentary Assembly Recommendation 2129 (2018) adopted on 26 April 2018 ultimately both the final text and the spirit of the declaration do not seem to seriously threaten ECHR’s implementation, see Gerards J, Lambrecht S (2018) The final Copenhagen declaration: fundamentally improved with a few remaining caveats. https://strasbourgobservers.com/2018/04/18/the-final-copenhagen-declaration-fundamentally-improved-with-a-few-remaining-caveats/#more-4166. For a more comprehensive evaluation of Brighton Process see Cram I (2018) Protocol 15 and articles 10 and 11 ECHR – the partial triumph of political incumbency post-Brighton? Int Comp Law Q 67:477–503. https://doi.org/10.1017/S0020589318000118

  45. 45.

    See f. e. Case 22,978/05 Gäfgen v. Germany, 1 June 2010, paras 142, 144; Case 17,153/11 Vučković and Others v. Serbia, 25 March 2014, para 75.

  46. 46.

    For general considerations in relation to this doctrine see Spiellman D (2012) Allowing the right margin: the European Court of Human Rights and the national margin of appreciation doctrine: Waiver or subsidiarity of European review? Camb Yearb Eur Leg Stud 14:381–418. https://doi.org/10.5235/152888712805580570; for the intristic link between margin of appreciation and the subsidiarity principle see Nußberger A (2014) Subsidiarity in the control of decisions based on proportionality: an analysis of the basis of the implementation of ECtHR judgements into German law. In: Seibert-Fohr A, Villiger ME (eds) Judgements of the European Court of Human Rights – effects and implementation. Nomos, Baden-Baden, p 181.

  47. 47.

    van der Heyning C (2011) No place like home. Discretionary space for the domestic protection of fundamental rights. In: Popelier P, van Nuffel P (eds) Human rights protection in the European Legal order: the interaction between the European and the national courts. Intersentia, Cambridge [et al], pp 92–93. For an example supportive of this thesis see joint cases 40660/08 and 60641/08 von Hannover v. Germany (II), 7 February 2012 para 124.

  48. 48.

    Harris D, O’Boyle M, Bates E (et al) (2014) Harris, O’Boyle, and Warbrick: law of the European convention on human rights, 3rd edn. OUP, Oxford et al, pp 143–147. The authors underline that even in cases in which the court is somewhat mistrustful of the national courts its capacity to conduct a fully-fledged independent investigation is rather limited due to practical reasons.

  49. 49.

    Case 15318/89 Loizdou v Turkey, 23 March 1995 para 75. See Greer S (2006) The European convention on human rights. Achievements, problems and prospects. CUP, Cambridge, p 169 ff. Peters A, Altwicker T (2012) Europäische Menschenrechtskonvention. 2nd edn. Beck, München, §2 para 9 f.

  50. 50.

    See para 61 of ECHR Rules of Court. For general information on the topic of pilot judgment see Lubiszewski M, Czepek J (2016) Procedura wyroku pilotażowego w praktyce Europejskiego Trybunału Praw Człowieka. Wolters Kluwer, Warszawa, 2016.

  51. 51.

    One speaks even of “de facto precedence“ character of ECtHR rulings, see Merrils JG (1993) The development of international law by the European Court of human rights. Manchester University Press, Manchester, p 12; Senden H (2011) Interpretation of fundamental rights in a multilevel legal system. An analysis of the European Court of Human Rights and the Court of Justice of the European Union. Intersentia, Antwerp, pp 9–10.

  52. 52.

    Martinico G (2012) Is the European convention going to be ‘Supreme’? A comparative-constitutional overview of ECHR and EU law before National Courts. Eur J Int Law 23:401–424. https://doi.org/10.1093/ejil/chs027

  53. 53.

    Bodnar A (2018) Wykonywanie orzeczeń Europejskiego Trybunału Praw Człowieka w Polsce. Wymiar instytucjonalny. Wolters Kluwer, Warszawa, pp 157–178.

  54. 54.

    See e.g., the effects of ECHR judgment in pilot-judgment case Rumpf v. Germany consisting in. creation of new remedies in German administrative law, Paulus A (2014) From implementation to translation: applying the ECHR Judgements in the Domestic Legal Orders. In: Seibert-Fohr A, Villiger ME (eds) Judgements of the European Court of Human Rights – effects and implementation. Nomos, Baden-Baden, p 268, see also Polish cases described below.

  55. 55.

    Case 20261/12 Baka v Hungary, 23 June 2016 related to the influence of judges employment termination conditions on their independence.

  56. 56.

    See, e.g., CMCoE Resolution ResDH(2006)79 of 20 December 2006 regarding Turkish constitutional amendments abolishing National Security Courts foreseen in the constitution in the aftermath of the ECHR judgment in case Çiraklar v. Turkey.

  57. 57.

    Case 26374/18 Guðmundur Andri Ástráðsson v. Iceland, 12 March 2019.

  58. 58.

    See particularly PACE Background memorandum PPSD (2014) 22 of 13 October 2014 The role of parliaments in implementing ECHR standards: overview of existing structures and mechanisms.

  59. 59.

    For general characteristics of the CM CoE’s role see Szklanna A (2009) Kontrola wykonywania orzeczeń Europejskiego Trybunału Praw Człowieka przez Komitet Ministrów – Ewolucja, Procedury oraz stan obecny. In: Machińska H (ed) 60 lat Rady Europy. Tworzenie i stosowanie standardów prawnych. Oficyna Prawa Polskiego, Warszawa, pp 249–266.

  60. 60.

    See description of proceedings in the case Mamadov v Azerbaijan case in Dzehtsiarou K (2018), Mammadov v. Azerbaijan: It Is about Effectiveness of the Strasbourg System. https://strasbourgobservers.com/category/cases/mammadov-v-azerbaijan/.

  61. 61.

    See Bodnar A (2018), pp 223 ff.

  62. 62.

    https://hudoc.echr.coe.int.

  63. 63.

    See particularly data available on the webpage of the Court. https://www.echr.coe.int.

  64. 64.

    See, e.g., CoE CM Recommendation of 18 December 2002 Rec(2002)13.

  65. 65.

    See award of 9 January 2003 in case ADF Group Inc. v. United States of America, ICSID Case No. ARB (AF)/00/1, 9 January, para 25.

  66. 66.

    Bonnitcha, J Skovgaard-Poulsen LN, Waibel M (2017) The political economy of the investment treaty regime. OUP, Oxford [et al], p 86. See also Jandhyala S (2020) The politics of investor-State dispute settlement: how strategic firms evaluate investment arbitration. In: Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy. Springer, Singapore.

  67. 67.

    see Dolzer R, Schreuer Ch (2012) pp 264–267; Kriebaum U (2009) Local remedies and the standards for the protection of foreign investment. In: Binder Ch, Reinisch A, Wittich S (eds) Local remedies and the standards for the protection of foreign investment. OUP, Oxford [et al], p 426. With regard to the second text, at least from the standpoint of this inquiry, it deserves noticing that while invoking the reasons for the existence of local remedies principle (p. 421) the author does not mention at all any justifications for the subsidiarity principle related to embedding international framework in the domestic context.

  68. 68.

    See, e.g., Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, 8 July 2016 (award) para 503; David R. Aven and others v. Republic of Costa Rica, ICSID Case No. UNCT/15/3, 18 September 2018 (final award) paras 354–355. For less stringent approach see in the case Rupert Binder v. Czech Republic, UNCITRAL 15 July 2011 (final award), paras 450–451.

  69. 69.

    See, e.g., Grand River Enterprises Six Nations, Ltd. and others v. United States of America, UNCITRAL, 12 January 2011 (award), paras 223–224.

  70. 70.

    See, e.g., Amco Asia Corporation and others v. Republic of Indonesia, ICSID Case No. ARB/81/1, 20 November 1984 (award), para 150; Mr. Franck Charles Arif v. Republic of Moldova, ICSID Case No. ARB/11/23, 8 April 2013 (award), para 445; Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, 8 July 2016 (award), paras 500–501.

  71. 71.

    UNCTAD fact sheet on investor–State dispute settlement cases in 2018, p 2. https://unctad.org/en/PublicationsLibrary/diaepcbinf2019d4_en.pdf.

  72. 72.

    For the importance of the repetitiveness for the compliance see Hirsh M (2009) Compliance with investment treaties: when are States more likely to breach or comply with investment treaties. In: Binder Ch, Kriebaum U, Reinisch A, Wittich S (eds) Local remedies and the standards for the protection of foreign investment. OUP, Oxford [et al], p 426.

  73. 73.

    Mouyal LW (2016) International investment law and the right to regulate. A human rights perspective. Routlege, London/New York, p 56; Dolzer R, Schreuer Ch (2012). pp 25–26.

  74. 74.

    Gáspár-Szilágyi Sz (2020, forthcoming) Why do or should foreign investors resort to the courts of the host country prior to investment treaty arbitration?. In: Fauchald KO, Behn D, Langford M (eds) The legitimacy of investment arbitration. Empirical perspectives. CUP, p 27. Manuscript available at https://www.academia.edu/37336807/Why_Do_or_Should_Foreign_Investors_Resort_to_the_Courts_of_the_Host_Country_Prior_to_Investment_Treaty_Arbitration, author conducted an in-depth analysis of investment disputes involving i.a. Hungary and Romania, frequent respondents in intra-EU cases. This lack of practical influence of IIAs on the practice of domestic courts seems to be a rule rather than exception also before other European and non-European courts, see Trade Law Clinic report Application of International Investment Agreements by Domestic Courts, Geneva, 2011. Available at https://www.tradelab.org/single-post/2018/03/02/Application-of-International-Investment-Agreements-by-Domestic-Courts. Notably, also the German Federal Constitutional Court judgment of 16 December 2016 in case 1 BvR 2821/11 Vattenfall, rendered during the ICSID proceedings against Germany contained not a single reference to the ECT.

  75. 75.

    See, e.g., UNCTAD (2012) Transparency, UNCTAD series on issues in international investment agreements II. UNCTAD, New York/Geneva, 2012, p 36 ff. See Chaisse J, Donde R (2018) The State of investor-State arbitration – a reality check of the issues, trends, and directions in Asia-Pacific. Int Lawyer 51(1):47–67.

  76. 76.

    See, e.g., UNCITRAL Arbitration Rules (as revised in 2010), Article 35 para 4; Convention on the settlement of investment disputes between States and nationals of other States (ICSID Convention) Artilcle 48 (5)).

  77. 77.

    According to the information available at UNCITRAL webpage. https://uncitral.un.org/en/texts/arbitration/conventions/transparency/status, as of today no EU country has become a party to the convention (though there are some signatories).

  78. 78.

    ILA (2018), p 11.

  79. 79.

    For more on the desirability of a dialogue between arbitral tribunals and municipal courts and lack thereof see Kalderimis D (2015) Back to the future: contemplating a return to the exhaustion of local remedies. In: Kalicki JE, Joubin-Bret A (eds) Reshaping the investor-State dispute settlement system: journeys for the 21st century. Brill, Leiden, pp 310–344.

  80. 80.

    Portfield MC (2015) Exhaustion of local remedies in investor-State dispute settlement: an idea whose time has come. Yale J Int Law, 41:1–12.

  81. 81.

    Henckels C (2014) The role of the standard of review and the importance of deference in investor-State arbitration. In: Gruszczyński Ł, Werner W (eds) Deference in international courts and tribunals. OUP, Oxford [et al], pp. 125, 133. Besides, it should be noted that subsidiarity principle may play a very important role also for mitigating possible conflicts between national and international law, see Stoll PT (2018) International investment law and the rule of law. Goettingen J Int Law 9:285 f.

  82. 82.

    See Ginsburg T (2005) International substitutes for domestic institutions: bilateral investment treaties and governance. Int Rev Law Econ 25:118 ff., more generally Chen RC (2017) Bilateral investment treaties and domestic institutional reform. Columbia J Transnatl Law 55:547–591. See also Chaisse J (2015) The issue of treaty shopping in international law of foreign investment – structuring (and restructuring) of investments to gain access to investment agreements. Hastings Bus Law Rev 11(2):225–306.

  83. 83.

    Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12, 31 August 2018 (Achmea issue), para 230; Ioan Micula, 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, 11 December 2013 (final award), para 340.

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    Born G (2012) A new generation of international adjudication. Duke Law J 61:775–879, see particularly 835 ff.

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    Demirkol B (2015) Remedies in investment treaty arbitration. J Int Dispute Settle 6:410–411.

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    de Brabandere E (2014) Investment treaty arbitration as public international law: procedural aspects and implications. CUP, Cambridge (et al), pp 183–190.

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    de Brabandere E (2014), pp 188–190.

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    The literature affirmative of the thesis of the BIT proceedings as a tool to exert pressure on governmental policy making seems to be quite numerous, see as an example Tienhaara K (2011) Regulatory chill and the threat of arbitration. A view from political science. In: Brown C, Miles K (eds) Evolution in investment treaty law and arbitration. CUP, Cambridge, pp. 606–627; van Harten G, Scott DN (2016) Investment treaties and the internal vetting of regulatory proposals: a case study from Canada. J Int Dispute Settle 7:92–116. https://doi.org/10.1093/jnlids/idv031; Pelc K (2017) What explains the low success rate of investor-State disputes? Int Organ 71:559–583. https://doi.org/10.1017/S0020818317000212. Unsurprisingly there are also prominent scholars critical of this thesis, see, e.g., Stone-Sweet A, Chung MY, Salzman A (2017) Arbitral lawmaking and State power: an empirical analysis of investor–State arbitration. J Int Dispute Settle 8:579–609. https://doi.org/10.1093/jnlids/idx009

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    Sattorova M (2016) Reassertion of control and contracting parties’ domestic law responses to investment treaty arbitration. Between reform, reticence and resistance. In: Kulick A (ed) Reassertion of control over the investment treaty regime. CUP, Cambridge, pp 53–80.

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    See Pérez-Salido P (2019) Royal Decree-law 17/2019: an opportunity for Spain to leave behind the renewable energy arbitrations? http://arbitrationblog.kluwerarbitration.com/2019/12/30/royal-decree-law-17-2019-an-opportunity-for-spain-to-leave-behind-the-renewable-energy-arbitrations/; For further information on the interconnections between national energy laws and investement law see: Chaisse J (2016) Renewables re-energized? The internationalization of green energy investment rules and disputes. J World Energy Law Bus 10(1):269–281.

  91. 91.

    An outline of most important issues related to the ECHR can be found in Polish Ministry of Foreign Affairs brochure Ministry of Foreign Affairs (2018) Poland in the European convention on human rights system. https://www.msz.gov.pl/resource/2a216648-a00d-4740-983d-25bc6ef68702:JCR.

  92. 92.

    Article 91 para 2 of the Polish Constitution of 2 April 1997, as amended.

  93. 93.

    Polish Constitutional Tribunal (CT) judgment of 28 January 2003 in case K 2/02, para. III.4.6 f. Paprocka A (2012) Wpływ orzecznictwa ETPCz na rozumienie konstytucyjnych praw i wolności w Polsce – kilka uwag na marginesie orzecznictwa Trybunału Konstytucyjnego. In: Zubik M (ed) XV lat obowiązywania Konstytucji z 1997 r. Księga jubileuszowa dedykowana Zdzisławowi Jaroszowi. Wydawnictwo Sejmowe, Warszawa, p 84, fn.38. In general, the interpretation of national law (including constitution) in concordance with international law seems to be the preferable way of ensuring the effectiveness of the latter in Polish legal order, see Czapliński W, Wyrozumska A (2014) Prawo międzynarodowe publiczne. Zagadnienia systemowe. Beck, Warszawa, para. 582.

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    CT Decision of 12 December 2005 in case K 32/04, para III 4.1. CT Decision of 18 October 2004 in case P 8/04, para III 2.6, quoted i.a. in CT Decision of 7 March 2005 in case P 8/03. III. 4. See also later CT judgment of 11 May 2007 in case K 2/07, para 4.5.3. For general remarks on this topic see Garlicki L (2003) Obowiązywanie Europejskiej Konwencji Praw Człowieka w porządku prawnym Rzeczypospolitej Polskiej. Biuletyn Biura Informacji Rady Europy (3):19 f.

  95. 95.

    For a more general account of the application of the application of ECHR by Polish ordinary courts see critical appraisal of the judicial dialogue between Polish Courts and ECtHR in Górski M (2017) The dialogue between selected CEE Courts and the ECHR. In Wyrozumska A (ed) Transnational judicial dialogue on international law in central and eastern Europe. Łódź University Press, Łódź. https://doi.org/10.18778/8088-707-7.05. pp 233–296.

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    For more information on the history of Committee’s functioning see Florczak A (2016) Polska przed Europejskim Trybunałem Praw Człowieka – bilans doświadczeń w latach 1993–2014. In: Leszczenko L, Szablicka-Żak J (eds) Wybrane problemy ochrony praw człowieka w Polsce. Wrocław University Press, Wrocław, pp 55–58.

  97. 97.

    See minutes of Committee’s meetings. Available at https://www.msz.gov.pl/pl/polityka_zagraniczna/europejski_trybunal_praw_czlowieka/wykonywanie_orzeczen_europejskiego_trybunalu_praw_czlowieka/. It has to be underlined that these meetings have been attended not only by the members of the government administration, but by the representatives of Parliament and various NGOs as well.

  98. 98.

    Bodnar A (2018), pp 362–364.

  99. 99.

    See Reports on the execution of ECtHR judgments issued by the Ministry of foreign affairs. Available at https://www.msz.gov.pl/resource/7e8554c9-e521-4c35-9c25-24b8115e095e:JCR, especially p 23 ff.

  100. 100.

    See CoE Country Factsheet for Poland. Available at: https://rm.coe.int/168070975d, p 6.

  101. 101.

    A detailed description of this process may be found in the author’s earlier piece Pluralizm konstytucyjny i dialog międzysądowy: instytucja izolacji postpenalnej w orzecznictwie Federalnego Sądu Konstytucyjnego Niemiec, Europejskiego Trybunału Praw Człowieka i polskiego Trybunału Konstytucyjnego In: Lachowski T, Mazurenko V (eds) Ukraina po Rewolucji Godności. Prawa człowieka – tożsamość narodowa. Bookmarked Olsztyn, 2017, pp. 86–90.

  102. 102.

    According to data available at UNCTAD and encompassing publicly known cases, Poland was seventh most-frequent respondent. see https://investmentpolicy.unctad.org/investment-dispute-settlement.

  103. 103.

    A detailed analysis of jurisprudence of Polish top courts is available in the author’s paper (2020) International Investment Law as an Ally in EU’s Rule of Law Endeavours: an Epic Journey or a Misguided Quest? ESIL Conference Paper Series. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3510811.

  104. 104.

    An up-to date overview of fields offering a fertile soil for conflicts between national and arbitration laws may be found in Stoll PT (2018), 267–292.

  105. 105.

    Such views are opposed mainly by the arbitration practitioners. For an outline of argumentation representative for this way of thinking see Brower Ch, Blanchard S (2014) From “Dealing in Virtue” to “Profiting from Injustice”: the case against “Re-Statification” of investment dispute settlement. Harv Int Law J 55:45–59.

  106. 106.

    CJEU Judgment of 3 March 2018 in Case C-284/16 Achmea, paras 43–49.

  107. 107.

    At this place it suffices to recollect the latest episode of this Commission-ATs saga, namely Commission’s decision to initiate infringement proceedings before CJEU for its failure to recover the financial means already paid to the successful investor, see EC Press Release (2018) State aid: Commission refers Romania to Court for failure to recover illegal aid worth up to €92 million. 7 December 2018. http://europa.eu/rapid/press-release_IP-18-6723_en.htm.

  108. 108.

    For description of the case see Ankersmit L (2017) Case C-142/16 Commission v. Germany: the habitats directive meets ISDS? https://europeanlawblog.eu/2017/09/06/case-c-14216-commission-v-germany-the-habitats-directive-meets-isds/.

  109. 109.

    European Commission (2015) Commission Staff Working Document Report Online public consultation on investment protection and investor-to-State dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP) SWD(2015) 3 final, Rather unsurprisingly, this resistance against ISDS was dismissed by some arbitration scholars and practicitioners as misguided and based on misinformation, prejudice and lack of sufficient understanding among the wider public. As a representative example see Brower ChN (2015) Are fear, disinformation, politics and the European Commission becoming the four horsemen of the apocalypse for international investment dispute arbitration? Arbitraje: Revista de Arbitraje Comercial y de Inversiones 8:653–686.

  110. 110.

    See particularly European Commission (2015) Fact sheet reading guide draft text on investment protection and investment court system in the Transatlantic Trade and Investment Partnership (TTIP) http://europa.eu/rapid/press-release_MEMO-15-5652_en.htm.

  111. 111.

    European Commission (2015) Concept paper investment in TTIP and beyond – the path for reform enhancing the right to regulate and moving from current ad hoc arbitration towards an investment court. http://trade.ec.europa.eu/doclib/docs/2015/may/tradoc_153408.PDF.

  112. 112.

    Joint statement Canada-EU Comprehensive Economic and Trade Agreement (CETA) of 29 February 2016. Available at: http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154330.pdf.

  113. 113.

    Submission of the European Union and its Member States to UNCITRAL Working Group III of 18 January 2019 and Submission of 12 December 2017A/CN.9/WG.III/WP.145 attached as Annex I thereto (“COM 2017 Submission”).

  114. 114.

    In any case, EU’s proposals for the Multilateral Investment Court, appellate mechanism and adjudicators’ selection are being discussed within the framework UNCITRAL Working Group III (see Working Group Meetings minutes and provisory agendas). https://uncitral.un.org/en/working_groups/3/investor-State.

  115. 115.

    CJEU Opinion 1/17 CETA ECLI:EU:C:2019:341 30 April 2019.

  116. 116.

    AG Bot opinion to Opinion 1/17 CETA 29 January 2019.

  117. 117.

    At this place it should be stressed that the EU’s position regarding the ISDS reform not only has not been endorsed by all the State-parties active with the UNCITRAL framework, but, equally, was subject to criticism expressed by arbitration practicitioners in both the arbitration literature (see, e.g., Bernardini P (2017) The European Union’s Investment Court System – A Critical Analysis. ASA Bull 4:812–836) and policy papers (see, e.g., reports commenting on the EU’s ICS proposals and the proposals presented during subsequent UNCITRAL meetings prepared by European Federation for Investment Law and Arbitration [EFILA]. Available at https://efila.org/publications/). On the other hand, some authors underline that EU’s proposals are too moderate and fall short of providing sufficient legitimacy to ISDS, see e.g., Diependaele L, De Ville F, Sterckx S (2018) Assessing the normative legitimacy of investment arbitration: the EU’s investment court system. New Polit Econ 24:37–61.

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    Kingsbury B, Schill SW (2009) Investor State arbitration as governance: fair and equitable treatment, proportionality and the emerging global administrative law. In: van den Berg J (ed) 50 years of of the New York convention: ICCA international arbitration conference, p 5 ff.; see also Salacuse JW (2010) The emerging global regime for investment. Harv Int Law J 51(2):427–474.

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    See, e.g., Weeramantry JR (2012) Treaty interpretation in investment arbitration. OUP, Oxford [et al], esp. paras 5.30–5.31; Gazzini T (2016) Interpretation of international investment treaties. Hart, Oxford/Portland, p 291 ff.

  120. 120.

    To name just a few examples from among the most acclaimed arbitrators: prof. Gabrielle Kaufmann Kohler, who was appointed i.a. in no less than 3 cases against Poland and Slovak Republic; 2 cases against Hungary1 case against Czechia, Estonia, Germany, Croatia Spain some of them of great importance for mutual relations between the EU-law and arbitration law, such as Electrabel v. Hungary, Oostergetel v. Slovak Republic, (see https://investmentpolicy.unctad.org/investment-dispute-settlement), a Swiss national, has been throughout her career a Swiss academic on the field of private international law and a lawyer or arbitrator in various law firms (see the CV available at: https://lk-k.com/team/gabrielle-kaufmann-kohler-lawyer/); Mr. Yves Fortier, who sat as arbitrator f. e. in at least 2 cases against Czechia, Poland and Estonia 1 against Hungary and Greece, whereby at least the case UPCD v Hungary was of importance (see https://investmentpolicy.unctad.org/investment-dispute-settlement) a Canadian national who for the most of his professional career worked for big law firms, with short intervals for governmental appointment in international organizations (see the CV available at: https://yfortier.ca/cv/Yves-Fortier-Resume-EN.pdf). Similarly, V. V. Veeder, who sat in 2 tribunals deciding upon claims against Poland and Cyprus, 1 against Slovak Republic, Hungary, Romania, Estonia, Spain and Bulgaria, including such important cases like Electrabel v Hungary or Achmea v. Slovakia https://investmentpolicy.unctad.org/investment-dispute-settlement is a QC with an outstanding experience as a barrister in commercial disputes and arbitrations (https://primefinancedisputes.org/expert/v-v-veeder-qc). Furthermore, all these three persons cases against today EU Member States constituted far less than one third of all the adjudicated cases.

  121. 121.

    See Article 9 para 1 of UNCITRAL Arbitration Rules (2010).

  122. 122.

    See Article 37 (2) (b) ICSID Convention.

  123. 123.

    See in-depth empirical study of Langford M, Behn D, Lie RH (2017) The revolving door in international arbitration. J Int Econ Law 20:310–314, for more information on the general involvement of arbitrations with big business see Eberhardt P, Olivet C (2012) Profiting from injustice How law firms, arbitrators and financiers are fuelling an investment arbitration boom. Corporate Europe Observatory, Brussels/Amsterdam.

  124. 124.

    See an empirical study conducted by Pauwelyn J (2015) The rule of law without the rule of lawyers? Why Investment Arbitrators are from Mars, Trade Adjudicators are from Venus. CTEI-working paper 2015-05 http://repository.graduateinstitute.ch/record/293200/files/CTEIWP-2015-05_Pauwelyn.pdf comparing the composition of ICSID and WTO Panels, showing that in case of the former in relation to the latter (i) the adjudicators coming from the “old” EU and US had much more dominant position; (ii) substantially less people had a noticeable public employment background, and (iii) there were considerably more ostensible division between the star adjudicators and the rest of arbitrators.

  125. 125.

    See the judges’ curricula. Available at http://www.echr.coe.int/Pages/home.aspx?p=court/judges. A vast majority of them served a noticeable amount of time as public servants, experts, judges or clerks in either their home States or international organizations; most of the judges with academic background holding chairs in public law (particularly, but not only with some European connotations). Of the small group of judges comprising counsels, a substantial part either was interested rather with criminal than commercial law, or performed quasi-public functions as supreme-court advocates.

  126. 126.

    See Petkova B (2014) Three levels of dialogue in precedent formation at the CJEU and ECtHR. In Dzehtsiarou K (ed) Human rights law in Europe: the influence, overlaps and contradictions of the EU and the ECHR. Routledge, New York, p 80 and Mahoney P (2004) The comparative method in judgements of the European Court of Human Rights: reference back to national law. In: Canivet G, Andenas M, et al (eds) Comparative law before the courts. BIICL, London, p 135 ff.

  127. 127.

    As an example see f. e. the annual conference held in ECHR under the name Dialogue of judges. https://www.echr.coe.int/Pages/home.aspx?p=court/events/ev_sem&c=; but see also analytical projects with the participation of national judges aimed specifically at the issue of judicial dialogue in Europe, conducted under the umbrella of European Institutions (EC DG Justice) between 2013 and 2014. https://www.eui.eu/Projects/CentreForJudicialCooperation/Projects/EuropeanJudicialCooperationinFR/EuropeanJudicialCooperationinthefundamentalrightspractice.

  128. 128.

    See, e.g., a presentation held by Dean Spielmann, president of the ECHR in FRAME, Brusseles on 27th March 2017 The Judicial Dialogue between the European Court of Justice and the European Court of Human Rights Or how to remain good neighbours after the Opinion 2/13, in particular pp. 11 ff. of the paper. Available at http://www.fp7-frame.eu/wp-content/uploads/2017/03/ECHRCJUEdialog.BRUSSELS.final_.pdf; or the speech given by CJEU Court’s president K. Lenaerts for the opening of ECHR judicial year 2018 The ECHR and the CJEU: Creating Synergies in the Field of Fundamental Rights Protection. https://www.echr.coe.int/Documents/Speech_20180126_Lenaerts_JY_ENG.pdf, on generally shared roots and goals of both courts see Martinico G, Pollicino O (2012) The interaction between Europe’s legal systems. Judicial dialogue and the creation of supranational laws. Edward Elgar, Cheltenham et al, p 138.

  129. 129.

    See list of such organizations available on the webpage of European Network of Councils of Judiciary. https://www.encj.eu/index.php?option=com_content&view=article&id=38&Itemid=94&lang=en. Generally on the topic of dialogue of judges see de Claes M, de Visser V (2011) Are you networked yet? On dialogues in European judicial networks. Utrecht Law Rev 8:100–114.

  130. 130.

    A practice expressly encouraged at pt. 20 b) of the 2012 Brighton Declaration.

  131. 131.

    See f.e former president of ECHR and current judge in the EU General Court speech Spielmann D (2017) The judicial dialogue between the European Court of Justice and the European Court of Human Rights or how to remain good neighbours after the Opinion 2/13. http://www.fp7-frame.eu/wp-content/uploads/2017/03/ECHRCJUEdialog.BRUSSELS.final_.pdf; speech of CJEU president Lenaerts K (2018) The ECHR and the CJEU: creating synergies in the field of fundamental rights protection. In: Dialogue between judges. European Court of Human Rights Council of Europe, Strasbourg, pp. 57–65; articles of deputy president of the German Federal Constitutional Court Kirchhof P (2011) Grundrechtsschutz durch europäische und nationale Gerichte. NJW (51):3681–3686; former judge in Polish Constitutional Tribunal and ECHR Garlicki L (2015) Ochrona praw jednostki w XXI w. (globalizacja-standardy lokalne-dialog między sądami). In: Gdulewicz E, Orłowski W, Patyra S (eds) 25 lat transformacji ustrojowej w Polsce i w Europie Środkowo-Wchodniej. UMCS University Press, Lublin, pp. 161–180.

Acknowledgment

This chapter is based upon my presentation A Wolf in the Sheep’s Clothing: International Investment Law and the Rule of Law in Europe which was made during the 2019 ESIL Annual Research Forum in Göttingen, and the conference paper was published in the ESIL Conference SSRN Paper Series.

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  1. Department for International and European Law, University of Łódź, General Counsel to Republic of Poland, Warsaw, Poland

    Bartosz Soloch

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  1. School of Law, City University of Hong Kong, Kowloon, Hong Kong

    Julien Chaisse

  2. School of Business and Law, University of Portsmouth, Portsmouth, UK

    Leïla Choukroune

  3. Institute of Malaysian and International Studies, National University of Malaysia, Bangi, Selangor, Malaysia

    Sufian Jusoh

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Soloch, B. (2021). International Investment Law: A Self-Proclaimed Ally in Commission’s Rule of Law Endeavors. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-3615-7_116

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