Predators in the pond of jurisdiction? The EU constitutional restraints on investor-State dispute settlement provisions in European comprehensive free trade agreements.

Investor-State dispute settlement (ISDS), once developed as ‘last straw’ for foreign investors to gain access to justice in the forgotten corners of this world, grew out of its niche existence – for the better or the worse. In a remarkable metamorphosis ISDS made its way not only into trade agreements among what was once called ‘civilised nations’, but also featured in newspaper headlines, parliamentary debates, and even in mass street protests in some EU Member States.

It is, thus, hardly surprising that eventually also the judiciary has been seized with the matter. In its recent Opinion on the EU-Singapore Free Trade Agreement, the Court of Justice of the European Union (CJEU) touched upon the Agreement’s ISDS provisions. While the CJEU postponed the ultimate showdown between the two ‘competitors’ in dispute resolution, new opportunities will surely arise. One can expect that the CJEU will then not have forgotten about the ‘reluctance’ arbitrators have shown to grant the Court its worthy and rightful place in the administration of justice in investment cases.

This seminar will not only sketch recent developments in the EU’s Common Commercial Policy in the area of investment, but also seeks to shed light on the instruments the CJEU has at hand to defend itself against ‘predators’ in what it perceives as its own pond of jurisdiction. The seminar will look at the conditions and limits stipulated by the Treaties upon which the European Union is founded, i.e. the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU), under which it can submit itself to investor-State arbitration. In this respect, the issue of distribution of competences between the Member States and the Union in the area of foreign investment has more widely been discussed and was recently decided upon by the Court in its Singapore-Opinion. When it comes to the establishment of dispute resolution bodies in international agreements concluded by the EU, there is, however, another crucial touchstone, i.e. the concept of autonomy of EU law. The role of this concept, mainly developed in a series of opinions of the Court, in limiting the Union’s ‘leeway’ in subjecting itself to the current model of investor-State arbitration has so far not been further defined by the CJEU and will form the focal point of this talk. To complete the picture and to embed the aforesaid analysis some remarks should also be made on an additional emerging constitutional stumbling block for the EU’s intention to wholeheartedly embrace ISDS, i.e. the possible restrictions flowing from the rule of law principle in EU primary law on transferring jurisdiction from Member State and EU courts onto arbitral tribunals in matters of control of public authority.