No arbitration for intra-EU investment agreements

The European Court of Justice ruled on almost 200 bilateral investment treaties between EU member countries.

The European Court of Justice (ECJ) ruled that arbitration clauses in almost 200 investment agreements between EU member countries violate EU law.

ECJ stated that “The arbitration clause in the bilateral investment treaty (BIT) has an adverse effect on the autonomy of EU law and is therefore incompatible with EU law.”

An arbitration proceeding such as referred to in a BIT derives from a treaty by which Member States agree to remove the dispute resolution from the jurisdiction of their own courts, and hence from the system of judicial remedies. This mechanism for settling disputes between an investor and a Member State could prevent these disputes from being resolved in a manner that ensures the full effectiveness of EU law, especially since they might concern the interpretation or application of that EU law.

Therefore, BIT arbitration is not in line with the Treaty on the Functioning of the European Union (TEU).

You can find the ruling here:

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