European Papers (Aug 2016)
An Investment Court System for the New Generation of EU Trade and Investment Agreements: A Discussion of the Free Trade Agreement with Vietnam and the Comprehensive Economic and Trade Agreement with Canada
Abstract
(Series Information) European Papers - A Journal on Law and Integration, 2016 1(2), 665-677 | European Forum Insight of 14 August 2016 | (Table of Contents) I. Introduction: on the (in)transparent negotiation of EU agreements. - II. Core features of the Investment Court system. II.1. Composition of the Court. - II.2. The appellate mechanism. - II.3. Ethical requirements. - III. A critical assessment in the light of EU law. - III.1. The autonomy of the EU legal order. - III.2. EU law: a matter of law or a matter of fact? - III.3. The prior involvement of the Court of Justice. - IV. Concluding Remarks. | (Abstract) The European Commission has recently concluded the negotiations on the free trade agreement between the EU and Vietnam and the Comprehensive Trade and Investment Agreement between the EU and Canada. Amongst other issues, these agreements provide for comprehensive chapters on investment, including provisions on investor-state dispute settlement. In response to stark criticism from civil society, which perceives these mechanisms to be undemocratic, the Commission has seized the opportunity to reform the traditional arbitration-based system and replace it with a permanent court system. The mechanism of the Investment Court incorporates many innovative features and addresses some of the core criticism, including a rooster of appointed members, an appeals mechanism, and heightened ethical standards for members serving on the Court. However, in spite of these structural and procedural innovations, the Investment Court system goes not unchallenged, not least because it risks politicizing the dispute settlement process. Most importantly, it fails to effectively address constitutional requirements under EU law, and thus risks a negative opinion by the CJEU. The recent case law on the principle of autonomy suggests that the prior involvement of the CJEU in questions concerning the interpretation of EU law is a procedural prerequisite for the consistency of every international dispute settlement mechanism with the EU Treaties. And under the agreements with Vietnam and Canada, the assessment of EU law is an essential task of the Investment Court.
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