The Arbitrability of Disputes Arising From Intra-EU BITs – Vol. 25 No. 3-4

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Author: Giovanni Zarra*

Published: April 2015



1.1 The issue of the jurisdiction1 of arbitral tribunals in international investment disputes between an investor, whose home State is a Member of the European Union (“EU”), and a State which is, in turn, also a Member of the EU, is one of the most discussed topics in recent years by international investment law scholars and practitioners. These disputes are initiated by investors on the basis of so-called “Intra-EU BITs,” i.e. Bilateral Investment Treaties (“BITs”), stipulated between two EU Member States prior to the accession in the EU of one of them. As of today, pursuant to the expansion of the EU that occurred mainly in 2004 and 2007, there are more than 100 Intra-EU BITs in force, in particular between the former States of the Union and the later-joining States from Eastern Europe. Pursuant to these expansions, as it will be further explained below, the validity and/or effectiveness of such treaties – and subsequently the arbitrability of the disputes regulated by intra-EU BITs – have been questioned by the EU Commission, by certain States, and on the part of scholars. The reasons for these objections are based on arguments of both international and EU law. With regard to the former, it has been argued that intra-EU BITs have become invalid or inapplicable in light of the provisions on conflict of norms provided for in the 1969 Vienna Convention on the Law of Treaties (“VCLT”); concerning the latter arguments, it has been stated that intra-EU BITs violate the principles of supremacy of EU law, uniform interpretation of EU law, and non-discrimination on the basis of nationality set forth in the EU treaties.

The debate on the matter is therefore still very much open and it will probably be so, at least until the Court of Justice of the European Union (“CJEU”)…

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*LL.M. Queen Mary, University of London. Ph.D Candidate, University of Naples Federico II. I am very grateful to Professor Loukas Mistelis for his comments and criticisms on earlier drafts of this work. Furthermore, I would like to thank Professor Fulvio M. Palombino for the meaningful discussions we had on the subject. Any error is, of course, only mine.