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Achmea: The principle of autonomy and its implications for intra and extra-EU BITs

Published on March 27, 2018        Author: 
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On 6 March 2018, the CJEU issued its judgment in Case C-284/16 Achmea, where it opined that intra-EU BITs and in particular their ISDS provisions are incompatible with the principle of autonomy of EU law. In a rather brief judgment, the Court found the ISDS provision under the Netherlands-Slovakia BIT has an adverse effect on the autonomy of EU law, as the latter in enshrined in Articles 344 and 267 TFEU. With this judgment the Court gave a definitive answer to a long-awaited controversial issue as to whether international investment treaties between EU Member States are compatible with EU law. Yet, Achmea does not provide conclusive answers as to the interaction between EU law and international investment law, neither with regard to intra-EU BITs, nor for extra-EU BITs. Considering that the compatibility of ISDS under CETA with EU law is challenged by Belgium and is the subject matter of a pending Opinion, Achmea adds a, admittedly important, piece to the puzzle.

In finding an incompatibility between an intra-EU BIT with EU law, the Court focused exclusively on the ISDS mechanism and its effects on the autonomy of EU law. Although the parties to the dispute and in particular the Commission argued about the existence of incompatibilities on other grounds as well, the most important being non-discrimination, the Court chose to address only the autonomy concerns. Referring to its landmark judgment on autonomy, Opinion 2/13, the Court confirmed the key role that autonomy plays for identifying the compatibility of international dispute settlement with EU law. The argument used is easy follow: the principle of autonomy protects the full effectiveness and consistency of EU law, which entails the uniform interpretation of EU law. Article 19 TEU guarantees autonomy by providing exclusive jurisdiction to the CJEU to offer authoritative interpretations of EU law and enabling a judicial dialogue with national courts via Article 267 TFEU. Investment arbitration under intra-EU BITs can have an adverse effect on autonomy, as investment tribunals a) can decide matters of EU law and b) are not subject to the CJEU’s control.

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