INTRA-EU INVESTMENT AGREEMENTS AND ARBITRATION: IS EUROPEAN COMMUNITY LAW AN OBSTACLE?

Bilateral Investment Treaties (BITs) between Member States of the EU have long been all but non-existent. However, with the two most recent rounds of EU enlargement about 190 BITs have become intra-EU. This has not only raised doubts about the conformity of these BITs with EC law, but has also prompted some (including the European Commission) to question the admissibility of arbitral proceedings brought under these Treaties. The article assesses the mechanisms through which a conflict between intra-EU BITs and EC law can become relevant from an arbitration perspective. It then analyses the principal alleged inconsistencies between BIT provisions and EC law: differing substantive standards of investment protection, unequal treatment of investors from different Member States and the lack of control by the ECJ. The discussion of these issues in the light of the relevant EC Treaty provisions shows that EC law should not, in fact, be regarded as an obstacle to intra-EU investment arbitration.