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Intra-EU BITs as the Kindling in the Battle between EU Legal Order and International Investment Arbitration? - Why both systems do not necessarily clash

Kormann, Veronika LU (2016) JAEM01 20161
Department of Law
Abstract
The case Micula gave people the impression that EU law and ICSID arbitration law are incompatible legal orders, unable to accept each other’s dissenting opinions. Every ICSID tribunal decision in the field seems to cause heavy defence reactions in the EU legal system.
However, this clearly does not have to be the case if all parties involved behave cautiously.
This thesis will analyse in detail the two legal orders’ jurisdiction on intra-EU investment disputes, and which law each legal order applies to the dispute.
It will be seen that there is no reason for conflicts in disputes arising at a time where both signatory states of a BIT are members to the EU. Both, the EU courts and ICSID tribunals, have jurisdiction on such investment... (More)
The case Micula gave people the impression that EU law and ICSID arbitration law are incompatible legal orders, unable to accept each other’s dissenting opinions. Every ICSID tribunal decision in the field seems to cause heavy defence reactions in the EU legal system.
However, this clearly does not have to be the case if all parties involved behave cautiously.
This thesis will analyse in detail the two legal orders’ jurisdiction on intra-EU investment disputes, and which law each legal order applies to the dispute.
It will be seen that there is no reason for conflicts in disputes arising at a time where both signatory states of a BIT are members to the EU. Both, the EU courts and ICSID tribunals, have jurisdiction on such investment disputes. Since they apply EU as prevailing law, there is no risk for incompatible decisions.
Disputes arising during the accession process of the second of the BIT signatory states are more complex. Arbitral tribunals can decide on the dispute, whereas EU courts do not have jurisdiction. Furthermore, in many cases ICSID tribunals are bound to let the BIT prevail over provisions of EU law. This can indeed create conflicts: EU courts might refuse to enforce such awards.
Nevertheless, the thesis will show that a plain refusal to enforce awards that are not in line with EU law is not beneficial. Instead, it argues in favour of a Solange II-like system: EU courts should enforce ICSID awards as long as the ICSID system gives the EU accession sufficient consideration in the facts of the case. This way, the risk for clashes between the two legal orders can be considerably mitigated.

It is thus not necessary that EU law and the ISCID system regularly clash. If all actors on the scene behave reasonable, a peaceful cohabitation between the systems is possible in the vast majority of the cases. (Less)
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author
Kormann, Veronika LU
supervisor
organization
course
JAEM01 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
ICSID, EU Law, Miclua, Investment Arbitration, BIT
language
English
id
8876939
date added to LUP
2016-06-07 14:04:50
date last changed
2017-10-10 08:56:07
@misc{8876939,
  abstract     = {The case Micula gave people the impression that EU law and ICSID arbitration law are incompatible legal orders, unable to accept each other’s dissenting opinions. Every ICSID tribunal decision in the field seems to cause heavy defence reactions in the EU legal system. 
However, this clearly does not have to be the case if all parties involved behave cautiously. 
This thesis will analyse in detail the two legal orders’ jurisdiction on intra-EU investment disputes, and which law each legal order applies to the dispute. 
It will be seen that there is no reason for conflicts in disputes arising at a time where both signatory states of a BIT are members to the EU. Both, the EU courts and ICSID tribunals, have jurisdiction on such investment disputes. Since they apply EU as prevailing law, there is no risk for incompatible decisions. 
Disputes arising during the accession process of the second of the BIT signatory states are more complex. Arbitral tribunals can decide on the dispute, whereas EU courts do not have jurisdiction. Furthermore, in many cases ICSID tribunals are bound to let the BIT prevail over provisions of EU law. This can indeed create conflicts: EU courts might refuse to enforce such awards. 
Nevertheless, the thesis will show that a plain refusal to enforce awards that are not in line with EU law is not beneficial. Instead, it argues in favour of a Solange II-like system: EU courts should enforce ICSID awards as long as the ICSID system gives the EU accession sufficient consideration in the facts of the case. This way, the risk for clashes between the two legal orders can be considerably mitigated. 

It is thus not necessary that EU law and the ISCID system regularly clash. If all actors on the scene behave reasonable, a peaceful cohabitation between the systems is possible in the vast majority of the cases.},
  author       = {Kormann, Veronika},
  keyword      = {ICSID,EU Law,Miclua,Investment Arbitration,BIT},
  language     = {eng},
  note         = {Student Paper},
  title        = {Intra-EU BITs as the Kindling in the Battle between EU Legal Order and International Investment Arbitration? - Why both systems do not necessarily clash},
  year         = {2016},
}