Investment arbitration and the autonomy of the EU’s legal order: a rule of law perspective

Abstract

Steps taken by the European Union (EU) towards putting an end to intra-EU investment arbitration have attracted much criticism, which ranges from accusations of legal imperialism to observations that the notion of autonomy of the EU’s legal order, which is the primary tool weaponised against intra-EU arbitration, is politically malleable. Nevertheless, those supporting the EU’s position argue that in a legal community like the EU, it is expected to litigate against state authorities before national courts. This article informs the debate from a rule of law lens – it contends that the concerns for the EU’s legal order with respect to intra-EU investment arbitration resonate dual standards and undermine article 2 of the Treaty on European Union (TEU). First, it analyses the inconsistencies of the European Commission’s position considering its failure to protect judicial independence in the EU. Then, it explains why the politicisation of the principle of the autonomy of the EU’s legal order in the Court of Justice of the European Union’s case law, which reflects the court’s commitment to self-increasing its jurisdiction and to prioritising procedure over substantive human rights, leads to tension with article 2 TEU. After shedding light on concrete cases illustrating why the EU’s stance on intra-EU investment arbitration hampers investors’ rights, it contemplates what solutions could be envisaged to ensure more adequate investor protection in the EU.