In several declarations, signed on Tuesday 15 and Wednesday 16 January, Member States undertook to terminate all bilateral intra-EU investment treaties (BITs), following the ‘Achmea’ judgement (see EUROPE 11975) in which the EU Court of Justice ruled them incompatible with EU law. A victory for the European Commission, which has repeatedly considered these treaties illegal and infringing on the rules of the single market.
As a reminder, bilateral investment treaties are international agreements that generally provide protection for investments made by nationals and companies of one State in another State.
Several EU Member States had concluded BITs with Central and Eastern European countries before their accession to the EU. From the date of accession to the EU, the agreements in question therefore became treaties between EU Member States, and therefore intra-EU. There are still officially just under 200 of them.
By these declarations, Member States undertake to terminate all BITs concluded between them by means of a plurilateral or bilateral treaty, deposited no later than 6 December 2019.
It is also a question of reassuring European investors about their rights in the absence of BITs, and the declarations also refer to the Commission's July communication on this subject (see EUROPE 12066).
Differences of opinion on the Energy Charter Treaty
However, it must be noted that the Member States were unable to agree on a single declaration, as initially planned. At the heart of the disagreements: the application of the conclusions of the Achmea judgement to the Energy Charter Treaty, as the Commission maintains.
Arbitration courts have ruled that the Energy Charter Treaty also contains an investor-state arbitration clause applicable between EU Member States. Taking up this interpretation, 22 Member States signed a declaration stating that the application of this Treaty clause should then be ruled out.
In contrast, in a second statement, Finland, Luxembourg, Slovenia and Sweden note that “the Achmea judgement is silent on the investor-state arbitration clause in the Energy Charter Treaty” and that the interpretation that this Treaty contains such a clause is currently being challenged before a Swedish court.
The four Member States therefore consider that it would be inappropriate, in the absence of a specific decision on this subject, to rule on its compatibility with EU law.
In an individual statement, Hungary considers that the issue “requires in-depth discussions and individual agreement amongst Member States”.
See statements: https://bit.ly/2QXx36m. (Original version in French by Marion Fontana)