The mechanism for the settlement of disputes between investors and States provided for by CETA with Canada, is compatible with European Union law, according to the conclusions of the Advocate General of the European Court of Justice (ECJ) Yves Bot, made public on Tuesday 29 January in Luxembourg.
Driven by the reluctance of its French-speaking entities faced with CETA - the free trade agreement between the EU and Canada - Belgium referred the matter to the ECJ in September 2017 concerning the new jurisdictional mechanism - the ‘Investment Court System’ (ICS) between investors and States - inserted in Chapter 8 of the CETA agreement (see EUROPE 11856).
It had submitted a range of questions to ECJ, relating to: 1) the exclusive jurisdiction of the Court over the definitive interpretation of EU law, 2) the general principle of equal treatment and the requirement that EU law is effective, 3) the right of access to a tribunal 4) which is independent and impartial.
The Opinion of Advocate General Yves Bot, in Opinion 1/17, argues that the mechanism for the settlement of disputes provided for in the EU-Canada Free Trade Agreement is compatible with EU law. “The establishment of a dispute settlement mechanism is the requirement of reciprocity in the protection afforded to the investors of each Party” and “that is consistent with the agreement not having direct effect”, according to the Court's press release.
Case law that cannot be transposed to the ICS
Opinion 1/17 is the latest in a series of opinions and judgements concerning the relationship between international courts and EU law. In the Achmea case (see EUROPE 11975), the Court concluded that the European Union's accession to an international dispute settlement system violated the principle of the autonomy of the EU legal order.
However, Advocate General Bot states in his Opinion that “the approach adopted by the Court in its case-law cannot be transposed to the examination of that mechanism", extracting these courts from the Union's legal system by placing them in the context of public international law. The ICS "is entirely consistent with the objectives of the Union's action on the international stage [...] with the express confirmation of the Parties right to adopt legislation necessary to achieve legitimate objectives in the public interest, for example in the areas of public health, safety, the environment and social protection ", Mr Bot judged.
A possible confirmation for the Commission in its international campaign to set up a Multilateral Investment Court, or MIC (see EUROPE 12176).
Finally, in his Opinion, the Advocate General also sweeps aside Belgian concerns about equal treatment and the protection of the right of access to an independent and impartial tribunal, considering that the guarantees put in place in the ICS system are sufficient.
Deception to the left of the political chessboard
Various civil society organisations, as well as political groups, that have opposed CETA and consider these courts illegitimate, have expressed their disappointment with this view.
The French Socialists of the S&D Group in the European Parliament believe that this opinion "does not change our political position: we remain opposed to CETA" because for them, the question is "mainly political", according to a statement published the same day. This is an opinion shared by the Greens/EFA, who call for waiting for the Court's opinion.
In the majority of cases, the interpretation of the judges in Luxembourg follows the line of reasoning of the Advocate General, but important nuances may still be expected, or indications on implementation added. The Court's verdict is expected within the next three to four months.
To consult the opinion of Advocate General Bot (in English): https://bit.ly/2DGYMos. (Original version in French by Hermine Donceel)