Of all the difficult interfaces that have emerged in recent years between the law of the European Union (EU) and the law of international arbitration, none rivals in salience the question of whether European Union law possibly furnishes a defense to liability under international investment agreements. In this chapter, I explore the reliance that has been placed on EU law by Respondent EU Member States in advancing jurisdictional and substantive defenses under these agreements.
I. EU LAW AS A JURISDICTIONAL DEFENSE
The jurisdictional challenge appears to be limited to that subspecies of international investment disputes commonly identified as “intra-EU,” by which is meant disputes between an EU Member State and a national of another EU Member State. The literature refers regularly to “intra-EU bilateral investment treaties,” or more typically “intra-EU BITs,” but an intra-EU dispute may also arise under any investment treaty (including multilateral treaties) to which multiple EU Member States are parties. Of the latter, the Energy Charter Treaty (ECT) is the prime example. It is anything but surprising that the law of the European Union should figure prominently in disputes arising under intra-EU BITs and under the ECT, since EU law plays a role, alongside international law, as a body of law applicable to such disputes. Investor-State tribunals have held that EU law forms part of international law and is, for that reason alone, relevant.