Originally from The American Review of International Arbitration  (ARIA)

ABSTRACT

Following a recent European Charter Treaty (“ECT”) decision, it appears that the fate of intra-EU investment disputes, when adjudicated in fora other than the Luxembourg courts, is finally all but sealed. In Green Power, an arbitration tribunal confirmed prior decisions taken in different jurisdictions that there is no room for adjudicating intra-EU investment disputes away from Luxembourg. This decision sided with the approach already developed by the Court of Justice of the European Union (“CJEU”) in three decisions, namely, Achmea, Komstroy, and PL Holdings, which in turn led to legislative action by the Energy Charter Treaty aiming to put an end to a different choice of venue. This initiative is in line with the often-expressed volition of the Luxembourg courts to preserve their monopoly over the interpretation of EU laws. While, from a strict legal perspective, the position of the Luxembourg courts is not entirely persuasive, and we advance in what follows arguments to this effect, it appears that ultimately discussion of the issue will soon be considered “water under the bridge” and the CJEU will preserve its monopoly over the adjudication of intra-EU investment disputes in the foreseeable future. With this arrangement, although EU member states can participate as individual entities in fora like the ECT, they (and their investors) can submit disputes arising from their participation therein only to Luxembourg.

I.     THE MONOPOLY OVER THE INTERPRETATION OF EU LAW

      Article 344 of the Treaty on the Functioning of the European Union (“TFEU”) reads: “Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein.”

This provision is cited as the statutory basis for conferring a monopoly of jurisdiction on the Luxembourg courts for all matters regarding the interpretation and application of EU treaties. But the key element here is the term “interpretation or application of the Treaties,” and more precisely its scope. What should come under this phrasing? Only the Treaty on European Union (“TEU”), and the TFEU? Is the secondary law covered as well? One would assume so, but how should we understand then the term “secondary law”? Does it cover international agreements signed as well? Does it matter if agreements are an expression of the EU’s exclusive competence, or do mixed agreements as well, come under the scope of Article 344?

We are still some way from having the whole picture painted. Furthermore, in this paper, we do not pay heed to the attitude of the Court of Justice of the European Union (“CJEU”) towards international adjudication. Indeed, this question over the scope of Article 344 has arisen in various contexts from the submission of disputes to the World Trade Organization (“WTO”), to doing the same before the European Convention on Human Rights (“ECHR”).  In this paper, we are not concerned with the horizontal issue, largely because it is unclear whether a horizontal response to the question posed is warranted. Here, we pay careful attention to intra-EU disputes, e.g., disputes between two EU member states, and ask under what conditions they can be submitted to a court/tribunal other than the Luxembourg courts, or, conversely, whether they must observe Article 344 of the TFEU. The theme of this paper is clear and focuses on the resolution of intra-EU investment disputes.