Abstract
The responsibility of the European Union (EU) and its Member States for breaches of International Investment Protection Agreements to which the EU is a party (EU IIPAs) is a highly topical and, to a large degree, unexplored subject. This is due to recent developments: The entry into force of the Lisbon Treaty in 2009 that shifted treaty-making competences for IIPAs to the EU, the imminent conclusion of the first post-Lisbon EU IIPAs and the adoption of internal EU legislation, which deals both with the management of disputes under EU IIPAs and the internal allocation of financial responsibility flowing from these disputes between the EU and its Member States. The subject is further of significant importance to its stakeholders: Arbitral awards and settlements arising out of disputes under EU IIPAs can and most certainly will, as experience has shown, churn out tremendous sums payable to aggrieved investors. Financial responsibility arising from these disputes can cut into the budgets of both the EU and the Member States depending on who is responsible; financial responsibility of the EU is practically shared by all Member States. A clear, fair and balanced delineation of responsibility between the EU and the Member States for breaches of EU IIPAs is, hence, crucial for a successful post-Lisbon EU international investment policy.
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Notes
- 1.
Opinion 2/15 EU-Singapore Free Trade Agreement (16 May 2017), para. 305.
- 2.
As the text of the EU-Vietnam IIPA is not yet available, this study will focus on the investment chapter of the EU-Vietnam FTA. The provisions will likely be the same.
- 3.
CETA is subject to this study in its September 2016 version. It is available at: http://data.consilium.europa.eu/doc/document/ST-10973-2016-INIT/en/pdf. Accessed 26 August 2018.
The EU-Singapore IIPA is subject to this study in its April 2018 version. It is available at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=961. Accessed 26 August 2018.
The Investment Chapter of the EU-Vietnam FTA is subject to this study in its January 2016 version. It is available at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437. Accessed 26 August 2018.
The Investment Chapter of TTIP is subject to this study in its November 2015 version. It is available at: http://trade.ec.europa.eu/doclib/docs/2015/november/tradoc_153955.pdf. Accessed 26 August 2018.
- 4.
See for an overview, European Commission (2017) A Multilateral Investment Court. http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_156042.pdf. Accessed 26 August 2018.
- 5.
ILC Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries, in ILC Report of the 53rd session (2001), UN Doc A/56/10 (2001).
- 6.
ILC, Articles on the Responsibility of International Organizations, with Commentaries, in ILC Report of the 63rd session (2011), UN Doc A/66/10 (2011).
- 7.
Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, Towards a comprehensive European international investment policy, Brussels 7 July 2010, COM (2010) 343, p. 10.
- 8.
Regulation (EU) No 912/2014 of the European Parliament and of the Council of 23 July 2014 establishing a framework for managing financial responsibility linked to investor-to-state dispute settlement tribunals established by international agreements to which the European Union is party [2014] OJ L 257, p. 121.
- 9.
Proposal for a Regulation of the European Parliament and of the Council establishing a framework for managing financial responsibility linked to investor-state dispute settlement tribunals established by international agreements to which the European Union is party, Brussels, 21 June 2012, COM (2012) 335.
- 10.
Explanatory Memorandum to the Proposal for a Regulation establishing a framework for managing financial responsibility linked to investor-state dispute settlement tribunals established by international agreements to which the European Union is party, Brussels, 21 June 2012, COM (2012) 335, p. 5.
- 11.
See Article 8.21 CETA.
- 12.
See Article 3.5 EU-Singapore IIPA.
- 13.
See Article 6 Section 3 Investment Chapter EU-Vietnam FTA.
- 14.
See Article 5 Section 3 Investment Chapter TTIP.
- 15.
For a description of the term ‘EU-Member State responsibility window’ and a definition of the scope of the constitutive effect on international responsibility, see Sect. 4.3.2. The term is inspired by the term ‘responsibility window’ coined by Pieter Jan Kuijper in the context of the EU and the Member States in Pieter Jan Kuijper (2010) International Responsibility for EU Mixed Agreements. In: Christophe Hillion and Panos Koutrakos (eds.) Mixed Agreements Revisited – The EU and its Member States in the World. Hart Publishing, p. 224.
- 16.
Statement submitted by the EC to the Secretariat of the Energy Charter pursuant to Article 26(3)(b)(ii) of the Energy Charter Treaty made on 17 November 1997 [1998] OJ L 69, p. 115. The relevant part of the ECT Statement reads: ‘[…] The European Communities are a regional economic integration organisation within the meaning of the Energy Charter Treaty. The Communities exercise the competences conferred on them by their member states through autonomous decision-making and judicial institutions. The European Communities and their member states have both concluded the Energy Charter Treaty and are thus internationally responsible for the fulfilment of the obligations contained therein, in accordance with their respective competences. The Communities and the member states will, if necessary, determine among them who is the respondent party to arbitration proceedings initiated by an Investor of another Contracting Party. In such case, upon the request of the Investor, the Communities and the member states concerned will make such determination within a period of 30 days. [Footnote:] This is without prejudice to the right of the investor to initiate proceedings against both the Communities and their member states […]’.
- 17.
Proposal for a Statement submitted to the Secretariat of the ECT pursuant to Article 26(3)(b)(ii) ECT replacing the Statement made on 17 November 1997 on behalf of the EC. For the Proposal text, see https://www.parlament.gv.at/PAKT/EU/XXV/EU/09/88/EU_98816/imfname_10619760.pdf. Accessed 26 August 2018.
- 18.
See para. 1 Proposal Revised ECT Statement.
- 19.
See paras. 3, 4 Proposal Revised ECT Statement.
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Stegmann, P.T. (2019). Introduction. In: Responsibility of the EU and the Member States under EU International Investment Protection Agreements. European Yearbook of International Economic Law(), vol 6. Springer, Cham. https://doi.org/10.1007/978-3-030-04366-7_1
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