Policy and practice of EU foreign investment law is utterly divided. On the one hand, the Commission has long advocated against the validity of investment agreements between Member States. Siding with its arguments, the Court of Justice has recently confirmed that intra-EU investment agreements are liable to undermine the autonomy of EU law. On the other hand, in negotiations with Canada, Singapore and Vietnam, the Commission is not prepared to let go of investor-state dispute settlement provisions. Here, the Court of Justice confirmed that reform proposals by the Commission in form of the Investment Court System in fact address shortcomings of traditional investor-state arbitration clauses, and safeguards the conformity of these agreements with the EU Treaties. Discussing remaining challenges in light of recent case law of the Court of Justice, this chapter demonstrates that a differentiation between intra-EU and extra-EU relations is overly artificial. In particular, concerns of incompatibility of investor-state dispute settlement mechanisms with the principles of non-discrimination and the autonomy of the EU legal order transcend such a divide. Yet this is not reflected the Court’s reasoning, which leaves much to be desired.
CITATION STYLE
Lenk, H. (2020). Investor-State Dispute Settlement: Constitutional Challenges and Pitfalls. In EU External Action in International Economic Law: Recent Trends and Developments (pp. 121–151). T.M.C. Asser Press. https://doi.org/10.1007/978-94-6265-391-7_6
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