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Why Europe Should Reconsider its Anti-Arbitration Policy in Investment Disputes

Summary: 1. Introduction. – 2. Moving away from arbitration and towards ‘investment courts’ in investor-state disputes. – 3. The Achmea case: a further blow to the popularity and use of arbitration in Europe. – 4. Follow-up: the aftermath of the Achmea case. – 5. Arguments behind the current European anti-arbitration stance. – 6. Are proposed alternatives an adequate reply to the weaknesses of investor-state arbitration? – 7. Conclusion

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Abstract

This paper addresses the current challenges to investor-state arbitration in Europe. Two parallel developments are outlined: the current change in the EU policy towards arbitration provisions in multilateral and bilateral investment treaties, and the consequences of the Achmea case decided by the Court of Justice of the European Union in March 2018. The author analyses the critical arguments behind the current European anti-arbitration stance and concludes that while some of them (but not all) may have some foundation, a sufficient number of reasons speak against the radical dismantling of the system of international investment arbitration. An analysis of the proposed alternatives shows that they fail to deliver viable solutions for diagnosed problems. In particular, the replacement of ad hoc tribunals by a multilateral investment court (MIC) seems to be a step in the wrong direction. The ISDS has played an important role in the global fostering of international investment by securing a basically fair system of dispute resolution in a very specific field. Its deficiencies are not beyond repair; on the other hand, the alternatives offered suffer from flaws that are the same or much more troubling. The author concludes that the consequences of the ‘change of tide’ in the approach to investor-state dispute resolution are likely to be detrimental to the very goals of those who advocate the abandoning of investment arbitration.

About Authors


Alan Uzelac, 
Prof. Dr., Full Professor of Law,
Head of Department for Civil Procedure,
Faculty of Law, University of Zagreb, Croatia
Trg Republike Hrvatske 14, 10000, Zagreb

auzelac@gmail.com 
https://orcid.org/0000-0001-5986-3909 

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Узелац Алан. Чому Європа повинна переглянути свою проти-арбітражну політику в інвестиційних спорах. Access to Justice in Eastern Europe, 2019, No 1 (2), 6-30.

Анотація. У статті досліджуються нагальні виклики арбітражного вирішення спорів між державами та інвесторами в Європі. Окреслено дві паралельні траєкторії розвитку: сучасна зміна політики ЄС щодо арбітражних положень багатосторонніх та двосторонніх інвестиційних договорів та наслідки справи "Achmea", яку вирішив Суд Європейського Союзу в березні 2018 року. Автор аналізує критичні аргументи щодо поточної європейської проти-арбітражної позиції і робить висновок, що хоча деякі з них (але не всі) можуть мати певну основу, достатня кількість причин свідчить проти радикальної переробки системи міжнародного інвестиційного арбітражу. Аналіз запропонованих альтернатив показує, що вони не мають життєздатних шляхів для вирішення виявлених проблем. Зокрема, заміна тимчасових судів багатостороннім інвестиційним судом є кроком у неправильному напрямку. Автор наголошує на потребі оцінити майбутні реформи системи врегулювання спорів між інвестором та державою. Існуюча система, що включає так звані поступові, системні та парадигмальні кроки, які не відображає фундаментальної реформи, яка виходить за рамки суто косметичних змін у системі інвестиційного арбітражу, але зберігає специфічні переваги арбітражу, включаючи його гнучкість, його здатність вибирати найкращі судові рішення для конкретної справи, значну ступінь самостійності сторін та її процесуальну ефективність. Така фундаментальна арбітражна реформа системи врегулювання спорів між інвестором та державою є найбільш перспективним шляхом. Система врегулювання спорів між інвестором та державою завжди відігравала важливу роль у глобальному стимулюванні міжнародних інвестицій, забезпечуючи в основному справедливу систему вирішення спорів у дуже специфічній галузі. Її недоліки не належать до непоправних; з іншого боку, запропоновані альтернативи містять недоліки, які є занадто тривожними. Автор робить висновок, що наслідки зміни тенденції у підході до вирішення спорів між інвестором та державою, ймовірно, можуть завдати шкоди самим цілям тих, хто виступає за відмову від інвестиційного арбітражу.

Ключові слова: арбітражне вирішення спорів між державою та інвестором, Європейський Союз, багатосторонній інвестиційний суд, ISDS, справа Achmea, CJEU, NAFTA, USMCA, TTIP

Keywords

  • investor-state arbitration, European Union, multilateral investment court, ISDS, Achmea case, CJEU, NAFTA, USMCA, TTIP

How to cite it?

  • A Uzelac,Why Europe Should Reconsider its Anti-Arbitration Policy in Investment Disputes (2019) No 1 (2) Access to Justice in Eastern Europe 6-30.