The future of Investor-State Dispute Settlement (ISDS) in the European Union

Thursday 9 September 2021

In the ideal-type ‘Westphalian system’, international lawmaking took place primarily through international agreements. The purpose of this side-event is to discuss the future of investor-state arbitration within the EU. In the Achmea judgment of 2018, the CJEU found that the arbitration clause contained in the Netherlands-Slovakia BIT was incompatible with EU law. Soon after Achmea, on 29 August 2020, the Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the EU entered into force. This put a formal ‘full stop’ to intra-EU BITs. However, subsequent developments suggest that the compatibility of the intra-EU investor-state arbitration with EU law is still a hot topic of debate, in particular when based on other treaties, such as the Energy Charter Treaty (ECT). In Poland v PL Holdings, the CJEU is to decide whether an individual arbitration agreement between an EU investor and a EU Member State is compatible with EU law, despite Achmea. In Moldova v Komstroy, AG Szpunar came to conclude that Article 26 of the ECT providing for investor-state dispute settlement is likely incompatible with EU law.