Does the European Union Have New Clothes?: Understanding the EU’s New Investment Treaty Model

Abstract

The purpose of this article is to critically analyse the methodology and impact of the investment chapter the European Union (EU) proposed for the Transatlantic Trade and Investment Partnership (TTIP). It focusses on the innovations of an appellate body and the incorporation of a ‘right to regulate’-provision, as well as general exceptions that are very similar to Article XX of the GATT. In light of the development that these features have been replicated in the CETA and the EU-Vietnam FTA, it questions why the EU is changing the traditional form of investor-State arbitration in a preferential trade and investment agreement and whether the EU’s model is viable, and formulated on a robust design that will stand the test of time.

An Investment Court that Judges the Judges: A Case of Natural Selection?

“…159 Similarly, there are constitutional issues to be resolved surrounding the consistency of the investment court design with the ICSID Convention. 160 Overall, this could result in an investor shying away of its willingness to undertake dispute settlement through the ICSID Convention. 161 Similarly, shifting to the ideal of a 'court', in the true sense of the term, is likely to be restrained by the jurisdiction of tribunal, where a determination of the issues involve the interests of a non-party (such as a litigant in the underlying court proceedings).…”

Transparency, Investment Protection and the Role of the European Parliament

“…158 There is a risk, however, that party-appointed arbitrators might favour the party that appointed them and that arbitrators might favour investors in order to ensure future opportunities for work. 159 The recent EU FTIAs part from the existing practice and contemplate two-tier standing Investment Courts, 160 with the exception of the current version of EU-Singapore, which only provides for the possibility of setting up an appellate body. The discretion of the disputing parties to choose the arbitrators is replaced with the power of the central treaty committees to appoint a list of arbitrators to act on the first instance tribunals and the appellate bodies, equally split between nationals of the EU, the other contracting party and third countries.…”