by Szilárd Gáspár-Szilágyi
I. SETTING THE STAGE
In recent years ISDS has been on the lips of many politicians, academics, NGOs and even laymen, some of whom have recently ‘discovered’ that there is a mechanism through which foreign investors (often large multinationals, but not always) can bring claims against host-states before an international arbitral tribunal. The arguments in favour and against ISDS are plentiful, but one always catches my eyes. According to this argument (page 3), the EU does not need ISDS in its new free trade and investment agreements (FTIAs) with developed states, because the original rationale of this mechanism was to protect foreign investors from host‑state jurisdictions where basic tenets of the rule of law were not observed. However, trading partners such as the US or Canada have well‑functioning judicial systems that protect foreign investors; therefore, ISDS is not needed.
As a novice to the field of EU investment law, I must confess I am not yet fully convinced by the benefits of ISDS. Nevertheless, the afore-mentioned argument resonates with my previous field of research, concerned with the domestic enforcement of EU and US international agreements, and once again illustrates that there is often a disconnect between the international and the domestic enforcement of treaties.
I will not advocate for the ‘greater’ protection of foreign investors. Instead, I want to shed some critical light on the argument according to which foreign investors already enjoy high levels of protection in advanced domestic judicial systems. I will argue that the domestic protection of foreign investors is more complex. On the one hand, foreign investors can bring a claim before a domestic court against the host-state, invoking domestic standards of protection. On the other hand, they could also potentially bring a claim before the same domestic courts, relying on international standards of investment protection. As I will illustrate, the international and domestic levels of enforcement should not be treated as worlds apart and the interplay between the two can shape the strategies of the treaty negotiators and of the investors. Continue reading
This blogpost concerns probably my favorite EU law topic: the scope of the Common Commercial Policy (CCP). The scope of the CCP as a source of litigation between the Council and the Commission goes way back and most likely will continue to be so for a considerable time. The reasons are quite simple: the Common Commercial Policy is an important foreign policy tool and exclusive EU competence. As such, Member States are not entitled to act within this politically sensitive field. This is different with respect to shared competences of course, which enable Member States – subject to the Treaties – to continue to make policy that is not in violation of existing secondary legislation. In the most recent edition of this feud between the Commission and the Council, the scope of the Common Commercial Policy was at issue vis-à-vis the scope of internal market competences. Litigation in the past has usually evolved around the relationship between trade (art. 207 TFEU) and environment (art. 192 TFEU), so this case is a welcome variant to that strand of case law already explored in the Daiichi Sankyo case (commented here). In this case the Commission won yet another victory against the Council.
In a second round of cases in Luxembourg, a number of seal hunters failed (yet again) to convince the General Court to annul the EU-wide ban on trade in seal products. In a nutshell, the seal hunters argued that the EU acted ultra vires by adopting the ban on the basis of article 114 TFEU (harmonization of rules for the establishment and functioning of the internal market). Moreover, the applicants argued that the ban violated their fundamental rights and the principles of subsidiarity and proportionality. According to the applicants, the EU-wide ban was not aimed at improving the functioning of the internal market, but rather at safeguarding the welfare of animals, an objective for which no legal basis exists within the EU Treaties.
In dismissing the arguments put forward by the seal hunters, the General Court made a number of interesting statements regarding the EU’s ability to severely restrict trade of an ‘exotic import’ (a product not made within the EU) within the EU’s internal market on grounds of protecting the welfare of animals living outside the EU. In this post I will focus on the competence issue by discussing the particularities of EU constitutional law and the (modest) challenge a ban on the sale of exotic imports such as seal products poses for EU legislative competence.