Europe

European Union (EU) member states have signed over 1300 investment treaties with third countries, in addition to some 200 between EU members. Non-EU European states are party to over 500 treaties. Most of these contain investor-state dispute settlement (ISDS) provisions, which enable foreign corporations to take ISDS claims against states if they deem their profits or potential investment to be affected by new laws or changes in policy.

The EU has ratified four agreements with an ISDS mechanism: the Energy Charter Treaty (ECT), to which 53 European and Central Asian countries are party, the Comprehensive Economic Trade Agreement (CETA) with Canada, and agreements with Vietnam and Singapore. Only the ECT has been fully in force. The ISDS provisions in the three others will be implemented after all member states have ratified them.

These three deals also include a revised ISDS mechanism created by the European Commission, known as the investment court system. Many critics say that this new system is largely window-dressing and does not address the core of the problem behind investor-state dispute measures.

In 2015, the European Commission asked the EU member states to terminate their intra-EU bilateral investment treaties (BITs), arguing they are incompatible with EU law, which was confirmed by the Court of Justice of the European Union in its “Achmea” decision.

As of April 2020, the number of intra-EU ISDS disputes amounted to 170, approximately 17% of all cases globally, 76 of which having been brought under the ECT.

Overall investors from European countries have initiated over 600 ISDS cases, half of which are against non-European states. European countries have been targeted in about 350 cases. Grouped together, investors from EU member states have launched the majority of total disputes (over 400).

Spain, the Czech Republic, Poland, Russia and Ukraine have been among the ten most frequent respondent states, while the Netherlands, the United Kingdom, Germany, Spain, France, Luxembourg, Italy and Switzerland have been among the ten most frequent home states of the investor.

The most well-known cases include:

Yukos (Isle of Man) vs. Russia: US$50 billion awarded in 2014 to majority shareholders of the oil and gas company (ECT invoked).

Eureko (Netherland) vs. Poland: case settled in 2005 for about €2 billion in favour of the investor, a large European insurance company (Netherland-Poland BIT invoked).

Ceskoslovenska Obchodni Banka (Czech Republic) vs. Slovak Republic: €553 million awarded in 2004 to the investor, one of the largest commercial banks in the Czech Republic (Czech Republic-Slovak Republic BIT invoked).

(April 2020)

Premium Times | 23-Nov-2020
The groups said they are concerned about the ICSID’s long-standing failure to promulgate clear rules for addressing cases where corruption has been alleged.
Le Temps | 20-Nov-2020
Lorsque leurs intérêts sont lésés à l’étranger, les multinationales n’hésitent pas à porter plainte et réclamer des réparations. Glencore, Holcim, Philip Morris, SGS et d’autres ont fait appel à une plateforme créée par la Banque mondiale
DW | 12-Nov-2020
A lawsuit by Vattenfall is also still pending before the International Centre for Settlement of Investment Disputes (ICSID), concerning several billion euros for the permanent closure of Krümmel and Brunsbüttel.
Egypt Today | 6-Nov-2020
The ICSID has turned down a lawsuit filed by Spanish companies Cementos La Union and Aridos Jativa against the Egyptian State, demanding a compensation of more than €236 million.
CIAR Global | 4-Nov-2020
Cuando parecía que las demandas de arbitraje de inversiones viraban ante un nuevo camino abierto por el Real Decreto impulsado por el Gobierno español sobre la nueva retribución a las explotaciones de energía renovable, la compañía japonesa Mitsui & Co. ha presentado una solicitud de arbitraje ante el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI).
Climate Action Network | 4-Nov-2020
The treaty is incompatible with the EU’s climate commitments and the current modernisation process will not fix this, as the necessary reforms are either opposed by other contracting parties or not being discussed.
Climate Home News | 29-Oct-2020
Brussels’ proposed green reforms to the Energy Charter Treaty face resistance from Japan, yet do not go far enough for environmental campaigners.
Mondaq | 26-Oct-2020
Most recently, Jersey has joined Hong Kong as another non-sovereign entity that negotiates its own BITs. Jersey is set to sign its first BIT with the UAE later this year.
Bar and Bench | 26-Oct-2020
The scope of consent to arbitration is an important issue that needs to be finally settled - not least because it could have multi-billion dollar implications for India in respect of other cases involving challenges to India’s taxation measures by foreign investors.
EU Observer | 23-Oct-2020
Cross-party MEPs called on the European Commission to be prepared to withdraw from the controversial Energy Charter Treaty, if negotiations for its modernisation fail.

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