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)

iPolitics | 23-Jul-2014
The end of the Canada-EU trade agreement (CETA) technical negotiations are “in sight” and the deal should be initialed in time for a late September bilateral summit in Ottawa, EU Trade Commissioner Karel De Gucht said Tuesday.
Global Arbitration Review | 11-Jul-2014
Corporate counsel and practitioners in Europe have formed a non-profit association to promote the benefits of investor-state arbitration and influence EU policy on investment protection.
ENDS Europe | 10-Jul-2014
Asked about the trade deal the Commission is currently negotiating with the US, which campaigners fear will allow private companies to challenge the EU’s environmental rules, Mr Juncker stressed that the normal, publicly accountable, court system should be used instead of private courts or arbitration panels.
PTI | 15-May-2014
With tax authorities pressing with over Rs 21,000 crore in unpaid dues, Finnish telecom major Nokia has invoked the Bilateral Investment Promotion and Protection Agreement (BIPA) India has with Finland to resolve the dispute.
Indian Express | 13-May-2014
Entangled in a protracted tax mess in the country, Nokia has said that it would like to address the issue under the bilateral investment treaty between Finland and India, sources told The Indian Express.
ETUC | 9-May-2014
The EU-Canada trade agreement – which may be concluded on May 8 at the Foreign Affairs Council – should not be used as a ‘Trojan horse’ to smuggle in a controversial Investor-to-State Dispute Settlement (ISDS) warned the European Trade Union Confederation (ETUC).
Live Mint | 8-May-2014
Vodafone Group Plc has abandoned the conciliation process and started international investment arbitration against the Indian government over its long-running tax dispute.
ETUC | 7-May-2014
The EU-Canada trade agreement – which may be concluded on May 8 at the Foreign Affairs Council – should not be used as a ‘Trojan horse’ to smuggle in a controversial Investor-to-State Dispute Settlement (ISDS) warned the European Trade Union Confederation (ETUC).
AP | 6-May-2014
Germany’s vice chancellor is underlining doubts about the need for new investment rules in a proposed European Union-U.S. trade deal — a thorny issue in the talks.
Les Echos | 14-Apr-2014
Un tribunal arbitral constitué sous l’égide du CIRDI condamnait l’Etat roumain à verser aux frères Micula, citoyens suédois ayant investi dans la distribution alimentaire et de boissons, le montant de 250 millions de dollars de dommages et intérêts.

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