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)

EurActiv | 14-May-2015
Richard Kozul-Wright, director at the United Nations Conference on Trade and Development (UNCTAD), said support for investor-state dispute settlement (ISDS) but not for state-investor was “incongruous”.
The Parliament Magazine | 7-May-2015
MEPs have threatened to block TTIP if ISDS is included, despite revised plans presented to them by European trade commissioner Cecilia Malmström.
Belga | 7-May-2015
La proposition de la commissaire européenne au Commerce, Cecilia Malmström, pour améliorer les procédures d’arbitrage (ISDS) entre États et multinationales dans le cadre de l’accord de libre-échange UE/États-Unis a reçu un accueil mitigé mercredi au Parlement européen.
EurActiv | 7-May-2015
European Trade Commissioner Cecilia Malmström tried to convince MEPs that there are ways to keep the Investment-State Dispute Settlement in the Transatlantic Trade and Investment partnership deal. But unimpressed lawmakers failed to greet it as a full-fledged reform.
Macleans | 6-May-2015
Mission accomplished? Not quite. American negotiations with Europe may trigger more changes to CETA
Social Sciences Research Network | 6-May-2015
The European Commission’s most recent proposal for ISDS reflects a move away from fake reforms to something potentially more meaningful, but it is insufficient and unreliable, says legal expert Gus Van Harten.
Global Arbitration News | 6-May-2015
The Italian government has recently declared its withdrawal from the Energy Charter Treaty (“ECT”).
Reuters | 5-May-2015
The EU’s trade chief proposed on Tuesday creating a new European court to settle disputes in international trade agreements, a step aimed at overcoming growing public resistance to a free-trade accord with the United States.
Korea Herald | 4-May-2015
The Dutch company will file an ISDS application against the Korean government, should the authorities refuse to pay 183.5 billion won ($169.9 million) in tax refund.
EurActiv | 24-Apr-2015
Shrouded with secrecy and posing a threat to public services, Owen Tudor tells EurActiv why the UK Trade Union Congress doesn’t believe the hype over TTIP, and why exploitation, rather than immigration, should be the cause of people’s concerns.

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