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).

Photo: War on Want

(April 2020)

DiEM25 | 24-Oct-2023
There is a coordinated move for EU members to withdraw from the dangerous Energy Charter Treaty but Ireland is refusing to act.
CIAR Global | 19-Oct-2023
El Gobierno de Portugal aprueba la renuncia del Tratado de la Carta de la Energía (TCE), una decisión esperada desde julio, cuando ya informó de su intención de abandonar el tratado firmado en Lisboa en 1994, del que es “Depositario” y receptor de las notificaciones de retirada.
Freshfields Bruckhaus Deringer LLP | 4-Oct-2023
Despite Ukraine’s recently announced termination of the BIT, and thanks to the continued application of its sunset clause, the treaty may yet give rise to a number of future claims.
OHCHR | 28-Sep-2023
Le « règlement des différends entre investisseurs et États » est devenu un obstacle majeur aux mesures qu’il faut prendre d’urgence pour faire face aux crises planétaires en matière d’environnement et de droits humains, selon un rapport des Nations unies.
DeSmog | 28-Sep-2023
A UN expert calls for ending confidential arbitration agreements in development and trade treaties, which are forcing nations to roll back climate, enviro, human rights protections while owing fossil fuel companies billions in damages.
TNI | 25-Sep-2023
Investment protection is necessary to encourage energy transition investment.
L’Echo | 20-Sep-2023
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CIAR Global | 14-Sep-2023
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The Guardian | 14-Sep-2023
Eleven countries have already pledged to exit the disastrous international charter treaty. We must join them.