We knew that the Achmea Case (C-284/16 ECLI: EU: C 2018) had ruled, contrary to the opinion of Advocate General Lawyer M. Wathelet, that the Bilateral Investment Treaties (BIT) between Member States of the EU, to the extent to which they referred to Arbitration, were incompatible with European Legislation. They are prohibited by the Treaties because they are not considered real Tribunals, cannot propose preliminary rulings, and their decisions constitute legislation parallel to the CJEU.
With barely any foundation, it excluded the Commercial Treaties from this prohibition. Furthermore, at first, it appeared not to comment on “Umbrella Treaties”, such as the Energy Treaty.
Now, resolutely taking one step further, the “Communication Proposal of the Commission to the Parliament and the Council” (COM /2018. 547/2), the EU, acting as “hidden member Nº29”, has established the definite criteria for burying any Investment Treaty that may occur between Member States. This includes the Energy Charter Treaty, despite having been signed by the EU itself with its own legal personality, since it understands that without the need for excessive arguments and making clear affirmations, that the fact that the EU signs a Treaty with the Member States absolutely does not amplify or restrict the profound interdiction to these in according investment protection systems that constitute an alternative judicial or arbitral order to the exclusive jurisdiction of the CJEU.
It is important to highlight that the Communication refers exclusively to intra- EU investment treaties, therefore not including investments carried out by community subjects (citizens, European Companies) in third countries, or, consequently, investors from third countries in the EU.
With regard to Treaties, bilateral or umbrella, by which any EU investor carries out their operation within an EU Member State, it is established that they can in no way resort to arbitration.
As a result, even the arbitrations of ICSID or UNCITRAL, are touched by death if they occur between intra-Community investors.
The content of the Communication, in spite of its extension (27 pages), adds nothing new. It limits itself to recounting how good European legislation is as it is interpreted by the CJEU, and the mandate of the judicial bodies of the Member States to be impartial, objective, neutral, independent and faithful followers of the judicial principles established in the jurisprudence of said court (proportionality, legitimate confidence, etc.). All this, after assuring that the investor is protected, including their freedom of enterprise and the right to property understood as fundamental rights (which goes further than our internal jurisprudence about the right to property). Furthermore, within a Social State, which is what thoroughly dominates the EU, the states cannot balance those protective investment rights with the public interest requirements that, when sufficiently proven, conclude by eclipsing and demolishing even those supposedly fundamental rights.
It is therefore a balance between private and public interests that must prevail. However, it falls exclusively to EU Members, through their judicial systems, to apply it. To do this they must trust that intra-Community investors know and learn to act as “informed investors” by understanding what investing in European countries entails, and what public goods, such as the environment, labour protection, gender equality, non-discrimination, culture and, in brief, all public goods that preside over the identity of any Member State, imply. Therefore they know beforehand that Member States can, with the public good in mind, modify the instructions given to investors, even if they have signed a multilateral Treaty, like the Energy Charter, also signed by the EU.
Subjectively mixed investments – that is those which are carried out in part by investors of a Member State, and in part by a third party investor – are excluded from this Communication. Nor will this be resolved if in the end these rules were applied to new Arbitration Tribunals as foreseen in the Treaty with Canada (CETA) or with Singapore, or with the recently signed agreement with Japan. There remains some doubt to be dispelled, and we will await a new Ruling from the CJEU, which is perhaps more predictable now, seeing as Treaties with large nations are being conducted by the EU and its systems of investment protection must be ratified by each and every one of the Member States, as we can see now in Italy´s reluctance with respect to CETA.
For Spain, in arbitration affairs, principally in topics related to alternative energies, the Communication clearly allows it to ignore the Arbitrations in which it is being condemned (and it has thirty pending arbitrations). In fact, in one case in a Swedish Court, Spain has already succeeded in stopping the Stockholm Chamber from carrying out arbitration proceedings against it.
It is not clear however what will become of those goods that the Spain possesses abroad.
What is clear, however, is the resolute and decided will of European institutions to prevent any and all alternative justice to the jurisdictional monopoly of the CJEU.
It so happens that, just as it occurs with every country that has been condemned by international investment arbitration, the national reaction is always the same: kill the messenger. In this case, the arbitrator that brings the bad news is bound by the old maxim tu patere legem quam ipse fecisti.
