Robbing Peter to Pay Paul? ISDS and ICS from an EU Law Perspective

Abstract

In 2009 the Treaty of Lisbon conferred upon the European Union the exclusive competence on foreign direct investments (Article 207 TFEU). Following from this new competence the Eu has carried out a comprehensive regulation of trade and investment issues and reforms which include the creation of an International Investment Court, as proposed by the European Commission in both CETA and TTIP negotiations. This article analyses some of the core legal issues of the proposed Court from a European perspective and comes to the conclusion that the same EU constitutional obstacles allegedly posed by ISDS are present in the ics. As a result, the Commission's proposal weakens the perception of ISDS as a fair and legitimate mechanism to deal with investment-state disputes, whereas it perpetuates the existence of an external and parallel mechanism of dispute resolution outside the European court system.