As of 1 January 2016, the EU Presidency is now in the hands of the Netherlands. What will the next 6 months of the Dutch EU Presidency bring for investment protection?
As we have reported several times in our previous newsletters, investment protection and access to investor-state dispute settlement (ISDS) is increasingly under fire from several fronts.
Regarding intra-EU Bilateral Investment Treaties (BITs) (i.e. BITs concluded between EU Member States), the European Commission has initiated infringement procedures against 5 EU Member States (Sweden, Romania, Austria, Slovak Republic and the Netherlands) arguing that their intra-EU BITs are violating EU law. Those Member States will soon submit their cases to the Court of Justice of the EU (CJEU). While a judgment is not expected in the next half year, it will be very interesting to see whether and how those states will defend their intra-EU BITs. It will be also interesting to see to what degree the line of arguments of those states will differ. So far the Netherlands has always been a staunch defender of its intra-EU BITs – even to the extent that it got actively involved in the Eureko/Achmea dispute against the Slovak Republic.
The new year already saw Italy withdrawing from the Energy Charter Treaty (ECT) to avoid new arbitrations over retroactive cuts to renewable energy. The European Commission is actively pushing member states to leave the ECT to make sure no new intra-ECT cases can be lodged.
The result of this strategy will be that European investors could only turn to domestic courts for relief, which – as we all know –in many Member States are corrupt and under direct political pressure from their governments. This will effectively lead to the removal of any effective level of investment protection within Europe.
The big question is: will the Netherlands – as EU President – be able to effectively stop this course of events?