CYIL 2011

TOMÁŠ FECÁK CYIL 2 ȍ2011Ȏ Even though it is not certain at the moment whether the solar levies will result in international arbitrations and therefore it would be premature to predict the outcome of such arbitrations, there is a specific reason why this case is mentioned here – its nature differs in a sense from the factual basis of the other disputes the Czech Republic has faced so far. All of those can be attributed more or less to individual failures, to economic transformation, lack of experience and expertise, the incidental effects of faulty legislature etc. By contrast, the measures in the solar sector are the product of a deliberate state policy, involving in full the highest executive and legislative bodies – these measures were – proposed by the Government, 42 adopted by Parliament and approved by the President, while each of them must have been aware of the potential consequences. The explanation given by the officials is not very convincing given that the original bad decision of the state is being remedied by an exceptional measure at the expense of an entire class of private parties which, regardless of the fact that they would otherwise generate economically unreasonable profits, have been conducting their business activities in accordance with valid rules. Considering the experience of the Czech Republic with investment arbitrations, these findings are somewhat disappointing. 4. Investment protection and the EU The relationship between EU law and the bilateral investment treaties concluded by EU Member States is a very complex one. These two legal systems interact with each other in many ways and no satisfactory and comprehensive explanation of this relationship has thus far been established by doctrine or by the practice of the parties involved. 43 Various overlaps and incompatibilities had already emerged before the Treaty of Lisbon entered into force in December 2009. Under the Treaty of Lisbon, the Union gained an explicit and exclusive competence for foreign direct investments, which now fall under the common commercial policy, further complicating the matter. Basically, the question of the relationship between BITs and EU law is twofold. The first problem concerns Member States’ BITs with third countries. Although they had always been recognized as valid international agreements concluded without the involvement of the EU, it has been submitted quite recently that certain provisions contained therein may violate EU law. The second problem concerns so-called intra-EU BITs, i.e. the BITs concluded by the Member States with each another, 42 Although the levies were not included in the original Governmental proposal to the Parliament, they were supported by agreement of coalition parties’ leaders and no member of cabinet has shown any kind of reservation to this proposal. 43 For a theoretical analysis of the issue, see, for instance: Elimansberger, T. Bilateral Investment Treaties and EU Law . Common Market Law Review, 46/2009, p. 383-429; Wehland, H. Intra-EU Investment Agreements and Arbitration: Is European Community Law an Obstacle? International and Comparative Law Quarterly, 58/2009, p. 297-320; Söderlund, Ch. Intra-EU BIT Investment Protection and the EC Treaty. Journal of International Arbitration 24(5)/2007, p. 455-468; Radu, A. Foreign Investors in the EU—Which ‘Best Treatment’? Interactions Between Bilateral Investment Treaties and EU Law. European Law Journal, Vol. 14, No. 2, March 2008, p. 237-260.

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