CYIL 2011

TOMÁŠ FECÁK CYIL 2 ȍ2011Ȏ the example of Pren Nreka, an innkeeper who was able to win his investment claim worth roughly USD 1.5 million. The experience with investment arbitrations is closely related to initiatives recently taken by the Czech Republic on the international level, especially to its “EU-conformity” positions. Most significant in this regard is the effort to terminate the BITs concluded with other EU Member States. Although the official reasoning refers to the incompatibility of these agreements with EU law, the officials can hardly hide their main intention to get rid of unwanted arbitration clauses. One would sympathize with this effort. At this stage, the Czech Republic is generally perceived as a standard democracy with a favourable investment climate. Today, intra-EU BITs can hardly be expected to attract any additional foreign investors, except for investment protection optimized structures. Moreover, the existence of such agreements within the single market, especially as regards the possibility of intra EU investment arbitrations, produces deficiencies that are not acceptable under the principles of EU law and is untenable long-term also from a political perspective. However, a critical remark is suggesting itself at this point concerning the recent case of solar energy subsidies, as discussed above. This case has so far indicated that the Czech Republic has not learnt much from its experience, putting the question of the legitimacy of intra-EU BITs in a slightly different light. In any case, the days when the Czech Republic was deciding on its own foreign investment policy are coming to an end. Any future development in this area will in the longer term depend on the European Union, which has under the Treaty of Lisbon gained exclusive competence for foreign direct investments. It will certainly take some time until the scope of this competence is clarified and until a common European investment policy is fully developed. It is possible that for some time the Commission will leave a certain degree of freedom to Member States for their own activities. However, greater involvement of the EU can be expected in every investment-related matter, until the Union ultimately takes over the foreign investment agenda completely.

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