CYIL 2015

POSTǧLISBON EXERCISE OF EU COMPETENCE IN THE FIELD OF FOREIGN INVESTMENT… de la Sorbonne (IREDIES), of the French Society for International Law, and of the Czech Society for International Law. Introduction After some teething troubles following the entry into force of the Lisbon Treaty, which expanded the exclusive competence of the European Union 2 in the field of common commercial policy (“CCP”) 3 to also encompass regulation of foreign direct investment (“FDI”), the Union has taken its first steps within this newly tailored legal framework. These steps combine internal European-law measures with international action. Such a two-pronged approach is indeed necessary, given that the Union is entering territory that has been long chartered mainly by the Member States and also considering the fact that while the Union is progressively moving in, the Member States are not necessarily moving out. The new EU regulatory engagement thus focuses not only on the negotiation of new agreements with third countries, which brings the new EU competence to its fullest potential, but has also sought to define the appropriate EU-law status for existing agreements in the field of FDI between the Member States and third countries (“extra-EU BITs”). It has also clarified intra-EU apportionment of financial responsibility that may arise under the investor-to-state dispute settlement (“ISDS”) mechanisms provided for in the international instruments to which the Union is party or which it may conclude in the future. It goes without saying that many aspects of this complex “intra-extra” EU regulation have never been tested and remain challenging, as evidenced by the Commission’s recent decision to turn to the Court of Justice of the European Union (“CJEU”) to clarify the “uncertainties” that the scope of the post-Lisbon competence of the Union is raising. 4 Because this paper deals with investment-related European and international regulation as affected by the post-Lisbon definition of the CCP and because the latter is linked to the external facet of EU action, it will leave aside the (no less intriguing) intra-EU aspects of protection of investment. These relate to the EU internal market and, notably, to several dozens of bilateral investment treaties reported to exist between some of the EU Member States (“intra-EU BITs”). 5 As early as 2006, the European 2 See Art. 3 (1) TFEU for the (non-exhaustive) list of fields falling under EU-exclusive competence. 3 Art. 207 (1) TFEU. 4 Commission decision of 30 Oct. 2014 requesting an opinion of the CJEU pursuant to Article 218(11) TFEU on the competence of the Union to sign and conclude a Free Trade Agreement with Singapore, C(2014) 8218 final. At the time of writing, the request had not appeared on the CJEU’s docket yet. 5 Several intra-EU investment arbitrations (based on an intra-EU BIT or on the Energy Charter Treaty) have dealt with EU-law aspects. These are not addressed in this paper. See esp. Eastern Sugar B.V v. Czech Republic , partial award, 27 Mar. 2007, SCC No. 88/2004, UNCITRAL ad hoc arbitration; Ioan Micula, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania , decision on jurisdiction and admissibility, 24 Sept. 2008, final award Dec. 11, 2013, ICSID ARB/05/20 (TCE); AES Summit Generation Limited and AES-Tisza Erömü Kft v. The Republic of Hungary , award, 23 Sept. 2010, ICSID Case No. ARB/07/22 (ECT); Eureko B.V. v. Slovakia , award

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