CYIL vol. 12 (2021)

Miriama Kiselyova CYIL 12 (2021) why the investment dispute settlement under CETA is compliant with EU law and intra EU investment arbitration under the ECT is not, considering that both treaties are international treaties with investment protection provisions and are part of EU law. As to the first question, the Court offers some answers directly in the Komstroy judgment. In particular, in para 65 the Court stated: “ It follows that, although the ECT may require Member States to comply with the arbitral mechanisms for which it provides in their relations with investors from third States who are also Contracting Parties to that treaty as regards investments made by the latter in those Member States, preservation of the autonomy and of the particular nature of EU law precludes the same obligations under the ECT from being imposed on Member States as between themselves. ” (emphasis added). Hence, the Court has directly confirmed that investment arbitration based on the ECT between the investor from third Contracting Party and a Member State is compliant with EU law. Per analogiam , there is no statement in the Komstroy judgment that vice versa disputes (EU investors against third Contracting Party) would be incompliant with EU law. Additionally, the Court has in para 40 of the Komstroy judgment posed an open question to “ specify which disputes may be brought before an arbitral tribunal pursuant to Article 26 ECT ” and concluded in para 66 of the Komstroy judgment inapplicability only towards intra EU ECT arbitration. Hence any stretching of the Court judgment application is not supported by its wording. Regarding the second question on comparison of the Komstroy judgment and CETA opinion, while at first glance it might be tempting to point out alleged inconsistencies, one should first carefully read both and also perceive the different context of the two treaties affected. The relevant part of the Komstroy judgment (and the Achmea judgment) apply to the international investment arbitration within the EU intra EU (based on BITs or ECT). On the other hand, the Opinion 1/17 applies to investment arbitration either between an investor from Canada and a Member State/EU, or between an investor from EU and Canada. The CETA clearly defines the parties (EU and Member States on one part, Canada on the other part) and applies to disputes of investors from one party against the other party. This has not been distinguished in the ECT, since the intra EU application has never been the purpose. The Opinion 1/17 was focused on the assessment of CETA investment chapter compliance with the EU law. The Komstroy judgment was (mainly, for the purpose of this discussion) focused on the intra EU application of Article 26(2) ECT. As to the compliance of CETA investment Chapter, the Court in the Opinion 1/17 36 concluded the following: The Court has first assessed whether investment arbitration tribunal under CETA does not impair the autonomy of EU law. The Court has underlined that the arbitration tribunal may not interpret EU law beyond CETA itself and its awards may not prevent EU institutions from operating in accordance with the EU constitutional framework 37 . Regarding the first requirement, the Court relied on the definition of applicable law excluding the EU law and national law (framing them as a question of fact), determination of the respondent by the Union and narrow powers of the Appellate tribunal when confirming that EU law will not be interpreted/applied beyond CETA itself. 38 Regarding the second requirement, the Court relied here mainly on CETA articles limiting awards to pecuniary damages or restitution of property, general exceptions 36 Kiselyová, M.: EU-Singapore Investment Protection Agreement in the light of the Opinion 1/17, in Czech Yearbook of Public and Private International Law , 2019. Available at https://www.cyil.eu/contents-cyil-2019/. 37 Opinion 1/17, para 118. 38 Opinion 1/17, para 134, 135.

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