CYIL vol. 9 (2018)

ONDŘEJ SVOBODA – JAN KUNSTÝŘ CYIL 9 ȍ2018Ȏ BIT concluded after the entry into force of the Lisbon Treaty in 2009. 22 This BIT is therefore the last evidence of the UK investment treaty practice. With regards to the UK’s Model BITs, the first one was formulated in 1974 on the 1967 OECD Draft Convention on the Protection of Foreign Property and German and Swiss practice with the ultimate goal to provide better protection for British foreign investments. 23 For this purpose, the fair and equitable treatment provision, the national and most favoured nation (MFN) treatment provisions, together with other provisions, such as transfers of funds and adequate compensation in the event of expropriation, were all included to provide high standards of investor protection. The model BIT also included the investor-state dispute settlement mechanism (ISDS) based on international arbitration. This was virtually a standard BIT feature during the 1980s and 1990s. And the inclusion of ISDS was also the standard practice of the UK as out of its existing 106 BITs, 104 include ISDS. Apart from BITs, the UK is a signatory to other treaties relating to investment protection. It is a signatory to the Energy Charter Treaty (ECT), the ICSID Convention, the New York Convention and the UN Convention on Transparency in Treaty-based Investor-State Arbitration (“Mauritius Convention”). The ECT is a multilateral agreement for cross-border cooperation in the energy industry, which includes an investment protection chapter and has been in force in the UK since 16 April 1998. Regarding the ICSID Convention, the UK signed it on 26 May 1965, and deposited its instrument of ratification on 19 December 1966. The ICSID Convention entered into force with respect to the UK on 18 January 1967. The New York Convention was ratified on 24 September 1975. The UK signed the Mauritius Convention on 17 March 2015, but similarly to other EU Member states it has not ratified it yet. 24 The yet-to-be-solved issue is on what basis the EU and its Member states can sign the Mauritius Convention with regard to the division of competences between the Union and the Member states. 25 The UK investment policy as a part of EU Common commercial policy Since the Treaty of Lisbon, the EU has had exclusive competence to negotiate investment protection treaties and to govern investment policy in general. While the UK still can continue to negotiate BITs with third countries, it now has to consider the framework of 22 O’NEILL, Aidan. ‘Brexit, BITs and enforcement’ [2018] ERA Forum 4. 23 WALTER, Andrew. ‘British Investment Treaties in South Asia: Current Status and Future Trends: Report Prepared for the International Development Centre of Japan’ [2000] 10. 24 UNCITRAL, Status of the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (New York, 2014). 25 Research service of the European Parliament provides that “the Commission proposal [requesting authority to sign the Transparency Convention] is currently blocked in the Council by a few Member States, for some due to political opposition to transparency in arbitration proceedings, and for others because of competence concerns. Moreover, some Member States consider that qualified majority voting cannot be used to approve the decision. On the competence issue, the Council Legal Service, supported by some Member States argued that, as the Convention would apply to both foreign direct investment and portfolio investments, and because of its application to the Energy Charter Treaty to which both the EU and all Member States are parties, the Convention would fall under both EU and Member State competence and would thus be a mixed agreement. Consequently, the need for an empowerment clause to allow Member States to sign the Convention was challenged. A compromise by the Latvian Presidency to permit the EU to sign ‘in as far as its competence allowed’, was rejected.” European Parliamentary Research Service, ‘UN Convention on Transparency in Treaty- Based Investor-State Arbitration, Brussels’ [2016] 2.

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