Bilateral Investment Treaties and the European Union. Recent Developments in Arbitration and Before the ECJ

The issue of the relationship between Bilateral Investment Treaties (BITs) and the EU legal order has recently attracted attention amongst scholars and practitioners in the field of international investment arbitration. Under a first perspective of the problem, the Arbitral Tribunal in Eastern Sugar B.V. v. The Czech Republic was confronted with the question of whether there was any room left for BITs between EU Member States. The Tribunal discussed the legal arguments advanced for and against the applicability of such “intra-EU BITs” between Member States. The issue, which is particularly relevant considering that there are currently more than 190 BITs concluded between EU Member States, will be analysed in the first part of this article. Under a second point of view of the problem, the European Court of Justice (ECJ) handed down two judgments on 3 March 2009 addressing incompatibilities with EC Law resulting from certain BITs entered into by Sweden and Austria with third countries. The second part of this article will deal with the consequences arising out of the Court’s rulings with regard to existing and future BITs entered into by Member States with third countries