March 6, 2018
Today, a landmark ruling of the European Court of Justice could signal the beginning of the end for some 200 investment agreements that include investor-state dispute settlement (ISDS) between EU Member States. The decision arises out of a dispute between the Netherlands and Slovakia over the compatibility of an investment tribunal decision and EU Treaties.
“This is a monumental decision from the court because it addresses the fundamental problem of how ISDS undermines domestic legal systems,” says Layla Hughes, Senior Attorney for the Center for International Environmental Law (CIEL). “Today, the ECJ begins the return of legal powers to democracies. While the court specifically identifies investment agreements within EU states, we hope its rationale opens the door for similar challenges to investment agreements that the EU and its member states have with countries outside of Europe as well.”
The ECJ emphasized how investment agreements create problems with access to justice, observing that they constitute an agreement to “remove from the jurisdiction of their own court, and hence from the system of judicial remedies” any dispute that may concern the application or interpretation of EU law. In doing so, an arbitration panel’s resolution of a dispute may not ensure “the full effectiveness of EU law.” As CIEL has previously argued, this is the very purpose of investor-state dispute panels: to resolve investor’s claims only according to the special rights that investment agreements provide to them, and without regard to the delicate balance struck between the public interest and private rights under national law, which can only be determined by domestic courts.
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Contact: Layla Hughes, Senior Attorney, lhughes@ciel.org
Center for International Environmental Law (CIEL) uses the power of the law to protect the environment, promote human rights, and ensure a just and sustainable society. CIEL is a non‐profit organization dedicated to advocacy in the global public interest, including through legal counsel, policy research, analysis, education, training, and capacity building.