IPOL | Policy Department for Citizens’ Rights and Constitutional Affairs
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PE 703.592
that the ECT is not applicable to investment disputes between EU investors and an EU Member State.
201
However, such objection was rejected as the Tribunal ruled that ‘the [Achmea] decision has no
preclusive effect such as to remove [the Tribunal’s] jurisdiction over the present dispute.’
202
Likewise,
the same jurisdictional objection was raised in the
Eskopol
SPA case and was rejected by the tribunal.
203
In practice, investment tribunals adopted interpretations to avoid the normative conflict between the
two treaties.
204
More
specifically, investment tribunals have ruled that there is no incompatibility
between treaty provisions of the EU; for instance, between Article 344 of the TFEU, which prescribes
the ECJ exclusive jurisdiction to decide disputes amongst EU Member States, and the dispute resolution
mechanism in the ECT based on Article 26 of ECT.
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It is noteworthy to mention here, an obiter dictum from an investment tribunal analysing the potential
conflict between the ECT and the EU, stated that ‘in case of any contradiction between the ECT and EU
law, the Tribunal would have to ensure the full application of its “constitutional” instrument upon
which its jurisdiction is founded. This conclusion is all the more compelling given that Article 16 of the
ECT expressly stipulates the relationship between the ECT and other agreements – from which there is
no reason to distinguish EU law.’
206
In conclusion, investment tribunals have rejected claims that EU Treaties and EU law prevails over the
ECT. As the decentralized international law system lacks hierarchical status among the international
courts, decisions from one international court do not have the binding force to form a binding
precedent to other international courts. As a tribunal has put it:
‘It is useful to recall that the international legal system is a general system without
any central authority
from whom the entire system flows. It is composed of different legal sub-systems, which have an
independent life, even if at times there may be interactions between them. As a whole, the
international legal system is bound by general principles of international law, i.e., by customary
international law, including norms such as jus cogens and pacta sunt servanda as discussed above. But
201
Greentech Energy Systems and Novenergia v. Italy (registered 7 July 2015) [12].
202
Greentech Energy Systems and Novenergia v. Italy (registered 7 July 2015) [395].
203
Eskosol SPA in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50, Decision on Jurisdiction, 7 May 2019.
204
Technically speaking, such normative conflict cannot be established based on the narrow definition of conflict. As Paris
Agreement imposes a set of obligations to the parties and the ECT imposes a prohibition, such divergence is not
recognized as a conflict. For a more detailed analysis on the distinction between narrow and broad
normative conflict in
international law see Erich Vranes, ‘The Definition of ‘Norm Conflict’ in International Law and Legal Theory’ (2006) 17 The
European Journal of International Law 395. Such an approach is followed for instance in the Indonesia — Autos case.
According to the facts, a claim was brought against Indonesia that it breached the national treatment provision of the
GATT, Article III. Such article imposes an obligation to the states not to discriminate between national and international
like products. Indonesia argued that as a developing country, it enjoys rights under the WTO Agreement on Subsidies
and Countervailing Measures (SCM Agreement), which permit developing countries to provisionally maintain certain
subsidies. However, the panel referred to the strict definition of conflict to resolve the dispute and it ruled that: ‘In
international law for a conflict to exist between two treaties, . . . [their] provisions must conflict, in the sense that the
provisions must impose mutually exclusive obligations . . . Technically speaking, there is conflict when two (or more)
treaty instruments contain obligations which cannot be complied with simultaneously.’ See WTO Panel Report,
Indonesia Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS59/R, WT/DS64/R, adopted on 23 July
1998, [649]. As a result, the Panel found that there was no conflict between the obligation of Article III and the
permission of the SCM Agreement.
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See Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1 [340]. ‘To conclude, EU law is
not incompatible with the provision for investor-State arbitration contained in Part V of the ECT, including international
arbitration under the ICSID Convention.’ See also Electrabel v. The Republic of Hungary, ICSID Case No. ARB/07/19,
Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012 [4.167].
206
RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.a.r.l. v. The Kingdom of Spain, ICSID
Case No. ARB/13/30, Decision on Jurisdiction, 6 June 2016 [75].