Posted on Sep 8, 2021 at 9:05 amUpdated on Sep 8, 2021, 9:07 AM
The myth of a common European defense is as old as Europe (we remember the failure of the European Defense Community in 1954 more than other ups and downs such as the announcement in 1999 of the creation of a permanent force of 60,000 men in Helsinki which never saw the light of day). Its advent, despite the debates of the last few days, remains moreover very hypothetical, and it would not occur to any of the members of the European Union also a member of the North Atlantic Treaty to question their membership. to the Alliance.
In stark contrast, the Court of Justice of the European Union ruled on September 2, 2021 that the investor-state dispute settlement mechanism in Article 26 (2) (c) of the Treaty on the Charter of Energy (TCE) did not apply to intra-European disputes (Komstroy case). This decision has the immediate effect of plunging into legal uncertainty the forty procedures currently initiated on the basis of this article and opposing Member States and investors from other Member States mainly before the International Center for the Settlement of Investment Disputes ( Cirdi), but also before the Stockholm Arbitration Court (SCC).
Paranoia
The Energy Charter Treaty, signed in Lisbon in 1994 and entered into force in 1998, establishes the multilateral framework regulating cross-border cooperation in the energy sector made necessary by the fall of the Soviet bloc and the advent of the multilateralism. Little known to the general public, its most publicized appearance undoubtedly dates back to 2014, the year when an arbitral tribunal constituted on the basis of the Treaty ordered Russia to pay $ 50 billion to the former shareholders of the Yukos oil group.
Since then, the various bodies of the European Union have made no secret of their desire to twist the necks of conflict resolution mechanisms between investors and States, arguing a legal uncertainty that remains to be proven, and preferring to propose to replace them more permanent structures, better able, according to them, to forge a unified interpretation of European law.
Thus, by an Achmea decision of March 6, 2018, the CJEU had already scared the legal community by declaring the recourse to arbitration for disputes between an investor from a State of the Union incompatible with European law. European Union to another State of the European Union on the basis of a bilateral investment protection treaty. The European Commission followed suit in October 2019 by announcing that the member states had agreed on the termination of the 190 bilateral investment treaties in force between different member states. This agreement was ratified in France by a law of June 11, 2021.
Cynicism
Faced with the resistance of certain arbitral tribunals which had already ruled that the Achmea decision did not extend to arbitrations on the basis of the Charter, and to the enforcement proceedings generated by this thunderclap, the Court indeed seized the opportunity of a business which lent itself a priori very little to continue its fatal work.
This decision responds to a preliminary question asked by the Paris Court of Appeal on referral after cassation. However, the question asked in no way concerned the validity of the dispute resolution mechanism, but an entirely different point, namely the definition of the notion of investment under the TCE. Moreover, this is not an “intra-European” affair, since if the attacked state is Moldova, the investor is Ukrainian for his part.
The political will at work is therefore obvious. The forty ongoing proceedings, in which Member States are exposed to major convictions, find themselves thrown at little cost into turmoil, in the name of the unity of Union law and against multilateralism. At the same time, the defense of Europe, or the Europe of Defense, the declared priority of the French presidency of the EU in January 2022, still has good press. However, since 1949, it has only been linked to NATO multilateralism.
Armand Terrien is a member of the Paris and New York bars.
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