Kulick: Constitutional Review of Investment Treaties by the European Court of Justice

Andreas Kulick (Eberhard Karls Universität Tübingen - Law) has posted Constitutional Review of Investment Treaties by the European Court of Justice (in The Rise of Domestic Courts in International Investment Law, C Brown, M Jarrett, & SW Schill eds., forthcoming). Here's the abstract:

The review of investment treaties by the Court of Justice of the European Union (CJEU) tells a story of inconsistency. As is well known, the Court rejected investor-state dispute settlement (ISDS) in the form of ad hoc arbitration in Achmea and Komstroy – and accepted it in the Investment Court System (‘ICS’) variety of the Canada-EU Free Trade Agreement (‘CETA’) in its Opinion 1/17. Taking a closer look at the various lines and subplots of this story, however, reveals three common themes. First, the CJEU’s review of investment treaties is a constitutional review not only in name but also in substance. It charges the law of internal and external EU commercial relations with the ‘values’ of Art. 2 TEU and thus introduces a ‘thick constitutionalism’ to this otherwise seemingly unspectacular area of EU policy: The Court does not merely insist on a review that may be characterized as constitutional in form – based on normative hierarchy and setting a floor and a ceiling to what is compatible with EU law. It also insists that it is tasked to protect the ‘values’ of the Union and makes them doctrinally operational by way of its – self-styled – role as exclusive guardian of the EU legal system. Second, such ‘thick constitutionalism’ provides an explanation for the doctrinal inconsistency in the Court’s jurisprudence. Promoting the ‘values’ of Art. 2 TEU in EU external relations requires a strategy of Voice, rather than Exit – and Opinion 1/17 enables the Commission and the Member States (in mixed agreements) to exercise such voice. Third, the impact of such ‘thick constitutionalism’ and the CJEU’s intention to provide the EU with Voice in its external economic relations vis-à-vis ISDS has repercussions regarding the Union’s agenda and wriggle-room in the current debates on ISDS reform in UNCITRAL Working Group III and in its current and future treaty practice.

Part II briefly recounts the main plot of this story, marking three milestones in the development of the CJEU’s case law thus far. In Part III, I will analyse and assess the Court’s jurisprudence with respect to the constitutional stakes it raises (III.1.) and regarding the different strategy it employs in order to ‘integrate’ the Union’s values also into its external commercial relations (III.2.). Part IV discusses how the Court’s ‘thick constitutionalism’ may impact the future of ISDS, both regarding the institutional and procedural matters as well as with respect to the substance of international investment agreements (‘IIAs’). Part V concludes.