The Protection of Intra-EU Investments: Putting the EU’s Rule of Law to the Test

Abstract

With the 2018 Achmea ruling, the European Court of Justice declared investment arbitration in the intra-EU setting to be inadmissible. As a result, the Member States have cancelled more than 190 bilateral investment protection treaties between themselves. Critics fear a high level of legal uncertainty for intra-EU investments. The EU Commission, on the other hand, believes that the existing law of the internal market provides ‘adequate and effective protection’ for such investments without further ado. Both sides invoke the rule of law. After an overview of the developments, individual elements of the protection of investments within the EU, namely the rights of investors, the balance between them and public interests, the legal means available and the question of compensation, are analysed comparatively. In the end, it emerges that both positions can lay claim to different elements of the rule of law. The rule of law does not require maintaining investment protection with bilateral treaties and investor- state arbitration. However, it is questionable whether the existing law in the internal market does adequately protect investments in the European Union. With the abolition of traditional international investment protection, the European Union faces major challenges with regard to the further improvement of the rule of law, the importance of which goes far beyond the issue of investment protection.