Managing Financial Responsibility for Investor Claims Under EU Investment Treaties

23 Pages Posted: 23 Feb 2013 Last revised: 25 Nov 2013

See all articles by Jan Kleinheisterkamp

Jan Kleinheisterkamp

London School of Economics - Law School; Cornell University - Law School

Date Written: December 10, 2012


This paper comments the EU Commission's proposal COM(2012) 335 final for a Regulation establishing a framework for financial responsibility linked to investor-state dispute settlement and on the study by Professor Tietje commissioned by the European Parliament on the subject. The paper starts by explaining the background against which this draft 2nd EU Regulation is to be understood in the context of the emerging international investment policy of the EU. In a second part, the paper assesses the criteria of allocating financial responsibility proposed by the Commission but also questions the underlying presumptions and highlights the implications that these will have for the existing system of state liability under existing EU law and the case law of the CJEU. The third part focuses on the dependency of financial responsibility and the substantive grounds for liability, for the consequences of which the draft Regulation purports to establish a legal framework.

The paper recommends clarifying that the provisions of the Regulation must be binding for arbitral tribunals deriving their jurisdiction from future EU investment agreements. It also shows that acceptance of the Commission proposal opens the door to future EU treaties fundamentally changing the existing system of financial responsibility of the EU and its member states. Finally, it addresses the different possibilities of providing for legal certainty by delineating the outer bounds of financial responsibility established by investment tribunals.

Keywords: investment treaties, BITs, arbitration, European Union

JEL Classification: F13, F21, K33, K39, O16

Suggested Citation

Kleinheisterkamp, Jan, Managing Financial Responsibility for Investor Claims Under EU Investment Treaties (December 10, 2012). Available at SSRN: or

Jan Kleinheisterkamp (Contact Author)

London School of Economics - Law School ( email )

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London WC2A 2AE, WC2A 2AE
United Kingdom
+44 20 7955 7256 (Phone)


Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

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