International Investment Law as an Ally in EU’s Rule of Law Endeavours: an Epic Journey or a Misguided Quest?

Abstract

The aim of this paper is to analyse whether and to what extent international investment law (IIL) is capable of contributing to the development of the rule of law within the European Union (EU), as suggested by some practitioners of international arbitration. Arguably, the rise of this argument may be traced back to two sets of events. The first one is the recent rise in importance of the rule of law issue connected to the controversies related to reforms of the judicial system in Poland, as well as developments in Hungary. The second one concerns the so-called “ISDS legitimacy crisis”, reaching far beyond the experts’ debate directly into the realm of politics, as evidenced inter alia by controversies around the (now frozen) project of the Transatlantic Trade and Investment Partnership (TTIP), along with the Comprehensive Economic and Trade Agreement (CETA) and the seminal Court of Justice of European Union (CJEU) Achmea judgment . Conceivably, placing greater emphasis on the ISDS’s alleged beneficial effect on the rule of law in host States could provide the so much needed legitimation boost, by placing IIL into the broader framework of institutional safeguards against the democratic backsliding.

Keywords: international investment law, international law and domestic legal order, European Union, rule of law, Investment State Dispute Settlement, Achmea judgment