The (Non-)Applicability of the Monetary Gold Principle in ICSID Arbitration Concerning Matters of EU Law

Abstract

The Monetary Gold principle contains the most-cited paragraph of the ICJ’s case-law for a reason: it holds strategic promise for respondents before international courts and tribunals as it may be relied upon to challenge jurisdiction. Not surprisingly, it is increasingly invoked in arbitration proceedings, including those administered under ICSID. One variation of this invocation concerns the seething regime conflict between EU institutions and international investment tribunals that has culminated in the recent Achmea judgment of the European Court of Justice. It is contended that investment tribunals should decline their jurisdiction based on the so-called Monetary Gold principle in matters in which substantial interests of the EU as a third party are concerned. We argue in this paper that such an approach misconstrues the thrust of the Monetary Gold principle and unnecessarily curtails the availability of global public good: international adjudication. Based on an analysis of the relevant case-law, we show that the Monetary Gold principle does not amount to a generally applicable necessary third-party rule. A contrary construction would overly impair the primary function ICSID tribunals, which is to adjudicate cases to which the parties to the proceedings have consented.