Proposal for a Regulation of the European Parliament and of the Council establishing a framework for managing financial responsibility linked to investor-state dispute settlement tribunals established by international agreements to which the European Union is party

The Treaty of Lisbon has brought foreign direct investment within the scope of the Union's common commercial policy and, consequently, of the Union's exclusive comptence. A central feature of international agreements on foreign direct investment (normally referred to as investment protection agreements) is the possibility for an investor to bring a claim against a state where the state is alleged to have acted inconsistently with the investment protection agreement ("investor-state dispute settlement"). When such litigation takes place, the state concerned will incur costs (fees for the administration of the dispute, for the payment of arbitrators, for the payment of lawyers) and may, if it loses, be required to pay compensation.

The Union is already party to one agreement with the possibility for investor-state dispute settlement (the Energy Charter Treaty) and the Union will seek to negotiate such provisions in a number of agreements currently under negotiation or to be negotiated in the future. It is thus necessary to consider how to manage the financial consequences of such disputes. This Regulation seeks to establish the framework for managing such consequences.

• Primary Source

EUR-Lex: COM(2012)335: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:335:FIN

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