Solving Conflicts with International Investment Treaty Law from an EU Law Perspective: Article 351 TFEU Revisited

Abstract:

This article is meant to contribute to the discussion of the relationship between European Union (EU) and international law. It focuses on bilateral investment agreements between EU Member States (intra-EU BITs), the majority of which will continue to have practical relevance. So how should one deal with a scenario in which the compliance with EU law (e.g., state aid law) means that a Member State must breach its obligation under an intra-EU BIT (e.g., by cutting returns on income from an investment protected thereunder)?

The article answers this question by critically analysing the protection granted to pre-existing international obligations of the EU Member States under so-called anterior treaties. It criticizes established case law under Article 351 TFEU as having emphasized the wrong issues, and suggests to turn the discussion back to the real questions: precisely when is there a conflict, and how far do a Member State’s duties under Article 351(2)TFEU reach?

It is argued that reconsidering Article 351 TFEU will foster doctrinal clarity and flexibility in dealing with the ‘obligations’, and also the ‘rights’ of the EU Member States under anterior treaties. Doctrinal clarity and flexibility will then benefit the relationship between EU and international law more generally.