The European Union and International Arbitration

Abstract

One of the aims of the European Union (EU) has been to establish an area of “freedom, security and justice” founded, inter alia, on the freedom of circulation of people, goods and capitals, in which legal decisions rendered in a Member State are free to circulate within the Union. The functioning of this legal order is based on the mutual trust between domestic courts, according to which, as a matter of principle, all decisions rendered in a Member State are not to be reviewed in other Member States. Automatic circulation of judgments should possibly incentivize the recourse to domestic systems of justice and, in the opinion of the EU institutions, all domestic courts within the Union should be seen as equal and apt to grant an equivalent level of justice. However, individuals and companies carrying out business activities still seem (at least partially) to distrust domestic systems of justice and to prefer recurring to international arbitration, which is sometimes perceived as a more neutral and efficient system of dispute settlement, more suitable for international commercial litigation. This consideration applies both in the field of purely commercial disputes – involving two private parties – as well in international investment arbitration – involving a foreign investor, on the one hand, and the host State where the former decided to carry out its business, on the other. In the last decade, the EU, for its part, has confronted with the continuous recourse to international arbitration on several occasions. As regards the outcomes, however, a clear distinction has to be drawn between international commercial litigation and investor-State dispute settlement (isds). As to international commercial arbitration, the EU legislator has been quite reluctant in regulating it within the normative framework of EU regulations on private international law. Arbitration is, indeed, expressly excluded by the Regulation No 1215/2012 (Brussels I-bis) and the extension of this exclusion is