The Interactions between EU Law and International Investment Law: The Five Acts of a Kabuki Play

The question of the linkages between EU law and international investment law has a long and complex history. The complicated relationship between the two branches is a hot topic in both EU and international law, considering the important number of investment arbitration cases ongoing in an intra-EU setting and the multiplication of EU free-trade agreements developing new investment dispute settlement mechanisms. It is also of great importance for the economic relations between Japan and the EU, most notably after the EPA and JEFTA were concluded. But the story of these relationships is most conspicuously a story of conflicts between courts and tribunals in the EU and the international judicial system. The case law of the ECJ on international arbitration was always based on a certain Manichean dichotomy between the EU legal order and the arbitral legal order: they would be two worlds apart, based on different fundamental premises (one based on fundamental trust in the national judge, the other aiming to avoid it). This conflict reached a peak with the “big NO” that the ECJ pronounced against intra-EU investment arbitration in the 2018 Achmea decision, a judgment that investment tribunals disregarded for several reasons, reinforcing the fragmentation between EU constitutional law and international investment law. Nevertheless, the recent Opinion 1/17 sounded like a “big YES” to a reformed ISDS model in extra-EU relations. The overall idea of this article is to theorize how the ECJ progressively constructed a regime conflict (using the expression of Gunther Teubner and Andreas Fischer-Lescano) between EU law and investment arbitration. The Court purposefully created fragmentation by Hitotsubashi Journal of Law and Politics 48 (2020), pp.37-52. C Hitotsubashi University