1. Introduction
‘Trends In The Design Of Dispute Resolution Mechanisms Included In The European Union’s Trade And ​Investment Agreements ​Towards Judicialization ​
EU Constitutional Law
National Courts
Prof. Takis Tridimas
Giorgia Sangiuolo
King’s College London
ICS
KCL 26/06/2017

2. Objectives - Scope
We look at DRM in EU trade and investment agreements
Road mapping exercise seeks to:
Assess evolution of EU policy and impact of Lisbon Treaty;
Test Commission flexibility model (one size does not fit all);
Identify patterns, make recommendations

3. Thesis
The Union has developed a ‘special relationship’ with individuals that has in time grown to become an essential constituency of its constitutional structure and its ‘autonomy’
The Union affords an additional layer of protection to individuals, complementary to that ensured by the Member States
When the Union outsources the resolution of disputes to arbitral panels it must ensure that non-State entities are granted some sort of participation (ie. protection) in the proceedings affecting them

4. Subject matter of the study
26 years ( )​
91 agreements with a DRM in force (also provisionally)​
53 trade and investment agreements containing an arbitration or quasi-judicial mechanism of dispute settlement ​
8 agreements rely only on political/diplomatic means
TTIP’S ICS ​& State to State DMR
Watershed moment in the analysis is 2009 – Entry into force of the Treaty of Lisbon

5. 17 indicators to identify “judicialisation”​
Abbot methodology: obligation – precision – delegation
‘delegation’ = extent of discretion allowed to the Panel  (selection and composition of the panel, transparency, independence of the panel, competence and powers of arbitrators, rules of procedure-code of conduct, third party participation, individuals’ standing)​ ​
‘effectiveness’ of the DRM (consultations, mediation mechanisms, timeframes, rule on compliance, appeal mechanism)​

6. Indicators Exhaustion of remedies Mediation Timeframes
No of arbitrators
Method of selection
Transparency
Interim report
Rules of compliance

7. Independence
Competence of arbitrators
Powers
Third party participation
Rules of interpretation
Rules of procedure
Possibility of Appeal
Individual standing
Particular features

8. General remarks
The great majority (53 out of 61) contain an arbitration or quasi-judicial clause of dispute settlement - only 8 relying on merely political/diplomatic means of dispute settlement
From 2009
Fewer agreements
Developed countries
Outside regional policies​

9. The complexity of DRM varies by reference to the time of adoption (path dependency)
Breadth and scope of the agreement (rational choice: the more intrusive the agreement, the greater the incentive to cheat?) Cf progress of EU integration

10. What the data say​ More discretion to the Panels:​
- Eg. Participation​
but also enhanced control:
-Eg. Transparency
More effective tools to exercise authority:​
-Eg. Timeframes and rules on compliance

11. Opinion 2/15
FDI is part of CCP and falls within EU exclusive competence
FDI provisions of Agreement fall within CCP even though they concern only protection of investments and not admission
Non FDI :
Does not fall within CCP
It falls within EU competence by virtue of EU power in the field of free movement of capital

12. It is not part of exclusive competence as the foreclosing effect of Article 3(2) arises only from EU secondary legislation not Treaty power
It is part of EU shared competence because it is necessary to achieve free movement of capital to and from third States
Sustainable development is an integral part of CCP and there is a duty to integrate horizontal objectives and principles into CCP

13. Decoupling of competence from compatibility: (The forgotten virtue of judicial discretion);
Dispute resolution settlement;
Government to Government: exclusive EU competence;
Investor – State: falls within shared competence of Member States even in areas which fall within exclusive EU competence because it removes disputes from jurisdiction of national courts;

14. ISDS requires mixity (only provided in Energy Charter – Singapore – CETA)
This increases the ‘costs’ of including ISDS in EU trade agreements;
They must in any event comply with EU law autonomy test;
Separation between DSM and substantive provisions: Is it correct in law? (cf Sharpston AG view);
Does it reflect the EU governance model? Changes to the position of the individual cannot be effected by the EU alone.

15. Conclusions Trend towards judicialisation;
This has been influenced by Lisbon changes and reflects a global trend;
Ambivalence on the position of the individual (direct effect – ISDS);
Does the above trend compensate for the increasing power exercised by arbitration tribunals?