In this chapter we examine how international investment law in relations between the Member States poses a challenge to EU law and its autonomy, hindering internal market integration as one of the core EU objectives, and the rule of law in the EU as its core value. We analyse tensions between international investment law and EU law, focusing first on intra-EU international investment agreements and the objectives of EU integration, and second on intra-EU investment treaty arbitration and the autonomy of the EU legal order. The Achmea judgment of the CJEU is the apotheosis of these tensions, and it has been endorsed in subsequent CJEU judgments. In the final part of this chapter, we analyse legal and policy implications of this jurisprudence, in the broader context of EU integration and the rule of law in the EU.

The influence of the EU and EU law on investment arbitration is one of the hotly debated topics in today’s arbitration world. Since the EU obtained the competence for the regulation of foreign (direct) investment on behalf of its Member States through the 2009 Lisbon Treaty, the European Commission’s efforts have brought about much change for both the EU’s internal and the EU’s external investment law relations. On the EU-internal level, the Commission – since 2018 backed by the European Court of Justice’s Achmea judgment and since early 2019 also by the EU Member States – has worked towards the elimination of investment arbitration. It seeks to have these disputes litigated before EU Member State courts instead. On the EU-external level, the Commission has successfully negotiated a new dispute settlement model in the EU’s free trade and investment agreements: an investment court system, the compatibility of which with EU law the Luxembourg court confirmed in 2019. This chapter seeks to set out these developments in a structured manner. It is necessarily incomplete, since the interaction between the Commission, investment tribunals, courts and other actors continues to develop – despite the fact that this interaction to a considerable degree remains determined by mutual ignorance.

Chapter 6 defines the concept of the autonomy of the EU legal order and examines its implications for the choice of the most effective institutional framework for achieving and maintaining homogeneity in the expanded internal market. The Chapter scrutinises the concept of autonomy from the perspectives of domestic law and public international law, analyses its content and application by the Court of Justice and ramifications for the acquis-exporting agreements concluded by the Union.