An International Law Critique of EU Interventions in Intra-EU Investment Arbitrations and Solutions from a Chinese Perspective
Since around 2006,the European Union(EU)has attempted to exclude and increasingly intervened in intra-EU investment arbitrations as a non-disputing party.Having explored how it interprets and applies EU law in such dispute settlement procedures,this article argues that the EU intervention violates international law in the following aspects.Firstly,the way it argues for the application of EU law is inconsistent with the rules on the application of treaties as it is intended to modify multilateral treaties,such as the ICSID Convention,between certain parties without fulfilling the legal conditions.Secondly,the proposed application of the Treaty of Lisbon and several CJEU decisions to investments covered by preexisting treaties runs counter to the principle of non-retroactivity,which is particularly evident in Micula v.Roma-nia.Thirdly,the expansive application of the primacy of EU law in order to construe EU law as the preferential applicable law to investment arbitrations while it is actually auxiliary and com-plementary means of interpretation does not conform with the rules of treaty interpretation.Fourthly,state aid interventions in investment arbitral awards are incompatible with the anti-subsidy theory and practice under international trade framework because it ignores the non-con-cessional and non-discriminatory nature of compensation for investment damage and is not analo-gous to subsidization risk incurred by economic compensation in the context of international trade remedy.EU interventions in intra-EU arbitrations pose a threat to the credibility of the in-vestment arbitration regime,affecting all of its beneficiaries,including Chinese investors.Mo-reover,Chinese companies that invest in EU countries are likely to be involved in intra-EU dis-putes indirectly,especially considering that Chinese renewable energy investment in the EU re-gion has grown rapidly in recent years.Based on the above two considerations,the author,in addition to the aforementioned critique of the EU practices,proposes the following solutions from Chinese perspective:on the one hand,the conditions for non-disputing party participation need to be improved,including more consistent application of the standards,additional restric-tions on repeated requests,and more substantive scrutiny of the purpose and effect of interven-tions;on the other hand,Chinese companies should make a balanced choice between the appli-cable remedies when involved in investment disputes with EU member states relating to intra-EU investments.An applicable BIT between China and an EU host state takes precedence over an intra-EU counterpart.In cases where an intra-EU arbitration is more possible or favorable,the claiming party should try to avoid places of arbitration within the EU and arbitral rules governed by EU law.
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