A. International Court of Justice

The CJEU has developed a close relationship with the International Court of Justice (‘ICJ’), the principal judicial organ of the United Nations. Not only does the ICJ play a significant role in resolving international legal disputes between states, it also contributes to the development of the international legal order.Footnote ¹⁸ The CJEU regularly cites and engages with the judgments of the ICJ and its predecessor, the Permanent Court of International Justice (‘PCIJ’).Footnote ¹⁹ To date, there have been no instances where the CJEU has departed from or seriously disagreed with a judgment or finding of the ICJ. Yet the CJEU does not treat the ICJ as a hierarchically superior court and may choose to engage or not with its judgments.Footnote ²⁰ In the field of customary international law, for instance, the CJEU often turns to the jurisprudence of the ICJ to determine the existence and content of such rules.Footnote ²¹

There are few chances of direct collision with the CJEU. One reason is that the CJEU and ICJ deal with very different subject matter; EU Member States will seek to resolve any disputes involving EU law using the CJEU. In cases where EU Member States have made use of the ICJ, they have emphasised that the dispute does not involve the interpretation of EU law. The most recent dispute involving two EU Member States was Germany's proceedings against Italy in the Jurisdictional Immunities cases.Footnote ²² These cases deal with Germany's allegations that Italy failed to respect the former's sovereign immunity when Italian courts allowed individual claims from war crimes victims against Germany, arguably in violation of a previous ICJ judgment. However, such a dispute does not involve an EU law dimension and would not lead to diverging approaches or interpretations by the two courts. Here, mutual interaction between the CJEU and the ICJ is promoted by a de facto division of labour; conflict is avoided by EU Member States themselves deciding not to submit cases before the ICJ where EU law issues may arise.

What if EU Member States were to employ the ICJ in a case related to Union law? In Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, for example, Belgium declared that the CJEU ‘is without jurisdiction in the area’.Footnote ²³ Yet if two EU Member States were to bring a case before the ICJ, the dispute may still indirectly involve the interpretation of EU law or EU law concepts. In such a case, the European Commission could launch infringement proceedings before the CJEU to prevent the Member States from bringing the case before to the ICJ. In these instances, there is no formal procedure for the ICJ to refer cases or questions to the CJEU. Rather, the CJEU has to trust the procedures built in the EU Treaties.

The situation described above would be similar to that of the Mox Plant case.Footnote ²⁴ Ireland instituted arbitral proceedings against the United Kingdom under the UN Convention on the Law of the Sea (‘UNCLOS’) in a dispute related to the UK nuclear facility. The European Commission initiated infringement proceedings against Ireland under Article 344 TFEU for bringing a case involving EU law to a method of settlement outside those in the EU Treaties. At the same time, the Tribunal also addressed the issue of possible diverging and conflicting judgments. The Tribunal President decided to suspend proceedings before the Permanent Court of Arbitration pending resolution of the dispute in the EU:

The Tribunal remained seized of the dispute throughout. It is important to emphasise that these proceedings were not suspended due to the application of any formal procedural rule, or because EU law was viewed as superior. Rather, they were suspended in the spirit of ‘mutual respect and comity’ and a need to resolve an ongoing international dispute between two states. This approach recognises that both the Tribunal and the CJEU had jurisdiction to interpret UNCLOS, but that overlapping and conflicting cases would not help to resolve the dispute between the parties.

B. WTO

The EU is a founding member of the World Trade Organization (‘WTO’) and is also active in its Dispute Settlement Body (‘DSB’). At the WTO, the EU is treated close to that of a ‘state-like entity’,Footnote ²⁶ and EU law as analogous to domestic law of a state. The EU's involvement in WTO dispute settlement has given rise to legal issues within the EU legal order, such as the competence to take part in the agreement and the effect of recommendations or rulings of the DSB in the EU legal order. However, the EU's participation in this system of dispute settlement has not given rise to serious conflicts or concerns about EU autonomy. The WTO might be considered a ‘special case’ given that the EU is a full member of the organization and exercises exclusive competences in most of the areas covered by WTO law. Yet the WTO example can also illustrate how dispute settlement bodies might work to coexist. As with the ICJ discussed above, this has been achieved through viewing the EU and WTO as separate legal orders that are not hierarchically superior to one another. It also shows how the CJEU itself can be somewhat pragmatic. From early on, the CJEU downplayed the relevance of WTO DSB decisions within the EU legal order; it found that nature and logic of the GATT/WTO law precludes it from having direct effect within the EU legal order.Footnote ²⁷ Similarly, the WTO DSB has avoided conflict with the CJEU. By treating EU law as a fact, it has avoided addressing questions that could potentially affect EU autonomy. As with the ICJ, interaction has functioned without the need for any special procedures such as requiring the CJEU to have ‘prior involvement’ in a case or requiring a panel to refer questions related to EU law to the CJEU.

C. European Court of Human Rights

The CJEU and the European Court of Human Rights (‘ECtHR’) are institutionally separate and distinct entities. Yet there is potential for overlap and conflict between the two courts. As all 27 EU Member States are also European Convention on Human Rights (‘ECHR’) Contracting Parties, there could be situations where the CJEU and ECtHR interpret certain rights or legal concepts in diverging ways.Footnote ²⁸ Moreover, there may be instances where the ECtHR is called upon, directly or indirectly, to interpret provisions of EU law or the case-law of the CJEU. To address these issues, both the CJEU and ECtHR have developed practices over time to avoid and manage conflict. Given the close nature of these two legal orders, it is remarkable that the CJEU and ECtHR have managed to avoid serious divergences and conflict. As with the situations above, this has been managed through a pragmatic approach that seeks to allow the two European courts to exist alongside one another, rather than formal procedural mechanisms.

A key technique to maintaining co-existence between the legal regimes has been the doctrine of ‘equivalent protection’ developed in Bosphorus and later cases.Footnote ²⁹ According to this doctrine, the ECtHR will refrain from hearing cases involving the interpretation of EU law, except in cases where the ‘equivalent protection’ presumption can be rebutted, or in cases where a Member State had discretion in how to implement EU law. There is nothing in the EU Treaties, the Convention or the courts’ procedural rules that mention such a presumption. Rather, it has been developed by the ECtHR as a way to coexist with other legal orders. This does not mean that the ECtHR will not fulfil its role to monitor states’ compliance with the Convention, even in cases where the violation stems from EU law. In Matthews, the ECtHR held that ‘[t]he Convention does not exclude the transfer of competences to international organizations provided that Convention rights continue to be “secured”’.Footnote ³⁰ The ECtHR seeks to avoid interpreting EU law or EU law concepts. It has emphasised that it is not a court of fourth instance, and thus does not rule on states’ compliance with domestic, international or EU law: ‘The task of interpreting and applying the provisions of EU law falls firstly to the CJEU…’.Footnote ³¹

For its part, the CJEU has also taken steps to avoid conflict with the ECtHR. While the CJEU occasionally refers to ECtHR judgments, it does not treat these as hierarchically superior, but to ensure that EU law stays in step with that of the ECtHR. Article 52(3) of the EU Charter of Fundamental Rights, for instance, requires the CJEU to interpret the meaning and scope of Charter rights in the same way as those interpreted by the ECtHR. The two courts do interact, but not in a way that has led to outright conflict or serious divergence. As with the ICJ and WTO examples discussed above, coexistence has been managed through judicial practices developed by the courts themselves.

This situation would arguably change once the Union accedes to the ECHR. While the EU is obliged to join this convention, this has stalled due to the negative opinion of the CJEU in Opinion 2/13. Rather than being two co-existing courts, the CJEU would become a court of an ECHR Contracting Party, and the ECtHR would be in a position to determine whether EU law complies with the European Convention. An Accession Agreement is necessary to allow the EU to join the ECHR. Any new agreement will have to address this new relationship and ensure that the autonomy of the EU legal order will not be undermined.Footnote ³² However, no matter how carefully drafted the Accession Agreement might be, it will unlikely cover all the scenarios that might arise that could potentially affect EU autonomy. In addition to insulating the EU legal order through procedures, the two courts will also have to develop new rules and doctrines in their case-law to manage pragmatic coexistence. As in the cases discussed above, this also requires placing trust in the EU legal order to withstand diverging opinions, and trust in the ECtHR to avoid undermining EU autonomy or entering into direct conflict with the EU Court.

D. Avoiding and Managing Conflict

This Section discussed some examples of the CJEU existing alongside other international courts and tribunals. Rather than provide an exhaustive account of each relationship, it focused on ways that dispute settlement bodies can seek to avoid conflict or overlap. In these instances, the relationships are not managed through concepts of hierarchy and primacy. Likewise, coexistence has not been established due to the introduction of procedural rules, such as a form of preliminary reference procedure. In these cases, the CJEU and other dispute settlement bodies are considered to be somewhat equal, and thus coexistence has been fostered by pragmatic approach. While the CJEU has exclusive powers to interpret and apply EU law, these relationships recognise that it is possible for similar disputes, similar facts, and similar legal questions to come before multiple international dispute settlement bodies, each with prima facie jurisdiction. Yet in these instances, no court is claiming superiority. This contrasts sharply with the approaches taken by the CJEU with respect to arbitral tribunals, which demonstrate a conflictual relationship, based on the primacy of EU law.

A. Achmea

In its 2018 Achmea judgment, the CJEU found that the arbitration clauses in intra-EU bilateral investment treaties ‘such as’ the Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic (1991) (‘Dutch-Slovak BIT’) were incompatible with EU law.Footnote ³⁵ This is because arbitral tribunals established under the BIT could be called upon to interpret and apply EU law. Such tribunals would not be in a position to refer questions regarding EU law to the CJEU, since they cannot be considered a ‘court or tribunal’ within the meaning of Article 267 TFEU. Thus, the Court found that this would have an adverse effect on the autonomy of EU law. Following Achmea, it was clear that, according to the CJEU, investment tribunals established under such BITs do not have jurisdiction in intra-EU disputes.

The CJEU's finding in Achmea appears to be in line with its previous case law on the autonomy of the EU legal order, including Opinion 2/13. In previous cases, the CJEU emphasised the clear link between Article 344 TFEU and the autonomy of the EU legal order.Footnote ³⁶ Over time, Article 344 TFEU has evolved from a negative obligation to refrain from submitting disputes concerning the interpretation or application of the Treaties to external dispute settlement procedures, to a more all-encompassing provision related to the autonomy of the EU legal order. In this vein, one can see how intra-EU investor-state dispute settlement (‘ISDS’) would give rise to similar concerns related to EU autonomy. Achmea was also met with criticism, in particular from within the field of international investment law, for adopting an overly broad approach to autonomy. Beyond this criticism, there was considerable discussion, both in academia and before arbitral tribunals, about whether the findings in Achmea would also apply to intra-EU dispute settlement in other contexts. For example, it was debated whether the CJEU's reasoning would apply in the context of dispute settlement under the ECT, a multilateral treaty to which the EU is also a party.

Following Achmea, respondent parties sought to use the judgment to argue before investment tribunals that they lacked jurisdiction to hear disputes between an EU Member State and an investor in an EU Member State. Since EU Member States were prohibited from participating in intra-EU ISDS based on EU law, it was argued, there could be no valid offer to arbitrate, and therefore the tribunal lacked jurisdiction. These arguments were mostly dismissed.Footnote ³⁷ One reason for this is that arbitral tribunals are established under an instrument of public international law and cannot be considered a part of the system of EU law. According to this view, the Achmea judgment is valid but only applicable within the EU legal order—it cannot have any bearing on the question on the tribunals’ jurisdiction, which is established on the plane of international law. Interestingly, initial reactions to the Achmea ruling tended to downplay the potential ramifications outside the EU legal order. Some commentators noted that the holding in the judgment was rather narrow,Footnote ³⁸ predicting that the ruling would only have effect within the EU legal order, and for a very specific range of disputes.Footnote ³⁹ Later cases, including Komstroy, showed that the CJEU would apply its reasoning in Achmea outside the context of BITs between EU Member States.

B. Komstroy

Following Achmea, there was discussion about whether the CJEU's reasoning would also apply to dispute settlement under the ECT.Footnote ⁴⁰ In its ‘Decision on the Achmea Issue’ the tribunal in Vattenfall noted ‘[t]he ECJ's reasoning was not specifically addressed to investor-State dispute settlement under the ECT’.Footnote ⁴¹ With the exception of the decision in Green Power (see Section IV.B) investment tribunals have consistently found that they have jurisdiction irrespective of the intra-EU objection based on Achmea. These decisions restrict Achmea to BITs that did not include the EU as a party: ‘[I]t is clear that Achmea pertains only to BITs concluded between EU Member States’.Footnote ⁴² Unlike the BITs between EU Member States, the ECT is a multilateral treaty that includes the European Union as a party, in addition to states that are not members of the Union. Dashwood argued that since the CJEU's reasoning in Achmea applied only to provisions of agreements ‘such as’ the Dutch-Slovak BIT, this would exclude its application to the ECT context.Footnote ⁴³ As a multilateral treaty to which the EU is a party, tribunals had found that the findings in Achmea do not apply in the ECT context.Footnote ⁴⁴

One reason for rejecting the intra-EU objection is that the tribunals are to establish jurisdiction in accordance with rules of public international law, including the relevant treaty. Under Article 26(6) ECT, a tribunal is to resolve disputes ‘in accordance with this treaty and with applicable rules and principles of international law’.Footnote ⁴⁵ Arbitral tribunals have not accepted that references to ‘international law’ should also include EU law. This has given rise to debates about the nature of EU law and whether it can be considered ‘international law’ for the purposes of establishing jurisdiction.Footnote ⁴⁶ In Electrabel SA v Hungary the tribunal found that ‘EU law is international law because it is rooted in international treaties; and both Parties accepted, of course, that the EU Treaties are legal instruments under public international law…’. Footnote ⁴⁷

In Komstroy the Grand Chamber found that its reasoning in Achmea did also apply in the context of the ECT. The case arose as a reference for a preliminary ruling from the Paris Court of Appeal concerning the jurisdiction of an arbitral tribunal established under Article 26(1) ECT. The underlying dispute was between the Republic of Moldova and a Ukrainian investor regarding the meaning of “investment” in the context of the ECT. Why did the CJEU have jurisdiction to hear a case involving parties outside the EU? The CJEU found that the ‘ECT itself is an act of EU law’.Footnote ⁴⁸ Therefore, since the CJEU has jurisdiction to give preliminary rulings concerning the validity and interpretation of acts of the European Union, the Court was competent to interpret the provisions of the ECT. Since the ECT is considered an act of EU law, an arbitral tribunal ‘such as’ that referred to in Article 26(6) ECT ‘is required to interpret, and even apply, EU law’.Footnote ⁴⁹ It held that the dispute settlement provisions in the ECT ‘must be interpreted as not being applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State’.Footnote ⁵⁰ The Court thus confirmed that the intra-EU application of the ECT's investor-state dispute settlement mechanisms is incompatible with EU law. While some had argued that the ruling in Achmea was narrow,Footnote ⁵¹ the CJEU has now applied its logic in the context of the ECT, a multilateral treaty to which the EU itself is a party.

These decisions exhibit different views about the very nature of EU law. In Komstroy, the dispute involved two parties—Moldova and a Ukrainian investor—that are outside the EU, and in a dispute that has little connection with the EU. It involved the interpretation of an international agreement—the Energy Charter Treaty—that is a legal act on the plane of international law and includes parties that are not members of the European Union. By considering the ECT to be an act of EU law, and thus in a position to interpret that act, the CJEU significantly expands its own jurisdiction. It justifies this expansive approach by reasoning that this is needed to forestall possible future divergences in interpretation, which may then have an impact within the EU legal order. The problem, however, is that the ECT parties decided to give jurisdiction to resolve disputes to arbitral tribunals, and not to the court of a regional organization belonging to some of the ECT parties. While such an approach may be legally justified within the EU legal order, it is highly antagonistic to legal regimes outside that legal order. It seeks to apply the principles of EU primacy to a dispute that, according to Advocate General Szpunar, ‘appears at first sight to be unconnected with the European Union’.Footnote ⁵² Given this antagonistic approach, it is perhaps unsurprising that arbitral tribunals have not accepted the CJEU's legal reasoning.

From the perspective of EU law, it is now clear that Article 26 ECT ‘is not applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State’.Footnote ⁵³ This was confirmed in Opinion 1/20, when the CJEU addressed a request by Belgium regarding the compatibility of the draft modernised Energy Charter Treaty with the EU Treaties, in particular Article 19 TEU and Article 344 TFEU. The CJEU found that it did not have sufficient information about the content of the revised ECT to determine whether it complies with the EU Treaties.Footnote ⁵⁴ Yet on the compatibility of Article 26 ECT with EU law, the Court states that it already ruled on this question in Komstroy.Footnote ⁵⁵ It is unfortunate the CJEU decided this in a case (Komstroy) where the question of the intra-EU application of the ECT was not a key issue in the dispute, and where parties, including other EU Member States, were not able to give their full views and arguments on the question. Achmea, Komstroy, and Opinion 1/20 are not decisions that seek to foster coexistence with other legal orders; rather they apply the logic of EU primacy to disputes on the plane of international law. The CJEU could have achieved the same result by using reasoning that could resonate with and be applied by other tribunals. For example, (as discussed in Section IV.A) as the CJEU could have demonstrated how its approach is also justified under public international law and the law of treaties.

C. Intra-EU Jurisdictional Objection

In the light of the Achmea and Komstroy judgments, arbitral tribunals have heard arguments on the ‘intra-EU’ jurisdictional objection. For example, the tribunal in Mathias Kruck and others v Spain was asked to review its decision on the ‘intra-EU’ or ‘Achmea question’ in light of the 2021 Komstroy decision.Footnote ⁵⁶ The tribunal decided that the Komstroy judgment did not warrant a reopening of the question. It disagreed with the position of the CJEU that the ECT must be interpreted authoritatively by the EU Courts. Such an approach would mean that the ECT would have a different meaning in intra-EU disputes and non-intra-EU disputes, and that such ‘an inherently discriminatory structure’ cannot be reconciled with the intention of the ECT contracting parties.Footnote ⁵⁷ While the tribunal accepts that the ECT is binding on the EU Member States and can be considered EU law ‘that does not mean that the ECT is transformed into EU law, losing its character as an international agreement subject to and applicable as part of public international law’.Footnote ⁵⁸

In these cases, respondents have argued essentially that a tribunal does not have jurisdiction because there was no valid offer to arbitrate between an EU Member State and an investor in another EU Member State. From an EU law perspective, the situation is clear: an EU Member State is prohibited under EU law from participating in intra-EU dispute settlement under the ECT. The challenge for respondents is to convince the tribunal, not only that intra-EU cases are prohibited in the light of EU law, but that EU law is of relevance when determining issues of jurisdiction and applicable law. In Eiser v Spain, for example, the Tribunal found that these EU law arguments did not apply since the Tribunal is not an institution of the EU legal order.Footnote ⁵⁹

One reason for this rejection is that the arguments before the tribunals tend to be presented in terms of supremacy and primacy of EU law. Investment tribunals, such as those set up under the ECT, are unlikely to give much weight to such arguments, which are based essentially on the superiority of EU law. EU law might be considered analogous to the domestic law of an ECT contracting party; claims to avoid jurisdiction based on EU law can be viewed as essentially invoking its internal law to avoid an international legal obligation. Indeed, respondents have sought to package their arguments in international law terms. For example, it has been argued that EU law should be considered a ‘successive treaty on the same subject matter’ under Article 30 VCLT (lex posterior) which would give normative priority to EU law. Alternatively, EU law could be viewed as a type of inter se modification of the ECT between EU Member States. With the exception of Green Power (discussed in Section IV.B) however, such arguments have been rejected. There continues to be a fundamental disagreement. From the perspective of the CJEU, the starting point is EU law and the autonomy and primacy of EU law. For tribunals determining their own jurisdiction, the starting point is the text of the international agreement. Rather than engage in dialogue with other tribunals and employ reasoning based in international law, the CJEU's more antagonistic approach is more likely to provoke conflict between legal orders. The following Part discusses some of the ways that this division might be overcome.

A. EU Court of Justice Engaging with External Bodies

The CJEU's reasoning in cases such as Achmea and Komstroy is firmly rooted in the principle of autonomy of EU law. Past cases involving external dispute settlement bodies have also developed the meaning and application of this principle. In Opinion 1/17 the CJEU found that the Comprehensive Economic and Trade Agreement between Canada and the European Union (‘CETA’) was compatible with Union law. It articulated that the EU may in principle join an international agreement that includes binding dispute settlement as long as the agreement does not have an adverse effect on the autonomy of the EU legal order:

Here the Court recognises the importance of engaging with international dispute settlement bodies for the Union's international relations. International dispute settlement might be seen a possible threat to the integrity of the EU legal order, but it is also a way by which the EU can strengthen the international legal order, for example, by ensuring that international legal disputes are resolved using judicial methods. Such support for international dispute settlement is not only in the EU's interests it also aligns with its obligation to promote the ‘strict observance and the development of international law’ in its international relations.Footnote ⁶¹ On the one hand, the Union seeks to design, support, and take part in international dispute settlement bodies, which is a way to strengthen enforcement and consistent application of international law. Yet in doing so, the EU must ensure that its interaction with such international dispute settlement does not undermine the integrity of its own legal order.

Rather than viewing autonomy in absolute terms, the CJEU has sought to balance these competing interests and goals. The CJEU will apply the principle of autonomy in a broad or a narrow fashion, depending on a range of circumstances.Footnote ⁶² As an overarching constitutional principle of EU law, autonomy is thus applied in a way that takes into account the type of relationship that will exist between the CJEU and other dispute settlement bodies. Autonomy is by its very nature a relational concept, and the CJEU will apply the principle in a way that takes into account the nature of that envisaged relationship. Thus, while critics have rightly pointed out how the principle has been applied in a somewhat inconsistent fashion,Footnote ⁶³ this is perhaps to be expected from a court applying the principle in different contexts and relationships. For example, the relationship between the EU and the tribunals established under CETA have far less potential to undermine EU autonomy than the relationship established between the EU and ECHR in Opinion 2/13. The point is that the CJEU considers the principle of autonomy to be a relative, relational principle. This recognises that the EU is not the same as a sovereign state, but an international organization ‘endowed with a certain autonomy’.Footnote ⁶⁴ Moreno-Lax and Ziegler argue in that regard that autonomy of international organizations is conceptually different from state sovereignty: ‘[A]utonomy and legal personality of international organisations are different in one important respect: while legal personality is “a yes or no question”, autonomy “is a matter of degree”’.Footnote ⁶⁵ This recognizes that the Union cannot be an isolated legal entity, but must live with other organizations, courts, and states. Interacting and engaging with these other entities, including other international dispute settlement bodies, would require an application of the principle in a way that allows engagement with external dispute settlement bodies (or ‘discursive autonomy’Footnote ⁶⁶) rather than seeking to isolate the EU legal order form external effects.Footnote ⁶⁷

Such an approach would show trust in the EU legal order's ability to withstand and respond to different interpretations of EU law and or diverging views of the nature of EU law. It would allow the CJEU and other bodies to develop practices that foster coexistence. As discussed in Part II, coexistence between the EU and the ICJ, WTO DSB, and the ECtHR has not been managed through the introduction of formal procedures but through a spirit of comity and mutual compromise. Such an approach also recognizes that the EU is a part of a wider international legal order, and as such the EU and its Member States participating in international dispute settlement will always entail some effects on the EU legal order. Rather than viewing autonomy in absolutist binary terms, this approach would require the Court to assess both the external dispute settlement body, but also the ability of the EU legal order to withstand potential conflict. In cases where those external norms can potentially undermine the integrity of EU law, the Court will set up higher boundaries. In cases where there is less chance of conflict, the Court can show trust in its own legal order to address those conflicts if and when they arise.Footnote ⁶⁸ The Court appears to go further than examining cases of actual conflict, but is also concerned with future and even hypothetical conflicts.Footnote ⁶⁹

B. Tribunals Engaging with International Law and EU Law

The previous Section focused on how the CJEU could apply the principle of autonomy in a way that promotes dialogue and cooperation with other dispute settlement bodies. Such dialogue also requires arbitral tribunals and other dispute settlement bodies to show willingness to engage with arguments based in EU law. As discussed earlier, tribunals have mostly rejected the ‘intra-EU’ objection to jurisdiction based on the non-applicability of EU law to their legal order. How could arbitral tribunals seek to integrate EU law arguments, without undermining the integrity of their own legal order?

Green Power and SCE Solar v Spain Footnote ⁷⁰ is an example of how a tribunal has sought to overcome the EU law/international law dichotomy that pervades legal arguments in this field. It is exceptional as it is the first time a tribunal has accepted the intra-EU exception. However, it did not come to this conclusion by simply accepting the primacy of EU law; rather, it integrates these EU law arguments into its international law reasoning. Thus, rather than taking an ‘EU’ or ‘international law’ perspective, the Tribunal sought to find ways to integrate both, and to overcome the sharp division.

Green Power involved a claim brought by Danish investors against Spain regarding changes it had made to the regulatory framework in the energy market, claiming that this violated the Energy Charter Treaty and international law. As in other cases involving EU Member States, the respondent state sought to rely on the CJEU judgments including Achmea and Komstroy to challenge the admissibility of the claims and the tribunal's jurisdiction. Spain argued that, since EU primary law and the case law in Achmea and Komostroy forbid intra-EU cases, there was no valid offer to arbitrate.

One of the key questions facing the Tribunal was whether EU law was even relevant to addressing questions of jurisdiction. The ECT Tribunal has the power to determine its own jurisdiction, which must be established in accordance with the ECT and the applicable rules and principles of international law.Footnote ⁷¹ Spain argued in this regard that the term ‘international law’ in the ECT also includes the law of the European Union.Footnote ⁷² Spain argued that it is EU law in its entirety, not just the EU Treaties, that is part of public international law. The claimants, on the other hand, argued that EU law is not part of international law, and that the ECT does not belong to the EU law system.Footnote ⁷³ The parties’ submissions revolved around various arguments based on international law and EU law. These arguments often require the tribunal to adopt either an EU law or international law approach to a particular question:

Green Power is remarkable insofar it does not adopt either an ‘EU law view’ or ‘international law view’ to the question—instead, it finds that ‘the distinction made between separate planes is artificial and obscures the issues that must be decided’.Footnote ⁷⁵ The resolution of the dispute ‘must overcome the binary logic of an either “insider” or “outsider” perspective with respect to EU law’.Footnote ⁷⁶ This approach contrasts with the approach in previous cases, in which the tribunal's findings turned on whether it saw EU law as a part of international law.Footnote ⁷⁷

While Spain also relied on arguments based in EU law, it packaged its arguments in terms of public international law, in particular the rules in the Vienna Convention on the Law of Treaties (‘VCLT’). The Tribunal considered the ECT as the starting point for determining its jurisdiction. As such, it turned to the rules in the VCLT to interpret Article 26 ECT.Footnote ⁷⁸ The Tribunal first employs the general rule of treaty interpretation in Article 31 VCLT which requires the Tribunal to examine the ‘ordinary meaning’ of the terms in Article 26 ECT.Footnote ⁷⁹ The Tribunal found that, on its wording, the offer to arbitrate must be ‘unconditional’ and that there may be other norms applicable to determine the validity to arbitrate.Footnote ⁸⁰ The Tribunal had to determine whether an EU Member State's unilateral offer to arbitrate under the ECT can be validly given, even though the EU Member States had made another agreement (EU law) that prevents it from making such an offer.Footnote ⁸¹

The Tribunal used Article 31 VCLT to examine the terms of the treaty in their context. This rule allows an interpreting body to consider ‘any subsequent agreement between the parties regarding the interpretation of the treaty’ and ‘any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation’.Footnote ⁸² The tribunal considered some of the declarations made by the EU Member States to be ‘subsequent practice’ that is relevant for the interpretation of the treaty. In particular, it considered the 2019 declaration made by representatives of EU Member States following the Achmea judgment.Footnote ⁸³ The tribunal found that the declaration would be relevant only ‘to the 22 EU Member States which signed Declaration II and it would reflect their authentic interpretation of the meaning of certain legal relations inter se’.Footnote ⁸⁴ The tribunal does not consider this declaration to be an inter se amendment of the ECT. Rather than modifying the terms of the ECT, the Declaration is evidence of the shared understanding of Spain, Denmark and twenty other EU Member States regarding the relevance of EU law to the issue of investment arbitration.Footnote ⁸⁵ The tribunal stresses that the Declaration is only used for the purposes of interpretation, further showing how Spain and Denmark understood their relations under the ECT and EU law. The tribunal thus found a way to bring in EU law: via systemic integration and the application of Article 31(3)(c) VCLT.Footnote ⁸⁶ This approach views EU law as belonging to a wider international legal system, rather than the either/or dichotomy of EU law and public international law.

Such an approach is an example of how dispute settlement bodies can seek to engage with the law of other legal orders. Rather than finding that EU law is not applicable to the decide jurisdiction, the tribunal takes the EU law arguments seriously. One problem with such an approach, however, is that the tribunal accepts that the ECT can be applied differently in disputes between different members, which would arguably undermine the consistent application and interpretation of the ECT. It should be noted that the declaration of 22 EU Member States does not show evidence of the intention of all ECT parties, but a fragment of them. The tribunal recognizes this, finding that ‘this mismatch must be taken into account when considering the weight to be given to this means of interpretation’.Footnote ⁸⁷ The tribunal thus found that EU law is valid for the interpretation of the ECT, but only insofar it applies to the mutual relations of the EU Member States. The tribunal attaches special importance to the fact that norms in the EU legal order have superior and overriding status: ‘The Tribunal deems important to note that the primacy of EU law in the relations between EU Member […] is not a matter of lex specialis or of lex posterior, but one of lex superior’.Footnote ⁸⁸

This approach allows the interpretation of the ECT to change depending on the party to a dispute. This goes against the finding in Vattenfall in which the tribunal found that Article 26 ECT includes EU Member States and non-EU Member States without distinction, finding that there was no inter se carve out for EU Member States. This finding was also based on the VCLT, the principle of good faith and the need for a single, coherent and unified interpretation of each treaty provision:

On the one hand, Green Power shows how legal arguments based on EU law can be presented in the language of public international law and the law of treaties. Rather than speaking in the language of primacy of EU law and autonomy, the tribunal discusses the law of treaties and the concept of lex superior. On the other hand, this approach has meant that the treaty is not given a single, coherent meaning and would establish different interpretations for different ECT parties. While the CJEU is concerned with the integrity and uniformity of EU law, the approach in Green Power gives rise to similar concerns about the consistent and uniform application of a multilateral agreement. Tribunals will continue to hear arguments against their jurisdiction based on Achmea and Komstroy, and will likely now refer to the Green Power decision. If they are to accept the legal reasoning adopted in Green Power, they should also address the real concerns raised in the ‘Decision on the Achmea’ quoted above.