Legal Analysis Of Achmea Case And Its Implications On ISDS In The EU

The EU plays an important role in ISDS,in the past 50 years,ISDS mechanism faced a lot of developments and challenges in EU.In March 2018,CJEU awarded that ISDS clause in the BIT is incompatible with EU law since it allows an tribunal which doesn't belong to EU legal system to interpret EU law when dealing with Achmea case.Since the decision of CJEU acts as precedent,the implications of Achmea also extend to extra-EU BIT and other EU investment treaties,thus this ruling on validity of ISDS clause is even considered to be an end of ISDS in the EU.For the purpose of preventing our investors and to reach an appropriate and reliable ISDS method in China-EU BIT,enough attention should be draw on the issue of conflict of ISDS and EU law.This article will start with the ruling of Achmea,and analyze the fact and reason why CJEU award that the arbitration clause violates Art.344 and Art.267 TFEU.Then basing on the core of Achmea-whether tribunal may interpret EU law,to find the scope of ISDS clause that affected by the ruling.In the end,it expresses the potential effects on intra-EU BIT,extra-EU BIT and EU investment treaties from different aspects of foreign investor,EU member states and the EU.Outlook and suggestions like modifying BIT,choosing applicable law carefully and launch unified ISDS method will also be given to face the implications of Achmea.This article is composed of 4 parts.Part I is the introduction of the background,current situation of ISDS in the EU,fact,procedure and the judgement by CJEU on Achmea case.Part II is legal analysis of issues on the limitation of interpration of EU law,the relationship between international treaties and EU law,and the reason why CJEU award that the arbitration clause violates Art.344 and Art.267 TFEU.Part III is based on the core of Achmea-whether tribunal may interpret EU law,to find the scope of ISDS clause that affected by the ruling and expresses the potential effects on intra-EU BIT,extra-EU BIT and EU investment treatiesPart IV will give appropriate outlook and suggestions to face the implications by Achmea from different aspects of foreign investor,EU member states and the EU.