S. International Arbitration and EU Law

The impetus for this seminar is the increasingly evident tension between two prominent international law regimes: international arbitration and the European Union. No two such regimes have been in this level of conflict for an exceptionally long time. For years these two regimes were like ships passing in the night. But that is by no means any longer the case. Each considers the other a major -- if not the major -- threat facing it.

The tensions begin with the European Commission's and European Court of Justice's position that investment treaty claims may not be brought by a national of one Member State against another Member State. So-called "intra-EU" treaties and "intra-EU" awards are invalid under EU law. Such awards must be set aside and denied enforcement by Member State courts, even where investors relied on those treaties in making their investments in other Member States. Yet, courts of other countries -- including but not only the US -- have readily enforced those awards. This has resulted in a flurry of anti-arbitration and anti-suit injunctions issued by EU member State courts targeting actions in other countries and similar injunctions by courts of other countries targeting actions in the EU. We examine wherein lies the cause of this troubled relationship and wherein lie the solutions if any.

Equally concerning has been the European Union's increasingly expansive view of "public policy" as a New York Convention defense to the enforcement of arbitral awards. This development calls into question the longstanding assumption that public policy as a defense to enforcement of awards is to be narrowly construed, so as to minimize the threat to international arbitration's efficacy. The elaboration of EU public policy is very much "a work-in-progress" that we will examine.

Both of these strains in the international arbitration/EU relationship are having a real impact on arbitral tribunals themselves, facing conflicting mandates from the law of international arbitration and the law of the European Union. We examine how tribunals are navigating these troubled waters.

Finally, the EU has of recent date pressed for the establishment of a permanent court that would replace the investor protection system as we know it today. It is already including investment courts in its free trade agreements with other countries, including Canada, Mexico, Vietnam and Singapore.

Grades in the seminar will; be based on seminar participation, a seminar paper due at the end of the course and presentation of that pare while in progress..