The European Union benefits from a significant network of bilateral investment treaties (“BITs”) which EU Member States have negotiated and concluded over the last few decades. BITs are treaties aimed at promoting and protecting reciprocal investments. In addition to substantial guaranties available to investors – both individuals and businesses –, these treaties contain procedural protections such as investor-state arbitration, allowing disgruntled investors to sue the authorities of the host state for failing to sufficiently protect their investments.
A typical example would be a French renewable energy business deciding to build, set up and operate a power plant in Romania. Should issues arise in relation to the project, the French company may rely on the France-Romania BIT to seek damages or other types of relief from Romania, in the context of arbitration proceedings. The French investor may be able to obtain compensation should the arbitral tribunal decide that Romania has breached the France-Romania BIT, for example by failing to provide sufficient protection to the foreign investment.
Recent legal and political changes across the European Union have been affecting the availability of investor-state arbitration, which has been until recently a major tool for the resolution of disputes across Europe.
For one, the Court of Justice of the European Union (“CJEU”) rendered a highly anticipated decision in the Achmea affair. In that decision, the CJEU essentially found that the arbitration clause contained in an intra-EU bilateral investment treaty was not compatible with EU law. In sum, Slovakia had asked a German court to refer its dispute over a €22 million arbitral award with a Dutch insurer, Achmea BV, to the CJEU, which resulted in the CJEU having to consider the legality of Slovakia’s bilateral investment treaty with the Netherlands.
The impact of this decision has been immense and is currently under scrutiny. Although the actual ruling did not say much, the CJEU nevertheless approached the growing clash between investment treaty law and EU law and reiterated the autonomy and supremacy of EU law. As things stand, there are a large number of pending arbitration proceedings initiated on the basis of an intra-EU BIT, whose outcome has become uncertain in light of the Achmea case.
Within the current European context, another event has recently laid the foundations for more change, potentially affecting the way in which international parties will operate in the future, including their ability to resolve disputes. On 23 June 2016, the United Kingdom expressed its wish to leave the European Union. On 29 March 2017, the English Government commenced the formal withdrawal process from the European Union which is on course to complete by 29 March 2019. Beyond the uncertainties associated with the current political climate, it remains that the UK has a large number of BITs in place with many other European countries. Brexit is likely to have drastic consequences on their availability.
In light of these major changes that are affecting business operators across EU territory, it is of paramount importance that potential investors reconsider their litigation options as early as possible while considering investments abroad.
Various solutions exist.
First, businesses or individuals can re-route their investment through more favorable jurisdictions, such as Switzerland, Singapore and perhaps the UK, in order to maximise treaty protection afforded to their investment in the future. Depending on the type of investment and assets that are at stake, companies should also try to include treaty-type provisions in the commercial contracts they are planning to conclude with state entities, so as to become less dependent on the availability of a valid or “surviving” BIT, should a dispute arise. More and more investors negotiate protections such as fair and equitable treatment or stabilisation clauses into their project agreements, which means that they won’t be reliant on investment treaties with the host state that may no longer be in force, as is the case with intra-EU BITs.
In this context, the UK’s imminent departure from the EU may also bring potential
advantages for international businesses. Twelve out of almost a hundred of the UK’s BITs currently in force were concluded with another EU Member State, i.e. Bulgaria, Croatia, Czech Republic, Hungary, Slovenia, Poland, Slovakia, Romania, Lithuania, Malta, Latvia and Estonia.
When (and if) the UK finally withdraws from the EU, these BITs will lose their intra-EU
character and growing incompatibility with EU law. Investments and projects structured through the UK will therefore no longer have an intra-EU element attached to them and will become free of the all uncertainty surrounding intra-EU BITs. This may allow British investors wishing to operate and invest in the European Union to benefit from the protections derived from the BITs listed above and to be able to pursue their claims before an international arbitration tribunal. The same protections would similarly apply to eligible European investors aiming to operate in the UK.
Second, it is essential that individuals or corporates aiming to invest within the EU carry out due diligence on the relevant protections offered by the national legislation of the country where their future project is to be located. Indeed, not only do domestic laws often offer similar protections to those that are included in international investment treaties such as intra-EU BITs, but local law frequently provides investors with the option of bringing claims before world-renowned arbitration institutions, such as ICSID, thus providing guarantees that claims will be processed in accordance with international standards.
 A fuller analysis of the issues developed in this article is included in L. Carpentieri, F. Gillion, Construction Arbitration and BITs: is there still a future for intra-EU investment arbitration?, Int’l Construction Law Review 167, January 2018.
 France and Romania entered into a bilateral investment treaty on 21 March 1995, which entered into force on 20 June 1996.
 CJEU Judgment in Case C-284/16 Slowakische Republik v. Achmea BV, dated 6 March 2018.
 The European Commission has adopted over the last few years a very strong position on the continuing availability of the bilateral investment treaty network for disputes within EU territory. The clear objective of the European Commission has been for all EU countries to terminate their bilateral investment treaties with other EU countries and promote the exclusive application of EU law instead. This will result in claimants of EU origin no longer being able to rely on the vast network of BITs which has been fully available so far across the European Union.
 ICSID, or the International Centre for Settlement of Investment Disputes, is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors. ICSID is part of and funded by the World Bank Group, headquartered in Washington, D.C.
 By way of an example, investors and contractors operating in Romania are entitled to rely on Romania’s Emergency Government Ordinance No 92 of 30 December 1997 on the Stimulation of Direct Investments which contains various investment protections for foreign companies, including ICSID arbitration.