IN THE MATTER OF AN ARBITRATION UNDER THE RULES OF THE
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES
-between-
JCDECAUX SA
Claimant
and
THE CZECH REPUBLIC
Respondent
ICSID Case No. ARB/20/33
28 July 2023
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I agree with the Tribunal's Decisions on jurisdiction (Decision, VII) and on Costs (Decision, VIII). I am also in agreement with most of the considerations supporting the Decision.
Although I do agree with the Decision's conclusion in para. 188 considering that the so called Achmea principle is inapplicable, I should clarify that I arrive at the same conclusion but based on a different reasoning.
Basically, I disagree with the Decision's treatment of the question of successive treaties related to the same subject matter, especially in relation to the interpretation and application of Article 30.3 of the Vienna Convention on the Law of the Treaties (VCLT).
Even if I do agree that Article 30 of the VCLT is not applicable to the present case, I am opposed to the idea that the BIT and EU law do not share, to a certain degree, the same subject matter in dealing with intra-EU foreign investment. I am also against the Decision's Majority proposition that introduced the category of “different treaty regimes” as to justify a second chance to reinterpret Article 30 of the VCLT.
To my understanding, and in contrast to the Majority's reasonings, I consider that, Article 30 VCLT is not applicable to the present case as a mere result of its plain interpretation in accordance with Articles 31 and 32 of the CVLT.
In order to explain this Concurring Separate Opinion, I will first refer to the interpretation of Article 30.3 of the VCLT; second, I will deal with arbitral precedents cited by the Decision pretending to vindicate the existence of a jurisprudence constante; third, I will focus on the Decision's alternative interpretation based on the concept of “different separate regimes"; and finally, I will address the general legal framework within which this opinion was conceived.
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1. In interpreting Article 30 of the VCLT special consideration must be given to the General Rule of Interpterion that prescribes that a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose (Article 31 of the VCLT).
2. The title and first paragraph of Article 30 of the VCLT refer to successive treaties relating to the same subject matter. The ordinary meaning of the expression “related to" does not suggest that both treaties must have the same object and purpose but simply refers to successive treaties that “are related”, in the sense of being at some point linked or associated to the same subject matter. The expression “related to” does not imply that treaties "with the very same subject matter" are the only object of that clause.
3. The above interpretation based on the ordinary meaning of the expression "related to" is also online within the context of Article 30.3 that deals with the compatibility of “treaty provisions” and not with a full and complete compatibility of both treaties' common objectives.
4. Article 30.3 states that: “When all the parties to the early treaty are parties also to the later treaty but the early treaty is not terminated or suspended in operation under Article 59, the early treaty applies only to the extent that its provisions are compatible with those of the later treaty”. Consequently, this Article recognizes the possibility of applying early treaty provisions that are compatible with the later treaty.
5. Within the context of the VCLT in dealing with termination of a treaty because of the celebration of posterior one, Article 59.1 states “A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter and: ...b) the provisions of the later treaty are so far incompatible with those of the early one that the two treaties are not capable of being applied at the same time." Thus, Article 59 applies to all successive treaties relating to the same subject-matter, independently that they share the very same object and purpose: Article 59 expressly refers to “treaty provisions” within the same context than that expression was incorporated in Article 30.3 of the VCLT.
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6. Then, the expression “relating to" does not prejudge on the scope of the concept of "same subject matter" as to only include each and all the clauses of the “successive treaties".
7. On that context, the ILC 2006 Report on Fragmentation of International Law, when dealing with the question on "same subject" as expressed in Article 30 VCLT, affirmed that, "As pointed out above, the test of whether two treatises deal with "the same subject matter" is resolved by assessing whether fulfilment of an obligation under one treaty affects the fulfilment of obligations under the other. This "affecting" might then take the form either of strictly preventing the fulfillment of the other obligation or of undermining its object and purpose".1
8. The above statement is a clear ILC recognition that the meaning of "same subject matter" refers to any particular provision (obligation) and not necessary to all the provisions of both treaties.2
9. ILC Report on Fragmentation also recognized that "...One of the problems is that the title of the Article (and paragraph 1) seems to limit it to a conflict between treaties "relating to the same subject-matter". If that interpretation is interpreted strictly, then it seems to lift most of the important cases outside its scope. However, as pointed out in Section B above,3 this is neither a necessary nor a reasonable interpretation of the expression 'same subject matter”.4 Therefore, "...If an attempted simultaneous application of two rules to one set of facts or actions leads to incompatible results, it can safely be assumed that the test of sameness is satisfied."5
10. In our present case, the BIT and EU law rules on settlement of disputes are incompatible
1 ILC Report on Fragmentation of International Law: Difficulties arising from the diversification and expansion of international law, Doc A/CN.4/1. 682 and Add.1., para 254 in fine. ↩
2 On the same line of reasoning the ILC Report on Fragmentation stated that “It must be assumed, as Fitzmaurice does, that lex specialis 'can only apply where both the specific and the general provision concern deal with the same substantive matter.' Moreover, the commentary to Article 55 of the Draft Articles on Responsibility of States for Internationally Wrongful Acts requires that, “for lex specialis to apply, the rules must deal with the same subject matter." The ILC refers to any treaty rule and not to the object or purpose of successive treaties: ILC Report on Fragmentation of International Law, para. 116: Citing paras. (4) and (5) of the ILC Draft Articles on International Responsibility of States for International Wrongful Acts, Yearbook ILC, 2001, vol. II (Part II) and corrigendum, pp.140-141. ↩
3 Section B: The Function and Scope of the lex specialis maxim, ¶¶ 56-122. ↩
4 ILC Report on Fragmentation of International Law: Difficulties arising from the diversification and expansion of international law, Doc A/CN.4/1. 682 and Add.1., para 253. ↩
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and the Tribunal must determine which rule prevails. Thus, considering that the early treaty (the BIT) was not terminated or suspended by the latter treaties (EU law), it should be assumed that both treaties are still in force. Article 30.3 states that if provisions of both treaties that remains in force are not compatible - in our case the ones dealing with settlement of disputes - the provision of the latter treaty must apply.
11. But to accept that the BIT and the EU law relates to the same subject matter, does not make Article 30 applicable to the present case, because its paragraph (3) establishes a presumption in favor of the lex posteriori that could not overrule an already generated "acquire right” under international law in favor of Claimant.
12. The literal application of the lex posteriori principle prescribed by Article 30.3 will produce an absurd or unreasonable result by ignoring the lex specialis status bestowed by the Contracting Parties to the BIT.
13. Within that particular context, Article 30.3 contains a lacuna, because it was drafted on a presumption that the parties to both successive treaties understood, and so they agreed, that any incompatibility between both treaty clauses, must result in the derogation of the provision of the early treaty. Its application would endorse a legal presumption that the present case, is not in conformity with the expressed or implied will of the parties involved.
14. This position is confirmed by recourse to the preparatory work of the treaty and the circumstances of its conclusion as a supplementary means of interpretation as provided by Article 32 of the VCLT.
15. Article 32.2 of the VCLT allows recourse to preparatory work of a treaty and the circumstances of its conclusion, "...in order to confirm the meaning resulting from the application of Article 31, or to determine the meaning when the interpretation according to Article 31...(b) leads to a result that is manifestly absurd or unreasonable”.
16. In that sense, the object of Article 30.3 of the VCLT reflects the common predisposition of the ILC Special Rapporteur (Sir H. Waldock, 5th and 6th Reports)6 that, when drafting
6 Special Rapporteur Sir Humphrey Waldock since 1961. Yearbook of the International Law Commission, 1962, vol. II, p.160. ↩
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rules dealing with the application of successive treaties, he only referred to the principle of lex posteriori. Article 30 does not expressly deal with the principle of lex specialis, nor with its relation to the principle of lex posteriori. Therefore, Article 30.3 of the VCLT application to the present circumstances, generates an absurd and unreasonable result provoking a lacuna. That lacuna must be solved by referring to the proper articulation of general principles of law. There is no evidence that Article 30.3 was a consequence of a customary international law codification process which was the main object and purpose of the VCLT drafting.
17. The ILC Comments on the Draft Articles on the Law of Treaties, confirmed this.”7 The ILC admitted that paragraph 3 of Article 30 was “...in conformity with the general rule that later expression of intention is to be presumed to prevail over an early one... ."8 (the underline is mine). Consequently, the ILC recognized that it has presumed the application of the principle of lex posteriori, overlooking the effects of the principle of lex specialis in drafting paragraph 3 of Article 30.
18. The referred presumption contained in Article 30.3 is manifestly unreasonable and so inapplicable to the present case. There is no evidence that in ratifying the EU treaties, the parties to a previous BIT understood that they were derogating one of the most relevant innovations introduced by such early treaty: the right of foreign investors to settle investment disputes by recourse to international arbitration.
19. Inconsistences on the content of Article 30.3 leads to the formation of a lacuna that needs to be fulfilled by recourse to Article 31.3.(c) of the VCLT. Article 31.3.(c) states that in interpreting a treaty text, it shall be considering together with the context "...any relevant rules of international law applicable in the relations between the parties." Therefore, general principles of law, as recognized by Article 38.1.c) of the Statute of the International Court of Justice must then apply. The principle of lex specialis and lex posteriori must be considered among the general principle of law recognized by
7 Draft Articles on the Law of Treaties, Yearbook of the International Law Commission, 1966, Vol. II, A/CN/SER.A/1966/Add.1., p. 216. ↩
8 Ibid., "The present Article applies only when both treaties are in force and in operation: in other words when the termination or suspension of the operation of the treaty has not occurred under Article 56. Paragraph 3, in conformity with the general rule that later expression of intention is to be presumed to prevail over an early one, then states that "the early treaty applies only to the extent that its provisions are compatible with those of the later treaty". ↩
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civilized nations. Customary international law has determined the prevailing role of lex specialis principle over the lex posteriori principle within special circumstances.9
20. Within customary international law, the idea that a special rule enjoys priority over a general or even a posterior rule, has a long pedigree in international jurisprudence.10
21. The ILC Report on Fragmentation of International Law outlines the role and nature of lex specialis rule as a pragmatic mechanism for dealing with situations in which two rules of international law that are both valid and applicable deal with the same subject matter differently.11
22. The ILC Report affirmed that “The principle that special law derogates from general law is a widely accepted maxim of legal interpretation and technic for the resolution of normative conflicts [...] Sometimes lex specialis is, however, understood to cover the case where two legal provisions, both of which are valid and applicable, are in no express hierarchical relationship and provide incompatible directions on how to deal with the same set of facts. In such case, lex specialis appears as a conflict resolution technic. It suggests that, instead of the (general) rule, one should apply the (specific) exception. In both cases, however, priority falls on the provision that is “special”, i.e., the rule of a more precisely delimited scope of application" 12
23. The ILC also outlined the application of the lex specialis principle in its Commentary to Article 55 of the Draft Articles on Responsibility of States for International Wrongful Acts. The Commission sustained that “For the lex specialis principle to apply it is not enough that the same subject matter is dealt with by two provisions; there must be some
9 "As a lex specialis in the relations between two countries, the Treaty supersedes the lex generalis, namely customary international law. This does not mean, however, that the latter is irrelevant in the instant case. On the contrary, the rules of customary law may be useful in order to fill in possible lacunae of the Treaty, to ascertain the meaning of undefined terms in its text or, more generally, to aid interpretation and implementation of its provisions": Amoco International Finance Corporation v. The Government of Islamic Republic of Iran et al., Iran-United States Claims Tribunal, case 56. 14 July 1987 15 IRAN-U.S. C.T.R., p. 189 at p. 222. ↩
10 Conf.; Beagle Channel Arbitration, Reports of International Awards, vol. XXI, 530, p. 100. Mavrommatis Palestine Concessions, 1924, PCIJ, Series A, No. 2, pp 29-33; Military and Paramilitary Activities in and against Nicaragua, ICJ Reports 1986, p. Judgment of 27 June 1986, ¶ 274; Continental Shelf (Tunisia/Libyan Arab Jamahiriya) Judgment ICR Reports 1982, ¶ 24; Case concerning Right of Passage over Indian Territory, ICJ Reports 1960, ¶ 44; Case concerning Gabcikovo-Nagymaros Project, ICJ Reposts 1997, ¶ 132; The Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, ICJ Reports 1996, ¶ 25. ↩
11 ILC Report on Fragmentation of International Law: Difficulties arising from the diversification and expansion of international law, Doc A/CN.4/1. 682 and Add.1., Chapter II, para 46. ↩
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actual inconsistency between them, or else a discernible intention that one provision is to exclude the other"13
24. Although the principle of lex specialis did not find its way into the text of the VCLT, it was observed during the drafting process that, among the technics for resolving conflicts between treaties, it was useful to pay attention to the extent to which treaty might be special in relation to other treaty.14
25. Finally, the absurd and unreasonable result of a literal interpretation of Article 30.3 would contradict the ILC affirmation that “...the lex posteriori will not abrogate a prior treaty obligation if the specialty of the prior obligation may be taken as an indication that the parties did not envisage this outcome".15
26. In reference to arbitral precedents quoted by the Decision,16 I could not agree with its para. 180, that based on “a strong body of authority”, concludes that the BIT and the EU Treaties differ in nature and in subject-matter and so, “no question of inconsistency can arise under Article 30”. This affirmation is grounded in several arbitral precedents dealing with the concept of successive treaties related to same subject matter.
27. From the analysis of the arbitral awards dealing with Article 30.3, as cited by the Decision, there is abundant evidence that those precedents did not base their conclusions in conformity with the VCLT General Rule of Interpretation. Consequently, and as stated above, the expression "relating to the same subject matter" not necessarily involves an overall comparison of the two treaties object and purposes, but also refers to the compatibility of provisions within successive treaties relating to the same subject matter: In the present case, the BIT and EU laws have different settlement of disputes systems.
13 The International Law Commission's Articles on State Responsibility, Crawford, J. Commentary to article 55. para 4, at p. 307. ↩
15 ILC Report on Fragmentation of International Law: Difficulties arising from the diversification and expansion of international law, Doc A/CN.4/1. 682 and Add.1, para. 114. ↩
16 Decision, paras. 178 et ss. ↩
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28. The Decision's reference to arbitral precedents dealing with Article 30 of the VCLT, are misleading. They have taken for granted that successive treaties related to the same subject matter must share the same purpose and objectives. As already stated, this is a false construction because it is not supported by a legal interpretation of Article 30.3 of the VCLT in conformity with Articles 31 and 32 of the same Convention.
29. As an example, the tribunal in Marfin Investment v. Republic of Cyprus, agrees with the EURAM v. Slovakia tribunal that the subject-matter of a treaty refers to the issues with which its constituent provisions deal, its topic and substance. The tribunal considers that “... a good faith interpretation of Articles 59 and 30 of the VCLT, in accordance with the ordinary meaning of the terms employed, seen in their context and in light of the object and purpose of the VCLT does not support the conclusion that two successive treaties deal with the same subject-matter if they may apply simultaneously to the same set of facts".17
30. Despite such introduction, the tribunal in Marfin failed to back its conclusion on the interpretation of Articles 30 and 59 of the VCLT. The tribunal merely assumed, with no further explanation18, previous case law conclusions. However, from the mere reading of the cited precedents, it could be established that none of these precedents has sustained their own interpretation process in conformity with Articles 31 and 32 of the VCLT.19 Therefore, the above arbitral cases, by ignoring recourse to the VCLT General Rule of Interpretation, as crystalized by Article 31, could not be considered as relevant precedents to evidence or to confirm the authentic interpretation of an applicable treaty rule.
31. As other relevant examples, in Muszynianka Spolka Z Ograniczona v. The Slovak
17 Marfin Investment Group Holdings S.A. et Al. v. Republic of Cyprus”, ICSID Case No. ARB/13/27, Award 26 July 2018, ¶. 587. ↩
18 Ibid., “...the tribunal sees no reason to depart from consistent case law finding that intra-EU BIT and EU treaties deal with different subject-matter.", ¶ 588. ↩
19 Eureko B.V. v. Slovak Republic, PCA Case No. 2008-13, Award on Jurisdiction, Arbitrability and Suspension, 26 October 2010, ¶¶ 247-263; Eastern Sugar B.V. (Netherlands) v. The Czech Republic, SCC Case No. 088/2004, Partial Award, 27 March 2007 ¶¶ 159-164; Jan Oostergetel and Theodora Laurentius v. The Slovak Republic, UNCITRAL, Decision on Jurisdiction, 30 April 2010, ¶¶ 70-79; and European American Investment Bank AG (EURAM) v. Slovak Republic, UNCITRAL, Award on Jurisdiction, 28 October 2012; ¶¶ 178-184; Marfin Investment Group Holdings S.A. et Al. v. Republic of Cyprus", ICSID Case No. ARB/13/27, Award 26 July 2018, ¶ 584 et ss. ↩
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Republic20 as well in Magyar Farming Company v. Hungary21, it has been expressed that investment treaty tribunals have understood that the subject-matter of a treaty is defined by the matters with which the treaty's constituent provisions deal. To back its affirmation both tribunals reproduced the words of the Oostergetel tribunal: “The requirement [...] that the two treaties relate to the "same subject matter" has to be construed in line with the dominant view expressed in scholarly writings to the effect that two treaties can be considered to relate to the “same subject matter" only if the overall objective of these treaties is identical and they share a degree of general compatibility"22 (the underline is mine).
32. Surprisingly, both tribunals reduced the interpretation process of Article 30 of the VCLT to accept a dominant view of scholars with no further reference to the General Rule of Interpretation as required by the VCLT.
33. The precedents cited could not reflect a jurisprudence constante rooted in an incomplete interpretation process of the rules that they should have applied; they did not only ignore the application of Articles 31 and 32 VCLT, but they also did not take into account the relevance of the basic investor's rights granted by the BIT that are in accordance with the general principles of law incorporated as part of the EU law.
34. For all the above reasons I disagree with Muszynianka conclusion at para. 236, reproduced in the Decision.23 Of course, I do agree that there is no doubt that the BIT and the EU Treaties do not share the same subject matter in reference to their main objects and purposes. However, there is also enough evidence to confirm that the BIT and EU Treaties share the same subject matter concerning investors' substantial rights and protections. The main exception is the exceptional right granted by the BIT to investors to settle their investment disputes through recourse to international arbitration.24
20 Muszynianka Spolka Z Ograniczona v. The Slovak Republic, PCA Case No. 2017-08, ¶ 233. ↩
21 Magyar Farming Company Ltd, et al. v. Hungary, ICSID Case No. ARB/17/27, Award 13 November 2019 ¶ 230. ↩
22 Jan Oostergetel and Theodora Laurentius v. The Slovak Republic, UNCITRAL, Decision on Jurisdiction, 30 April 2010, ¶ 70. ↩
24 Eastern Sugar B.V. (Netherlands) v. The Czech Republic, SCC Case No. 088/2004, Partial Award, 27 March 2007, ¶¶ 160-165. ↩
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35. The overlap of substantial rules concerning the treatment of investors of one Member State investing in another Member State, does not generate contradictions because both set of rules - BIT and EU treaties- are rooted on the same legal matrix based on general principles of law adopted by Member States' domestic legal systems, and reflected in their mutual international law commitments.
36. In this context, settlement of disputes rules is an exception. The BIT recognizes to investors of one Member State that invest in another Member State, the right to settle investment disputes, through recourse to international arbitration. That specific investor right constitutes a departure from applicable general rules for the settlement of disputes. In that sense, the exceptional nature of the settlement of dispute system implemented by the BIT confirms its lex specialis nature.
37. In conclusion, Article 30.3 is not applicable to the present case because there is no need to test the compatibility of a rule that was created as a lex specialis, vis a vis a posterior rule of a general character that was agreed upon by the Contracting Parties involved, without the intention, expressed or implied, to modify or derogate the previous lex specialis as recognized by Article 10 of the BIT.
38. I could not agree with the Majority's reasoning expressed at para. 184 of the Decision that, as suggested by the ILC on its Study Group Report, “...it can still be relevant to consider whether the two treaties are part of the same regime or project...”. The Majority then affirmed that “Taking that approach...it would conclude that the BIT and the EU Treaties are not part of the same regime or project25, implying that even if the two regimes otherwise address the same subject-matter, they have separated definitively on the relevant issue to which each must apply its own principles and approach.
39. But even assuming that the BIT and the EU Treaties “are not part of the same regime
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or project", it does not affect the application of Article 30 of the VCLT just because it is a fact that both set of rules are expressed in treaties that, being part of international law, are subordinated to its general principles of law.
40. The reference made by the Majority to back its conclusion on a suggestion proposed on the ILC Report on Fragmentation, is misrepresenting the overall Commission's analysis concerning “separated treaty regimes”.
41. The ILC statement “that the principle of lex posterior or lex specialis ‘seems clearly more powerful between treaties within a regime than between treaties in different regimes", does not help to justify the legal bases of the Majority's alternative conclusion. Even more, the precedent sentence to the cited by the Majority clearly recognized the limited relevance of identifying “treaty regimes” stating that: “The significance of identifying such “treaty regimes” lies in the way it seems relatively less complicated to establish a relationship between two instruments within one such regime than between two instruments across different regimes."26
42. The Commission further confirmed the limited relevance of the "treaty regimes" concept as differentiated from the concept of “successive treaties related to the same subject" by expressing that: “Treaties may of course end up in conflict both within and across regimes. To make that distinction is merely to point out that the task of settling the conflict [...] may be much easier or more straightforward in the former [same treaty regime] than in the later situation, [same subject matter] where a conflict of wider objectives or values underlying the very regimes themselves is often at issue".27 (In between brackets is mine)
43. The concept of “different treaty regimes", as expressed in the ILC Report on Fragmentation28, seems to be the result of an academic exercise, with no reference to the applicable law. The above concept could not even be implied as part of a valid interpretation of Article 30 of the VCLT. As previously stated, Article 30 must be
26 ILC Report on Fragmentation of International Law: Difficulties arising from the diversification and expansion of international law, Doc A/CN.4/1. 682 and Add.1., para. 255. ↩
28 Ibid., “252. Article 30 deals with the issue of conflict between prior and subsequent treaties. As many commentators have noted, however, it does not appear to do so very successfully [...] 256. The distinction between treaties dealing with "same subject matter" and treaties within the same "regime” may appear slight, but it constitutes an important practical shift of perspective..." ↩
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interpreted in conformity with Article 31 of the VCLT. Nothing on the text of Article 30, its context, or on the object and purpose of the VCLT, suggest that the application of successive treaties relating to the same subject matter is conditioned to the existence of "different treaty regimes". The aspirational legal status of such academic exercise sounds ingenious but not sufficient to justify the necessary existence of “two regimes” to determine the compatibility or not of successive treaty rules relating to the same subject matter.
44. The ILC Report also recognized that “The rationale for special regimes is the same for lex specialis. They take better account of the particularities of the subject matter to which they relate: They regulate it more effectively the general law and follow closely the preferences of their members..."29
45. The above conclusion seems to be online with the role of lex specialis in interpreting Article 30.3 of the VCLT. On that line, the ILC Report at para. 256, recognized the speculative character of the relationship between the expressions "same subject" and "special regimes", stating: "The distinction between treaties dealing with "same subject matter" and treaties within the same regime may appear light, but it constitutes an important practical shift of perspective..."30
46. In my view, that practical shift of perspective is not based on an authentic interpretation process in conformity with VCLT. At the same time, the ILC Report on Fragmentation recognized its lege ferenda approach by expressing that "Owing to the inconclusive nature of the general law on conflicts between successive norms, as well as the generally open-ended formulations of Article 30 of the 1969 Vienna Convention, it seems important that States include some directions..."31 Thus, the Commission is encouraging States to generate new rules, recognizing that its suggestions are not based on an interpretation, neither in the application of an actual rule of law.
47. Consequently, I found no legal bases backing the Majority's alternative approach as expressed in para 184 of the Decision. The cited paragraphs in the ILC Draft on
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Fragmentation could not support such founding.
48. Finally, even if I do agree with para. 186 of the Decision, I could not endorse its very last sentence by which the Majority “...adopts what was sustained by the tribunal in AS PNB Banka” at paras. 573, 574 and 578. In our present case, Respondent has argued that the BIT and the Termination Treaty must be interpreted in conformity with Article 31 of the VCLT32. Respondent has not argued that the Declarations or the Termination Treaty have the object to interpret the BIT, thus reference to AS PNB Banka is irrelevant.
49. Considering that the jurisdiction of the Tribunal should be determined in compliance with the BIT, the correct application of its Article 10 is seminal. Accordingly, in interpreting that Article in conformity with VCLT, it is reasonable to conclude that the right of an investor to recourse to international arbitration for the settlement of investment disputes, has been formulated as an exception to the applicable general rules concerning settlement of disputes.
50. The exceptional nature of the settlement of investment disputes system, as expressed by Article 10 of the BIT, must be considered as a recognition of the principle lex specialis derogate lex generalis, and as such it could not be modified or terminated by a latter international rule, except if that latter international rule expressly contemplates its derogation (aside from the special situation for international peremptory norms).
51. This understanding has been recognized by the Contracting Parties to the Termination Agreement. Article 4.2 of the Termination Agreement provides that “The termination in accordance with Article 2 of Bilateral Investment Treaties listed in the Annex A, and the termination in accordance with Article 3 of Sunset Clauses on Bilateral Investment Treaties listed in Annex B shall take effect, for each such treaty, as soon as this Agreement enters into force for the relevant Contracting Parties...".
52. Consequently, Article 4 of the Termination Agreement recognized that BITs
32 Respondent's Request for Bifurcation, 30 November 2021, para 181 et ss. ↩
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enumerated in Annex A will continue to be valid until the time the Termination Treaty enters into force for the relevant Contracting Party.
53. Therefore, even if the Contracting Parties to the Termination Treaty could impose retroactive effects to their agreement, such retroactivity could not affect investors "acquire rights" to settle a dispute through international arbitration. Once an investor of a Contracting Party, which has invested in the other Contracting Party, has consented to arbitration under the BIT, an acquired right under international law has been duly established.
54. The above conclusion is independent from the understanding that the Achmea principle is part of international law. The Achmea principle derived from a ruling of the CJEU that applies EU law, and EU law have its source in treaty law. But the mere recognition that EU Law is part of international law does not prejudge the primacy of EU Law over other rules of international law expressed on treaties as well as on customary international law. Thus, it is not relevant to consider EU Law as a sub-branch of international law33 to justify the non-binding effect of a CJEU precedent (the Achmea principle) over an arbitral tribunal's own jurisdiction. In that context, an arbitral tribunal is not bound by a judicial or arbitral precedent that ignores the lex specialis character of a specific treaty (in the present case, the applicable BIT) which confers the arbitral tribunal with its own jurisdiction.
55. On the same line of reasoning, the fact that EU Law and BITs dealt with same subject matters, at least concerning certain investors rights, could not be construed as the basis to consider that EU law, being posterior, prevails over the BIT.
56. Whereas Article 10 of the BIT, is a lex specialis, prevails over any other general international rule contained in any subsequent treaty that has not expressly modified or derogated the exceptional character of such lex specialis (excluding peremptory international norms).
57. In conclusion, the BIT recognizes to investors of one Member State that invest in another Member State, the right to settle investment disputes, through recourse to
33 See Cavalum, As PNB and Renergy cases, mentioned at para. 154 of the Decision. ↩
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international arbitration. That specific investor right constitutes a departure from applicable general rules for the settlement of disputes. In that sense, the exceptional nature of the settlement of dispute system implemented by the BIT, constitutes a lex specialis.
58. In reference to the present case and in conformity with the applicable BIT, Claimant, having accepted the offer made by Respondent to settle a dispute through international arbitration, has crystalized the generation of an “acquire right” under international law that could not be affected by a latter agreement of the Contracting Parties to the BIT.
59. Therefore, I agree with the reasoning restricting the retroactive effect of the Termination Treaty in relation to Claimant's “acquire rights" to recourse to international arbitration to settle an investment dispute.
Signature
Professor Raúl E. Vinuesa
Co-arbitrator
Date: 28 July 2023