Paradigm Shift: Reflections on the Interpretation of International Investment Agreements by National and Supranational Courts Post-Achmea

Abstract

The Court of Justice of the European Union (CJEU or the Court) in Republic of Moldova v. Komstroy, Case C-741/19, was called upon to answer the questions posed by the Paris Cour d’Appel, essentially addressing the interpretation of the notions of ‘investment’ and ‘investor’ under Article 1(6) and 1(7) of the Energy Charter Treaty (ECT), even though the underlying case had no immediate qualifications for the jurisdiction of the CJEU. National courts undertake the interpretation of international investment agreements (IIAs) in connection with the set aside or recognition and enforcement of investment arbitration awards. For example, the Paris Cour d’Appel in Venezuela v. Serafín García Armas and Karina García Gruber has set aside an investment arbitration award, deciding that the definitions of ‘investment’ and ‘investor’ in the Spain- Venezuela Bilateral Investment Treaty (BIT) required that assets were ‘invested by investors’ of the other contracting State and, hence, that investors must satisfy the nationality requirement when making the investment. In Clorox Spain S.L. v. Venezuela, the Swiss Federal Tribunal set aside an investment arbitration award noting that Article 1(2) of the Spain-Venezuela BIT reflects an asset-based definition of the notion of ‘investment’, and that the relevant BIT does not include a denial of benefits clause, nor additional requirements in establishing the nationality of an investor, which could justify the interpretation of the notion of ‘investment’ in a narrow sense, with emphasis on the wording ‘invested by investors’.