Intra-EU Bits, Compatible With EU Law?

In a somewhat surprising development but one that will be warmly welcomed by the international arbitration community, the Advocate General of the Court of Justice of the European Union (AG), Mr Wathelet, has issued an opinion stating that the bilateral investment treaty (BIT) between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic is compatible with EU law. This is the first time that the compatibility of an intra-EU BIT with EU law has been considered by the AG and Court of Justice of the European Union, (CJEU).

Whilst the opinion of the AG is not binding on the CJEU it is typically influential. The opinion runs contrary to the position repeatedly adopted by the EU institutions, including the EU Commission, that intra-EU BITs do conflict with EU law. The CJEU will have the final say on this but on the basis there are currently 196 intra-EU BITs in force the ramifications could be very significant.