On September 6, 2017, Belgium requested an opinion from the European Court of Justice (“ECJ”) on whether the investment protection rules set out in Chapter Eight of the EU-Canada Comprehensive Economic and Trade Agreement (“CETA”) conform to EU Treaties. This request stems from the last-minute deal between Belgium and its regional governments on October 27, 2016, which essentially sought to appease Wallonia’s concerns regarding investor protection and the new Investment Court System (“ICS”) and unblocking domestic opposition to the signing of CETA.

Belgium is now asking the ECJ to provide its opinion on “the compatibility of the ICS with:

  • the exclusive competence of the Court of Justice of the European Union to provide the definitive interpretation of European Union law;
  • the general principle of equality and the ‘practical effect’ requirement of European Union law;
  • the right of access to the courts; and
  • the right to an independent and impartial judiciary.”

Belgium is also seeking an opinion on the issue of the “right to an independent and impartial judiciary”, particularly with respect to:

  • the conditions regarding the remuneration of the members of the Tribunal and the Appeals Body, the appointment of members of the Tribunal and the Appeals Body, and the release of members of the Tribunal and the Appeals Body;
  • the guidelines of the International Bar Association regarding conflicts of interest in international arbitration and the introduction of a code of conduct for the members of the Tribunal and the Appeals Body; and
  • the external professional activities related to investment disputes of members of the Tribunal and the Appeals Body”.

This request will not affect the provisional application of most of CETA (98% of the agreement), which is scheduled to begin on September 21, 2017.

A trend seems to be forming around post-treaty completion referrals to the ECJ. The EU’s most recent trade agreement prior to CETA (EU-Singapore), was also referred to the ECJ for an opinion on the issue of competence to conclude free trade agreements. Given the Commission’s ambition to conclude increasingly comprehensive treaties moving beyond traditional “trade” categories, this is perhaps to be expected as member states and other stakeholders seek clarity on their rights to influence international trade.

As the Commission continues to canvass support from domestic stakeholders and other states for a permanent Multilateral Investment Court for the settlement of investment disputes between investors and states (the ICS is considered as groundwork for the multilateral court), the ECJ’s opinion will likely have a significant impact on these plans. However, it is uncertain when the ECJ will deliver – it took almost two years to issue its opinion on the EU-Singapore FTA.

For further information on how this may affect your organization, please contact: fclaprevote@cgsh.com or schanallen@cgsh.com