Exchanging Bilateral Investment Treaties and Investor-State Dispute Settlement for the Acquis Communautaire : A three-stage analysis of the effects for investors, the level of investment protection and for the flow of Foreign Direct Investment on the inte

Sammanfattning: Through the judgements of Achmea and PL Holdings, the Court of Justice of the European Union (CJEU) has prohibited the use of Investor-State Dispute Settlement (ISDS) as well as the enforcement of any awards stemming from such procedures within the European Union (EU). This means that investors on the internal market can no longer enjoy the protection which was awarded to them by the protection standards inherent in the Bilateral Investment Treaties (BITs) which were previously relied upon by investors in the Member States (MS), and which provided for the possibility of ISDS. Investors are instead referred by the CJEU to place their faith in the protection awarded by EU law. In the light of this change in protection standards, the purpose of this thesis is to examine whether or not the protection available to cross-border investors on the internal market can be considered adequate in the absence of BITs and ISDS. This thesis has examined this question from three different perspectives. Firstly, in comparison to the formerly applicable BITs, secondly in relation to the constitutional demands of EU law, and thirdly in relation to the level of protection that is needed to sustain FDI flows on the internal market. The comparative analysis between the substantive and procedural standards of the formerly applicable intra-EU BITs and their counterparts in EU law resulted in a finding of a comparative advantage for the BIT standards in both the substantive and procedural areas. The comparatively low levels of substantive protection standards in EU law are however quite understandable and unproblematic when seen from a constitutional EU law perspective. This is because the EU is not about providing an absolute and non-derogatable level of protection but mainly concerned with sustaining a non-discriminatory environment with a level playing field, while at the same time respecting certain sovereign rights of the MS. However, the lower level of procedural protection in EU law raises certain consistency-issues from a rule of law and legal certainty perspective. As regards the effect on FDI flows, research suggests that the existence of BITs results in an average increase of 30-35% in FDI flows between the treaty-partners compared to countries without BITs. In addition to this economic loss, research also suggests that the absence of BITs together with the procedural problems inherent in the system of EU law and the rule of law-crisis in certain MS could result in foreign investors resorting to alternative ways of protecting their investments in such politically and judicially unstable environments, acting as a force that sustains institutional weakness and corruption on the internal market.