Investment Protection and the Principle of Equality Before the Law

Professor Tarjei Bekkedal, Centre for European Law, University of Oslo

The most important question in our time

• ISDS: «super rights»

• «VIP-status to right holders»

• «Threat to equality»

Equality at stake?

Equality affected;

in the legal sense?

in the constitutional sense?

Article 20 CFR: «Everyone is equal before the law»

- Requirement of unity

1. demanding infringements of the rule of law to be repaired from within 2. demanding the unity of the catalogue of human rights to be preserved 3. demanding unity between internal and external action

1. Unity with regard to the protection of the rule of law

• «Compatibility with the Treaties of investment dispute settlement provisions in EU trade agreements» 1. June 2016

- autonomy of the EU legal order - constitutional principles and fundamental rights

autonomy

• only intepret the international agreement

• no jurisdiction to rule on the legality under domestic law

• only possible concequence is payment of damages

• CETA investment chapter protects the right to regulate

Equality before the law

• Art 20 CFR: Reduced to discrimination

• «Similar situations shall not be treated differently unless differenatiation is objectively justified»

• The principle of equal treatment does not mean that everyone must be treated in the same way but that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified.

Copies James and Others vs UK

• “the position of foreign investors is different from that of domestic investors in the Union and in Canada inasmuch as the conditions for investment within a Part may be less adapted to foreign investors than to domestic investors and that, moreover, investors in a foreign market may as such face obstacles. They may perceive a possible bias in the treatment on the part of the political, administrative or judicial authorities in the territory where they make their investment…”

Lost in translation?

Promotes equality Threat to equality

Equality before the law is not only a factual question but a normative

question • The principle of equal treatment does not

mean that everyone must be treated in the same way but that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified.

What is a normatively different situation?

• Are blondes and people with dark hair normatively different if we accept as true that they are treated differently in fact?

• Are Europeans and Canadians normatively different if treated differently

• Are they different or are they just treated differently?

1st proposition

• To preserve the unity of the legal system, the principle of equality before the law:

requires (the risk of) arbitrary behaviour to be coped with from within

2. The unity of the human rights catalogue

• «Human rights can’t suffer by extra protection»

• Second generation rights

• Equality before the law require balancing when rights conflict

Unity with regard to substantive balancing

requires conflicting rights to be balanced and to be attributed equal respect, not depending on how a complaint has been lodged (compare Von Hannover no 2 para 106).

Unity with regard to the balancer

“The Convention does not exclude the transfer of competences to international organisations provided that Convention rights continue to be ‘secured’. Member States’ responsibility therefore continues even after such a transfer.»

(Matthews v. The United Kingdom para 32)

2nd proposition

To preserve the unity of the legal system, the principle of equality before the law:

preserves the unity and thus the integrity of the catalogue of human rights

3. Unity between the internal and the external action of the EU

- Constitutional test: Internally legal?

- Intra-EU bits – not legal.

TEU article 21:

• The Union's action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law.

Incoherence

• In policy

• Between Intra EU-BITs and external BITs

• Within the EU – due to the broad definition of an investor

3rd proposition

• To preserve the unity of the legal system, the principle of equality before the law;

demands coherence between action on the internal and on the external level.