The influence of the EU and EU law on investment arbitration is one of the hotly debated topics in today’s arbitration world. Since the EU obtained the competence for the regulation of foreign (direct) investment on behalf of its Member States through the 2009 Lisbon Treaty, the European Commission’s efforts have brought about much change for both the EU’s internal and the EU’s external investment law relations. On the EU-internal level, the Commission – since 2018 backed by the European Court of Justice’s Achmea judgment and since early 2019 also by the EU Member States – has worked towards the elimination of investment arbitration. It seeks to have these disputes litigated before EU Member State courts instead. On the EU-external level, the Commission has successfully negotiated a new dispute settlement model in the EU’s free trade and investment agreements: an investment court system, the compatibility of which with EU law the Luxembourg court confirmed in 2019. This chapter seeks to set out these developments in a structured manner. It is necessarily incomplete, since the interaction between the Commission, investment tribunals, courts and other actors continues to develop – despite the fact that this interaction to a considerable degree remains determined by mutual ignorance.

Chapter 3 addresses the potential for norm conflict arising from the parallel application of investment treaties and international humanitarian law. It argues that such conflict must be avoided through treaty interpretation. Drawing from their interaction with human rights law, the rules of armed conflict should inform the meaning of investment treaty clauses through ‘systemic integration’. The chapter shows that investment tribunals possess the authority and duty to conduct such a subordinate examination under humanitarian law as part of the interpretive exercise. Although standards of protection may, as a result, be lower than in peacetime, the chapter argues that giving effect to humanitarian rules through investment law ensures the normative appeal of investment treaties. It allows taking into account military concerns and rejects special treatment of foreign investors compared to ‘ordinary’ civilians. At the same time, the chapter highlights, investment treaties give investors a unique opportunity to enforce international rules during armed conflict and secure compensation for unlawful conduct in hostilities.

The author introduces the term ‘judicial engagement’ to conceptualize the interaction between different international courts. Judicial engagement occupies a large middle ground on the continuum between resistance and convergence, highlighting the willingness of the participating adjudicators to consider external sources in the appropriate case, denoting commitments to judicial deliberation but being open to the outcome of either harmony or dissonance. This chapter focuses on two specific research questions. Firstly, it searches for the normative grounds for this adjudicative behaviour, identifying the elements that support it, as well as those that render ‘cross-judging’ impossible. The second question to be answered is the possible function and contribution of engagement between trade and investment tribunals. The ultimate enquiry concerns whether we should or should not promote this adjudicative behaviour. If so, what would its benefits be? The discussion in this regard will look into the possible function of judicial engagement in the light of the legitimacy challenges currently faced, and the role of governance currently performed, by the tribunals involved.